This paper focuses on the familiar but under-researched area of the sourcing and usage of enterprise software by SMEs. In 2007 there were 4.7 million micro, small and medium sized enterprises (SMEs) in the United Kingdom, representing 99.9% of all UK private enterprises. UK SMEs employ an estimated 13.5 million people and have a combined annual turnover of £1,440 billion which constitutes over half of the UK economy. Despite the potentially huge size and importance to national economies of the SME market, enterprise software adoption in this sector is very low, with market-leading enterprise software supplier SAP, for example, reporting only 64,000 SME customers worldwide.

Although there has considerable research into the adoption and usage of enterprise systems, most of this has centred on large firms. This is to be expected and reflects the reality of enterprise systems usage. Cost, vendor supply policies and nervousness about the role and effectiveness of consultants all militate against adoption by SMEs of this technology. A small proportion does engage, and it is this minority that is explored in the paper. Five companies, spanning a range of industry sectors, based in the North West region of the UK and using enterprise systems were identified. Firm sizes ranged from 3 to 70 employees and annual turnover from £150k up to £4m, thereby offering broad coverage of the SME spectrum.

Through semi-structured interviews and secondary sources five small case studies were developed to track the experience of companies from choice of enterprise system through to evaluation. The experience was viewed through the theory lenses of adoption, including both user and provider perspectives, and evaluation. The research identifies not only the similarities between firms in terms of their logic for adoption including the pursuit of operational efficiencies rather than strategic competiveness but also the differences. These are significant in the area of sourcing and include the influence of legacy systems, the role of self development and third part provision. Theoretically the research advances the case for a contingency approach to make sense of SMEs behaviour in the context of enterprise systems, rather than the more familiar technology adoption and acceptance models. No similar research has been identified and the work has implications for practice and, in particular, for providers.