Ashok's TCS Project Report New

A STUDY ON
INFORMATION TECHNOLOGY ROAD MAP FOR SMEs AT

IDA BALANAGAR, HYDERABAD
Project report submitted to

Tata Consultancy Services
Hyderabad
Submitted By
G Ashok Kumar
Under the Supervision of
Mr. Aslam Basha
Regional Manager
Tata Consultancy Services
DECLARATION
I hereby declare that this project report entitled An Empirical Study on
Information Technology Road Map for SMEs in IDA Cherlapalli,
Hyderabad. Has been prepared by me during the period of 45 days to be
submitted SANSKRITHI SCHOOL OF BUSINESS, Puttaparthi in practical
fulfillment for the award of degree
POST GRADUATE DIPLOMA IN
BUSINESS MANAGEMENT prescribed by ALL INDIA MANAGEMENT

ASSOCIATION ,NEW DELHI. Under the guidance of Dr. Venkat Barla Director,
SANSKRITHI SCHOOL OF BUSINESS, Puttaparthi.
I also declare that this project report is the result of my own effort and it
has not been copied from any of the earlier reports submitted by anybody to ALL
INDIA MANAGEMENT ASSOCIATION ,NEW DELHI or any other university
for the award of any degree in diploma.
I also assert that the information collected by me for Information
Technology
Road
Map
for
SMEs
In
IDA
Cherlapalli,
Hyderabad will be confidential.
(G Ashok Kumar)
2 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar
ACKNOWLEDGEMENT
My profound thanks and deep sense of gratitude to Mr. Aslam Basha, Regional
Manager, TCS and to authorities of TCS, Hyderabad who gave me the opportunity
for doing this project work at Hyderabad.
Its my primary duty to express my humble thanks and deep sense of
gratitude to our director sir Dr. Venkat Barla sir who acted as a source of
inspiration in completing my work by constantly enlightening me with his valuable
guidance and suggestions during the period of this project.
I also thank the staff for providing my all help and facilities in carrying out
my project and making me feel at home
I also express my gratitude towards the help rendered by Dr. Venkat Barla
Director &my project guide, Sanskrithi School of Business for guiding me in
completion of this project work.
Finally, I thank all my friends for spending their valuable time providing
their valuable suggestions in successful completing of this project.
(G Ashok Kumar)
Table of Contents
Executive Summary................................................................................................ 7
Introduction............................................................................................................. 9
Enterprise Resource Planning........................................................................9
Origin of "ERP".............................................................................................................
Expansion..................................................................................................................
Characteristics..........................................................................................10
Functional areas........................................................................................11
Components.............................................................................................11
Indian SMEs [Small and Medium Enterprises]................................................13
Definition of SMEs.....................................................................................14
Indian SMEs in Technology Adoption.............................................................16
Future Technologies for SMEs......................................................................17
Key challenges faced by Indian MSME sector.................................................18
Objectives.............................................................................................................. 21
Methodology.......................................................................................................... 23
Collection of Data......................................................................................23
Sampling.................................................................................................25
Formulation of Questionnaire......................................................................26
Scope of the Study............................................................................................... 29
Limitation of the Study........................................................................................ 31
Data Analysis Tools............................................................................................... 33
Contribution........................................................................................................... 35
Industry Profile...................................................................................................... 37
Company Profile.................................................................................................... 40
History....................................................................................................40
1968 to 2000.............................................................................................................
2000 to present.........................................................................................................
Products and services................................................................................41

Service lines...............................................................................................................
Literature Review................................................................................................. 43
Information Technology Adoption Concept.....................................................44
Information Technology Adoption within SMEs...............................................45
Influencing Factors....................................................................................45
Internal Factors......................................................................................................
External Factors......................................................................................................
Conclusion, Suggestions & Future Research..................................................66

Primary Data Analysis.......................................................................................... 70
Findings.................................................................................................................. 96
Suggestion............................................................................................................. 98
Conclusion............................................................................................................ 100
Summary.............................................................................................................. 103
ERPBLIOGRAPHY................................................................................................. 105
Website Referred.....................................................................................105
Book Referred.........................................................................................106
Article Referred.......................................................................................106
ANNEXURE............................................................................................................ 108
List of Company......................................................................................109
EXECUT
IVE
SUMMA
RY
Executive Summary
Small and Medium Enterprise (SMEs) constitute over 90% of total enterprises in most of
the economies and are credited with generating the highest rates of employment growth and
account for a major share of industrial production and exports. In India too, the SMEs play a
pivotal role in the overall industrial economy of the country. SMEs are thus important for the
national objectives of growth with equity and inclusion. The process of liberalization and market
reforms since 1991 has brought about intense competition for SMEs both in domestic and
overseas markets. This has made it imperative for the Indian SMEs to overcome the challenges
that they face and maintain, improve and sustain competitiveness through lower cost, improved
quality, making available wider choice by initiating various measures including innovation and
up-gradation of technology.
Having realized the need to preserve, protect and promote SMEs, the Indian government
is also committed to the growth and development of the SMEs and to enhance their
competitiveness. The government seeks to fulfill its mission by formulating policies and
designing/implementing support measures in the field of credit, technological up gradation,

