ERP system procurement in SMEs - two contrasting ways

Abstract: ERP systems have originally been developed for large enterprises (LEs). However, market saturation, integration of supply chains and improvements in technology have led to more and more small and medium-sized enterprises (SMEs) adopting ERP systems. Though there is a focus shift from LEs to SMEs in the ERP market, most academic literature on ERP systems is based on findings from LEs. In addition, while the ERP system adoption life cycle consists of three stages: procurement, implementation and post-implementation, academic discourse has been mostly focusing on implementation or post-implementation phases, indicating a knowledge gap on ERP system procurement stage, especially in SMEs. In our study we have investigated how ERP system procurement is carried out in SMEs. Based on academic literature we built a theoretical framework on ERP system procurement in SMEs, which we later used as a foundation for our empirical investigation. We then conducted five interviews with individuals representing different parties participating in ERP system procurement: three of them with consultants working with ERP procurement and implementation, one with an ERP vendor, and another with an SME that has recently procured an ERP system. Based on our empirical findings we have identified two contrasting ways SMEs are likely to carry out ERP system procurement. In addition, we have found a number of SME specificities and other factors affecting the procurement process in SMEs. Lastly, we have explained the effects that our identified specificities and other factors have on ERP system procurement in SMEs.