Potential of critical e-applications for engaging SMEs in e-business: a provider perspective

Against a background of the low engagement of small and medium-sized enterprises (SMEs) in e-business, this paper investigates the emergence of, and potential for, critical e-applications defined as ‘an e-business application, promoted by a trusted third party, which engages a significant number of SMEs by addressing an important shared business concern within an aggregation.’ By a review of secondary data and empirical investigation with service providers and other intermediaries, the research shows that such applications can facilitate the engagement of SME aggregations. There are three key findings, namely: the emergence of aggregation-specific e-business applications; the emergence of collaboratively based ‘one to many’ business models; and the importance of trusted third parties in the adoption of higher-level complexity e-business applications by SMEs. Significantly, this work takes a deliberately provider perspective and complements the already considerable literature on SME IT adoption from a user and network perspective. In terms of future research, the importance of a better conceptual understanding of the impact of complexity on the adoption of information technologies by SMEs is highlighted.     

Factors affecting the adoption of information and communication technology in small and medium enterprises: a perspective from rural Saudi Arabia

ABSTRACT

Small and medium enterprises (SMEs) can play an important role in the national economy of developing countries. The adoption of information and communication technology (ICT) has enabled local SMEs to participate in the international market. However, little research has addressed issues related to SMEs adopting ICTs, especially in rural areas of Middle Eastern developing countries such as Saudi Arabia. Using the extended technology-organization-environment framework with personal innovativeness, this study examined the factors that influence the adoption of ICTs among SMEs in rural areas of Saudi Arabia. The study found that relative advantages, top management support, culture, regulatory environment, owner/manager innovativeness and ICT knowledge had a significant relationship with ICT adoption among SMEs in Saudi Arabia, whereas compatibility, complexity and a competitive environment had no significant relationship with ICT adoption. The findings of this study will potentially help SME managers/owners and the Saudi government in the successful adoption and diffusion of ICT in SMEs located in rural areas in Saudi Arabia.     

A coordination-theoretic investigation of the impact of electronic integration on logistics performance

Using the Coordination Theory, we explored the impact of electronic integration of intra-organizational and inter-organizational business processes on organizational performance in terms of logistics cost and service improvements. Our work extends knowledge on adoption of information technology (IT) in logistics operations, with a focus on examining the performance implications of electronic integration within and between firms in a supply chain. Data was collected from 227 trading firms in Hong Kong and analyzed to investigate the research issues. Our empirical findings revealed that electronic integration is positively associated with logistics performance in cost but not in service, suggesting that electronic integration is not sufficient for delivering superior logistics services. Theoretical and practical implications of our results are discussed.     

The joint impact of service-oriented architectures and business process management on business process quality: an empirical evaluation and comparison

What is the interplay between business process management (BPM) and service-oriented architecture (SOA) in achieving high business process quality? In this paper, we empirically investigate the impact of both SOA and BPM on business process quality in terms of straight-through processing, business-to-business integration, quality control, as well as standardization and consolidation of business processes. For the empirical evaluation of our model, we use the data of 157 German service firms. The results show that the SOA paradigm has still received rather low adoption rates in the industry. However, SOA, BPM, and related information technologies have a direct positive impact on business process quality and the analysis provides evidence for the complementarities of BPM and SOA since interaction effects between them have an additional significant impact on business process quality. Consequently, firms having adopted SOA can more effectively apply BPM.     

Does RFID improve firms’ financial performance? an empirical analysis

Radio frequency identification (RFID) is viewed as a technology that improves supply chain efficiency by enhancing inventory efficiency, optimizing logistics, and coordinating the flow of materials. Although RFID has gained great attention in many business applications, the financial gain that accrues over time from RFID adoption is not well understood. We examine the effects of RFID on firm profits while adjusting for self-selection of adoption choice. We find that firms self-select into a certain adoption mode on the basis of their organizational characteristics. Our results also show that RFID confers significant benefits for firms that have adopted RFID. Interestingly, improved inventory ratio and sales efficiency begin to play a greater role in shaping higher profitability over time for firms that have adopted RFID possibly due to time-consuming processes for them to reap the benefits from RFID. However, we find that the values of RFID that accrue to firms are not universal across firm. That is, our results suggest that RFID confers a significant value for certain firms while it does not for other firms with unobservable disadvantages. In sum, our study sheds new light on what drives firms to adopt RFID and on which firms achieve higher financial performance in a post-adoption period as a result of RFID adoption.     