marketing, entrepreneurship development etc. and undertaking effective advocacy for these
purposes.
The SMEs that are successfully competing today are the enterprises that have developed
a culture of success through appropriate ERP &ERP interventions that has enabled them to stay
ahead of others. The SMEs with heavy infusion of technology are much better adapted to meet
the business needs and compete in the domestic as well as global markets.
Finance is one of the critical inputs for the promotion and development of the micro and
small enterprises. Recognizing the importance of easy and adequate availaERPlity of credit in
sustainable growth of the SME sector, the Government has been announcing various policy
measures. Faced with increased competition on account of globalization, SMEs are beginning to
move from a reliance on bank credit to a variety of other specialized financial services and
options.
The role of government policies, technology interventions and financial measures for
creating competitive SMEs has been discussed in detail in this background note.
INTRODU
CTION
Introduction
Enterprise Resource Planning
Enterprise resource planning (ERP) is a business management softwareusually a suite
of integrated applicationsthat a company can use to collect, store, manage and interpret data
from many business activities, including:
Product planning, cost
Manufacturing or service delivery
Marketing and sales
Inventory management
Shipping and payment
ERP provides an integrated view of core business processes, often in real-time, using common
databases maintained by a database management system. ERP systems track business resources
cash, raw materials, production capacityand the status of business commitments: orders,
purchase orders, and payroll. The applications that make up the system share data across the
various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data.
ERP facilitates information flow between all business functions, and manages connections to
outside stakeholders.
Enterprise system software is a multi-ERPllion dollar industry that produces components that
support a variety of business functions. IT investments have become the largest category of
capital expenditure in United States-based businesses over the past decade. Though early ERP
systems focused on large enterprises, smaller enterprises increasingly use ERP systems.
The ERP system is considered a vital organizational tool because it integrates varied
organizational systems and facilitates error-free transactions and production. However, ERP
system development is different from traditional systems development. ERP systems run on a
variety of computer hardware and network configurations, typically using a database as an
information repository.
Origin of "ERP"
In 1990, Gartner Group first used the acronym ERP as an extension of material requirements
planning (MRP), later manufacturing resource planning and computer-integrated manufacturing.
Without replacing these terms, ERP came to represent a larger whole that reflects the evolution
of application integration beyond manufacturing.
Expansion
ERP systems experienced rapid growth in the 1990s, because the year 2000 problem and
introduction of the euro disrupted legacy systems. Many companies took the opportunity to
replace their old systems with ERP.
ERP systems initially focused on automating back office functions that did not directly affect
customers and the general public. Front office functions, such as customer relationship
management (CRM), dealt directly with customers, or ebusiness systems such as ecommerce,
egovernment, etelecom, and efinanceor supplier relationship management (SRM) became
integrated later, when the Internet simplified communicating with external parties.[citation
needed]
"ERP II" was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead Long
Live ERP II. It describes webbased software that provides realtime access to ERP systems to
employees and partners (such as suppliers and customers). The ERP II role expands traditional
ERP resource optimization and transaction processing. Rather than just manage buying, selling,
etc.ERP II leverages information in the resources under its management to help the enterprise
collaborate with other enterprises. ERP II is more flexible than the first generation ERP. Rather
than confine ERP system capaERPlities within the organization, it goes beyond the corporate
walls to interact with other systems. Enterprise application suite is an alternate name for such
systems.
Developers now make more effort to integrate moERPle devices with the ERP system. ERP
vendors are extending ERP to these devices, along with other business applications. Technical
stakes of modern ERP concern integrationhardware, applications, networking, supply chains.
ERP now covers more functions and rolesincluding decision making, stakeholders'
relationships, standardization, transparency, globalization, etc.
Characteristics
ERP (Enterprise Resource Planning) systems typically include the following characteristics:
An integrated system that operates in (or near) real time without relying on periodic
updates[citation needed]
A common database that supports all applications
A consistent look and feel across modules
Installation of the system with elaborate application/data integration by the Information

Technology (IT) department, provided the implementation is not done in small steps
Functional areas
An ERP system covers the following common functional areas. In many ERP systems these are
called and grouped together as ERP modules:
Financial accounting: General ledger, fixed asset, payables including vouchering,

matching and payment, receivables cash application and collections, cash management,
financial consolidation
Management accounting: Budgeting, costing, cost management, activity based costing
Human resources: Recruiting, training, rostering, payroll, benefits, 401K, diversity

management, retirement, separation
Manufacturing: Engineering, ERPll of materials, work orders, scheduling, capacity,

workflow management, quality control, manufacturing process, manufacturing projects,
manufacturing flow, product life cycle management
Order Processing: Order to cash, order entry, credit checking, pricing, available to
promise, inventory, shipping, sales analysis and reporting, sales commissioning.
Supply chain management: Supply chain planning, supplier scheduling, product

configurator, order to cash, purchasing, inventory, claim processing, warehousing
(receiving, putaway, picking and packing).
Project management: Project planning, resource planning, project costing, work

breakdown structure, ERPlling, time and expense, performance units, activity
management
Customer relationship management: Sales and marketing, commissions, service,

customer contact, call center support - CRM systems are not always considered part of
ERP systems but rather Business Support systems (BSS).
Data services : Various "selfservice" interfaces for customers, suppliers and/or

employees
Components
Transactional database
Management portal/dashboard
ERP system
Customizable reporting
Resource planning and scheduling
Analyzing the product
External access via technology such as web services
Search
Document management
Messaging/chat/wiki
Workflow management
Cloud computing
Cloud computing is a recently evolved computing terminology or metaphor based on utility and
consumption of computing resources. Cloud computing involves deploying groups of remote
servers and software networked that allow centralized data storage and online access to computer
services or resources. Clouds can be classified as public, private or hybrid.
The criticisms about it are mainly focused on its social implications. This happens when the
owner of the remote servers is a person or organization other than the user, as their interests may
point in different directions, for example, the user may wish that his or her information is kept
private, but the owner of the remote servers may want to take advantage of it for their own
business.
Cloud computing relies on sharing of resources to achieve coherence and economies of scale,
similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing
is the broader concept of converged infrastructure and shared services.
Cloud computing, or in simpler shorthand just "the cloud", also focuses on maximizing the
effectiveness of the shared resources. Cloud resources are usually not only shared by multiple
users but are also dynamically reallocated per demand. This can work for allocating resources to
users. For example, a cloud computer facility that serves European users during European
business hours with a specific application (e.g., email) may reallocate the same resources to
serve North American users during North America's business hours with a different application
(e.g., a web server). This approach should maximize the use of computing power thus reducing
environmental damage as well since less power, air conditioning, rack space, etc. are required for
a variety of functions. With cloud computing, multiple users can access a single server to retrieve
and update their data without purchasing licenses for different applications.
The term "moving to cloud" also refers to an organization moving away from a traditional
CAPEX model (buy the dedicated hardware and depreciate it over a period of time) to the OPEX
model (use a shared cloud infrastructure and pay as one uses it).
Proponents claim that cloud computing allows companies to avoid upfront infrastructure costs,
and focus on projects that differentiate their businesses instead of on infrastructure. Proponents
also claim that cloud computing allows enterprises to get their applications up and running faster,
with improved manageaERPlity and less maintenance, and enables IT to more rapidly adjust
resources to meet fluctuating and unpredictable business demand. Cloud providers typically use
a "pay as you go" model. This can lead to unexpectedly high charges if administrators do not
adapt to the cloud pricing model.
The present availaERPlity of high-capacity networks, low-cost computers and storage devices as
well as the widespread adoption of hardware virtualization, service-oriented architecture, and
autonomic and utility computing have led to a growth in cloud computing.
Cloud vendors are experiencing growth rates of 50% per annum.
Indian SMEs [Small and Medium Enterprises]

