Adoption of Electronic Data Interchange by Agribusiness Organizations

Abstract

This study presents new insights into the adoption of new information and communication technologies (ICTs) by agribusiness organizations and focuses on Electronic Data Interchange (EDI) and its adoption by small companies. In the last two decades there is consensus that the implementation of electronic communication throughout the supply chain has changed profoundly the way businesses operate. The adoption of EDI results in substantial cost savings, transaction efficiency as well as facilitates food supply chain management. However, the overt advantages of EDI are not sufficient to explain its current diffusion rates in food industry, which are lower than anticipated and lower than other industries. This study aimed to understand how small agribusiness enterprises perceive new information and communication technologies, and electronic data interchange in particular. A conceptual framework of the factors that associate to EDI adoption was developed based on literature survey. Case research of seven small agribusiness firms was used in order to understand the adoption of EDI. The results of multi-case research show that small agribusinesses were aware of new ICTs and three of them planned to implement EDI in the near future. The cost and the complexity associated to EDI were perceived as the most significant barriers to its implementation. Small agri-business adopted a reactive stance and external pressure, i.e., by a big customer, would initiate the adoption process. The paper concludes by providing managerial and policy implications, suggesting further research, and indicating how the research findings might be used in other contexts.