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Siti Aisyah Salim, Information Systems School, Queensland University of Technology, Australia,

In spite of a wealth of studies on ERP adoption in recent years, prior studies have presumed ERP
adoption as an immediate action rather than as a process. We also argue that cross-sectional research
design does not adequately represent the complexity and the highly volatile nature of the process of ERP
adoption. Based on a content analysis of one hundred studies on academic and vendor successes, we have
identified 27 transition factors contributing to the adoption of cloud ERP. Building on two process
research studies (Guttman et al. 1998; Klein and Sorra 1996), this research attempts to explore which
transition factors are relevant to the distinct phases of cloud ERP adoption. These transition factors are
classified as “necessary” or “sufficient”; where “necessary” transition factors need to exist in order for
the firm to move to the next stage, while “sufficient” means assisting in the movement. This paper not
only consolidates, but also extends the existing literature on the technology adoption process for complex
organization-wide technologies. For practitioners, this study will assist ERP and cloud vendors in
prioritizing and upgrading their business quality at any point in time during the adoption process, which
would thus increase the likelihood of cloud-based ERP adoption among SMEs.

Keywords: cloud, ERP, SMEs, process

This paper is organized as follows: it commences by explaining the works related to this study. it has been expected the SME adoption of cloud ERPs would increase. For example. and thus lead to a successful system implementation. Saeed et al. Exploring these factors without studying how these factors evolve over time is similar to placing all factors into a single phase. while research on ERP implementation in small and medium sized enterprises (SMEs) is still lacking. 2 RELATED WORK This section attempts to provide an overview of existing technology adoption topics in the literature reviews. However. Oracle. Microsoft and NetSuite. The percentage of SMEs that have adopted cloud ERP systems still remains relatively low (Haddara and Zach 2011). Finally. such as on-demand access. Prior research has focused predominantly on ERP implementation in large organisations. and ability to concentrate on core business activities. but also extends the existing literature on the technology adoption process for a complex organization-wide technology. aside from understanding the phases involved in complex technology adoption and research context (cloud ERP and SMEs). Thus. . ease of use. these studies have only listed all influencing factors and conceived the adoption of cloud ERP as being a one-off dichotomous decision (Huizingh and Brand 2009). Studies by Klein et al. vendors as well as firms could identify their main role in completing the adoption process. A number of researchers have attempted to study the factors that encourage firms to adopt cloud ERP systems. extendibility. The framework presented (please refer to Figure 1) will show how the factors that influence cloud ERP adoption (named as transition factors) act as triggers that help the firm in moving from the initial stage of adoption (entering) until the last stage (commitment). This is not surprising. due to the realization of the importance of SMEs in global industry. By understanding how these transition factors work and flow. several ERP providers have started to introduce new cloud-based ERP systems to the marketplace. in response to this research gap. (2011) and Walther et al. this study will help ERP and cloud vendors in prioritizing and upgrading their business quality at any point in time during the adoption process and thus will increase the likelihood of cloud-based ERP adoption among SMEs. Project Management and transparency analytics tools (Pereira 2012). with the comprehensive view of the technology adoption unable to be achieved. as the main influencing factors for cloud ERP adoption. the paper concludes with future studies proposed in this field and recommendations for academics and practitioners. These include SAP. For practitioners. With more specialised features being embedded into cloud ERP. (2005) and Krippendorff (2004). This paper not only consolidates. this study attempts to develop a process framework for cloud ERP adoption. The discussion then continues with the methods used. the paper continues with a discussion and introduction of an a priori conceptual framework of the technology adoption process. 2002). Until recently. However our expectations have not been correct. Considering the fact that content analysis will help the researcher to explore the transition factors. (1996) and Gutman et al. Subsequently. since ERP systems could only be afforded by large companies in past years. this research employs a content analysis method as suggested by Hsieh et al. A small number of these studies attempt to gauge how and why these factors flow throughout the technology adoption phases. (2012) have identified reduction of implementation costs.1 INTRODUCTION Enterprise Resource Planning (ERP) systems have been popular information technology (IT) applications since the 1990’s (Robey et al. It is highlighted that most academic literature focuses on factors that influence technology adoption and the sub-phases involved in the adoption. (1998) were used as a guidance to develop the process framework.