Strategic context and patterns of IT infrastructure capability

The importance of a firm's information technology (IT) infrastructure capability is increasingly recognised as critical to firm competitiveness. Infrastructure is particularly important for firms in industries going through dynamic change, for firms reengineering their business processes and for those with multiple business units or extensive international or geographically dispersed operations. However, the notion of IT infrastructure is still evolving and there has been little empirically based research on the patterns of IT infrastructure capability across firms.We develop the concept of IT infrastructure capability through identification of IT infrastructure services and measurement of reach and range in large, multi-business unit firms. Using empirical case research, we examine the patterns of IT infrastructure capability in 26 firms with diverse strategic contexts, including different industry bases, level of marketplace volatility, extent of business unit synergies and the nature of firm strategy formation processes. Data collection was based on a combination of quantitative and qualitative methods with multiple participants.More extensive IT infrastructure capability is defined as a combination of more IT infrastructure services and more reach and range. More extensive IT infrastructure capability was found in firms where: (i) products changed quickly; (ii) attempts were made to identify and capture synergies across business units; (iii) there was greater integration of information and IT needs as part of planning processes; and (iv) there was greater emphasis on tracking the implementation of long term strategy. These findings have implications for both business and technology managers particularly in regard to how firms link strategy and IT infrastructure formation processes.     

A cross-national comparison of the adoption of business process reengineering: fashion-setting networks?

Business Process Reengineering (BPR) was developed as a new idea which, it was suggested, could revolutionise the corporation and give it a major competitive advantage by simplifying key business processes and utilising information technology to secure cross-functional communication and focus on customer requirements. Rather than continue the debate about whether BPR is ‘good' or ‘bad', ‘old' or ‘new' (e.g. Earl and Mumford), the focus here is on understanding how the concept ‘BPR', however defined, has been diffused across European firms. The results from a survey of firms in four countries support previous research on the diffusion process with the rate of adoption of BPR related to micro-organisational level variables—characteristics of the firm and the boundary spanning activities of individual members. In addition there were differences across industry sectors and across countries in the extent of adoption of BPR. It is argued that attention to these meso-industry level and macro-national level factors, as well as the micro-organisational level dynamics, will improve our understanding of the relationship between networking and innovation processes. In particular, the paper focuses on how networking activity can be restrictive and lead to the creation of fashions which limit the extent of organisational learning during BPR adoption.     

Data mining-based variable assessment methodology for evaluating the contribution of knowledge services of a public research institute to business performance of firms

This study proposes a methodology for assessing the contribution of knowledge services (KSs) provided by a Korean public research institute to the business performance of firms. A new methodology based on a data mining-based variable assessment method in a regression model is proposed for the service-level assessment. The contribution of the KSs to firms’ business performance is analyzed using their attributes and specific business performance indicators through the conditional variable permutation method in the random forest regression. This reduces the ambiguity in variable importance caused by the correlations among input variables. The proposed methodology is applied to the survey dataset collected from firms. The survey dataset is examined 1) for the whole data and 2) for a subset of the data, namely, small- and medium-sized enterprises (SMEs). The empirical results show behavioral properties of firms with regard to the given KSs in general and SMEs in particular. Practical and user-friendly service product types increase the firms’ expectation on business performance. Also, flexibility in the service products helps firms acquire much-needed knowledge and boosts their expectation on business performance. In particular, SMEs expect better business performance from the KSs that help them create business plans and strategies.     

