A perception-based model for EDI adoption in small businesses using a technology–organization–environment framework

Abstract

The wide adoption of electronic data interchange (EDI) has been argued to be important for the success of the technology. Past studies on EDI have focused mainly on large firms, as they were the major users at the time. With the advance of technology, however, EDI applications that used to require mainframe computers can be used on PCs at a much lower cost. At a result, small businesses are now able to enjoy the benefits of EDI. Using a technology–organization–environment framework, this study proposes a perception-based small business EDI adoption model that is tested against data collected from 575 small firms in Hong Kong. Six factors are tested using logistic regression and five are found to be significant in distinguishing adopter firms from non-adopter firms. The results suggest the perception-based model using a technology–organization–environment framework is a useful approach for examining factors affecting the adoption decision. For small businesses, while direct benefits are perceived to be higher by adopter firms than by non-adopter firms, indirect benefits are not perceived differently by either adopter firms or non-adopter firms, contrary to the findings in studies on large business. In addition, adopter firms perceive lower financial costs and higher technical competence than non-adopter firms do. Also, adopter firms perceive higher government pressure but lower industry pressure than non-adopter firms do. Implications of the findings and future research areas are discussed.