The adoption of information systems by small business requires an innovative approach to the acquisition of technology. There are external pressures from the environment, such as customer and supplier expectations regarding interacting with the small business. However, it is incumbent upon management and employees form within to be open to considerations for change that will result in the small business. Further, a successful adoption will be facilitated through participation of everyone who will be affected by the adoption. The overall goal is improvement in processes which will positively impact the competitive advantage of the small business. This chapter addresses the issues involved in small business adoption of information systems. The adoption of technology in general will result in significant changes to the small business. It is not necessary that the technology is leading edge, just new to the small business. Pressure to adopt a new technology may come from external or internal sources. Externally, customers or suppliers may expect to interact with the small business via some form of technology. Internally, senior management of the small business may perceive that the adoption of a technology will provide a benefit to the business.
TopTechnological innovation involves a sequence of three stages (Pierce & Delbecq, 1977; and Thompson, 1969). The first stage, initiation, involves gathering and evaluating relevant information about the specific innovation. In the second stage, adoption, a decision is made to acquire the innovation. The third stage, implementation, relates to the installation and use of the innovation.
A recognized authority of Innovation Theory, Rogers (1983) has defined an innovation as an idea, practice, or object which is perceived by the adopting individual or work unit as new. Thus, the innovation itself may have existed for some time. But, its adoption in a specific situation is new and novel for the small business (Zaltman et al, 1973).
In general, an innovation is composed of four dimensions (Poutsma et al, 1987). First, an innovation may be a process or a product. A process innovation may improve and administrative or production activity. A product innovation involves the development and dissemination of a physical entity. A second dimension of an innovation relates to revolutionary versus evolutionary. A revolutionary innovation results in a radical change. An evolutionary innovation involves an incremental change. Third, the innovation may result from a technology-push or market-pull. A technology-push innovation suggests that as technology evolves its adoption is considered necessary. A market-pull innovation results from the demand for the technology. The fourth dimension is planned versus incidental. Planned innovations result from specific actions by an entity to implement a change. An incidental innovation occurs as a reaction to a market demand.
Chibelushi (2008) investigated issues surrounding the adoption of new technologies by small business. Initiatives to adopt new technologies emanated from within the small business. These initiatives were facilitated when the owner-manager possessed knowledge of information technology obtained through education. The adoption of new technologies may enhance both efficiency and effectiveness. More specifically new technologies may facilitate business transformation which, in turn, may contribute to competitive advantage.