Creating Business Value from Cloud-Based ERP Systems in Small and Medium-Sized Enterprises

Eli Hustad,Emeli Høvik Jørgensen,Vegard Uri Sørheller,Dag H Olsen

doi:10.1007/978-3-030-29374-1_56

Eli Hustad, Emeli Høvik Jørgensen + Show 2 more

Open Access

https://doi.org/10.1007/978-3-030-29374-1_56

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Publication Date: Jan 1, 2019
Citations: 2	License type: cc-by

Affiliation: University of Agder, Equinor (Norway), Accenture (Norway)

Abstract

This qualitative study focuses on how small- and medium-sized enterprises (SMEs) can realize benefits and create information technology (IT) value by investing in cloud enterprise resource planning (ERP) systems. We interviewed 19 respondents from cloud providers and cloud clients and found that their SMEs experienced both benefits and challenges when implementing cloud ERP systems. The digital value was obtained through work process automatization, fast updates of system functionalities, enhanced security of data storage, and increased access to critical business data from multiple digital units. Challenges in realizing these benefits related to organizational compliance with standard solutions and the need for organizational changes for employees to optimize system usage. The SMEs preferred an informal process for realizing benefits and creating digital value from the system. In contrast, the providers wanted to integrate benefits realization as part of their formal implementation methodology. Based on frameworks identified in the literature, we integrate a benefits realization model with an information systems value model to understand how SMEs realize benefits and create business value from cloud ERP systems. We contribute to the SME literature and explain the value creation process for SMEs implementing cloud ERP systems.

Highlights

Enterprises face an increasingly turbulent and competitive business environment, and advanced information systems (IS) functionality is essential to stay competitive and profitable
One of the provider informants explained that cloud-based enterprise resource planning (ERP) systems are better than on-premise systems regarding automatization: “cloud-based systems are easier to keep updated with new functionality, and it is possible to achieve more automation.”
Some of the small- and medium-sized enterprises (SMEs) sought to automate a number of manual processes, while others sought to automate as many processes as possible and integrate the ERP system with other systems to ensure inter-system communication

Summary

Introduction

Enterprises face an increasingly turbulent and competitive business environment, and advanced information systems (IS) functionality is essential to stay competitive and profitable. The software-as-a-service model offers SMEs advanced enterprise system functionality as a subscription service over the Internet [5]. Cloud providers give customers access to a wide variety of IT services over the Internet, freeing them from the restrictions of locally installed software and local infrastructure or traditional application service providers (ASPs) [9]. They make it feasible for small companies to implement advanced IT functionality that they could not acquire otherwise due to limited resources and a lack of IT capability [10]. Cloud-based ERP solutions offer functionality similar to that of terrestrial systems; their infrastructure (software, hardware, etc.) is delivered and managed by the suppliers [11]

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