Economic Crisis and its Effects on ERP Adoption in Sri Lanka

Abstract

ERP (Enterprise Resource Planning) systems are comprehensive software platforms that are specifically designed to manage a wide range of a business's essential processes, including finance, accounting, human resources, procurement, inventory management and project management. In the event of a country facing forthcoming economic collapse, organizations often find it challenging to determine the technological innovation activities they should engage in. The proliferation of the IT industry and its associated value proposition has led to the adoption of ERP systems becoming a popular strategic decision for businesses in the contemporary world. However, organizations' perception affects their inclination to adopt new technologies during economic crises. Hence, identifying factors influencing ERP adoption and assessing crises' impact on such systems is crucial. This research endeavor aims to examine the factors that are likely to exert a significant influence on the adoption of ERP systems within the context of Sri Lanka. The study adopts the Technological - Organizational – Environmental (TOE) framework to provide a comprehensive understanding of the factors that affect the adoption of ERP systems in organizations in Sri Lanka. This study seeks to investigate how the factors identified impact the adoption of ERP systems and how the turbulent economic condition in Sri Lanka has affected it. Existing scholarly literature on ERP adoption during an economic crisis is relatively scarce, and thus, this study will fill a critical gap in the body of knowledge. Furthermore, this study will offer invaluable insights into the importance of the identified factors, ICT Infrastructure, Human Capital, Competitive Pressure, Demand for Products or Services and Trading Partners’ Readiness for business communities in Sri Lanka. Also, this will provide insights into how a country's finance affects ERP adoption, helping organizations make informed technology adoption decisions. Keywords: Economic crisis, Enterprise Resource Planning systems, ERP adoption, Innovation and Technology, Technology adoption and PLS-SEM.