He want to view how SMEs develop competencies and capabilities in the context of a resource-scarce environment, to ensure successful ES upgrade and implementation. This study is based on investigated the adoption of enterprise systems in SMEs. Issues such as a lack of strategic planning, lack of resources required for information systems implementation and a shortage of initial set-up capital remain the primary concerns for SMEs. The low ES adoption rates and the high failure rates for ES utilization in SMEs have inspired this researcher to examine these problems with ES adoption in light of the ES implementation literature, the resource-based view, and competency and capability development theories. In addition, a lack of clarity around the roles and responsibilities of staff; weak organizational culture or unstructured business processes; inadequate management systems for ES implementation and the challenges of ES transformation have compounded the situation for SMEs. Furthermore, few studies have investigated the ES experience in terms of systems upgrade, especially among SMEs, thus pointing to the need for further research in this area.