DETERMINANTS OF ENTERPRISE RESOURCE PLANNING ADOPTION ON ORGANIZATIONS' PERFORMANCE AMONG MEDIUM ENTERPRISES

Background: Enterprise Resource Planning (ERP) is a method of using computer system technology to integrate all functions in various departments, such as marketing, inventory control, accounting and human resource across an entire company. ERP system intends to facilitate information sharing, business planning, and decision making in enterprises organization. This study proposes a theoretical framework that will determine the factors affecting ERP system adoption among medium-sized enterprise firms based on a case study. Methods: This present study applied resource based value and contingency theories to explain the factors that affect ERP system adoption and firm's performance. The study proposes a framework which was prepared on the basis of results obtained from the questionnaire research. The specially prepared questionnaire was distributed to 217 companies of various medium sizes, located in Oyo State, Nigeria. CEO/MD and managers were selected as the key respondents of the questionnaire. After the completion of data collection, the empirical data were analyzed using the Partial Least Squares Structural Equation modelling. Results: The result reveals that organizational structure and technological change have a significant influence on the adoption of the ERP system to improve the performance of medium size enterprise firms. In this regard, the effectiveness of ERP system adoption would strongly affect a firm's performance. Conclusions: This paper proposes an enhanced theoretical framework that examines the vital issues concerning ERP system factors of adoption, thus, providing valuable outcomes for medium-sized enterprise firms. The originality of the paper is supported by its three-dimensional approach.