Electronic Data Interchange and Small Organizations: Adoption and Impact of Technology

Abstract

Many EDI researchers and practitioners have recognized the importance of high penetration levels for the success of EDI. Unfortunately, such penetration is partly impeded by the resistance of small companies to become EDI capable. To investigate this issue, three major factors are identified that influence the EDI adoption practices of small firms. These factors are: organizational readiness (because of the low levels of IT sophistication and resource availability of small firms), external pressures to adopt (because of the weak market positions of small firms and the network nature of the technology), and perceived benefits (because of the limited impact that IT has on small firms due to under-utilization and lack of integration). By combining the anticipated effects of these factors, we developed a framework of EDI adoption by small businesses. The applicability of this framework is empirically demonstrated using the results of seven case studies. Finally, recommendations are made for the development of successful EDI partner expansion plans. These include the development of a long-term EDI partner expansion plan from the very beginning, the individual assessment of each partner’s EDI preparedness level, and the selection of appropriate influence tactics to expedite adoption by small partners. Specifically, it is suggested that EDI initiators pursue promotional efforts to improve partners’ perceptions of EDI benefits, provide financial and technological assistance to partners with low organizational readiness, and carefully select and enact influence strategies to reduce resistance.