Challenges and Success Factors of ERP Systems in Australian SMEs

Integrated, streamlined, responsive and agile are the key words used to define what organizations must be developed into, in order to stay profitable, in particular for the sustainability of SMEs in today’s global and competitive environment that businesses face [ 1 5 ]. With advancements in information technology (IT) in the past decade, enterprise-wide adoption of technology is considered, and enterprise resource planning (ERP) systems are viewed as a key enabler of an organization’s business transformation [ 6 9 ]. It is globally known to large companies, as well as SMEs that providing the right information at the right time brings marvelous returns to enterprises in the competitive market [ 10 13 ]. Therefore, organizations require efficient and effective information systems like ERP to compete in today’s complex and fast market economy [ 14 ]. However, SMEs face various issues of integration with ERP solutions [ 5 15 ]. These form the underlying reason for ERP vendors to offer systems, and they have started to channel their efforts to attract smaller firms. This paper covers the vendor perspectives to implement and deploy ERP systems for SMEs. Vendors are targeting the SME market with repackaged ERP systems. ERP vendors are offering these systems keeping in view the SMEs’ budget and time constraints and are presenting economical, simple, easy-to-install, pre-configured ERP systems or hosting services. However, the perceptions of SMEs of such systems need to be studied. While ERP vendors perceive ERP opportunities in SMEs, there are several implementation constraints and success factors that are based on each SME’s business context. The main adoption issue is the misfit in the actual ERP implementation by a typical SME due to non-alignment between the vendor’s standard ERP system and the SME’s business strategy [ 15 ]. In order to gain an in-depth and first-hand understanding of the ERP implementation problem in SMEs, the constraints reported in the literature need to be explored, and the actual ERP implementation process adopted by an SME is to be studied in the present local and global context, so that useful adoption lessons could be learnt from other similar SMEs [ 3 6 ]. Hence, the aim of the paper is to identify from the literature the constraints and factors affecting the adoption and implementation of ERP systems in SMEs that are similar to the Australian context. In the past, research studies conducted with Australian SMEs have reported the importance of capital outlay and human resources for ERP selection and implementation, and ERP implementations were undergone as a mere technological fix to problems rather than a strategic investment [ 16 17 ]. With new technological paradigms, such as cloud computing, the situation requires a revisit, as the cost constraints and other success factors are not the same. While the majority of recent research in Australia has been focusing on ERP implementations in higher education [ 18 19 ], in this paper, a structured approach to ERP deployment in a small courier business in Australia is presented as a case study in the contemporary context. We believe this paper takes a modest step to fill the gap in the literature, as there is a scarcity of research studies on contemporary issues surrounding ERP implementation in Australian SME. In particular, since SMEs grow rapidly, achieving a fully-integrated ERP system in such a dynamic situation requires a well-planned feasibility study and a well-guided implementation process. Our focus is to report on the implementation process details undertaken by a fast-growing Australian SME for its ERP adoption. This study includes identifying the common challenges and barriers faced by the SMEs and current strategies adopted by ERP vendors that have resulted in arriving at specific process-based guidelines for successful ERP implementation in the Australian SME. We describe the best practice steps adopted by the SME, including various success factors identified and the actual outcomes achieved.