Based on the issues brought up. picking and choosing constructs from multiple theories to develop new theories (Jeyaraj et al. 2. we believe that technology adoption at the firm level should be able to answer “how” and “why” questions (Chia and Langley 2004). Table 1. it is not the main objective of this research to determine the best term to be employed for explaining the process of complex technology adoption. Therefore. namely: the individual (e. and players involved in each phase.2 Technology Adoption Phases in Organizations It is generally believed that organizations go through several phases of innovation. but rather. Guttman et al. 2012) and the characteristics of technology adoption (e. for instance..g. typical phases used in technology adoption studies will be discussed. inquiry. Therefore.g. and marketing lifecycle. change. implementation and post-implementation (Yu 2005). Please refer Table 1 for details of studies selected. Technology adoption has been studied at two levels. namely: discovering the determinants (factors that influence) of technology adoption (Frambach and Schillewaert 2002) stages involved in technology adoption (e.. In the next section. short listing and commitment. The five stages used are: entering. Separating these dimensions will lead to several assumptions. ERP lifecycle. practice. Wang et al. treating technology adoption as a single phase decision (Thong 1999). (1996) provide the nearest similarity to our stages. We also acknowledge that the use of different terms might provide different interpretations of activities. Bajwa et al. The majority of technology adoption studies has typically focused on one dimension of research. However. events. However. 2001). activity. these two studies were used to build up our research framework. . Studies on Lifecycle and Phases References Our res earch Entering Inquiry Technology Adoption/Buying Phases Inquis itive Short lis ting Commitment (Rogers 1995) Agenda s etting Matching Res tructuring Clarifying Routinis ing (Klien and Sorra Awarenes s Selection Adoption Implementation Routinis ation 1996) (Shoham 1992) Awarenes s Interes t Evaluation Trial Adoption (Guttman et al Need Product brokering Merchant Negotiation Purchas e and 1998) identification brokering delivery (Verville and Planning Information Selection Evaluations Choice (s ) Negotiations Halingten 2003) Search 1 There are many more studies on process and lifecycle.. Further. inquisitive. and temporal evolution (Langley 2007). focusing on what phases are involved in triggering SMEs to adopt cloud ERP.1 Technology Adoption New technology adoption (also known as innovation) is defined as an idea. event. technology adoption should be treated as a process embracing movement. or object that is perceived as new by an individual or other unit of adoption (Rogers 1995). To select the most appropriate phases in relation to our research context. The pre-implementation or the adoption phase has proven to be a critical stage (Markus and Tanis 2000) in achieving a successful project.g.2. three research streams were reviewed: technology adoption. we selected only eight studies that were relevant to our research context. Based on Table 1 summary.g. The innovation stages could consist of three to six phases and have similarities in terms of highlighting pre-implementation. to understand and to explore how these phases evolve and interconnect with each other. Wang et al. (1998) and Klein et al. Cooper and Zmud 1990.. Brown and Venkatesh 2005) and the firm (e. and citing and adopting constructs from both domains regardless of whether they are studying an individual or organizational level of adoption (Plouffe et al. 2010). this research focuses on the pre-implementation stage. simplifying the process of new technology adoption. Our search has found seven relevant studies1 (refer to Table 1 for the details of the stages). 2004). 2006).

and (2) mapping phase – to understand how transition factors could influence the movement of the overall technology adoption process. as well as prior exploratory studies (e.3 METHODS – EXPLORING AND MAPPING Two steps were carried out to produce the final framework. the results were constrained between 2005 and 2012. but have a similar meaning.1 Exploring Transition Factors To ensure validity. following two simple guidelines. a research study requires certain standards and processes. provision of consistent and accurate information. The main keywords employed in the academic search were restricted to a title and body text search of. and the desired output can still be obtained even though these transition factors do not exist. The synthesis process was conducted with another two experts on Innovation and ERP systems. using a thesaurus. As the intention of this study is not only to look at the benefits of cloud ERP adoption. The search identified 86 academic studies and 14 customer testimonials (the reference list can be requested by emailing the authors). Gable 2010). Two different types of transition factors were used in this paper. Furthermore.g. a list of synonyms were considered. . the existence of these factors can help the movement of the adoption process (Hakansson et al. This entails two main phases: (1) content analysis phase – to explore the transition factors for technology adoption. The second is transition factors with necessary 2 The main concern of the paper is to discuss the process of pooling and synthesizing the factors. 1982). The guidelines include: (1) when two technology adoption factors are identical. a search was performed using the ScienceDirect database and top IS journals and conference proceedings.g. The synthesis process identified 27 unique technology adoption factors of cloud ERP systems. Each transition factor has a different level of importance. The synthesis procedure attempts to reduce the identified adoption factors by removing overlapping measures so as to attain unique factors. therefore details of this method will only be provided upon request to the authors.2 Mapping the Transition Factors into Technology Adoption Phases The main objectives of the mapping exercise are two-fold: (1) to provide a clear understanding how the transition factors flow throughout the adoption process. All 100 “sources of evidence” were then scanned for the stated adoption factors (reason for adoption). The first was transition factors with sufficient condition – meaning. sufficient transition factors mean that these factors will be the gateway to move from one phase to another. In this context. The twenty-seven (27) transition factors found from the content analysis are then mapped into the adoption process framework. namely. (1) cloud ERP and (2) SaaS ERP2. and (2) to differentiate between sufficient and necessary transition factors. The inclusion of the ScienceDirect database ensured that the search results included complex technology adoption articles from multiple disciplines. The guidelines mentioned allowed us to follow the same logic when synthesizing the 142 citations. The selection of prior studies for analysis is based on the approach of Webster and Watson (2002).. To ascertain the relevant literature on cloud ERP adoption. This process yielded a total of 142 adoption factors. We also noted that approximately 80% of the stated adoption factors were benefits of cloud ERP (e. they were merged into a single statement. 3. we then synthesized the adoption factors benefits. The practitioner material was scanned using the vendor-stated “customer testimonials”. and (2) when two technology adoption factors use different keywords. reduction of infrastructure and administrative costs. 3. with theoretical and conceptual studies excluded.. and standardization of reporting).

