Information Systems for Small and Medium-sized Enterprises: State of Art of IS Research in SMEs

429 Pages·2014·5.213 MB·English

by  Erik Guldentops (auth.), Jan Devos, Hendrik van Landeghem, Dirk Deschoolmeester (eds.)

Progress in IS
Jan Devos
Hendrik van Landeghem
Dirk Deschoolmeester Editors
Information
Systems for Small
and Medium-Sized
Enterprises
State of Art of IS Research in SMEs
Progress in IS
For furthervolumes:
http://www.springer.com/series/10440
Jan Devos Hendrik van Landeghem
•
Dirk Deschoolmeester
Editors
Information Systems for
Small and Medium-Sized
Enterprises
State of Art of IS Research in SMEs
123
Editors
Jan Devos Hendrik vanLandeghem
ELIT-Lab Industrial Management
UniversityCollege West-Flanders Ghent University
Kortrijk Ghent
Belgium Belgium
and Dirk Deschoolmeester
Department of Management,
Ghent University Innovation andEntrepreneurship
Ghent Faculty ofEconomics and Business
Belgium Administration
Ghent University
Ghent
Belgium
ISSN 2196-8705 ISSN 2196-8713 (electronic)
ISBN 978-3-642-38243-7 ISBN 978-3-642-38244-4 (eBook)
DOI 10.1007/978-3-642-38244-4
SpringerHeidelbergNewYorkDordrechtLondon
LibraryofCongressControlNumber:2013948746
(cid:2)Springer-VerlagBerlinHeidelberg2014
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Foreword
Thisbookpresentingarticlesofdiverseandvariednatureisofutmostimportance
to help scholars and practitioners having also academic interests to analyse,
interpret and support discussions about the real world of ICT and SMEs.
In the seventies and eighties I saw major large-sized companies and organi-
sations being confronted with a gradual penetration of computerisation efforts to
support, with hopefully relevant data being of proper quality (information), and
their administrative tasks occurring in a variety offunctional domains. The con-
cernsthatmostoftenlarge-sizedinstitutions,buttosomeextentalsocompaniesor
organisationsofmedium-sizethenhavewastobefocusedonquestionslikehowto
organise—centraliseordecentralise—theirplanning,controlandexecutionwitha
steadily growing IT/IS infrastructure. And thus supporting management and
employees with timely, effective and efficient managerial and operational deci-
sion-making and execution capabilities. From early research on, then emerging
with bits and pieces, I learned that the volume of investments and recurrent costs
madeinIT/IS,weremostoftenrelatedtothesheersizeoftheorganisation. More
specifically,ownresearchtaughtmethatthesizeinemployment,morespecifically
the number of white collar employees, was a measure for the volume and com-
plexity of organisation’s administrative tasks (Debrabander et al. 1972). Thus the
statistical relationship between IT-investments and costs seen over time and the
number of white collar employees was found very relevant and the highest sig-
nificancewasfoundbetweenallrelationshipshypothesisedaspotentiallyrelevant.
Inotherwords,thesizevariableexpressedinnumbersofwhitecollaremployment,
representing the volume, complexity and variabilityof the administrative tasks of
an organisation was a major driver for investing in IT. So in this 1970–1980s
perioditwasunderstandablethatSMEslogicallyweremorelaggardsthanearlyIT
adopters.
Once these more quantitative observations were made, the research agenda
changed with new questions on quality, value and impact on organisational per-
formanceofIT/ISefforts.Mostoftheseeffortshadtoberealisedbyveryengaged
personnel having either a very technical IT education or a higher level education
excluding on IS-aspects. So personnel lacking proper education for IT/IS in a
business context, having also no sufficient experience in connecting and
v
vi Foreword
integrating IT with business domains, were asked to develop IT applications for
senior management. IT/IS-Capabilities for organisations were being developed
from scratch with personnel not really having been properly educated for IT/IS.
