Electronic data interchange : an assessment of the factors leading to EDI adoption

Electronic Data Interchange (EDI) is a revolutionary way to conduct business. The electronic exchange of information between business partners can have a significant impact on the performance and profitability of businesses. However, despite the numerous potential advantages EDI can provide, only fraction of the market is using EDI. The current study attempts to find the explanation for this phenomenon. Thus, which factors are affecting the decision to adopt EDI? This study is based on Iacovou et al. (1995) research where seven cases of EDI adoption were studied. Iacovou et al. (1995) identified three major variables affecting the adoption of EDI: perceived benefits, external pressure and organisational readiness. The current study modified Iacovou et al.'s (1995) model by introducing the awareness variable. This study also changed the organisational readiness variable to financial strength and technology used. The current study was conducted using questionnaires that were sent to 1000 businesses in different industries in Quebec. A sample size of 149 companies was used to test the revised model. The results suggest that there is some relationship between EDI adoption and awareness, financial strength and technology used. Furthermore, this study suggests also a strong relationship between EDI adoption and pressure from important partner