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For over a decade large companies have turned to supply‐chain management and inter‐organisational system‐development techniques to increase their efficiency and effectiveness. Smaller companies, however, have struggled to adopt and benefit from such systems, traditionally citing reasons such as a lack of financial resources and technical capability. This paper seeks to identify a framework of key variables which influence the adoption of inter‐organisational and supply‐chain systems with particular reference to smaller companies. This framework is then applied to a supply‐chain case study in the chemicals sector to consider the reality of system adoption for a small‐ to medium‐sized enterprise (SME) in the chain. The paper concludes that significant benefits are indeed attainable for the SME; however, a culturally‐rooted lack of vision and awareness are restricting adoption and the realisation of benefits associated with such systems.

This paper investigates the reasons underpinning the diverging adoption rates of different types of inter‐organisational systems (IOS) amongst small‐ to medium‐sized enterprises (SMEs). It explores the evolution of IOS from traditional proprietary and closed systems to Internet‐based open, flexible systems. It illustrates, through the study of 25 SMEs, that the emergence of new Internet‐based IOS provides SMEs with a rich set of technologies that may fundamentally change the technological perspective of SMEs from reluctant, reactive, slow implementers of technology to enthusiastic, proactive, rapid innovators of technology. The paper suggests that positive experiences by SMEs of Web‐based electronic commerce and the continued desire of larger firms to achieve full compliance with their IOS will dramatically increase the adoption rate of Web‐enabled IOS.