ERP in SMEs : exploring ERP lifestyle cost issues
Doctoral thesis, Peer reviewed
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This thesis presents a study of Enterprise Resource Planning (ERP) systems lifecycle in small and medium-sized enterprises (SMEs). The majority of businesses and firms around the globe can be considered to be SMEs. Thus, SMEs are seen to be typical companies that are the cornerstone of most economies. Compared with large enterprises (LEs), SMEs have limited budgets and resources, and have a higher sensitivity to costs. Although ERP adoption is one of the most complex, costly, and biggest projects an enterprise can embark on, many factors lead SMEs to take such a decision. When SMEs take the first steps towards adopting an ERP system, they need to think about many things; first and foremost, they need to take into account the cost of adoption. Literature and professional reports show that a prevailing number of ERP adoption projects fail because of inaccurate or optimistic budgets and time schedules. In addition, many organizations have difficulty identifying the potential cost factors that could occur during their adoption projects Moreover, current mainstream cost management and estimation methods are inadequate in ERP adoptions settings. The purpose of this thesis is to explore and identify the cost factors and other cost estimation related issues that may occur when SMEs adopt ERP systems. Many researchers have argued that expected and potential benefits are influential during the budgeting process and investment evaluation, and should not be ignored. Thus, the investigation of benefits management and realization practices falls within the boundaries of this research. In order to identify cost factors associated with ERP adoption in SMEs, and SMEs practices and behaviours in relation to the estimation of costs and benefits, it is necessary to explore one main research question and its subset of questions.- What are the challenges to the management and estimation of costs and benefits within on-premise ERP adoption projects in SMEs? The ERP adoption term used in this thesis refers to the first five phases of the ERP lifecycle framework developed by Esteves and Pastor (2007), which denote the ERP introduction process. This process moves from the “adoption decision” through to go-live and maintenance, and evolution; however, it excludes the retirement phase. In order to understand and investigate the challenges in their perspective context, a qualitative exploratory research approach is adopted to answer there search question stated above. This PhD study was carried out through a combination of literature reviews, panels of experts, and case study research. The empirical part of the study encompasses a multiple case study, an experts’ panel, and one in-depth case study of ERP adoptions in four SMEs. All four organizations are privately owned Egyptian small and medium -sized enterprises. Besides the target organizations, the data collection process covered two ERP vendors (local and international), two implementation partners, two independent ERP and investment consultants, and eight participants on the experts’ panel. Data analysis was carried out in order to identify impending cost factors and challenges that SMEs may encounter when justifying and evaluating their investments and estimating their adoption budgets. This thesis has mainly adopted a six-phase ERP lifecycle framework. There search results are presented in six articles, which focused on the different lifecycle phases. The articles have been published in international peer reviewed conference proceedings and journals.
Doctoral dissertation, Faculty of Economics and Social Sciences, University of Agder, Kristiansand 2013