IS Research in SMEs: Literature • SME-IT Literature overview 5 IT Managerial, IT Artifact Impact Methodological, and Satis-Technological Capabilities System Information 6 faction 121 Use 37 1 12 Quality Quality Organiza- Individual 5 1 tional Impact Impact 3 32 8 2 IT Managerial, Methodological, and Technological Practices 14 Source: Benbasat & Zmud, 2003; Gable et al, 2008 Devos, J. Van Landeghem H. & Deschoolmeester D., (2009), IT and SMEs: Literature Overview.
IS Research in SMEs Cover-Up Deaf, Dumb high Organization and Blind Organization Mum Effectbad news is Healthy Ostrichtransmitted lessfrequently than low Organization Organizationgood news low high Deaf Effect reluctance to hear bad news Blowing the whistle on troubled software projects (Keil, 2001)
Conclusions • Why do IT projects fail in SMEs? • Information asymmetry • Low IT managerial, technological and methodological capabilities in SMEs • How do IT projects fail in SMEs? • Opportunistic behavior • Deterioration of trust • Lack of control • How do SMEs manage there IT? • Absence of a formal intentional IT management • Why is there not enough IT Governance in SMEs? • IT Governance is not an SME concept • Lack of IT managerial, technological and methodological practices
Theory of Lemon Markets• Nobel Prize Winner G. Akerlof, 1970 (Akerlof, G.A. (1970). „The Market for Lemons: Quality Uncertainty and the Market Mechanism‟. Quarterly Journal of Economics, 84(3), 488-500.)• a market with unbalanced information can lead to complete disappearance or to offerings with poor quality where bad products (lemons) wipe out the good ones• Popular economic grant theory • Used car market (lemons) • E-business, E-auctions, IT security, Grid computing, IT outsourcing• Devos J., Van Landeghem H. and Deschoolmeester D., (2010), An IS Theory: The Lemon Market, in Information Systems Theory: Explaining and Predicting Our Digital Society, Y.K. Dwivedi, M. Wade & S.L. Schneberger, to be published in 2011
Theory of Lemon Markets • A market place: buyers and sellers (internally/externally; individuals/firms): von Neumann-Morgenstein maximizers of Expected Utility • Information Asymmetry between transacting partners • Overall quality of goods and services offered is reflected to the entire group of sellers rather than on individual sellers • Lack of seller differentiation • There is incentive to market low quality (igniting condition) • High-quality sellers flee the market because their quality and reputation cannot be rewarded • Complete Market Deterioration
Theory of Lemon Markets independent Information Asymmetry + - + Adverse Trust Moral Hazard Selection - + - - Opportunistic Reputation Behavior - Perceived Quality
Problems and solutions Top 10 of IS failure risks 1. Lack of top management commitment to the project 2. Failure to gain user commitment 3. Misunderstanding the requirements 4. Lack of adequate user involvement 5. Lack of required knowledge/skills in the project personnel 6. Lack of frozen requirements 7. Changing scope/objective 8. Introduction of new technology 9. Failure to manage end user expectations 10. Insufficient/appropriate staffing Source: Schmidt, Lyytinen, Keil & Cule; Identifying Software Project Risks, 2001
Problems and solutions A Framework for IT Governance in SMEs • Building theory from case studies (Eisenhardt, 2007) ▫ Observations from previous literature ▫ Commons sense ▫ Experience • Multiple case studies (#5) ▫ Theoretically chosen, not randomly ! • Software Project Risks (Schmidt et al, 2001) ▫ Potentially important constructs • Pattern mapping Result the OISF Framework