ERP Software as Service (SaaS): Factors Affecting Adoption in South Africa

Within the cloud computing hype, ERP SaaS is receiving more focus from ERP vendors such as ERP market leader SAP announcing SAP by Design, their new ERP SaaS solution. SaaS is a new approach to deliver software and has had proven success with CRM systems such as Salesforce.com. The appeal of SaaS is driven by amongst other things, lower Total Cost of Ownership and faster implementation periods. However, the rate at which ERP SaaS is being adopted is low in comparison to other SaaS applications such as CRM or Human Resource systems. Hence the need to establish the reasons for this low adoption. Consequently the purpose of this research was to determine barriers that affect the adoption of ERP SaaS in South Africa. Using interviews and qualitative data analysis, this study developed a model that explains the factors that affect the adoption of ERP SaaS. Network limitations, customisation, security and cost concerns were raised as dominant factors affecting the adoption of ERP SaaS. The research concludes by suggesting that over time the adoption of ERP SaaS should increase as the technology matures.