Using T-O-E theoretical framework to study the adoption of ERP solution

Hart O Awa,Bartholomew C Emecheta,Ojiabo Ukoha,Shaofeng Liu

doi:10.1080/23311975.2016.1196571

Abstract

AbstractThis paper provides further insight into IS adoption by investigating how 12 factors within the technology-organization-environment (T-O-E) framework explain SMEs’ adoption of enterprise resource planning (ERP) software. Survey data were collected from executives of SMEs drawn from six fast service enterprises with strong operations in Port Harcourt, Nigeria. Purposive and snow ball sampling was adopted and the proposed framework was tested using the logistic regression; specifically, the likelihood ratios, Hosmer and Lemeshow’s goodness of fit, and Nagelkerke R2 were used. The hypothesized relationships were supported at either p < 0.01 or 0.05 with each factor differing in its statistical coefficient and some bearing negative values; suggesting that some factors do not pose much threat to adopters but to non-adopters. Thus, adoption of ERP by SMEs is well-explained by T-O-E framework though it is more driven by technological factors than by organizational and environmental factors. Implicit is t...

Highlights

Enterprise resource planning (ERP) software represents one of the state-of-the-art technology innovations that manages connections and integrates business and management processes within and across the organization’s basic internal systems, sub-systems, and/or processes (Hitt, Wu, & Zhou, 2002; Shiau, Hsu, & Wang, 2009)
Adoption of ERP by SMEs is well-explained by T-O-E framework and more driven by technological factors than by organizational and environmental factors
Awa, Okoye, Emecheta, and Anazodo (2013) opine that some of these models/theories evolve from the theory of reasoned action and have their principal constructs cross-cutting though each contributes to the underpinning adoption theory. On assumption that their propositions are well known, this paper proposes 12 constructs from the T-O-E framework and uses that to explain the adoption of ERP solutions by service-oriented SMEs

Summary

Introduction

Enterprise resource planning (ERP) software represents one of the state-of-the-art technology innovations that manages connections and integrates business and management processes within and across the organization’s basic internal systems, sub-systems, and/or processes (Hitt, Wu, & Zhou, 2002; Shiau, Hsu, & Wang, 2009). The contemporary global economy emphasizes proficient use of human intellectual capital and technology to integrate processes, support enterprise strategies, optimize resources and to build competitive advantage (Metaxiotis, 2009; Pang & Jang, 2008; Yen & Sheu, 2004). Scholars (Federici, 2009; Maguire, Koh, & Magrys, 2007; Shiau et al, 2009) posit that such integration and support provide enterprises with opportunities to reduce costs and improve operational efficiencies and customer service through circle time and lead-time compression, data integration, fewer personnel, network externalities, optimal inventory holding, and search activities.

Methods

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Discussion

Conclusion