SME sector of India is considered as the backbone of economy contributing to 45% of
the industrial output, 40% of Indias exports, employing 60 million people, create 1.3 million
jobs every year and produce more than 8000 quality products for the Indian and international
markets. With approximately 30 million SMEs in India, 12 million people expected to join the
workforce in next 3 years and the sector growing at a rate of 8% per year, Government of India is
taking different measures so as to increase their competitiveness in the international market.
There are several factors that have contributed towards the growth of Indian SMEs. Few
of these include; funding of SMEs by local and foreign investors, the new technology that is used
in the market is assisting SMEs add considerable value to their business, various trade directories
and trade portals help facilitate trade between buyer and supplier and thus reducing the barrier to
trade
With this huge potential, backed up by strong government support; Indian SMEs continue
to post their growth stories. Despite of this strong growth, there is huge potential amongst Indian
SMEs that still remains untapped. Once this untapped potential becomes the source for growth of
these units, there would be no stopping to India posting a GDP higher than that of US and China
and becoming the worlds economic powerhouse.
The research framework posits that IT adoption and IT assimilation are directly affected
only by the elements of the organizational context. These two constructs are affected by the
technological and environmental contexts only indirectly, through the mediating effect of the
organizational context, and especially through the SME owner-managers strategic orientation.
Among all organizational factors, there is reason to underline the particular role played
by the owner-managers strategic orientation. Indeed, according to the upper echelon theory,
organizational strategic outcomes and

processes are a function of the managerial characteristics of top managers, and this is particularly
true in the case of SMEs, as previously mentioned. Following this theory, strategic choices are
more of the outcome of behavioral factors than calculations for economic optimization, and will
reflect decision-makers idiosyncrasies. Strategy being the mediating force between the firm and
its environment, it is through the small business owner-managers strategic orientation that one
can understand the latters sense-making of the technological and environmental contexts, that is,
how he or she detects threats and opportunities. This sense-making will affect the development
of the owner-managers competencies as well as his or her choices in regard to acquiring human
resources and developing employees competencies.
Definition of SMEs
(a) Enterprises engaged in the manufacture or production, processing or preservation of goods as
specified below:
(i) A micro enterprise is an enterprise where investment in plant and machinery does not exceed
Rs. 25 lakh;
(ii) A small enterprise is an enterprise where the investment in plant and machinery is more than
Rs. 25 lakh but does not exceed Rs. 5 crore; and
(iii) A medium enterprise is an enterprise where the investment in plant and machinery is more
than Rs.5 crore but does not exceed Rs.10 crore.
In case of the above enterprises, investment in plant and machinery is the original cost excluding
land and building and the items specified by the Ministry of Small Scale Industries vide its
notification No.S.O.1722 (E) dated October 5, 2006.
(b) Enterprises engaged in providing or rendering of services and whose investment in
equipment (original cost excluding land and building and furniture, fittings and other items not
directly related to the service rendered or as may be notified under the MSMED Act, 2006 are
specified below.
(i) A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10
lakh;
(ii) A small enterprise is an enterprise where the investment in equipment is more than Rs.10
lakh but does not exceed Rs. 2 crore; and
(iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2
crore but does not exceed Rs. 5 crore.
In accordance with the provision of Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two
Classes:
(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of
goods pertaining to any industry specified in the first schedule to the industries (Development
and regulation) Act, 1951) or employing plant and machinery in the process of value addition to
the final product having a distinct name or character or use. The Manufacturing Enterprise are
defined in terms of investment in Plant & Machinery.
(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are
defined in terms of investment in equipment.
The limit for investment in plant and machinery / equipment for manufacturing / service
enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under:
Manufacturing Sector
Enterprises
Investment in plant & machinery
Micro Enterprises
Does not exceed twenty five lakh rupees
Small Enterprises
More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises
More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises
Investment in equipment
Micro Enterprises
Does not exceed ten lakh rupees
Small Enterprises
More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises
More than two crore rupees but does not exceed five core rupees
Indian SMEs in Technology Adoption

Technology is the backbone of modern business. But Indian Small and Medium
Enterprises (SMEs) lag behind in the adoption of technology and this proves to be roadblock in
the path of catching up with their global counterparts.
India, according to a report by Pluggd.in, has the second largest population of SMEs
among BRIC and the US. This has not gone unnoticed by IT vendors, who seek to tap the
potential that Indias SMEs hold.
The provision of Software-as-a-Service (SaaS), for example, has allowed firms such as
TravelCarma, (a travel firm based in Gujarat) to extend its services in Frankfurt. A report from
the Business Standard noted that while SaaS as a platform for delivering applications has been
around for quite a while now, SMEs have only started to realize its true potential after the
recession, because of the services cost-effectiveness.
However, while a number of software product SMEs are benefitting from the interest of
multi-national corporations and IT firms from all over the world, many new players hesitate to
take up new technology is due to the lack of awareness, and majority of those who are aware step
back because of their nervousness to embrace the new technologies.
Although SMEs provide employment to about 75percent of Indias workforce, these
enterprises spend only 30 percent of the countrys IT spending. These statistics from Pluggd.in
are only made more shocking with the fact that only 12 percent of Indian SMEs use computers
and 90percent of them use it just for document processing. A major change in this attitude will
help the SMEs to a huge extent in competing globally.
Some of the main reasons behind Indian SMEs avoiding the adoption of technology
include budget and infrastructure limitations. The shortage of skilled labor that has the basic
know-how to work computers is another looming problem for SMEs from upcoming cities.
The government seems more than eager to help SMEs change their perception of
technology though. In a Seminar on Information, Communication & Technology for Enhancing
Competitiveness of Indian SMEs, organized by PHD (Punjab Haryana Delhi) Chamber in New
Delhi, Dr Ajay Kumar, the Joint Secretary of the Department of IT in the Ministry of Information
and Technology, Government of India, said Information Technology is a tool which enables you
to innovate and make a difference. IT enables better information use and better information
management.
However, the government is yet to encourage SMEs in the adoption of new technologies
by promoting low-cost technology solutions that are designed specifically for SMEs. A few other
steps that would encourage SMEs in this regard would be the provision of opportunities, as well
as the implementation of a culture of innovation, especially in the fields of marketing.
Adopting the latest IT tools and techniques can help India's small and
medium businesses boost revenues by $ 56 ERPllion, while also creating over a
million jobs, according to a report by software giant Microsoft.
The research, conducted by global management consulting firm BCG for the Microsoft
report, also revealed that about 90 per cent of small and medium enterprises (SMEs) in India
have no access to the Internet.
"The report - Ahead of the Curve: Lessons on Technology and Growth from Small
Business Leaders - found that if more SMEs in India adopt latest IT tools there is potential for
SME revenue to grow by $ 56 ERPllion and create 1.1 million new jobs," Microsoft India
Managing Director Karan Bajwa said.
BCG surveyed Brazil, India, China, Germany and the US and found SME revenue could
grow by a comERPned $ 770 ERPllion in these five primary countries if more SMEs could
achieve the growth rates of those SMEs that use modern IT tools.
"These same SMEs could add some 6.2 million new jobs in those countries alone. BCG
believes that this association between IT adoption and growth would be consistent in countries
across the world," BCG Senior Partner and co-author of the report Neeraj Aggarwal said.
BCG surveyed 4,000 SMEs in these five countries, which included 750 surveyed in India,
during July 2013.
The research revealed nearly 90 per cent of SMEs in India have no access to the Internet,
compared with only 22 per cent of SMEs in China and 5 per cent of SMEs in the US.
Future Technologies for SMEs
If we stretch our vision long term we can think of some new technologies which can
prove important to MSMEs.
1. Cloud computing
Cloud computing can prove to be buzzword for SMES in future. It is nothing but literally
placing computing in internet space. All the applications, IT resources and software rest on
internet space and can be made available on demand, free of cost or some subscription fee or
may be on pay per use basis. It is beneficial for SMEs as they do not have to pay upfront and
invest huge amounts. Its applications are modular where SMEs can pick the features they need
leaving out the rest. Other than the common applications, high end applications such as ERP &
CRM are available through cloud computing.
2. Remote infrastructure Management

