An IS Success Model for SMEs

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An IS Success Model for SMEs

  1. 1. Theoretical Foundations for IS Success in Small- and Medium-sized Enterprises (work in progress) Jan Devos Ghent University Association Department Howest, ELIT - Lab Keywords: IS Success, IS Failures, SMEs, IS Theories, IT Governance, IT AdoptionECIS 2011 ES & BPC - J. Devos 1
  2. 2. Small and Medium-Sized Enterprises (SMEs) Definitional problem Bolton Committee (1971) defines an SME as one that:  has a relatively small market share, is managed by its owners or part owners in a personalized way, not by an organized managerial structure, is independent U.S. Small Business Administration defines an SME as one that:  depends on the industry of the SME, number of employees (<500) or the average annual receipts, is independently owned and operated, is not dominant in its field of operation Europe defines an SME as  number of employees ( <10 10-50 <250), annual turnover, or annual balance sheet total and Canada, Singapore, New-Zealand, Australia, ....ECIS 2011 ES & BPC - J. Devos 2
  3. 3. SMEs Our Focus: – Small companies (headcount <<200) • white collars (>10) vs blue collars – Family owned and managed – Turnover < €20 million – Cross sectional – Small (domestic) markets and export Relevance ? (Europe = 99%) reference: website Europe (http://ec.europa.eu/enterprise/policies/sme)ECIS 2011 ES & BPC - J. Devos 3
  4. 4. IT and SMEs Different economical, cultural and managerial environment compared to corporate accounts – Resource poverty (financial, knowledge, IT, ...): • Depend heavily on external IT expertise (Verhees et al. 2004) • Low IT capabilities and IT practices (Dibbern et al. 2009) • Slow adopters of IT, reluctance to use advanced IT – Centric role of CEO – owner (Cragg, 2008; Levy et al. 2004) • Unique strategic orientations (Wang et al. 2009) • Appetite for innovativeness depends on CEO (Dibrell et al. 2008) – Lack of process orientation • Too much task oriented (Antlova, 2009) • Do not change business models if results (of IT) are unclear (OECD, 2004)ECIS 2011 ES & BPC - J. Devos 4
  5. 5. IT and SMEs • Lack of relevant IS research in SMEs – Since 1978 (to November 2010): less then 300 refereed A1- publications (Devos, 2010; working paper) – IS (business) research mainly in large organisations • Obtaining IS Success in SMES – Implementing IT Governance – Guidelines and methods for governing, implementing and managing IT are not suitable for SMEs – Why? There are no basic theoretical foundations spelling out how IS success can be achieved by implementing IT Governance – IT Governance … a bridge too far for SMEsECIS 2011 ES & BPC - J. Devos 5
  6. 6. Questions • How can we explain IS Success in SMEs? • How can we rethink the concept of IT Governance in SMEs? What are the basic theoretical foundations of IS Success in SMEs?ECIS 2011 ES & BPC - J. Devos 6
  7. 7. Research Question How can these four theories help to explain IS success in SMEs? • Theory of Planned Behavior (TPB) • Transaction Cost Economy (TCE) • Technology Acceptance Model (TAM) • DeLone & McLean IS Success Model (D&M)ECIS 2011 ES & BPC - J. Devos 7
  8. 8. Theory of Planned Behavior Behavioral Belief Attitude Evaluation Normative Belief Subjective Intention Adoption Motivation Norm To Comply Control Belief Perceived Perceived Control Power AJZEN, I. 1991. THE THEORY OF PLANNED BEHAVIOR. Organizational Behavior and Human Decision Processes.ECIS 2011 ES & BPC - J. Devos 8
  9. 9. Transaction Cost Economy Internal Complexity / Transaction Bounded Frequency Costs Rationality Production Assets Costs Adoption Opportunism External Specificity Transaction IN / OUTSOURCED Uncertainty Costs Human Environmental Transaction Production Factors Factors Costs Costs Bounded Asset Internal Build cost Rationality Specificity Opportunism Uncertainty External: Contact, Run cost Contract, Frequency / Control Complexity COASE 1937. The Nature of the Firm. Economica. WILLIAMSON 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.ECIS 2011 ES & BPC - J. Devos 9
  10. 10. Technology Acceptance Model Perceived Usefulness Behavioral Actual Intention to Use System Use Perceived Ease of Use Source: Davis et al. (1989), Venkatesh et al. (2003)ECIS 2011 ES & BPC - J. Devos 10
  11. 11. DeLone & McLean IS Success Model - Frequency - Duration - Intensity - Nature Information is - clear - accurate Information - sufficient Quality - up-to-date Intention Use - exact what is needed To Use - Availability Net - Adaptability System Benefits - Reliability Quality - Response Time User Satisfaction - Assurance Service - Responsiveness Quality - Empathy DELONE & MCLEAN 2003. The DeLone and McLean model of information systems success: a ten-year update. Journal of Management Information SystemsECIS 2011 ES & BPC - J. Devos 11
  12. 12. Literature on SMEs and the theoriesECIS 2011 ES & BPC - J. Devos 12
  13. 13. Nomological IS Net IT managerial, methodological, and IT artifact Usage Impact technological capabilities IT managerial, methodological, and technological practices (Benbasat et al. 2003)ECIS 2011 ES & BPC - J. Devos 13
  14. 14. Contribution of the theoriesECIS 2011 ES & BPC - J. Devos 14
  15. 15. The Complete FrameworkECIS 2011 ES & BPC - J. Devos 15
  16. 16. Validation of the framework • Mapping with Cobit v.4.1 (IT Governance Institute) – mapping of the detailed control objectives of Cobit Acquire & Deliver domain with the framework – Cobit are best practices – but no theoretical underpinnings – Cobit is well used with practitioners, even in SMEs (QuickStart) – Cobit is very normative • Interview with CIOs-CEOs from SMEs (to do)ECIS 2011 ES & BPC - J. Devos 16
  17. 17. Validation of the frameworkECIS 2011 ES & BPC - J. Devos 17
  18. 18. Preliminary findings • The framework offers a possible theoretical foundation for a majority of Cobit A&I controls • Complementary assets – Major issue in Cobit – Not directly in the framework • part of the Information Quality (D&M) • COBIT has less attention for behavioral aspects – PU and PEoU are absent in Cobit (TAM) • A ‘minimal’ capability maturity level is neededECIS 2011 ES & BPC - J. Devos 18
  19. 19. Discussion and conclusions Contribution of the framework: - Novel, testable and empirical valid - An unique SME perspective: egocentric role of CEO, resource deficit, dependency on external expertise, … - Generic, process oriented, cross-functional and not only suitable for a particular IT or artifact (ERP, CRM, …) - Start to rethink IT Governance in SMEs - More ‘behavioral’ less ‘mechanical’ approach Limitations: - Validation over a large group of SMEs needed - More and other theoretical perspectives are possibleECIS 2011 ES & BPC - J. Devos 19
  20. 20. Discussion and conclusions Explanatory Explanatory High Domain of knowledge High Domain of knowledge D&M TCE PT TAM PT PAT PAT ICT ICT OT LMT Low OT LMT Low TPB Low High Predictive Low High PredictiveECIS 2011 ES & BPC - J. Devos 20
  21. 21. Discussion and conclusions Questions ?ECIS 2011 ES & BPC - J. Devos 21

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