Strategic technology adoption: extending ERP across the supply chain

This article proposes examining how small to medium‐sized organisations (SMEs) are responding to the challenge of harnessing enterprise resource planning (ERP) and internet technologies to enhance performance and improve competitiveness and aims to identify the barriers preventing organisations from harnessing these technologies.

A case‐based research strategy was chosen. Four leading SMEs were interviewed to determine their approach to extended ERP and the barriers encountered. The primary data collection was based on structured in‐depth interviews with key respondents who were involved in the implementation of extended ERP and closely involved in day‐to‐day operations.

While each of the SMEs had already taken some steps to extended ERP, they adopted a cautious approach to the future. In short, SMEs considering extended ERP should determine the impact on all organisations before proceeding and should also apply the lessons learned from their initial ERP implementation.

Single company case studies could be used to uncover some of the causal mechanisms behind the processes observed. Within‐sector case studies could be used to highlight the issues faced by particular sectors. Cross‐sector case studies could be used to validate the article's conclusions as well as to elucidate differences among sectors.

Managers of SMEs embarking on extended ERP should consider the following challenges: business processes, whether internal or external, must be examined and redesigned as necessary to take advantage of the new technology; an effective change management and communications programme must be run; the lessons learned from the original ERP implementation should be revisited and mistakes made in the past avoided; and a strong business case needs to be developed, with clear objectives and critical success factors.

While the internet has facilitated a shift towards dynamic communication and improved integration, the complexity of integrating electronic supply chain management, e‐procurement and customer relationship management poses an enormous challenge for organisations. This research study indicates that there are multiple ways in which extended ERP can be achieved to add value to SMEs but it is not simply a matter of adding a new application.