Electronic data interchange (EDI) is a key enabling component of business-to-business electronic commerce. As firms adopt and integrate advanced information technologies such as EDI, it is important to understand the nature of challenges faced by them. This becomes especially important given the fact that nearly 99.7% of all businesses in the US can be classified as small- to medium-sized enterprises (SMEs). As costs and risks associated with implementing new information technologies decrease, these firms will surely need to focus their attention on managing impediments associated with new technology implementation and learn from the failures or successes of their peer. Consequently, this article reports the findings of a study conducted to understand the characteristics, seriousness, and structure of impediments faced by SMEs. A survey of 353 EDI-capable firms was used to assess the impediments faced by SMEs adopting and integrating EDI. Analysis of data revealed that SMEs face many serious challenges when implementing EDI and cite high startup costs, difficulty of learning a new technology and methodology, and high cost of integration and expansion of EDI use as among the three most significant impediments. Further analysis also produced an eight-factor latent structure that best describes the nature of EDI impediments. These results have implications for both SMEs and researchers.