3. Virtualization
4. SaaS
Key challenges faced by Indian MSME

sector
Despite its strategic importance in any industrialization strategy, the opportunities that the
Indian landscape presents and its immense potential for employment generation the MSME
sector confronts several challenges. They face problems at every stage of their operation,
whether it is buying of raw materials, manufacture of products, marketing of goods or raising of
finance. Some of the challenges Indian MSMEs face have been briefly discussed below:
1. High Cost of Credit

Access to adequate and timely credit at a reasonable cost is the most critical problem
faced by this sector. The major reason for this has been the high risk perception among the banks
about this sector and the high transaction costs for loan appraisal. While the quantum of
advances from the public sector banks (PSBs) to the MSEs has increased over the years in
absolute terms, from Rs.46, 045 Crores in March 2000 to Rs.1, 85,208 Crores in March 2009, the
share of the credit to the MSME sector in the Net Bank Credit (NBC) has declined from 12.5
percent to 10.9 percent during the same period.
2. Collateral Requirements
Players in MSME sector are not in a position to provide collateral in order to avail loans
from banks and hence denied access to credit.
3.
Limited Access to Equity Capital
This is common challenge faced by this sector in spite of the fact that overall capital
inflows have witnessed significant increase in the recent years. Absence of equity capital may
pose a serious challenge to development of knowledge-based industries, particularly those that
are sought to be promoted by the first-generation entrepreneurs with the requisite expertise and
knowledge.
4.
Problems in supply to government departments and

agencies
Majority of government tenders prescribe high eligiERPlity criteria such as annual

turnover, past experience etc. which deters entity to MSME sector
5. Procurement of raw materials at a competitive cost

This is a growing challenge faced by this sector as procurement for raw materials is
carried out within local territory due to their financial constraints and procurements are much
smaller in scale as compared to industry at large.
6. Problems of storage, designing, packaging and product

display
MSMEs face problems of storage, display and designs for their products. Non
availaERPlity of selling outlets for their products is a serious constraint. In addition, MSEs also
face problem of inadequate infrastructure for marketing of their products to interior/remote parts
of the country.
7. Lack of access to global markets

With the liberalization and globalization of the Indian economy, the small enterprises in
India have unprecedented opportunities on the one hand, and face serious challenges, on the
other. While access to global market has offered a host of business opportunities in the form of
new target markets, possiERPlities to exploit technological advantage, etc., the challenges in this
process have flowed mainly from their scale of operation, technological obsolescence, and
inaERPlity to access institutional credit and intense competition in marketing.
8.
Inadequate infrastructure facilities, including power,

water, roads, etc.
To ensure competitiveness of the MSMEs, it is essential that the availaERPlity of

infrastructure, technology and skilled manpower are in tune with the global trends. MSMEs are
either located in industrial estates set up many decades ago or are functioning within urban areas
or have come up in an unorganized manner in rural areas. The state of infrastructure, including
power, water, roads, etc. in such areas is poor and unreliable.
9.
Low technology levels and lack of access to modern

technology
The MSME sector in India, with some exceptions, is characterized by low technology
levels, which acts as a handicap in the emerging global market. As a result, the sustainaERPlity
of a large number of MSMEs will be in jeopardy in the face of competition from imports.
10. Lack of skilled manpower for manufacturing, services,

marketing, etc.
Although India has the advantage of a large pool of human resources, the industry
continues to face deficit in manpower with skills set required for manufacturing, marketing,
servicing, etc.
11. Absence
of a suitable mechanism
Which enables the quick revival of viable sick enterprises and allows unviable entities to
close down speedily.
12. Branding and Marketing

Due to very high cost of business acquisition, Low media budget, non-participation in
International events, the MSME branding and visiERPlity is extremely poor.
OBJECTI
VES
Objectives
To analysis the growth of SMEs in term of IT infrastructure.

To identify the challenges facing by SMEs in adoption of IT.
To analysis the future trend of IT in SMEs.
To study the future market of ERP in SMEs.
To fill the knowledge gap in the IT literature for understanding the process of adoption
and implementation of IT innovations in organizations.
METHOD
OLOGY
Methodology
Collection of Data
The data has been collected from the company reports and websites which were obtained by the
company.
1. Primary Data
Data that has been collected from first-hand-experience is known as primary data.
Primary data has not been published yet and is more reliable, authentic and objective. Primary
data has not been changed or altered by human beings, therefore its validity is greater than
secondary data.
Sources of Primary Data

Sources for primary data are limited and at times it becomes difficult to obtain data from
primary source because of either scarcity of population or lack of cooperation. Regardless of any
difficulty one can face in collecting primary data; it is the most authentic and reliable data
source. Following are some of the sources of primary data.
a. Experiments: Experiments require an artificial or natural setting in which to
b.
c.
d.
e.
perform logical study to collect data. Experiments are more suitable for medicine,
psychological studies, nutrition and for other scientific studies. In experiments the
experimenter has to keep control over the influence of any extraneous variable on the
results.
Survey: Survey is most commonly used method in social sciences, management,
marketing and psychology to some extent. Surveys can be conducted in different
methods.
Questionnaire: This is the most commonly used method in survey.
Questionnaires are a list of questions either open-ended or close -ended for which the
respondent give answers. Questionnaire can be conducted via telephone, mail, live in a
public area, or in an institute, through electronic mail or through fax and other methods.
Interview: Interview is a face-to-face conversation with the respondent. In
interview the main problem arises when the respondent deliberately hides information
otherwise it is an in depth source of information. The interviewer can not only record the
statements the interviewee speaks but he can observe the body language, expressions and
other reactions to the questions too. This enables the interviewer to draw conclusions
easily.
Observations: Observation can be done while letting the observing person know
that he is being observed or without letting him know. Observations can also be made in
natural settings as well as in artificially created environment.
2. Secondary Data
Data collected from a source that has already been published in any form is called as
secondary data. The review of literature in nay research is based on secondary data. Mostly from
books, journals and periodicals.
Sources of Secondary Data

