Adoption and risk of ERP systems in manufacturing SMEs: a positivist case study

Abstract

Purpose In order to deepen the knowledge and further advance theory on enterprise resource planning (ERP) implementation in small‐ to medium‐sized enterprises (SMEs), this paper seeks to explore the following question: what can be done to minimize the risk of ERP system implementation, from the adoption stage onwards, in a small manufacturing firm? Design/methodology/approach The research method is based on a positivist holistic single‐case design in order to perform an initial test of a process model of ERP system adoption by SMEs. The unit of analysis selected by purposeful sampling is a small manufacturing business. Findings In attempting to minimize the risk of ERP implementation, the small manufacturing firm applied three principles, eight policies and ten specific practices in adopting ERP. Research limitations/implications The research design, based upon a single‐case study, imposes care in generalizing the results of the study. This design, however, allowed the identification and understanding of the risk of ERP from a managerial/practical standpoint, as opposed to a research/theoretical standpoint. Practical implications In managerial terms, the results show that highly formalized management is not necessary to minimize ERP implementation risk in the context of SMEs. Originality/value Few studies have focused on the adoption process within the ERP implementation cycle. The proposed model, as validated empirically in this study, adds to the understanding of this process in small‐manufacturing firms, especially as regards the minimization of implementation risk from the adoption stage onwards.