Analysis Factor of Cloud ERP Adoption on MSME’s In Greater Jakarta: DOI and TOE Frameworks

Abstract

The present study explores the key determinants that shape the willingness of Indonesian Micro, Small, and Medium Enterprises (MSMEs) to implement cloud-based Enterprise Resource Planning (ERP) solutions. To achieve a broader and more integrated perspective on adoption behavior, the research merges the TechnologyOrganization-Environment (TOE) framework with the Diffusion of Innovation (DOI) theory.The findings of this study shows that ICT skills, organizational culture, relative advantage and perceived complexity are significantly determine adoption intention. Among these factors, relative advantage is found to be the strongest predictor. In contrast, the regulatory environment doesn’t give a significant impact for MSME’s willing to adopt cloud-based ERP. The data were collected from 391 MSME owners who are considered potential users of cloud ERP systems. This Study performing Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 4.0 tools. The finding in this study generally indicate that internal factors, especially those concerning technology readiness and organizational characteristics, exert a more significant influence on adoption decisions than external environmental factors. This Study Providing Government and industry practitioners to aiming digital transformation on MSMEs in Indonesia.