Secondary data is often readily available. After the expense of electronic media and
internet the availaERPlity of secondary data has become much easier.
a. Published Printed Sources: There are variety of published printed sources.
Their crediERPlity depends on many factors. For example, on the writer, publishing
company and time and date when published. New sources are preferred and old sources
should be avoided as new technology and researches bring new facts into light.
a.1.
Books: Books are available today on any topic that you want to research. The
use of books start before even you have selected the topic. After selection of topics
books provide insight on how much work has already been done on the same topic and
you can prepare your literature review. Books are secondary source but most authentic
one in secondary sources.
a.2.
Journals/periodicals: Journals and periodicals are becoming more
important as far as data collection is concerned. The reason is that journals provide upto-date information which at times books cannot and secondly, journals can give
information on the very specific topic on which you are researching rather talking about
more general topics.
a.3.
Magazines/Newspapers: Magazines are also effective but not very
reliable. Newspaper on the other hand are more reliable and in some cases the
information can only be obtained from newspapers as in the case of some political
studies.
a.4. Published Electronic Sources: As internet is becoming more advance,
fast and reachable to the masses; it has been seen that much information that is not
available in printed form is available on internet. In the past the crediERPlity of internet
was questionable but today it is not. The reason is that in the past journals and books
were seldom published on internet but today almost every journal and book is available
online. Some are free and for others you have to pay the price.
a.5. E-journals: e-journals are more commonly available than printed journals. Latest
journals are difficult to retrieve without subscription but if your university has an elibrary you can view any journal, print it and those that are not available you can make
an order for them.
a.6. General Websites: Generally websites do not contain very reliable

information so their content should be checked for the reliaERPlity before quoting from
them.
a.7. Weblogs: Weblogs are also becoming common. They are actually diaries written
by different people. These diaries are as reliable to use as personal written diaries.
b. Unpublished Personal Records

Some unpublished data may also be useful in some cases.
b1. Diaries: Diaries are personal records and are rarely available but if you are conducting
a descriptive research then they might be very useful. The Anne Franks diary is the most famous
example of this. That diary contained the most accurate records of Nazi wars. Letters: Letters
like diaries are also a rich source but should be checked for their reliaERPlity before using them.
b2. Government Records: Government records are very important for marketing,
management, humanities and social science research.
c.Association Data
c.1. Association records
c.2. Educational institutes records
d. Public Sector Records

d.1. NGO's survey data
d.2. Other private companies records
Sampling
In statistics, quality assurance, & survey methodology, sampling is concerned with the
selection of a subset of individuals from within a statistical population to estimate characteristics
of the whole population. Acceptance sampling is used to determine if a production lot of material
meets the governing specifications. Two advantages of sampling are that the cost is lower and
data collection is faster than measuring the entire population.
Each observation measures one or more properties (such as weight, location, color) of
observable bodies distinguished as independent objects or individuals. In survey sampling,
weights can be applied to the data to adjust for the sample design, particularly stratified sampling
(blocking). Results from probaERPlity theory and statistical theory are employed to guide
practice. In business and medical research, sampling is widely used for gathering information
about a population.
The sampling process comprises several stages:
Defining the population of concern

Specifying a sampling frame, a set of items or events possible to measure
Specifying a sampling method for selecting items or events from the frame
Determining the sample size
Implementing the sampling plan
Sampling and data collecting
Data which can be selected
Sampling Technique
Sample Size
Sample Element
Sampling Area
:
Research Instrument
Statistical Method
Analysis
:
Simple random Sampling
:
50
:
Companies
IDA Cherlapally, Hyderabad
:
Questionnaire
:
Percentage Method
:
Bar Diagrams, Pie-Charts
Sampling design of the study constitutes of

two steps
Selection of the study area.
Selection of the sample size.
The sampling design is considered as non-probaERPlity sampling. Convenience sampling has
been taken for conducting the survey.
Sampling Procedure
Simple random sampling was used to collect the information because of time factor.
Sample Size
100 Samples were collected for the study
Period of Study
The period for the study went for 45 days.
Formulation of Questionnaire
The structured un-disguised questionnaire was prepared for collection of Primary data
from the customers. As the questionnaire is the only mode of Communication between the
researcher and the respondent, the questionnaire for the Study was drafted with at most care and
caution so that relevant and essential Information for the inquiry may be collected without any
difficulty, amERPguity or Vagueness. To attain the objectives different pattern of questions were
made use of in the study, they are
1. Dichotomous questions
Dichotomous questions allow for only two possible answers are yes or no.
2. Multiple Choice questions
These types of questions list a number of answers and permit the subjects to select the
answers that best approximate their own views.
3. Open-ended questions
In this type of questionnaire, the questions are structured but the responses are Unstructured. The respondents are free to reply with whatever information and in words, which they
consider to be relevant.
4. Close-ended questions
In this type of questionnaire, both the questions and answers are arranged in a structured
pattern. Under this type of questions, there are various sub-types.
Statistical Design
To draw the inferences and conclusions from collected observations both
conventional and non-conventional statistical techniques were used. The conventional Statistical
techniques adopted in the present study are percentage analysis
Population Size
I have divided the entire population industry wise and from each industry and from each
department I have picked up 10 companies randomly and collected data.
Sample size is: 250
SCOPE
of the
STUDY
Scope of the Study
Information technologies (IT) have become one of the most important infrastructural
elements for SMEs in service industries. Now, these firms show specific characteristics and
behaviors with regard to adopting and assimilating IT. These specificities have not been taken
into account however in formulating a research framework or program on the adoption and
assimilation of IT in service SMEs. The present study thus seeks to fill this void. After reviewing
the literature on IT in the services sector, the antecedents of IT adoption and assimilation in the
context of service SMEs are identified and integrated within a research framework. This
framework is then applied to generate a set of twenty-two salient propositions for future research
on IT adoption and assimilation in service sector SMEs.
Adoption rates vary depending upon the nature of IT. For instance, in a study of ERP
adoption by European midsize companies, indicated, already in 1998, an adoption rate of about
20% in the project industry and the wholesale industry, vs. nearly 40% in discrete and
automotive, explaining these differences by the fact that ERP has its roots in manufacturing. In
effect, most ERP vendors initially developed products only for manufacturing companies and
thus did not target the services market. However, the expectations were high in the years 19982000 regarding ERP in the services sector, as s study found that 24% of the application budget in
this sector was allocated to ERP. This being said, if one analyzes the adoption of ERP or
integrated enterprise systems further, one quickly identifies fundamental differences between the
services and manufacturing sectors at the software module level. For example, one can easily
understand that service firms do not implement production planning modules, as the notion of
material requirements planning does not really apply in this context. However, they use human
resources and workforce management modules more than manufacturing firms. With regard to
ERP modules, research suggests that the services sector largely benefit from logistics modules
such as project management and after-sales services even though their integration is not as
complete as in the manufacturing sector. While ERP and supply-chain management (SCM)
system adoption rates are lower in the services sector, they are higher with regard to customerrelationship management (CRM) systems. And studies also indicate that e-commerce technology
has been adopted at a faster pace by services enterprises than by manufacturers.
The scope of this particular study has been restricted because of the various
constraints. Therefore the boundary or scope for this study has been restricted to a selected
sample of industry of IDA Cherlapally, Hyderabad. An effort has been made to ensure that the
sample is represented the whole population. A sample of 50 companies out of the total all most
all 50 companies we gathered information through personal interaction with the questionnaire for
obtaining their responses.
LIMITAT
ION of
The
STUDY
Limitation of the Study
This
study
covers data on Information Technology Road Map for SMEs located in IDA
Cherlapally, Hyderabad only. It will not represent all India data.
The
consisted only of companies with turnover of 50cr to 100cr.
sample
Companies of
the lesser turnover were not considered for the purpose of study.
There is no
concrete basis to prove the response given is a true measure of the opinion of all the
companies as a whole.
Basic Assumptions
It has been assumed that one of the limitations of ERPas as stated above does not exist in
the responses obtained by the companies this is because if there is any kind of aERPas in the
answers
to
the
purpose of conducting the
we go by the assumption
surveyed are free of ERPas
exhiERPt a true picture of
questionnaire, then the

