Organizational, technological and extrinsic factors in the implementation of cloud ERP in SMEs

Abstract

Purpose Use of cloud-based enterprise resource planning (ERP) services equips an SME to forego the requirements of high financial budget, IT infrastructure, and trained IT personnel as it is required for on-premise ERP solution. The purpose of this paper is to analyze the organizational and technological factors as well as the factors that concern the performance of cloud service provider. These concerns are known as extrinsic factors and they are compliance, network, and information security. This study links the organizational and technological factors of SMEs and the extrinsic factors of cloud vendor for the successful implementation of cloud ERP. Design/methodology/approach Resource dependence theory (RDT) was used to understand the relationship of SMEs and cloud service provider. Structural equation modeling was employed in analyzing the data of 208 SMEs that were collected through a survey. Findings The empirical analysis supports the RDT as the critical success factors of the SMEs have a positive relationship with the extrinsic factors (compliance, network, and information security) during the cloud ERP implementation. Research limitations/implications The data collected in this study is from India and this acts as a limitation as the result might not hold true for other countries and regions. Also, the data collected are cross-sectional and only represent the perspective of the respondents at the time of filling the questionnaire. Originality/value This paper attempts to bring out a relationship between SMEs and cloud service provider for the successful implementation of cloud ERP.