Using T-O-E theoretical framework to study the adoption of ERP solution

Figures & data

Figure 1. Proposed framework explaining ERP adoption within T-O-E.

Table 1. Sample description

	SMEs	Administration	Managers/Owners	Senior executives	Returns
1	ICT maintenance	65	14	51	38
2	Legal services	70	28	42	41
3	Health care services	80	18	62	52
4	Laundry and dry cleaning	52	40	12	42
5	Make-ups	56	12	44	34
6	Management consultancy	50	14	36	37
	Total	373	126	247	244

Table 2. Factor, validity, and reliability analyses

Factor dimension and items measured	EVA	Eigen-value	Cronbach Alpha	CR	KMO	Bartlett’s Test of Sphericity
ICT infrastructures (see Pang & Jang, 2008)		7.24	0.881	0.712	0.810	71.23
Number of employees connected to the internet	0.77
Number of computers connected online	0.69
Number of computers to employees	0.63
Technical know-how (see Brown & Lockett, 2004; Riemenscheider et al., 2003)		6.02	0.802	0.776	0.821	73.16
Availability of technical/maintenance unit(s)	0.87
The number of technical officers employed	0.79
Regularity of staff training on ICT	0.73
Existence of ICT consultants	0.69
Availability of service providers and spare parts	0.63
Perceived compatibility (see Grandon & Pearson, 2004; Khemthong & Roberts, 2006; Tornatzky & Fleischer, 1990)		4.40	0.711	0.898	0.804	76.31
Fit between the new and existing technologies	0.82
Fit between the new systems and existing work procedures	0.78
Fit between the new systems and corporate culture	0.70
Fit between the new systems and corporate philosophies, norms, and values	0.64
Perceived values (see Al-Qirim, 2006; Beatty, Shim, & Jones, 2001)		2.94	0.784	0.780	0.871	78.26
Reduced operating costs	0.81
Improved operational efficiency	0.76
Improved customer service	0.72
Improved customer relationship	0.69
Reaching new customers	0.65
Security (see Shah Alam et al., 2011)		2.54	0.768	0.788	0.817	79.11
Lack of confidentiality of transaction details	0.85
Web transaction information is not private	0.82
No confidence in web payment system	0.79
Current laws and regulations are insufficient to protect user’s interest	0.73
Scope of business operations (see Chopra & Meindl, 2001; Gurbaxani & Whang, 1991; Shapiro & Varian, 1999)		2.34	0.771	0.891	0.820	81.10
Reducing costs associated with operational expansion	0.88
Reduction of external costs of operations	0.82
Operations and lead-time compression	0.73
Integration of units and independent partners at a reduced cost	0.67
Demographic composition (see Awa et al., 2011; Awa, Ojiabo et al., 2015; Chuang et al., 2009; Hambrick & Mason, 1984)		1.94	0.708	0.712	0.812	84.13
Heterogeneity of decision-makers	0.86
Homogeneity of decision-makers	0.83
Occupational mobility	0.75
Functional tracks	0.71
Size of the firm (see Grandon & Pearson, 2004; Jeyaraj et al., 2006; Lertwongsatien & Wongpinunwatana, 2003; Tornatzky & Fleischer, 1990)	0.76	1.64	0.801	0.769	0.832	85.32
Resources	0.76
Skills and experience	0.74
Level of resilience	0.68
Operational agility	0.62
Subjective norms		1.45	0.764	0.786	0.827	86.03
Influence by others	0.74
Group cohesiveness	0.71
Strong belief in group norms	0.68
Fear of group penalty	0.64
External support (see Akbulut, 2002; Bingham, 1976). Governments, NGOs and inter-governmental influences may generate:		1.22	0.790	0.770	0.911	74.67
Grants/donations	0.90
Transfer of technical assistance	0.83
Soft-loans	0.78
Loan guarantee and loan insurance	0.76
Subsidies and tax relieve operations	0.68
Competitive pressure (see Jeyaraj et al., 2006; Lertwongsatien & Wongpinunwatana, 2003)	0.89	1.10	0.809	0.754	0.902	78.43
Operational necessity
Strategic necessity	0.79
Vendor or third party support	0.73
Opponents adopt it	0.67
Trading partners readiness		1.06	0.829	0.777	0.881	75.28
Partners want integration	0.77
Partners are buoyant	0.74
Partners belief in the innovation’s values	0.70
Partners have the technical resources	0.66
Adoption (see NSSBF)		7.23	0.752	0.784	0.929	84.04
The use of ERP to improve customer service	0.88
The use of ERP for inventory management	0.79
The use of ERP for operational efficiencies and cost reduction	0.76
The use of ERP for inter-firm funds transfer	0.69
The use of ERP to update contents and integrate operations	0.70