survey is defeated. Hence
that the responses of the
and prejudice and that they
the company.
DATA
ANALYSI
S TOOLS
&
TECHNIQ
UE
Data Analysis Tools
This are the toolsof MS Excel what I have
used to analyze the survey data
1. Sort: You can sort your Excel data on one column or multiple columns. You can sort in
ascending or descending order.
2. Filter: Filter your Excel data if you only want to display records that meet certain
criteria.
3.Conditional Formatting: Conditional formatting in Excel enables you to

highlight cells with a certain color, depending on the cell's value.
4. Charts: A simple Excel chart can say more than a sheet full of numbers. As you'll see,
creating charts is very easy.
5. Pivot Tables: Pivot tables are one of Excel's most powerful features. A pivot table
allows you to extract the significance from a large, detailed data set.
6. Tables: Tables allow you to analyze your data in Excel quickly and easily.
7. What-If Analysis: What-If Analysis in Excel allows you to try out different values
(scenarios) for formulas.
8. Solver: Excel includes a tool called solver that uses techniques from the operations
research to find optimal solutions for all kind of decision problems.
9. Analysis ToolPak: The Analysis ToolPak is an Excel add-in program that provides
data analysis tools for financial, statistical and engineering data analysis.
Data Analysis Technique

Narrative
Descriptive
Statistical/mathematical
Audio-Optical
Others
CONTRIB
UTION
Contribution
Historically, firms in the SME sector have used IT mainly for managing accounts. Firms
such as Tally etc. grew very strongly during the first half of 2000s mainly due to providing
standalone IT solutions for accounting needs. Over the past few years however, the SME sector
is realizing the benefits of the increased IT adoption in other areas as well. ERP giants such as
SAP and Oracle have announced separate initiatives to launch products especially designed for
the SME sector. These products take short implementation times and licensing mode is favorable
to firms in the growth stage.
Benefits from increased IT adoption are manifold. While internally, increasing ICT
penetration can improve collaboration and efficiency, externally it can provide access to markets
which would have been otherwise inaccessible. When used properly, ICT can enable small and
medium sized businesses to:
Spur innovation
Increase efficiency
Manage customer relationships properly
Provide linkage to local, regional and international markets
Enable access to new technologies
Major benefits for increased IT adoption among SMEs are enumerated in exhiERPt 2. As
is evident from the research, the major drivers for increased IT adoption among the SME is to
increase communication within the organization and to provide linkages between customers and
suppliers. While these drivers are listed for organizations of all types, manufacturing firms tend
to focus more on aspects such as operations management.

It is also evident that accounting functionalities no longer figure in the top-7 drivers for
IT adoption. This may be because accounting functionalities mostly come out of the box and
most organizations have already implemented solutions that can fulfil their basic accounting
needs.
INDUST
RY
PROFIL
E
Industry Profile
Current Information Technology Industry
User data is like a treasure trove and ERP (ERP) is the tool that helps enterprises leverage
the data to increase customer engagement, satisfaction and resolve their business imperatives.
Slowly yet gradually Indian CIOs are realizing the hidden potential of ERP. They are also
undergoing added pressure from consumers, environmental policies, government and industry
regulations to improve their operations and processes to become both agile and efficient in a
volatile marketplace. These internal and external pressures are driving increased adoption of
analytics solutions across the country.
CIOReview as the navigator for enterprises to get the clear picture of the ERP industry
presents to you the '25 Most Promising ERP Companies in India'. We bring to you detailed
profiles of some of the best contenders in the ERP industry that help enterprises adopt data
analytics to ultimately fuel their business growth. A distinguished panel comprising of
accomplished Indian CEO's & CIO's of public companies, VC's, analysts, founders of other VC
funded companies including CIOReview's editorial board decided on the top 25 companies.
These companies have the technical skill sets and business acumen to become high value
organizations. The list will help you make the right choice for your ERP needs.
10 Most Promising ERP Companies in India

Company
Founder/CEO
Founded
Description
Advantics Solutions WinayakDurganandWagle 1991

Pvt.Ltd
Director
Mumbai,
Maharashtra
advantics.co.in
A two decade old provider of end-to-end Data

Warehousing and ERP solutions, mainly in the
Banking, Finance, Pharmacy and other business
verticals.
Bodhtree Consulting Pal

Limited
CEO
Hyderabad, Andhra
Pradesh
bodhtree.com
A provider of ERP tools and solutions specializing

in business strategy, business process, ERP&
advanced analytics Information management to
name a few.
Natarajan 1999
Board
Software
(India) Pvt. Ltd.
Mumbai,
Maharashtra
board.com
Partha
Sen 2008
Managing
Director Asia
Pacific
A provider of programming-free toolkits for rapid and costeffective development of Corporate Performance
Management and ERP software applications.
BeetleRim
Technologies
Pvt.
Ltd.
Hyderabad, Andhra
Pradesh
BeetleRim.com
BhargaviPagadala 2007
Founder
and
Managing
Director
A provider of ERP tools and solutions specializing in

business strategy, business process, ERP& advanced
analytics
Information management to name a few.
ERPrst India Private Manish Jani 2004

