Cloud Enterprise Resource Planning (ERP) Adoption in Ethiopia: Case of an Ethiopian Shipping and Logistics Services Enterprise

Background

Information technologies typically mature and undergo commoditization as new stream of technologies emerges. The concept of cloud computing is said to be relatively new and an emerging paradigm. Kim et al. (2009) argued that cloud computing is not an entirely new concept, noting that it is similar to network computing and grid computing concept of the 1990s. Following this, a number of researchers conjectured that the existence of cloud computing is due to the convergence of earlier technologies such as virtualization, cluster computing, grid computing, broadband marketing and large-scale datacenters centralized at a low-cost location (Salleh et al.,2012).

Cloud computing is an unconventional IT model to host and share both software and hardware assets over the Internet. It approves businesses to practice a group of IT resources and applications as services essentially through the web, without substantially holding these computing assets within themselves (Priyadarshinee et al., 2017). The Internet is a network of networks, which provides software/hardware infrastructure to establish and maintain connectivity of the computers around the world, while Cloud Computing is a novel technology that delivers many types of resources over the Internet. Therefore, Cloud Computing could be identified as a technology that uses the Internet as the communication medium to deliver its’ services (Priyadarshinee et al., 2017).

Since the adoption of Cloud Services are still at a premature stage, it becomes increasingly important to understand the nature of each type of cloud computing service categories such as Software as a service (SaaS), Platform as a service (PaaS), and Infrastructure as a service (IaaS) in order for organizations to fully benefit from them (Salleh et al., 2012). SaaS application, the user can access services through Web-based software in the browser without installing or maintaining any software. The cloud requires the users to access via a Web-based browser and pay only for “using time” (Tongsuksai et al.,2019). The software is not licensed or owned by the end-user, instead provided as a service of which user paid subscription fees and the service can be accessed from a normal internet connection upon use. (Salleh et al.,2012).

ERP (Enterprise Resource Planning) systems are defined as complete and packaged software solutions that seek to integrate processes and functions into a holistic view of the business from a single IT and information architecture (Costa et al., 2016; Klaus et al., 2000). They are designed to provide, at least in theory, seamless integration of processes across functional areas with improved workflow, standardization of various business practices, and access to real-time up-to-date data (Rajnoha et al., 2014). Traditional ERP systems that hosts an organization’s functional requirements and is required to access the organization’s information and communication technology (ICT) infrastructure. These traditional systems, however, become rather inconvenient for acquiring information when accessed remotely; in this case, they show less reliability and flexibility because the information system is not in real-time (Tongsuksai et al., 2019). They have often been considered too clunky, expensive and complex for most organizations, which require on premise deployment implying that ERP resources (data, module applications, and database servers) are hosted internally and maintained by client organizations (Ahmed et al.,2020). Cloud-ERP is emerging as the new trend in the ERP market as opposed to on premise ERP systems; this is due to cloud-ERP having the advantages of economies of scale gained from shared resources.