Inhibitors to EDI Adoption in Small Businesses: An Empirical Investigation

While electronic data interchange (EDI) has been discussed in the literature as a technology that can provide several advantages, both strategic and operational, to its adopters, the adoption rate, especially that of small businesses, has not been as high as predicted. The question is why? Based on data collected from more than four hundred and sixty non-EDI adopters, our results suggest that the three most significant “inhibitors” to EDI adoption in small businesses are all related to the degree of “organizational readiness”, rather than to those factors related to the costs and benefits of adopting the technology or the influence exerted by external parties such as the government, industrial partners or EDI vendors. The small businesses that decide not to adopt EDI believe that (1) they do not possess sufficient knowledge and skills about the technology, (2) they do not have internal IT support at the level to support the use, and (3) adopting EDI is not as good for their companies as the technology advocates claim, i.e., they possess a nonpositive attitude towards adopting the technology. In the eyes of small businesses, the “ability to adopt” is more important than the “benefits of the adoption” when considering adopting EDI.