Limited
Managing
Ahmedabad, Gujrat Director
ERPrst.com
A provider of an automated end-to-end, enterprise-caliber ERP

platform that solves the problem from data to visualization.
Datawise
Vinay Kumar 2003
Hyderabad, Andhra CEO
Pradesh
mydatawise.com
A provider of ERP/Analytics, Consulting, Outsourcing and

data mining, incorporating strategic thoughts in cross
functional analytical intelligence.
Deflytics
Software Sanjeev
Pvt
Ltd
Agrawal
Mumbai, Maharashtra Director
Deflytics.com
2012
A provider of ERP and Analytic solutions with professional

Services to design, develop, configure, deploy and maintain
analytic solutions including ERPg Data and vertical specific
solutions, both on-premises and on-demand.
DreamorERPtSoftech Sanchit Jain 2010

Pvt.
Ltd.
CEO
Bangalore, Karnataka
dreamorERPt.com
A provider of services across the entire Supply Chain and

Logistics and offers ERP consulting services on the industry
leading Microsoft SQL Server and LITE ERP platforms.
Elegant
KartikPatel
JERPElegantJERP
CEO
Ahmedabad, Gujarat
elegantjERP.com
The company uses its innovative Managed Memory

Computing technology that has expanded the scope of
application for ERP tools.
GrayMatter Software Vikas

Services Pvt Ltd Gupta
Bangalore,
CEO
&
CTO
2006
2001
A provider of ERP, Analytics and Data Science services delivering

enterprise wide reporting/decision enabling solutions.
COMPA
NY
PROFIL
E
Company Profile
Tata Consultancy Services Limited (TCS) is an Indian multinational information
technology (IT) service, consulting and business solutions company headquartered in Mumbai,
Maharashtra. TCS operates in 46 countries. It is a subsidiary of the Tata Group and is listed on
the Bombay Stock Exchange and the National Stock Exchange of India. TCS is the largest Indian
company by market capitalization and is the largest India-based IT services company by 2013
revenues. TCS is now placed among the Big 4 most valuable IT services brands worldwide. In
2013, TCS is ranked 40th overall in the Forbes World's Most Innovative Companies ranking,
making it both the highest-ranked IT services company and the top Indian company. It is the
world's 10th largest IT services provider, measured by the revenues.
History
1968 to 2000
Tata Consultancy Services Ltd was founded in 1968 by a division of Tata
Limited. Its early contracts included providing punched card
services to sister company TISCO (now Tata Steel), fortune
Sons
ranking 1 working on an Inter-Branch Reconciliation System for the Central Bank of India, and
providing bureau services to Unit Trust of India.
In 1975, TCS conducted its first campus interviews, held at IISc, Bangalore. The recruits
comprised 12 Indian Institutes of Technology graduates and three IISc graduates, who became
the first TCS employees to enter a formal graduate trainee programme.
In 1979, TCS delivered an electronic depository and trading system called SECOM for the Swiss
company SIS SegaInterSettle. TCS followed this up with System X for the Canadian Depository
System and automating the Johannesburg Stock Exchange. TCS associated with a Swiss partner,
TKS Teknosoft, which it later acquired.
In 1981, TCS established India's first dedicated software research and development centre, the
Tata Research Development and Design Centre (TRDDC) in Pune.
In 1985 TCS established India's first client-dedicated offshore development centre, set up for
clients Tandem.
In early the Indian IT outsourcing industry grew rapidly due to the Y2K bug and the launch of a
unified European currency, Euro. TataConsultancyServices created the factory model for Y2K
conversion and developed software tools which automated the conversion process and enabled
third-party developer and client implementation.
2000 to present
On 25 August 2004, TCS became a publicly listed company.
In 2005, TCS became the first India-based IT services company to enter the bioinformatics
market.
In 2006, TCS designed an ERP system for the Indian Railway Catering and Tourism
Corporation.
In 2008, TCS's e-business activities were generating over US$500 million in annual revenues.
TCS entered the small and medium enterprises market for the first time in 2011, with cloudbased offerings.
In the 2011/12 fiscal year, TCS achieved annual revenues of over US$10 billion for the first
time.
In May 2013, TCS was awarded a six-year contract worth over 1100 crores to provide services
to the Indian Department of Posts.
In 2013 TCS moved from the 13th position to 10th position in the League of top 10 global IT
services companies.
In July 2014, TCS became the first Indian company to cross the Rs 5 lakh crore mark in market
capitalization.
Products and services
TCS and its 59 subsidiaries provide a wide range of information technology-related products and
services including application development, business process outsourcing, capacity planning,
consulting, enterprise software, hardware sizing, payment processing, software management and
technology education services. Its established software products are TCS BaNCS and TCS
MasterCraft.
Service lines
TCS' services are currently organised into the following service lines (percentage of total TCS
revenues in the 2012-13 fiscal year generated by each respective service line is shown in
parentheses):
Application development and maintenance (43.80%);
Asset leverage solutions (2.70%);
Assurance services (7.70%);
Business process outsourcing (12.50%);
Consulting (2.00%);
Engineering and Industrial services (4.60%);
Enterprise solutions (15.20%); and
IT infrastructure services (11.50%).
LITERAT
URE
REVIEW
Literature Review
The modern economic environment which is dominated by globalization, hypercompetition, and knowledge and information revolution has revolutionized the way business is
conducted (Pavic et al., 2007). This new technological epoch is apparent through the intensified
investment in computer-processing and data preparation appliance in the manufacturing and
service industry and telecommunications infrastructure, and its widespread usage in government
agencies, educational organizations, and, more recently, in the households. Owing to these
technological progressions, the implementation and application of IT is a significant driving
force behind many socioeconomic changes (Dierckx and Stroeken, 1999). As the utilization and
commercialization of IT becomes more widespread throughout the world, the adoption of novel
IT can generate new business opportunities and various benefits. Nowadays, both large
organizations and SMEs are seeking out ways to reinforce their competitive position and
improve their productivity (Premkumar, 2003). Accordingly, there is an increasing consciousness
of the necessity to derive profit through investing in IT within SMEs. IT tools significantly assist
SMEs through supplying required infrastructure necessary for providing appropriate types of
information at the right time. IT can also provide SMEs with competitiveness through integration
between supply chain partners and inter-organizational functions, as well as by providing critical
information (Bhagwat and Sharma, 2007). Prior IT literature however has shown that only a
small number of studies focused on the adoption and use of IT in SMEs (Grandon and Pearson,
2004). Moreover, it has been found that in spite of exponential growth of IT within SMEs, the
rate of IT adoption by these businesses has remained relatively low (MacGregor and Vrazalic,
2005) and large organizations have noticeably profited more than SMEs in both their IT-enabled
improved sale and costs saving (Riquelme, 2002). In looking for reasons for such differences in
IT adoption in SMEs, unique characteristics of these businesses can be highlighted. SMEs
generally have limited access to the market information and suffer from globalization constraint
(Madrid-Guijarro et al., 2009). Moreover, management techniques such as financial analysis,
forecasting, and project management are rarely used by SMEs (Blili and Raymond, 1993).
Tendency to employ generalists rather than specialists, reliance on short term planning, informal
and dynamic strategies and decision making process, and lack of standardization of operating
procedures are other distinctive characteristics of SMEs (Dibrell et al., 2008; Thong et al., 1996).
However, restricted resources controlled by SMEs, which is commonly referred to as resource
poverty (Thong et al., 1997; Welsh and White, 1981), is the major differentiator between SMEs
and large organizations. Therefore, and with regard to the weakness of SMEs at different
organizational and managerial, technological, individual, and environmental levels, the IT
adoption and use in SMEs is in a disadvantage position in this respect (Al-Qirim, 2007;
MacGregor and Vrazalic, 2006).
The aim of this research is to achieve a better understanding of IT adoption in SMEs
through explicitly and understandably exploring and identifying factors influencing IT adoption
process within SMEs in both developed and developing countries existing in the literature with
high concentration on certain SME-related issues. Proposed conceptual framework demonstrates

