Market requirements of a hosted MES for small and medium size manufacturers in South Africa
Thesis (MBA)--Stellenbosch University, 2013.
As small manufacturing enterprises (SMEs) grow, the complexity of their manufacturing operations are likely to increase to a point where they can benefit from manufacturing specific information systems, such as a manufacturing execution system (MES), to manage the complexity of their operating environment. Unfortunately, the capital expense required to implement an MES may prohibit smaller enterprises from adopting this potentially advantageous technology. Software-as-a-Service (SaaS) is a developing delivery channel that promises to realise the same economies of scales of large software implementations by hosting software centrally and allowing access by multiple customers through the internet. This delivery model promises, amongst its many benefits, access to advanced software at a subscription based fee, which reduces its capital expense and makes it affordable to smaller enterprises. The purpose of this study is to identify factors that would influence the adoption of SaaS based MESs in South-African manufacturing SMEs. A literature survey was conducted to understand the characteristics of SaaS, the functionality and benefits that can be derived from an MES and the characteristics of SMEs that differentiate them from larger organisations. Instruments were identified which can be used to assess the propensity of SMEs to adopt new technology. An internet survey of South-African manufacturing SMEs was conducted to determine their perceptions and beliefs regarding SaaS and MES, and their intent to implement licensed or SaaS based MES within the next 12 months. The survey results were analysed to determine which beliefs were the most influential in determining an SME’s intention to adopt an MES and particularly which beliefs bias their decision towards either a licensed or a SaaS based MES implementation. The perceived benefits of an MES were found to be the most significant factor in driving the intent to adopt an MES. It was found that some beliefs regarding SaaS and licensing may influence the choice of delivery channel, and the perceptions of industry peers and customers were also found to influence the decision to adopt either a licensed or a SaaS based MES. A simple screening of input variables was effective in improving the predictive ability of the research model. While a full set of variables was able to explain 9.4% of the variation in the intent to adopt MES, a screened set of variables was able explain 15.5%. Further improvement in screening techniques could further improve the predictive power of the model. Since the model was only able to explain around 15.5% of the variation in the intent to adopt an MES, it is likely that there may be other significant factors that drive the intention to adopt an MES that are not covered in this study. These could include personal attitudes of the owner that are independent of the enterprise itself.