2012) (Wind et al. 1994) (Blackwell et al. Findings from the mapping exercise can be viewed in Table 2. 2009) Internal Ability to perceive of events or sensory patterns Entering awareness (Dwyer et al. the stages used are more relevant to this research context. The individual who throws support behind the Inquisitive. 2012) . Commitment Consultant demonstration on the product (PobaInquisitive Demonstration Nzaou and Raymond 2010) Question regarding maintenance and upgrade Maintaining and support offered from ERP vendors (Ng and Inquisitive upgrading Gable 2009) Functions (ease New technology is perceived as being difficult Inquisitive of use) to understand and use (Wind et al. Sufficient and necessary concepts are widely used in the fuzzy set QCA method to see the importance of certain conditions in relation to their experiments (e. 1987) (Comegys et al. 2012) Any cost incurred prior to or during the Inquisitive. transition factors that are categorized under this category need to exist (Hakansson et al. 2007) Short listing. 1987) Senses a difference between actual state and Business Entering desired state of firm performance (Comegys et characteristics al. In general.condition – meaning. Table 2: Transition Factors Description. More than twenty studies were reviewed in order to understand the process of complex technology adoption (please refer to Table 1 for example of studies). Ragin 2000. 1987) External Pressure. external sources preaching (Dwyer et awareness al. for carrying out those strategies (Mintzberg planning Inquiry 1994) Financial Form of material reward. 2012) (Repschlaeger et al. 2007) Inquiry. Phase Mapping and References Factor Description with Reference Phase New technology is observed as being an Entering Business benefits improvement on its predecessor (Ramdani et al. in order to obtain the required output. Sen and Pattanaik 2012). a necessary condition is more significant than merely a sufficient condition. 2006) (Mergel and Bretschneider 2013) (Yap et al. By differentiating between these two (sufficient and necessary) terms. Project champion new technology adoption (Basoglu et al. Cost estimation implementation of innovation (Walther et al. All the transition factors mapped into the technology adoption phases (entering. Short listing 2012) Authors (Phase) (Campbell 2011) (Dwyer et al. 2006) (Buchowicz 1991) (Paul and Kumbhojkar 2012) (Abramovitch 2012) (Poba-Nzaou and Raymond 2010) (Repschlaeger et al. inquisitive. or allow the firm to evolve to the next phase.. The combination and merging of several studies into a single adoption framework will assist us in understanding how this process was performed. 2006) Planning strategies and step-by-step instructions Strategic Entering. inquiry.g. in exchange for acting Inquiry incentives in a particular way (Zhu and Kraemer 2005) Financial The need to have available financial resources Inquiry availability (Blackwell et al. 1982) and be placed in the correct phase. 2006) Perceived need from employees to facilitate the Inquiry Urgency need business operation (Thong and Yap 1995) Government intervention either to give pressure Inquiry Regulation or support (Oh et al. Output here refers to the movement of the firm from the prior stage to the next stage of the cloud ERP adoption process. Since our study is based on SMEs and cloud ERP technology. short listing or commitment) are guided by academic literature studies and industry success stories. firms or vendors could prioritize and aim for the best action to expedite the adoption process. Chaiken and Trope 1999.

