Advantages and Disadvantages of Adopting ERP Systems ...

Advantages and Disadvantages of Adopting ERP Systems Served as SaaS

from the Perspective of SaaS Users

Leila Hoseini

School of Information and Communication Technology, KTH Degree project 30 ECTS credits Degree subject: Engineering and Management of Information Systems Degree project at the master level Spring term 2012 Supervisor: Prof. Paul Johannesson Reviewer: Dr. Danny Brash

Abstract

Scholarly reviews expound that current prevailing on-premise Enterprise Resource Planning (ERP) systems could not be sufficient for enterprises to form highly dynamic units around vibrant requirements of the market. In response to satisfying ever-changing demands of the market, cloud computing has been recently emerged which its basic promise is convergence of IT efficiency and business agility in information technology. Software-as-a-Service (SaaS) is the most common type of cloud service which has been heralded to be a serious alternative for on-premise software. Considering shortages of current on-premise ERPs and high potentiality of SaaS to be as an alternative for on-premise software, this study seeks to empirically understand real advantages and disadvantages of adopting ERP systems served as SaaS from the perspective of SaaS users. "Real advantages and disadvantages" in this study are the ones which are not only certified through literature but also through empirical data. Grounded in literature review and personal communication with two Information Systems (IS) professionals, 19 items were considered as advantages and 12 items as disadvantages of ERP as SaaS adoption categorized in three groups of strategic, financial, and technical. Survey data of 90 responses were collected and analyzed out of 212 contacts with industry experts in different types of business and sizes of the enterprise in Sweden through nonprobability sampling. By application of Non-parametric test, our data analysis revealed that users of ERP as SaaS believed in five real advantages in adoption of ERP as SaaS while they did not agree with any real disadvantages in such adoption. They accepted that adoption of ERP as SaaS a) helps users to run their business more globally, b) enhances users' business to go mobile, c) reduces large up-front investment of users on resource provision, d) saves technology costs, and e) helps users not to be concerned about management and maintenance of the ERP as SaaS. Moreover, our final results showed that majority of every enterprise size do not have plan of adopting ERP as SaaS in the future. Based on the findings, detailed discussion will be given about social consequences of the results and underlying reasons which could have impact on recognition of few real advantages and no real disadvantages in this study.

Keywords: ERP, SaaS adoption, Cloud computing, advantages, disadvantages, SaaS user

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Acknowledgement

This dissertation would not have been possible to be accomplished without the guidance and help of several individuals in academia, industry, and family whose contribution of their valuable assistance enabled me to complete this study.

First and foremost, I would like to express my sincere gratitude to my advisor, prof. Paul Johannesson, for his wise and watchful supervision, for his patience and immense knowledge, and especially for his benign presence that helped me to receive a full fund higher education position from the Pennsylvania State University in U.S.A.

Besides, I would like to thank Abhishek Sinha, the previous Service Delivery Manager at IBM, for his insights and valuable viewpoints which helped me to perceive current state of SaaS adoption in the market. I do also appreciate him because of contributing to the phase of construct validity check in this study. My special thanks also goes to Anders Svensson, the Business Solution Architect at IFS, who contributed to the phase of construct validity check through his practical and solid experience. I have furthermore to thank Dr. Yazdani, professor of statistics in University of Tehran, for his guidance in data analysis of current research. My special thanks also goes to Dr. Danny Brash for his thoughtful review and constructive comments on this research report.

My greatest appreciation goes to my parents for their true love and constant support, for believing in me, and for encouraging me to achieve my dreamy research position at the Pennsylvania State University. Without whom I would never have managed to complete this research. My sincere thanks also goes to my lovely sisters, Hedie and Fahimeh, and their families who accompanied me spiritually through whole the time of master's study especially in the hardship times when I missed them.

Last but not the least, I would like to thank my friends namely Niloofar, Navid, Parisa, Ivan, and Azadeh who were always there for supporting me in different ways.

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