IT Management in Small and Medium-Sized Enterprises

IT Management in Small and Medium-Sized Enterprises

Theekshana Suraweera (University of Canterbury, New Zealand)
DOI: 10.4018/978-1-60566-014-1.ch110
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Abstract

Computer-based information systems have grown in importance to SMEs, and are now being used increasingly to help them compete. For example, many SMEs have turned to the Internet to support their endeavours. Although the technology that is being used is relatively well understood, its effective management is not so well understood. A good understanding of IT management is important, as the management of IT is an attribute that has the potential to deliver a sustainable competitive advantage to a firm (Mata, Fuerst, & Barney, 1995). This article shows that there is no one accepted view of the term “IT management” for either large or small firms. However, the term “management” is often considered to include the four functions of planning, organising, leading, and controlling. This framework has been applied to SMEs and specifically to their IT management. The article also shows that recent studies have shown significant links between IT management and both IT adoption and IT success. Resource-based theory is helping researchers gain a greater understanding of IT competences. These advances look likely to improve our understanding of the relationship between IT use and SME performance.
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Background

What is meant by the term “IT management”? There are three interrelated terms that are frequently used in the literature with respect to the management of computer-based technology: IT Management, IS Management, and Information Management.

Two of the terms, Information Technology Management and Information Systems Management, usually refer to the same phenomenon. These terms typically refer to managerial efforts associated with planning, organising, controlling, and directing the introduction and use of computer-based systems within an organisation. Also, we see little advantage in attempting to distinguish between information technology (IT) and information systems (IS). Thus, IT management and IS management refer to the same activities, that is, to the organisation’s practices associated with planning, organising, controlling, and directing the introduction and use of IT within the organisation.

Table 1 provides examples of the concept of IT management, but before that we should clarify the term Information Management. This is a term which has frequently been used by authors to refer to two different but related activities. Some conceptualise information management as a process comprised of planning, organisation, and control of information resources (Earl, 1989). Thus Earl’s information management is the same as IT management, as described above. However, other authors use the term information management to recognise that organisations have information that needs to be managed as a resource (e.g., Hicks, Culley, & McMahon, 2006). We argue that this view of information management is an important subset of IT management, as “IT management” as a broader term recognises that an organisation has to manage information, as well as hardware, software, people, and processes.

Table 1.
Different views of IT management in SMEs
IT Best Practices
Cragg (2002)
IT Strategy and IT Structure
Bergeron et al. (2004)
IT Management Sophistication
Suraweera et al. (2005)
Information Management Issues
Hicks et al. (2006)
Managers view IT as strategic
Managers are enthusiastic about IT
Managers explore new uses for IT
New IT systems are customised
Firms employ an IT specialist
Staff have the skills to customise IS
IT environment scanning
Strategic use of IT
IT planning and control
IT acquisition and implementation
IT planning
IT leading
IT controlling
IT organising
External expertise
Information exchange
Implementation and customisation of IS
Monitoring, control, and costing
Information flow from customers and sales
Information identification, location, and organisation
Implementation and operation of quality systems
Numbering and traceability of machines, assemblies, and parts
Information availability and accessibility
Information systems strategy and planning

Key Terms in this Chapter

Leading: Guiding the work efforts of other people in directions appropriate to action plans; leading involves building commitment and encouraging work efforts that support goal attainment.

External Support: This refers to assistance from persons outside the firm. Some firms pay for such support by employing a consultant. Other common forms of external support include IS vendors, and advice from peers, that is, managers in other firms.

Management Support: Managers can provide degrees of support for IT. For example, some managers take the lead role as they are keen to see the organisation adopt a new system, for example, the Internet. Other managers may take less active roles, for example, by giving approval for financial expenditure but not getting involved in the project.

Controlling: Monitoring performance, comparing results to goals, and taking corrective action; controlling is a process of gathering and interpreting performance feedback as a basis for constructive action and change.

Organising: Allocating and arranging human and material resources in appropriate combinations to implement plans; organising turns plans into action potential by defining tasks, assigning personnel, and supporting them with resources.

IT Alignment: This refers to how well a firm’s information systems are linked to the needs of the business. One way of measuring alignment is to examine how well a firm’s business strategy is linked to their IS strategy.

Resource: See competence above.

Competence: The concepts of resource and competence have been discussed in the literature, and a wide range of definitions can be found. This article follows the definitions used by Peppard and Ward (2004). Thus, resources are viewed as stocks of available factors that are owned by the firm; these include the IT knowledge and IT skills of staff, as well as IT hardware and software. Competences can be viewed as abilities, and typically reflect combinations of both skills and technologies. For example, an SME may possess the ability to integrate IT plans with business plans, or the ability to customise an information system.

SME: Small and medium-sized enterprise: there is no universal definition for this term. Most definitions are based on the number of employees, but some definitions include sales revenue. For example, up to 50 employees is the official definition in New Zealand, while in North America, a firm with 500 could be defined as a small firm. Another important aspect of any definition of “SME” is the firm’s independence, that is, an SME is considered to be an independent firm, that is, not a subsidiary of another (typically larger) firm.

Planning: Determining what is to be achieved, setting goals, and identifying appropriate action steps; planning centres on determining goals and the process to achieve them.

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