These two factors could assist in changing the ignorance of the firm’s owner or manager. 2012) (Repschlaeger et al. Phase Mapping and References Support from the vendor in terms of Inquisitive. 2012) (Abramovitch 2012) (Shoham 1992) (Shaul and Tauber 2012) DISCUSSION For a clearer view. 2006) Implementation The complete and precise execution plan Commitment plan (Basoglu et al. rather than just reacting (Varshney et al. understanding business characteristics (the status quo of the firm) and strategic planning are considered as sufficient transition factors. While discovering business benefits. 2011) Proactive behaviour involves acting in advance Short listing Proactive service of a future situation. 2012) (Mergel and Bretschneider 2013) (Repschlaeger et al. external players or the service provider. However. 2012) (Mergel and Bretschneider 2013) (Repschlaeger et al. In the entering phase. (Wind et al.Table 2: Transition Factors Description. Support consultation. It is also shown that the transition factors have been classified as sufficient or necessary. the firm’s representative (business. 2012) (Repschlaeger et al. 2012) (Repschlaeger et al. responsiveness Short listing. 2012) (Repschlaeger et al. inquisitive. 2006). 2012) Participation of organizational members for the Commitment Staff involvement success of adoption process (Truman and Raine 2002) New technology can be experimented with on a Commitment Trialability limited basis (Zhu et al. 2000) The technical security aspects that include potential risks of data loss. The firm’s representative starts become familiar with the . and commitment (Chan and Lee 2003) Commitment Collective perception and second hand Vendor Short listing information of the vendor capabilities (Einwiller reputation 2001) A team consisting of the business owner. scoping Short listing many legal-financial entities/ operational entities and configuring (Markus et al. As presented in Figure 1. we found external awareness (information provided by vendors or business affiliations) and internal awareness (recognition of the firm’s needs) as the necessary transition factors. 2007) 4 (Repschlaeger et al. Ignorance occurs when there is a lack of knowledge (Burke and Jarratt 2004) or incapability on the part of the firm’s members to articulate their long term vision (Mendelssohn 1991). and commitment. expertise. training. Short listing pre-requisite system and technology (Zhu et al. At the inquiry phase. only a reliable sense (information) of awareness could strongly lead the movement from being ignorant to being more curious about something (Comegys et al. data manipulation by Short listing Security concern internal employees. manager or project champion) begins to gather relevant information (Comegys et al. 2000) The selection of the ERP system according to Short listing Preferred solution the firm's specific requirements (industry type) (Tsai et al. the adoption of cloud ERP can be disseminated into five phases: entering. senior Short listing Committee management and product line manager (Kartam 1996) New technology is perceived as being reliable Short listing Compatibility for the existing needs of the firm (Olhager and Selldin 2003) Infrastructure Physical hardware used to interconnect people. findings from Table 2 are transferred into Figure 1. 2006). short listing. 2003) Creating a logical structure involving one or Install. inquiry.