Ofcourseassignedprofessionalsweredoingtheirverybest,buttheupsideand
downsiderisksweresohighthatmanyeffortsfornewISsystemsfailedtoalarge
extent. A steady and fast introduction of newer information technologies were
adding a constant risk to yield IT/IS-investments failures and thus organisational
pain, misery and often annoying chaos. More automation was continuously
breeding a excessive need for more and more automation while efforts continued
alltoooftentoresultinillusionsandpromisesforobtainingstableresultsfromIT/
ISatsomedistantfuture.ThisgoodenoughculturearoundIT/ISefforts,especially
when external service providers were involved, all too often created serious cla-
shes due to misaligned or badly executed agreements about IT/IS products and
services. Coping with angriness about failure and idle promises occasionally
neededinvolvementoflegalcourt,lawyersandexpertsgivenaroleformediating
and brokering the litigate case. These cases of IT failures usually showed that
proper planning, evaluation ex-ante and more,especially trust between partners,
was missing despite great expectations of managers to improve performance of
theirorganisation.Itisthereforeunfortunatetorecognisethatmorerecentresearch
showsthatsimilarstrugglingtoimproveintegrationandimpactofIT/ISforbetter
performance of organisations might still be too frequently a lasting and trouble-
someconcern(Poels2012).Andthissituationisclearlyworsewhenobservingand
studying computerisation in SMEs. Indeed, SMEs do experience a series of more
adverse conditions when selecting and implementing IT applications and infra-
structure.Theygenerallylacksufficientresourcesandoftenarehamperedintheir
efforts for attracting the internal and external high-skilled personnel or service
providers with proper knowledge and experience in both the IT and business
domains.Whileoutsourcingbecameachoiceforlargercompanies,forSMEsthis
is the major option. They have to bring in external service providers, hopefully
also knowledgeable in their business domain and models of operating. SME
management being often seduced for sourcing on less stable products, also
designed and introduced in a style of ‘bricolage’. Luckily also exceptions on this
rather negative state exist. Indeed, there exists also a minority of visionary and
knowledgeable SME-directors who succeed to bring their IT-efforts under ade-
quatecontrol.Andwhounderstandhowtosucceedatreasonablecostsandefforts,
withengagement oftheircollaborators,togradually workoutIT-investmentsthat
help them to perform well.
Thesetofarticlesinthisbookon‘‘ICTandSMEs’’isofcoursecomingtoolate
for helping to avoid the many IT-failures of the past. But today in a context of
social media and penetration of ubiquitous and omnipresent computing I would
gladly saythisbookispublishedinduetime.Iwashonouredfortheinvitationto
assist and help as a co-editor and I congratulate my co-editors and especially the
initiatorofthiscontributedvolume,Dr.JanDevos,togetherwithalltheauthorshe
Foreword vii
couldreassembleonthesubject,becausetheycreatedastep-stoneforscholarsand
practitioners who coach and advise SMEs to improve their capabilities to realise
better conditions than earlier IT systems needed for quality decision-making and
operations.
Gent Belgium Prof emer Dr. ir Dirk Deschoolmeester
Vlerick Business School
Ghent University
Gent, Belgium
References
Debrabander,B.,Deschoolmeester,D.,Leyder,R.,&Vanlomme,E.(1972).Effect
oftaskvolumeandcomplexityuponcomputeruse.JournalofBusiness45(1),
pp 56–84.
Poels, G. (2012). International Conference on Research and Practical Issues of
Enterprise Information, Enterprise information systems of the future 6th IFIP
WG 8.9 Working Conference, CONFENIS, Ghent, Belgium, September
19–21, 2012, revised selected papers, Berlin, New York: Springer.
Preface
Small and Medium-Sized Enterprises (SMEs) constitute nowadays a major busi-
nesssectorallovertheworld,coveringawidespectrumofindustries.Thenumber
of SMEs far exceeds the number of large and very large organisations. SMEs
contribute strongly to the GDP and even more to the growth in employment of
most countries. In Europe, two-thirds of all new jobs are created by SMEs and
more than 99 % of all enterprises are SMEs (Commission 2011a; Commission
2011b). Even today, the U.S. economy is by no means dominated by giant cor-
porations. More than 99 % of all independent enterprises employ fewer than 500
employees (SBA 2011). These SMES account for 52 % of all U.S. workers.