Understanding the successful adoption and use of IS/IT in SMEs: an explanation from Portuguese manufacturing industries

Abstract. The objectives of the research were to identify factors enabling or inhibiting the adoption and use of information systems and technology (IS/IT) in Portuguese manufacturing small and medium‐sized enterprises (SMEs) and understand how these factors interrelate in determining relative success in the adoption and use of IS/IT. This research elicited factors from previous quantitative and qualitative research, which had been shown to influence IS/IT adoption in SMEs in other contexts. A strategic change framework was used to structure the factors and ensure that comprehensive evidence about their nature and effects could be obtained in the empirical research. Further factors were identified by initial fieldwork, before carrying out 12 in‐depth case studies, across a range of situations – different industries, different levels of adoption and a range of degrees of success in IS/IT use. The pattern that emerged from the analysis of the data shows that certain factor combinations and relationships appear to determine the relative degrees of IS/IT success across the firms. This pattern can also be explained by interpreting the roles and relationships of the key actors involved in the process of IS/IT adoption and use. Top management perspectives and attitudes towards IS/IT adoption and use play an important role in the development of internal IS/IT competencies and provide an important contribution to the development of a context that enables IS/IT success.     

Predicting multilateral trade credit risks: comparisons of Logit and Fuzzy Logic models using ROC curve analysis

Employing pooled data of 3344 listed firms from seven Asia-Pacific countries, this is the first empirical study to classify and predict trade credit risks in the international trade context. In addition, this paper extends previous work by applying receiver operating characteristic (ROC) curve analysis to compare the model performance of Logit to that of Fuzzy Logic (FL). We are unaware of any other paper that has discussed the application of ROC curve analysis in the business and finance literature.The results show that FL exceeds Logit in terms of overall classification accuracy and prediction accuracy. However, by incorporating measurement in the form of ROC curves, Logit is proven to outperform FL in classifying non-default firms. This suggests that though FL is superior in overall accuracy and in classifying default firms, Logit is preferable in situations where higher accuracy in classifying non-default firms is preferred. The stability of the models is also demonstrated.     

Variable use of standards-based IOS enabling technologies in Australian SMEs: an examination of deliberate and emergent decision making processes

Use of inter-organizational systems (IOS) is widely recognized as pivotal to organizational success. However, the nature of decision making processes regarding the adoption and use of IOS-enabling technologies has received little research attention. The authors explore approaches to decision making relating to SMEs’ use of these technologies and outline the drivers and implications of such decision making. Data were collected through two crosssectional surveys and multiple case studies. The surveys allowed for the identification of two groups of three SMEs each—the first group increased and the second group decreased the use of IOS-enabling technologies over time. This identification provided the context of strategic change or transition in the use of these technologies over time. The study’s results challenge widely held assumptions about the performance benefits of higher-level, deliberate planning over functional-level, emergent decision making regarding SMEs’ technological choices. Results also show that SME managers mainly use flexible IOS technology adoption and implementation strategies to promote organizational performance. Further, two main factors drive flexible decision making: a lack of managerial power and a lack of financial resources. Overall, the study offers insights into the link between IOS-enabling technology use and organizational strategy, and advances research concerning the contingencies influencing SMEs’ decision making in this context.     

Internet Retailing Adoption by Small-to-Medium Sized Enterprises (SMEs): A Multiple-Case Study

Despite the proliferation of Internet retailing and the relative novelty and complexity of this phenomenon, very little theory-guided qualitative research has been conducted to improve our understanding of the adoption of Internet retailing project by SMEs. This study presents a theoretical framework for analyzing the adoption of Internet retailing for SMEs. Organizational readiness (IT sophistication, financial resources, and customer readiness), perceived benefits of Internet retailing, and environmental factors are proposed to be the key drivers of adoption of Internet retailing. This research was designed using a qualitative approach through in-depth case studies selected from firms in Hong Kong where there is a proliferation of SMEs. The contextual meaning and practical manifestation of the key adoption factors were captured through the case studies. Our findings provide preliminary support for the proposed research framework, and contribute towards a better conceptual and practical understanding of the main factors driving SMEs to adopt Internet retailing. Contrary to popular belief, customer readiness for Internet shopping was not found to be a significant factor influencing SMEs' decision to adopt Internet retailing.     