Therefore. are classified as sufficient conditions. Thus. Though cloud ERP will be managed and maintained by the selected ERP vendor. For a firm in the category of an SME. 2006). In the inquisitive stage. ensure the compatibility of the system with the firm’s business model. incentives. while issues such as project champion. Project champion is the one who sets goals and legitimates change by advocating and promoting the benefits of the new system (Shanks et al. pay attention to the advertisements. urgency needs will expedite the adoption process. support and other system functions will also be raised during this phase. as the support for the process to move to the next stage. 2000) to board members. only certain individuals or groups can actually make the decision. cost estimation. firms’ decisionmaking process is perhaps being made by different individuals or groups of individuals. The findings from Table 1 have demonstrated that collaboration from several parties is needed in order to align business goals (Luftman 2000). Walther et al. competitors and industry alliances. Queries regarding estimation costs. the level of influence and involvement becomes more specific. Consistent with Kimberly and Evanisko (1981) statement. The compatibility of the existing system with the new technology is also an important aspect (Karahanna et al. The new cloud ERP deployment concept is not the same as the traditional ERP system where firms are locked-in with a specific vendor for a certain period (Acumatica 2012). support and functions are considered as sufficient transition factors.. At the short listing stage. Other studies suggest that cost (cost estimation (specific)) would be the major factor for SMEs. cost estimation (specific) and compatibility are considered as necessary transition factors. regulation and strategic planning. 1987) as soon as the customer (firm) signs the contract. whether or not to select the product offered (Masset and Sekkat 2011. However. Therefore. As the decision will be made at this stage.g. 2006). the factors that influence them to move can come from several sources. At the same time. This situation compels vendor to actively seek to maintain their relationship with customers (firms) so that they will not run away or terminate the service with them.products. having a project champion will encourage the adoption process. andanswer specific questions in relation to the product (Poba-Nzaou and Raymond 2010). even if this research tries to examine transition factors in technology adoption from firm level perspectives. The pre-adoption process will end at this point. However all these are not considered as the main triggering factor. units or departments from both inside and outside the organisation. As the technology adoption process moves into a more critical stage (from entering to commitment). any kind of investment or expense will be made only when it is required. setting rule cut-offs for the products in their short listing set will help them to make the decision (Comegys et al. 2012). The potential ERP and cloud vendor will be asked to provide the product demonstration (Repschlaeger et al. when the firm starts thinking of or realizing the need to have such a system. These usually include: external vendors. and find the most appropriate vendor and product so that they can ask more specific questions. For certain firms. Demonstration is needed to introduce some of the most important functions. the firm members will express their agreement to buy and adopt the system. Therefore. but rather. Sometimes it is difficult to make a choice. . the involvement from external parties or individuals cannot be avoided. With new cloud technology concept. 2006) to be considered. the firm’s representative will attempt to screen available product and vendor choices (Comegys et al. sufficient). more specific and informational questions will be asked (Verville and Halingten 2003). Cloud and ERP vendor loyalty is achieved (Dwyer et al. 2012). firms can decouple the system at anytime they want. especially between products and vendors that have a good reputation. Urgency needs and project champion are identified as necessary transition factors. each of the transition factors will have the same condition (e. Not seeing the need to adopt a new system is also a key factor for not continuing on to purchase the system. other transition factors listed in the phase are classified as sufficient transition factors. only demonstration is considered as being a necessary transition factor. At the commitment stage. For example. Raihana 2012. The other four transition factors: financial availability. as the process moves towards making the final decision. The classification of the transition factors into several phases shows that the process of cloud ERP adoption is affected either directly or indirectly by individuals.

For us. Project champion 5. Infrastructure prerequisite 7. As this is a preliminary finding. but could also help the firm in understanding how the collaboration between several components (individual. Business characteristics 5. We also believe that the management’s maturity level and firm’s technology infrastructures have an effect on the readiness and speed with which to adopt new technology. Therefore. the a-priori framework presented in this paper is conceptual. 3. it could help vendors prioritizing and upgrading their business quality at any point in time during the adoption process. Proactive service 10. we will conduct a series of case studies with IT decision makers from two different types of SMEs. Cost estimation (specific) 3. this will be an interesting research area to be studied. External awareness 2. 5. Preferred solution 9. Committee 6. Internal awareness 3. Financial availability 4. we will validate these preliminary findings by using a q-sorting procedure as suggested by Moore et al. By understanding the evolving process. as opposed to being lumped into a single stage. and discusses the preliminary findings of research. understanding the level of firm maturity will become another agenda for our future research. group. Vendor reputation 1. 3. Support 4. yet applicable model of cloud ERP adoption for the SME market. Incentives 5. 4. Regulation 6. 4. Project champion Support Implementation plan Trialability Staff involvement Key: Underlined and bolded terms are necessary condition transition factors Figure 1. 5. SHORT LISTING Demonstration Project champion Cost estimation Support Functions (ease of use) Maintaining and upgrading support COMMITMENT 1. These transition factors were also classified as being sufficient or necessary. Urgency need 2. this study not only provides buying strategies. with the objective of identifying and categorizing each of the factors into one of the five phases of the cloud ERP adoption framework (refer to Figure 1). . depending on the condition of a particular phase. Strategic Planning 1. Compatibility 2. First. The mapping of the factors could potentially be different in other scenarios.ENTERING 1. 2. The term “transition factors” was introduced after identifying the need to understand the factors that influence complex technology throughout the entire process stages. valid. our goal is to derive a robust. 2. Business benefits 4. Hence. as it will help us in understanding how the management pattern will actually influence the speeding-up of the adoption process. The purpose of this paper is to extends the understanding of technology adoption process for complex organization-wide technologies. (1991) in order to produce inter-rater reliabilities. Second. External Strategic planning INQUIRY INQUISITIVE 1. departments. simple. to assess the general relevance of each factor in each phase. there are several plans that have been developed. firms and global) could influence and accelerate the adoption process. Security concern 11. 6. Install. While for cloud ERP clients (firms). Project champion 3. however. A Priori Cloud ERP Adoption Framework Conclusion and Future Works This paper explores the transition factors that lead to the adoption of cloud ERPs in SMEs. scoping and configuring 8.

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