Similar numbers can be found for other developed as well as for developing
countries all over the globe. SMEs contribute disproportionately to innovation,
generating 13 times as many patents per employee as large companies do (Horn
et al. 2012).
Contradictorily, many SMEs struggle to survive and grow and they display
limited productivity. In spite of being a key economic contributor in many
countries, SMEs suffer from various challenges, often inherent, often induced by
social, economic, geographical or cultural grounds or other reasons beyond their
control. Although there are quite some factors contributing to low SME survival
rates, one crucial factor that has been singled out is the (lack of) successful
adoption and use of Information Technologies (IT). IT can be seen as an enabler
for business growth,effective competition, andinnovation inSMEs (Higon 2012;
Levyet al.2005).However,whenitcomestoITadoptionand use,SMEsarenot
the best pupils in class as many studies have shown (Antlova 2009; Arbore et al.
2006;Sharma2009;Wielickietal.2010).SMEsoftenexpressareluctantvisionto
ITadoptionwhichismainlybasedonalackofmanagerialITcapabilities.Thisis
duetoorganisationalimmaturityandresultsinanasymmetricrelationshipwithIT
suppliers dominating the arena (Devos et al. 2012). SMEs are vulnerable organ-
isations with a shortage of expertise, resources and managerial maturity (Welsh
et al. 1981).
OntheotherhandweseethatinthefieldofISresearchmostempiricalworkis
conducted in large organisations and SMEs are often left on their own (Devos
2011).Thereasonsforthisaremanifold.Somescholarsdonotalwaysbelievethat
SMEs constitute a different unit of analysis for IS research. There is still much
debategoingoninthatdomain.Researchhasrevealedthatthesuccessofbringing
ix
x Preface
ITintoorganisationsispositivelyrelatedtoorganisationsize(Eindoretal.1978).
Although it is very cumbersome to clearly define what constitutes IT success, it
wasshownthatsuccess ofbringing,for instance, ERP intoorganisations supports
thesizehypothesis(Ifinedo2007;Mabertetal.2003).Thereisalsotheproblemof
definingwhatconstitutesanSME.InEuropeSMEsaredefinedascompanieswith
lessthan250employees,butintheU.S.SMEsaredefinedascompanieswithupto
500 employees (Commission 2003).
However in view of the current economic turbulence, it has never been more
importanttofocusonthecollectionofscientificknowledgeonSMEsinrelationto
IT/IS, since it is on the back of these organisations that innovation, growth and
potential recovery will be realised. To stimulate the IS research in SMEs we
decided to bring various works of scholars and practitioners together in a con-
tributed volume. There are two dimensions inevery contributed chapter: an IT/IS
phenomenon and an SME environment. Both dimensions are intertwined, but in
their concerted action a unique subfield of IS research is created.
Thisvolumeisdividedintosixpart,whichcovervariousaspectsofISresearch
in SMEs. In all chapters the unit of analysis is the SME. The first part, ‘‘IT
Governance’’, contains three chapters presenting various aspects of governance
and management in SMEs. The first chapter, ‘‘Governance of IT in Small and
Medium-Sized Enterprises’’ by Erik Guldentops addresses the enterprise gover-
nance of IT as the responsibility of the top layer of an entity to ensure IT is
effectiveandefficientandprovidesvaluetotheenterprisewhilekeepingriskstoan
acceptablelevel.EnterprisegovernanceofITfocusesonITValueandITRiskand
consistsofpractices,organisationalstructuresandrelationshipsbetweenexecutive
and management. In SMEs however, these structures and relationships very often
rest in one person, the owner/entrepreneur. The biggest value and risk challenge
forSMEsistheacquisitionofautomatedsolutionsbecausetheyoftendonothave
sufficient capabilities to deal with it, they do not occur often and represent a
relatively large risk. To address this, a set of acquisition guidelines is proposed.
