There can be countless factors or reasons for a company to decide on whether to adopt or not ERP systems. Rate of adoption can either be high or low, strong or weak.
ERP or enterprise resource planning is an IT-based method of integrating the various functional areas of a company into a unified system. EP system is characterized by the use of a centralized database for all of the companys historical and solid data in various amounts and formats.
The most common factors that were confirmed to have great influence on ERP adoption level among various companies include company size, economies of scale, and complexity of the business. While some organizations evidently disregard ERP systems as a business process solution, other organizations instead would willingly adopt ERP to their management and structural organization. Size of firm may be considered by some companies as a strong predictor of a low rate ERP adoption, whereas business complexity is considered to be a weaker predictor.
Surprisingly, small-medium size enterprises (SMEs) show a low rate to an even non-ERP adoption due to financial limitations and not of certain organizational and structural issues. On the other hand, other large companies may found to disregard ERP adoption for organization issues. Further, a high or strong rate of ERP adoption could come among medium enterprises (MEs) because of competitive pressure and suitability of software with the business processes of these companies.
It is understandable for larger companies to seriously invest for ERP since they are more focused on managing data and an integrated process, plus they would have adequate resources required to making the implementation possible. Several medium-sized companies may not have sufficient resources for such tasks, even more with some SMEs.