Drivers and export performance impacts of IT capability in ‘born‐global’ firms: a cross‐national study

Past research focusing on large firms has argued that information technology (IT) capability enhances firm performance. However, these studies have seldom explored why firms develop IT capability, and have also left a void the understanding of the role of IT capability in Small‐ and medium‐sized enterprises (SMEs). This study attempts to fill that void by examining the effect of relevant environmental and firm‐level factors on IT capability, and the effect of IT capability on the export performance of Chinese and US born‐global firms, a special breed of export‐focused SMEs. Results indicate that environmental factors such as information intensity, and firm‐level factors such as international entrepreneurial orientation, prompt born‐global firms to develop IT capability. Further, our results also strongly emphasise the positive role that IT capability plays on the performance of born‐global firms. Finally, a comparative analysis of the Chinese and US born‐global firms revealed a lack of a cross‐cultural difference in the factors leading these firms to develop IT capability, therefore supporting the ‘convergence’ perspective in cross‐cultural research.     

Tuning into the digital channel: evaluating business model characteristics for Internet firm survival

More than 5,000 Internet firms have failed since the beginning of 2000. One common perception is that the downturn in the economy drove many firms out of business. But then, why have some firms survived? In this research, we provide an empirical analysis by examining how the business model characteristics of an Internet firm affect its survival. We analyze a panel data set of 130 public Internet firms using two different techniques: non-parametric survival analysis, and the semiparametric Cox proportional hazards model. We characterize the survival rates throughout the lifetimes of the public Internet firms in our sample. Our results reveal that smaller firms that facilitate customer-provider interactions, are transaction brokers, and that rely on advertising as their primary source of revenue sources have had a lower likelihood of bankruptcy or failure. In addition, the detrimental effects on failing to serve as interaction platforms for individuals and businesses, and a larger firm size diminish over time as Internet firms mature, and the weaker ones are forced out of the marketplace. Our research also points out important dimensions of an Internet firm’s business model that affect its survival.     

Business processes in the agile organisation: a socio-technical perspective

This paper takes a cross-disciplinary view of the ontology of “business process”: how the concept is treated in the IS research literature and how related concepts (with stronger human behavioural orientation) from organisation and management sciences can potentially inform this IS perspective. In particular, is there room for socio-technical concepts such as technology affordance, derived from the constructivist tradition, in improving our understanding of operational business processes, particularly human-centric business processes? The paper presents a theoretical framework for understanding the role of business processes in organisational agility that distinguishes between the process-as-designed and the process-as-practiced. How this practice aspect of business processes also leads to the improvisation of various information technology enablers, is explored using a socio-technical lens. The posited theoretical framework is illustrated and validated with data drawn from an interpretive empirical case study of a large IT services company. The research suggests that processes within the organisation evolve both by top-down design and by the bottom-up routinisation of practice and that the tension between these is driven by the need for flexibility.     

Organizational information systems competences in small and medium-sized enterprises

We used resource-based theory and evidence from empirical studies to evolve a framework of IS competences in small and medium-sized enterprises (SMEs). The framework significantly improved our understanding of internal IS expertise in SMEs. We used relevant IS competence and SME literature, as well as empirical data from SME case studies. Our set of twenty two IS competences were organized around six macro competences. Each competence refers to a specific ability at the organizational rather than the individual level and they cover a broad range of activities, such as those associated with recognising business opportunities, IS planning, accessing IS knowledge, defining requirements, software and hardware sourcing, applications development, and managing relationships with IS suppliers. The framework was tested against prior literature, including studies of IS adoption, IS success, and entrepreneurial competence. Each competence was fully explained and discussed using evidence from the case studies. The framework creates a comprehensive set of IS competences that can be used in both SME practice and research.     

