IT Governance Practices of SMEs in South Africa and the Factors Influencing Their Effectiveness

IT Governance Practices of SMEs in South Africa and the Factors Influencing Their Effectiveness

Charles Boamah-Abu (University of Cape Town, South Africa) and Michael Kyobe (University of Cape Town, South Africa)
DOI: 10.4018/978-1-4666-8524-6.ch010
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The higher failure rate in SMEs is attributable factors including poor leadership, management and governance. Although IT adoption is prevalent in SMEs, not much is known about its governance. This research investigated IT governance practices in 67 SMEs in selected industries and provinces in South Africa. The findings revealed both sound and poor practices. SMEs with centralised IT departments had better practices, e. g., IT strategic investments; closer interactions among IT and business managers; and training of employees. The other SMEs managed IT opportunities poorly, e. g., irrationally IT investment decision-making; poorly defined IT roles and responsibilities; and noncompliance with IT legislations. It was also found that firm size, industry type and location influenced IT governance practices. Larger SMEs had more effective practices and there were differences in IT resource management among provinces. However, age of a firm and years of IT usage did not have much influence.
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Literature Review

Since the advent of IT, researchers and practitioners have been preoccupied with its governance and contribution to business performance. The objective of any form of governance is to set and control strategies to ensure that business goals are accomplished. This involves developing overall strategies, establishing structures through which decision authority may be delegated to management, and ensuring that managerial activities are consistent with achieving these strategies.

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