Finally, four management practices that resulted from recent pragmatic research
are proposed for SME leadership to consider. This exertion is of high relevance
since it is based on a long and intense work onIT Governance within the COBIT
framework. The COBIT framework helps managers deal with enterprise gover-
nance of IT.
The second chapter, ‘‘Business Process Management in Small Business:
A Case Study’’, by Ian Dallas and Moe T. Wynn brings a case study of a BPM
initiative to develop process infrastructure in an establishing small business. It
explores whether mainstream BPM tools, techniques and technologies can be
appliedinasmallbusinesssetting.Thechapterprovidesabackgroundtothecase
organisation, outlines the activities undertaken in the BPM initiative and distils
key observations drawn from participation in the initiative and consultation with
stakeholders. Based on case study experiences, a number of implications are
identified for further consideration by the BPM community as it continues to
address the question of how it can become more widely adopted amongst SMEs.
Preface xi
In the third chapter, ‘‘Information Technology (IT) Security in Small and
Medium Enterprises’’, Michael W. Kimwele addresses the issue of IT security in
SMEs. SMEs should embrace IT security in order to realise the benefits of IT
without compromising the IT security status. Much like any other business asset,
information is an asset that needs to be strategically managed and protected. It is
therefore imperative that SMEs understand the value of information contained
within their business systems and have a framework for assessing and imple-
menting IT security. To address challenges faced by SMEs, this research estab-
lishesanInformationTechnology(IT)frameworkthatcanallowSMEsimplement
cost effective security measures. The framework is likely to assist SME stake-
holders measure the effectiveness of their security enhancing mechanisms.
The second part, ‘‘Adoption and Use’’ consists of five chapters. In the fourth
chapter, ‘‘Enterprise Architecture for Small and Medium-Sized Enterprises:
A Starting Point for Bridging EA to SMEs, Based on Adoption Models’’, by
MaximeBernaert,GeertPoels,MoniqueSnoeckandManuDeBackerinvestigate
whyEnterpriseArchitecture(EA)isnotyetadoptedbySMEs,despitethebenefits
EA can offer. This chapter offers a starting point for EA technique developers to
really adapt EA techniques to an SME context. Research steps are given to start
developing EA techniques, as well as a starting point for a metamodel based on
only four concepts, because the characteristics of SMEs emphasise the need for
simpleEAtechniques.Theseconceptsrefertofourdimensionsthatarepresentin
a broad spectrum of EA techniques.
The fifth chapter entitled, ‘‘Assessment of Information Technology Use
in Small and Medium-Sized Enterprises: Empirical Investigation in Five Cases’’,
by Emre Sezgin and Sevgi Özkan presents an exploratory study with the practice
of a new model for assessment of IT use in SMEs, which is called ITMEM:
Information Technology Management Enhancement Model. This model aims to
enhance IT management and processes within five domains (Identification,
Selection, Acquisition, Exploitation and Protection) which brings together the
organisational useofITinacoherentwhole.Theresultspresentedthatpracticing
assessment in companies is encouraging in terms of IT use by employees and
increasingqualityofbusinessprocesses.Thereportedfindingswouldbeavaluable
asset for researchers who are developing a model, and for practitioners who are
developing managerial implications on IT management and IT use in SMEs.
The sixth chapter, ‘‘ICT Policy to Foster Interorganisational ICT Adoption by
SMEs: The Netherlands Goes Digital Case’’, by Marijn G. A. Plomp, Ronald S.
BatenburgandPim den Hertog deals with apolicy programme thatagovernment
set in place to improve SMEs on their adoption of ICT, particularly interorgani-
sational ICT. Previous research provides unclear evidence on the effectiveness of
theseprogrammes.Withthisstudytheauthorsaimtoprovidenewinsightintothe
impact of such policy choices on ICT adoption. They assess a policy programme
that ran in the Netherlands from 2002–2007. Participants are found to use sig-
nificantly more interorganisational ICT and also more often find that ICT has
enhanced their firm’s performance compared to the control group. However, pre-
selection effects cannot be ruled out. Based on these results, the authors suggest