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Literature review: Role of Technology (ERP) in the Development of SMEs in the United Kingdom

Jayawickrama et al (2019) in their study Knowledge retention in ERP implementations: the context of UK SMEs published in the Production Planning & Control journal investigated how different approaches to Knowledge retention (k-retention) affect the implementation of ERP systems in SMEs. The study was underpinned by the fact that k-retention plays a critical role in the implementation of ERP systems of SMEs across the UK. Using the qualitative analysis design, they investigated 12 SMEs in the UK that were implementing the ERP approach and found that the most critical elements included k-retention tools, comprehension of k-retention challenges, Documentation and human capital. Two additional factors also proved critical (organizational culture and project management) (Sirinaga, Khatibi & Azam, 2019). The study had the limitation of targeting a small sample of industry players.

Salim et al (2015) in their study Moving from evaluation to trial: How do SMEs start adopting cloud ERP? Investigated the evolution process of how SMEs adopt cloud ERP systems.  The study was underpinned by the realization that ERP cloud technology leads to significant reductions in business overheads among SMEs. Focusing on subscription service cloud technology products while sampling 162 SME owners, they found that adoption of cloud ERP systems is a multi-stage process that involves several stakeholders at each stage. They concluded that the factors affecting owners’ intention to adopt cloud ERP systems are diverse at the adoptive phase, requiring flexibility and tailor made solutions depending on the business. Indriasari, Prabowo & Hidayanto (2018) also found this to be true which validated the study.

Ruivo et al (2020) assessed the influence that extended ERP capabilities such as Add-ons, Analytics, Collaboration and Web-portals have on ERP usage within SMEs and value.  Using a mixed method design (quantitative and qualitative) on SMEs in Germany, Portugal, and the UK, they found that the moderation model comprehensively explained the relationships best. The results indicated that ERP usage within SMEs is more important when regulating ERP capabilities and value compared to when regulating ERP capabilities and value without usage. They concluded that ERP capabilities can positively influence value from the perspective of investment and ERP usage (Pranto et al, 2019). Hence this study was able to explore both the measurable and non-measurable aspects of the study to come up with a comprehensive finding with respect to the industry in question. Taylor (2015) in a meta-study of ICT adoption in SMEs indicated that the adoption process between large corporations and SMEs was radically different. This was due to SME specific characteristics such as resource availability and staffing levels. Using the guidelines from the technology, organization and environment framework and the diffusion of innovation theory they found that an integrated theoretical model should guide ERP adoption among SMEs which includes various factors such as an overarching typology that categorizes critical internal and external factors affecting the adoption of ERPs among SMEs’.

Managers will make informed investment decisions on how integrated systems systematically improve competitive advantage.

Studies indicate that managers can make good decisions when it comes to investments if they work within the frameworks of integrated systems (Awa, Uko & Ukoha, 2017). A quantitative survey of business executives using the purposive sampling technique, produced an Integrated technology-organization-environment (T-O-E) taxonomy and test it to investigate its role in the adoption of ERPs among SMEs (Awa, Uko & Ukoha, 2017). It found that T-O-E factors as independent variables had statistically significant influences on ERP adoption as dependent variables. It was able to isolate factors within technology and organization as having significant and positive impacts while those within environment as an isolated factor had negative impacts. This means that an average unit increase in the pressures of implementation reduced the likelihood of ERP adoption and vice versa.

Ben Laadar, Cherti & Bahaj (2019) in the study ERP Systems in SMEs between a Choice & An Obligation weighed the trends of SME adoption of ERPs with an interest in determining whether it was just a fad or a lasting development. Though a qualitative approach in which they engaged SME chief executives, they found that both supporters and sceptics of the ERP wave were unanimous that the systems are here to stay. However, there was no consensus over whether ERPs would be beneficial for SMEs in terms of cost cutting, increased profitability and administrative dynamism (Budiarto & Pramudiati, 2018). Hence the study still had gaps with respect to the views of executives in the importance of ERPs

Alaskari, Pinedo-Cuenca & Ahmad (2019) conducted a case study to identify the frameworks that best guide adoption of ERP Systems. They noted that for SMEs to remain competitive, it was imperative for them to adopt all the units of their structure to ICT systems to ensure real-time sharing of information especially in the manufacturing and service sectors. They found through a literature review that failure rates in ERP adoption among SMEs in the sectors indicated was as high as 70% due to implementation of inappropriate systems. They therefore developed a theoretical framework to guide the adoption process consisting of three stages; Definition, Evaluation and Selection. Thus in their view would minimize the risks SMEs selecting the wrong ERPs to adopt into their systems (Tolefree, 2020; Polivka & Dvorakova, 2021). Furthermore, they asserted that their framework would enable managers make better decisions and strategies that would improve ERP adoption. Alsharari, Al-Shboul & Alteneiji (2020) examined how SME were implementing cloud ERPs within the UAE with the aim of elucidating how implementation of cloud ERP systems interplays with user challenges and other factors. Using a qualitative design consisting of in-depth interviews with experts, they categorized these factors in environmental, management and technological. They found that usage of cloud ERPs is critical to the success of SMEs because they improve the quality of decision making among both managers and staff. However, the effectiveness of implementation was found to be reliant on the competence of the provider, which hampered organizational independence among SMEs (Al-Okaily et al, 2019).  The study had the advantage of providing critical implications for both scholars and managers but had the limitation of being restricted to case study weaknesses such as a lack of ability to generalize.

Faccia et al (2019) investigated the correlation between Accounting Information Systems (AISs) and ERP within the United Arab Emirates with a focus on the challenges of handling Big Data. They were of the view that AISs could not stand in isolation because of the need to integrate big data management, inventory regulation, personnel management, security, etc into accounting implications. However, they found that many softwares can manage these diverse aspects but do not integrate them into an interrelated organizational system as would be expected in management systems (Faccia, 2019b; Moşteanu & Faccia, 2020; Faccia & Mosco, 2019). ERPs therefore offer promise in this regards due to their ability to integrate various functions in a coherent and productive manner.

De Matos (2017) noted that SMEs faced challenges of viability due to limited access to resources.  However, ERPs in his view, emerged as useful tools that enhance performance while increasing business value, creating a competitive advantage.  The challenge was a limited knowledge and understanding of these systems among SMEs.

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Literature review: Role of Technology (ERP) in the Development of SMEs in the United Kingdom . (2021, December 27). Essay Writing . Retrieved June 14, 2024, from https://www.essay-writing.com/samples/literature-review-role-of-technology-erp-in-the-development-of-smes-in-the-united-kingdom/
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