Information Systems Innovations Adoption and Diffusion Among SMEs: Current Status and Future Prospects

Information Systems Innovations Adoption and Diffusion Among SMEs: Current Status and Future Prospects

Boumediene Ramdani (Cranfield University, UK), Oswaldo Lorenzo (Instituto de Empresa, Spain) and Peter Kawalek (The University of Manchester, UK)
DOI: 10.4018/978-1-60960-597-1.ch004
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Abstract

The attention of software vendors has moved recently to Small to Medium-sized Enterprises (SMEs) offering them a vast range of Information Systems’ (IS) innovations including enterprise systems (ES), which were formerly adopted by large firms only. Although the number of SMEs adopting new IS innovations has increased over time, strong empirical evidence is still lacking. This paper aims to fill this gap by reporting the findings of a survey on SMEs located in the Northwest of England. The survey results reveal that even more complex IS innovations are increasingly adopted by SMEs. Also, nearly half of the surveyed SMEs are willing to adopt ES in the next three years. These findings suggest that there is a considerable opportunity and a need for further research in the adoption and diffusion of new IS innovations among SMEs.
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Is Innovations Adoption And Diffusion Research

Researching IS innovations’ adoption and diffusion in SMEs is a challenge not only because smaller firms are more dynamic, innovative and responsive to market changes than their large counterparts (Nolan & O’Donnell, 1991), but also because SMEs are not miniature versions of large firms, they are unique in their own right (Barnett & Mackness, 1983; Westhead & Story, 1996). SMEs differ from large companies in important ways affecting their information-seeking practices (Buonanno et al., 2005; Lang & Calantone, 1997). Thus, the adoption and diffusion of IS innovations in SMEs cannot be a miniaturised version of the larger organisations. Earlier studies suggest that most SMEs avoid the adoption of sophisticated software and applications (Chen & Bernard, 1993; Cragg & King, 1993). More recent studies found that SMEs are more reluctant to spend on technology (Dennis, 2000; Walczuch, Van Braven, & Lundgren, 2000) because most small firms lack the adequate capital to undertake technical investment (Raymond, 2001). SMEs are also found to lack technical expertise (Barry & Milner, 2002) and their decisions are usually made by the owner/manager (Bunker & MacGregor, 2000).

Many theoretical models have been used to examine SMEs’ adoption and diffusion of IS innovations: Technology Acceptance Model (TAM) (e.g. Grandon & Pearson, 2004); Theory of Planned Behaviour (TPB) (e.g. Harrison, Mykytyn Jr, & Riemenschneider, 1997); Combined TAM and TPB (e.g. Riemenschneider, Harrison, & Mykytyn Jr, 2003); TAM2 (e.g. Venkatesh, 2000); Innovation Diffusion Theory (e.g. Premkumar, 2003); Resource-Based View (e.g. Mehrtens, Cragg, & Mills, 2001); Stage Theory (e.g. Poon & Swatman, 1999); and Unified Theory of Acceptance and Use of Technology (UTAUT) (e.g. Anderson & Schwager, 2003). From reviewing these models (Ramdani & Kawalek, 2007b), the adoption and diffusion of IS innovations’ research typically evaluate various technological, organisational, and environmental factors that facilitate or inhibit adoption/diffusion. As a generic theory of technology adoption and diffusion, Technology-Organisation-Environment (TOE) framework has also been tested and validated (e.g. Kuan & Chau, 2001).

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