The impact of early XBRL adoption on analysts’ forecast accuracy - empirical evidence from China

Developing common standards, such as eXtensible Business Reporting Language (XBRL), to smoothen information sharing in the value chain is considered the leading issue for releasing the potential of e-business. Data standards such as XBRL play a critical role in an increasingly networked environment. Despite promises of XBRL to improve data accuracy, few empirical studies have tested the impact of early XBRL adoption on the quality of information. Theories explaining information technology (IT) productivity paradox indicate that value realization from IT innovations may experience time lag due to the need for technology refinement and diffusion. This study examines the impact of early adoption of XBRL on analysts’ forecast accuracy with empirical data of Chinese firms. The uncertainty related to the unproven technology, such as information errors, has decreased analysts’ forecast accuracy during the early adoption period among firms in an economy with little public information on listed firms. Our findings have practical implications that will facilitate the quality improvement of financial information in a networked business environment. Our findings highlight the importance of quality assurance and policy enforcement for value realization from XBRL adoption to regulators, filers, information consumers, the accounting profession and other stakeholders.     

Using resource-based theory to interpret the successful adoption and use of information systems and technology in manufacturing small and medium-sized enterprises

The purpose of this paper is to consider how resource-based theory can be used to explain success with the adoption and use of information systems and information technology (IS/IT) in manufacturing small and medium-sized enterprises (SMEs). A number of authors have explored the applicability of resource-based theory to the IS/IT domain, mainly at a conceptual level. Overall they infer that the key differentiators for long-term successful IS/IT deployment reside within the internal context of an organisation, based on organisational competences. This paper is based on in-depth case study research in 12 Portuguese manufacturing SMEs, which identified two factors that, from the empirical evidence, appeared to be the determinants of the different levels of success in IS/IT adoption and use. These factors were also primarily associated with the internal context of the organisations. Therefore, the findings were analysed from the perspective of resource-based theory, to understand why and how the attributes of these factors caused the differential levels of IS/IT success in the firms studied.     

Leveraging geographic and information technology scope for superior performance: an exploratory study in international banking

Here we investigate the relationship between the use of geographic and information technology (IT) scope as complementary factors to affect the value of products, the cost of operations and the overall performance of firms. We introduce the IT/Geographic Scope Matrix (IGSM) as a framework with which to study and understand the relationship in order to better manage the firm. We develop expectations that the consistent use of either high or low levels of IT and geographic scope may result in better firm performance than inconsistent use, where high levels of one are matched with low levels of the other. We apply the IGSM in a study of eleven firms, all of which provide financial services, specifically international cash management and trade finance, to firms in Hong Kong. The results of our study suggest that the IGSM may be a useful tool for IS planning and research and have implications for the co-ordination of business and IT planning.     

A perception-based model for EDI adoption in small businesses using a technology–organization–environment framework

The wide adoption of electronic data interchange (EDI) has been argued to be important for the success of the technology. Past studies on EDI have focused mainly on large firms, as they were the major users at the time. With the advance of technology, however, EDI applications that used to require mainframe computers can be used on PCs at a much lower cost. At a result, small businesses are now able to enjoy the benefits of EDI. Using a technology–organization–environment framework, this study proposes a perception-based small business EDI adoption model that is tested against data collected from 575 small firms in Hong Kong. Six factors are tested using logistic regression and five are found to be significant in distinguishing adopter firms from non-adopter firms. The results suggest the perception-based model using a technology–organization–environment framework is a useful approach for examining factors affecting the adoption decision. For small businesses, while direct benefits are perceived to be higher by adopter firms than by non-adopter firms, indirect benefits are not perceived differently by either adopter firms or non-adopter firms, contrary to the findings in studies on large business. In addition, adopter firms perceive lower financial costs and higher technical competence than non-adopter firms do. Also, adopter firms perceive higher government pressure but lower industry pressure than non-adopter firms do. Implications of the findings and future research areas are discussed.