Enterprise Resource Planning Business Case Considerations: A Review for Small and Medium-Sized Enterprises

Abstract

Previous studies have estimated the failure rate of Enterprise Resource Planning (ERP) implementations to be between 40 to 60%. This high failure rate also extends to ERP adoption by Small to Medium-sized Enterprises (SMEs) in developing countries. The failure rate is concerning since SMEs contribute to the development of many nations. It is known that the quality of a business case has a profound effect on the outcome of an investment. Hence, stronger business cases would increase the success of IT implementations. Yet, there is a lack of research or guidance for SME on preparing business cases. As a first step in addressing this concern, this study aimed to integrate various business case elements from the academic literature, distilling a set of considerations which SMEs adopting ERP systems can use to develop realistic business cases. The study uses a general inductive approach to analyse the academic literature as a secondary data source. The review looks at the broad area of IT business cases reviewing in more detail ERP business cases at one side of the spectrum and SME IT business cases on the other extreme. The final result is a description and a summary of categorised business case considerations for SMEs adopting an ERP system. The practical contribution of the paper is that SMEs adopting ERP systems may use the proposed framework to build realistic business cases, thereby increasing their chances of implementing ERP systems successfully. Secondly, the study lays a foundation for further research on business case considerations for SMEs adopting ERP systems and the subsequent confirmation of the proposed framework to support the development of better business cases.