FACTORS AFFECTING THE ADOPTION OF ELECTRONIC DATA INTERCHANGE BY SMALL MEDIUM ENTERPRISES

Abstract

MBA thesis - WBSRecent technological advancement in the area of electronic data interchange (EDI) provides the mechanism for small medium enterprises (SME) to leverage trading networks at a much lower cost. The result is that SMEs can enjoy the benefit of EDI. This study attempts to discover how many SMEs do make use of EDI and in addition, what motivated the decision to make use of EDI. This study makes use of a technology-organisation-environment framework to test thirteen factors which impact a SMEs decision to adopt EDI and to understand the relative importance of those factors that impact the decision. The study makes use of quantitative methods to determine the factors, the method of analysis has been completed by means of confidence interval estimation of the mean and factor analysis of data collected by electronic and hard copy survey. The results suggest that there are a number of factors that impact a SME decision to adopt electronic data interchange. The perception amongst SMEs that have adopted EDI is good with regard to the implementation, continued use and expansion of electronic data interchange. SMEs perceive the increased operating efficiency benefit, increased financial benefit, improved customer service and increased buyer pressure to be the main factors that influence their decision to adopt ED