Adoption of cloud-based enterprise resource planning payroll system state-owned enterprises in South Africa

Background: Cloud computing simplifies the access of applications and data from any location worldwide using Internet connected devices. Whilst adoption of cloud computing seems to be attractive, most companies are still using the on-premise enterprise resource planning (ERP) systems. Cloud computing provides organizations with scalable computer resources; nevertheless, state-owned corporations in South Africa have a poor adoption rate for integrating ERP and, in particular, payroll into the cloud (SOEs). Objectives: The goal of the study was to investigate factors affecting the adoption of ERP payroll cloud solutions in SOEs and basing on these factors develop an ERP payroll cloud solution adoption model. Method: In this study, a qualitative research approach was employed. Data were collected through observation, interviews and document reviews, and were analysed using thematic analysis method. Results: The a priori themes for this study: policy, security, cost, compliance and privacy were confirmed, whilst Protection of Personal Information Act, data centre location and top management emerged and were found to have a substantial influence in cloud ERP Payroll adoption process in SOEs. Conclusion: To move from on-premise to cloud ERP solution, SOEs managers need clarity on: Protection of Personal Information Act (POPI) act adherence, data centre location, top management support, privacy assurance, security guarantee, cost effectiveness, compliance controls and policy formulation adoption and implementation. The studied SOEs were not yet ready to migrate from on-premise solution to a cloud solution because of these factors. Addressing the above-mentioned concerns may enable SOEs’ managers to gain confidence in adopting cloud services.