Information and Communication Technology Adoption in SMEs in Sri Lanka; Current level of ICT Usage and Perceived Barriers

Information and Communication Technology Adoption in SMEs in Sri Lanka; Current level of ICT Usage and Perceived Barriers

Jayani Chamarika Athapaththu (University of Colombo, Colombo, Sri Lanka) and Busige Nishantha (University of Colombo, Colombo, Sri Lanka)
Copyright: © 2018 |Pages: 15
DOI: 10.4018/IJEEI.2018010101

Abstract

Information communication technology (ICT), considered as one of the major impacts of organizational performance and small and medium enterprises (SMEs), plays a significant role in the Sri Lankan economy as a strategic partner. Thus, the article examines current levels of ICT usage and perceived barriers to ICT adoption in SMEs in Sri Lanka. The findings revealed that despite the majority of respondents using IT for essential functions, they lacked proper internal IT infrastructures, personal motivation, had internet connection issues, trust issues, and lack of knowledge. These factors were identified as the perceived barriers to ICT adoption in SMEs in Sri Lanka. Data was collected from 67 SME owners from Sri Lanka, except the North province, in November 2016. The findings offer valuable insights to policy makers in general and to the SME owners. The methodology, implications, and suggestions are also discussed.
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Introduction

Information and communication technologies (ICT) have influenced almost all sectors including education, health, bank and entertainment to name a few. Business organizations are rapidly investing in ICT because, there so many advantages attached to it. Many researchers have proven that there is a significant impact on ICT and business performance (Hajli & Sims, 2015; Melville, Kraemer & Gurbaxani, 2004; Halachmi,1988).

Small and medium enterprises (SMEs) play a major role in any economy. They generate employment, introduce new business methods and products, reduce poverty, inflation and income inequality and solve the balance of payment problem (Prasad, Tata & Guo, 2012; Zeinalnezhad, Mukhtar and Sahran, 2011; Singh, Garg and Deshmukh, 2010; Tambunan, 2008, as cited in Priyanath & Premarathne, 2014).

ICT helps particularly in SMEs to create business opportunities and to compete profitably. According to Parida et al. (2010) Information technology (IT) helps to eliminate cost by improving internal processes, providing faster communication with SMEs’ customers and better promoting and distributing their products via online. The value chain concept developed by Michel Porter views the firm as a series, or a network which consists of basic and secondary activities and particularly basic activities that add value to its products and services and ultimately leads to achieve competitive advantages (Porter & Michael, 2001). Hence this framework provides an image of a company to achieve competitive advantage by implementing competitive strategies through the value chain. According to Obrian and Marakas (2010) implementing IT through the value chain adds value to a company’s products and services consequently enhance the overall business value of the company.

Many SMEs implementing IT for their business and enjoy many benefits attached to it. Enhancing productivity and effectiveness of certain activities or functions, assist in the adoption of new organizational, strategic and managerial models that enable access to new environments, as well as the generation of new markets and business model (Brady et al., 2002; Kahn, 1996, 2001; Javalgi & Ramsey, 2001; Corbitt, 2000; Johnston & Lawrence, 1998 as cited in Barba-Sánchez, 2007).

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