An IS Success Model for SMEs

ECIS 2011 ES & BPC - J. Devos

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Theoretical Foundations for IS Success in

Small- and Medium-sized Enterprises (work in progress)

Jan DevosGhent University Association

Department Howest, ELIT - Lab

Keywords: IS Success, IS Failures, SMEs, IS Theories, IT Governance, IT Adoption


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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, ....


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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)


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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)


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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 SMEs


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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?


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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)


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Theory of Planned Behavior

AJZEN, I. 1991. THE THEORY OF PLANNED BEHAVIOR. Organizational Behavior and Human Decision Processes.

BehavioralBelief

Evaluation

NormativeBelief

MotivationTo Comply

ControlBelief

PerceivedPower

Attitude

SubjectiveNorm

PerceivedControl

Intention Adoption


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Transaction Cost Economy

COASE 1937. The Nature of the Firm. Economica.

WILLIAMSON 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.

BoundedRationality

Opportunism

Complexity / Frequency

Assets

SpecificityUncertainty

InternalTransaction

Costs

ExternalTransaction

Costs

ProductionCosts Adoption

IN / OUTSOURCED

HumanFactors

Environmental

FactorsTransaction

CostsProduction

Costs

BoundedRationality

Opportunism

AssetSpecificity

Uncertainty

Frequency / Complexity

External:Contact,Contract,Control

Internal Build cost

Run cost


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Technology Acceptance Model

PerceivedUsefulness

PerceivedEase of Use

BehavioralIntention to Use

ActualSystem Use

Source: Davis et al. (1989), Venkatesh et al. (2003)


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DeLone & McLean IS Success Model

DELONE & MCLEAN 2003. The DeLone and McLean model of information systems success: a ten-year update. Journal of Management Information Systems

Information is - clear

- accurate - sufficient

- up-to-date - exact what is needed

- Availability- Adaptability- Reliability

- Response Time

- Assurance- Responsiveness

- Empathy

Information Quality

System Quality

Service Quality

- Frequency- Duration- Intensity- Nature

NetBenefits

UserSatisfaction

IntentionTo Use

Use


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Literature on SMEs and the theories


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Nomological IS Net

(Benbasat et al. 2003)

IT managerial, methodological, and

technological practices

IT managerial, methodological, and

technological capabilities

IT artifact Usage Impact


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Contribution of the theories


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The Complete Framework


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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)


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Validation of the framework


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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 needed


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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 possible


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Predictive

Explanatory

High

High

Low

Low

PAT

LMT

PT

ICT

OT

Domain of knowledge

Explanatory

High

High

Low

Low

TPB

TCE

D&M

TAM

PAT

LMT

PT

ICT

OT

Predictive

Domain of knowledge


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Questions ?

Documents

An IS Success Model for SMEs