Development of measures to assess the ERP adoption of small and medium enterprises

Purpose – The purpose of this paper is to contribute to the development of measures to assess the ERP adoption of small and medium‐sized enterprises. Design/methodology/approach – The paper follows Churchill's guideline for developing measures that have desirable reliability and validity. The pilot data are used to develop a proper measurement. The survey data, based on the 126 valid responses of 328 companies, are analysed by structural equation modelling (SEM) statistical methods. Findings – The paper finds that the dimensions affecting ERP adoption show that characteristics of the CEO and perceived benefits possess positive effects on ERP adoption, while cost and technology have negative effects on ERP adoption. However, only “perceived benefits” is a significant dimension. It is surprising that the cost of the ERP system does not significantly affect ERP adoption. Research limitations/implications – The paper shows that the sample size should be taken into consideration when generalising the findings, and extended data and measures are required for further in‐depth investigation in specific areas. Practical implications – The paper points out that the managers of SMEs with limited resources can find many ways to get more resources from governments. Government managers should be more realistically set the goal of helping firms in a healthy condition to adopt e‐business instead of setting the goal of improving the e‐business readiness of all SMEs. To help all CEOs of SMEs to realise the potential benefits, governments can work with academic research groups to set up forums and workshops to broadcast knowledge. Originality/value – The paper develops measurements to assess the ERP adoption of small and medium‐sized enterprises. The results offer practical help for government managers to better understand ERP adoption with institutional help in Taiwan. Meanwhile, researchers interested in IT/IS can use the information provided here to guide their future enquiries.