Table 3. Discriminant validity and collinearity statistics

	ICT1	TK	PC	PV	Sec	SBO	DC	SF	SN	ES	CP	TPR	AD	Tolerance	VIF
ICT1	0.655													0.458	2.30
TK	0.410	0.539												0.608	3.10
PC	−0.199	−0.200	0.560											0.727	2.80
PV	0.451	0.360	−0.220	0.622										0.468	2.54
Sec	0.527	0.343	−0.274	0.457	0.638									0.540	2.82
SBO	0.422	0.463	−0.362	0.482	0.526	0.551								0.470	2.87
DC	0.438	0.361	0.255	0.662	0.476	0.427	0.602							0.583	2.49
SF	0.481	0.517	0.373	0.477	0.652	0.362	0.470	0.610						0.517	3.32
SN	0.525	0.564	0.367	0.524	0.713	0.467	0.640	0.540	0.510					0.661	4.20
ES	0.476	−0.362	0.463	0.419	−0.204	−0.362	0.517	−0.204	0.221	0.661				0.712	5.40
CP	0.652	0.255	0.361	−0.197	0.266	0.255	0.564	0.266	0.481	0.517	0.591			0.645	4.16
TPR	0.723	0.373	0.517	0.421	0.343	0.463	0.373	0.565	0.525	0.564	0.218	0.612		0.443	0.541
AD	0.468	0.376	0.564	0.527	0.463	0.361	0.367	−0.220	0.410	0.441	0.301	0.412	0.514	-	-

Notes:

ICT1 = ICT infrastructure; TK = technical know-how; PC = perceived compatibility; PV = perceived values; Sec = security; SBO = scope of business operations; DC = demographic composition; SF = size of firm; SE = external support; CP = competitive pressure; TPR = trading partners’ readiness; and AD = adoption.

Table 4. Classification

	Observed total	Predicted		Percentage correct
		Adopters	Non-adopters
Adopters	178	155	23	87.08
Non-adopters	66	22	44	66.67
Overall	244	199	45	78.70

Table 5. Logistic regression test

−2 Logistic likelihood = 99.400
Nagelkerke R^2 = 0.456
Hosmer and Lemeshow χ^2 = 5.670
Significance = 0.817
Dimension factor	Coefficient (S.D)	Wald statistic	Sig
ICT infrastructures	0.653 (0.314)	7.450	0.070*
Technical know-how	0.167 (0.331)	2.541	0.072*
Perceived compatibility	0.576 (0.302)	7.331	0.073*
Perceived values	0.459 (0.299)	2.404	0.049**
Security	0.686 (0.349)	3.425	0.065*
Size of the firm	0.103 (0.710)	0.255	0.011**
Demographic composition	−0.483 (0.279)	2.330	0.070*
Scope of business operations	−0.589 (0.374)	6.377	0.019**
Subjective norms	−0.634 (324)	3.211	0.062*
Competitive pressure	−0.495 (0.263)	2.219	0.067*
External support	−0.480 (0.201)	2.106	0.041**
Trading partners’ readiness	−0.661 (0.347)	3.370	0.059*

^* Level of significant of p < 0.01.

^** Level of significant of p < 0.05.

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