Utilization of Enterprise Resource Planning Tools by Small to Medium Size Construction Organizations: A Decision-making Model

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2008-04-21

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Abstract

Enterprise Resource Planning (ERP) utilization in the Construction Industry has been limited to a few large organizations. Significant segments of the industry are either not aware of or have not been able to adopt this new technology successfully. The largest groups of construction organizations that either have failed in their efforts to adopt this technology, or are not familiar with it are the Small to Mid Size Construction Organizations (SMSCO). Failure in or refusing to adopt ERP by this group, despite all its potential benefits, was the problem that was addressed in this research.

This research sets out not only to formulate the reason(s) why SMSCO fail to utilize ERP systems, but also to propose a decision-making model which could be utilized when they decide to adopt an ERP system.

After a careful review of existing technology models, a new ERP Adoption Model (EAM) is formulated and projected. This model adopted a new paradigm shift proposed by Bagozzi (2007) and incorporated it's a new decision making core. Prohibitive criteria that are at play and prevent SMSCO members from successfully adopting and implementing ERP systems were redefined as prohibitive/self-regulation criteria and introduced into the model. Utilizing the results obtained from a field questionnaire distributed among industry experts, these criteria were analyzed and ranked in order to increase the understanding of their impact on EAM's processes.

A case study to verify EAM in general and impact of prohibitive/self-regulation criteria was conducted. Ultimately EAM, incorporating the study's findings associated with prohibitive/self-regulation criteria was finalized and proposed to be utilized by SMSCO in order to increase the chances of successful implementation of ERP system. The results of this study provides SMSCO members that are currently not utilizing ERP systems, but are contemplating its use, with a decision making tool. ERP Adoption Model (EAM) provides a road map that could be utilized as a decision making tool by SMSCO.

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