the determinants of IT adoption process in SMEs through review of prior literature including
concepts, methodologies, theories, empirical research and case studies relative to IT adoption
among SMEs, and by comERPning exiting perspectives. The research investigates and reveals a
number of internal and external issues pressuring and persuading SMEs to adopt IT solutions.
Likewise, barriers to IT adoption in SMEs will be addressed by reviewing and classifying IT
adoption factors. Using the proposed conceptual framework, the authors categorize and elucidate
the key factors that directly or indirectly, as well as positively or negatively impact the process of
IT adoption in SMEs.
Information Technology Adoption Concept

In order to describe the process of IT adoption, it is essential to define IT, as well as to
scrutinize the adoption concept. For this paper, an inclusive term of information technology is
defined to cover the multiplicity of these technologies. Within the diffusion and adoption of
information technology literature, there is no generally accepted IT definition as various
definitions of IT have widely been employed by different researchers. IT might be regarded as
technological aspect of Information System (IS) (Hollander et al., 1999), which is aimed for
creation of computer-based IS by using computer systems in organizations (Sarosa and Zowghi,
2003). IT can be defined as those technologies engaged in the operation, collection, transport,
retrieving, storage, access presentation, and transformation of information in all its forms ...
(Boar, 1997). Moreover, IT adoption is defined by Tan et al. (2009) as application of Information
and Communication Technologies (ICT) tools including computer hardware, software, and
networks required for connecting to the internet. According to (Attaran, 2003) , Information
technology is defined as capaERPlities offered to organizations by computers, software
applications, and telecommunications to deliver data, information, and knowledge to individuals
and processes, however, and with regard to the concept of supplier relationships, Carr and
Smeltzer (2002) defined IT as the use of automated purchasing systems, supplier links through
electronic data interchange (EDI), computer-to-computer links with key suppliers and finally
information systems. In the light of aforementioned views, term IT will cover wide range of
information processing and computer application in organizations in this study. IT will cover IS,
ICT, internet and their infrastructure including computer hardware and software, those
technologies that processes or transmit information to enhance the effectiveness of individuals
and organizations. Furthermore, term IT also includes any computer application and required
hardware packages, Computer Aided Design (CAD), Computer Aided Manufacturing (CAM),
EDI, and Enterprise Resource planning (ERP) which increase the productivity of businesses, as
well as any technologies used for electronic commerce (EC) such as electronic funds transfer
(EFT), intranet, extranet, collaborative planning, forecasting, and replenishment (CPFR)
applications, supply chain communications systems, and electronic supply chain management
systems.
On the other hand, different definition of IT adoption in organizations has been provided
by prior literature such as decision to accept and use the innovation (Premkumar and Roberts,
1999; Tan et al., 2009; Thong, 1999; Zaltman et al., 1973), the full use of innovation as intended
by the designer (Bving and Bdker, 2004), implementation success (Thong, 2001), extent of
usage (Davis, 1989; Grandon and Pearson, 2004)) and effectiveness and success of adopted IT
based on acceptance of or satisfaction with IT (Al-Gahtani et al., 2007; Al-Gahtani and King,
1999; Foong, 1999; Palvia, 1996; Palvia and Palvia, 1999). Thong and Yap (1995) defined IT
adoption is SMEs as applying computer hardware and software solutions that provide support of
operations, management, and decision-making in organizations. They explain that the aim of IT
adoption (including computer applications such as CAD/CAM, EDI, MRP) is increasing
business productively.
Information TechnologyAdoption
withinSMEs
The rich diversity of different perspectives toward factors that affect IT adoption process
is available on a huge body of literature. The review of previous research has identified a number
of influencing factors. Most of these perspectives and studies have concentrated on influencing
factors such as top management, organizational behavior and characteristics, firms resources,
government, customers, supplier and external IT consultant and vendors.
Based on a review of the existing literature on IT adoption in SMEs, an integrated
framework has been developed and used to classify various issues and factors relative to process
of IS/IT adoption within SMEs (Figure1). This model merely comprises different aspects of
internal and external IT adoption factors (Drivers, Influencing factors and barriers) and does not
categorize adoption factors based on being drivers or barriers of IT adoption in SMEs. The
authors believe that the presented categorization of IT adoption issues and factors through
developed conceptual framework can help governments, organizations, managers and IT
consultants to achieve clearer understanding of IT adoption process. It also add further
knowledge to the literature while more comprehensive study of IT adoption within SMEs
investigating SME-related influencing factors simultaneous with other aspects (drivers, enablers
and inhiERPtors) of IT adoption has been warranted by prior literature. In the first part, internal
and external factors influencing IT adoption are discussed. This section puts forward a proposed
conceptual framework according to the literature and also includes inclusive categorization, as
well as review of factors influencing adoption process. Finally, a brief explanation on the IT
adoption issues in SMEs would be followed.
Influencing Factors
Within this study and as suggested by Figure 1, influencing factors are categorized into
two major clusters of factors and their subcategories: internal and external factors. In addition, a
brief review and categorizations of factors influencing IT adoption in SMEs has been offered in
Table 1, those factors that are merely SME-related.
Internal Factors
1. Top Management
In SMEs, IT adoption process is directly affected by top management where all decisions
from daily functions to future investments are made by them (Bruque and Moyano, 2007;
Nguyen, 2009). SMEs mainly have simple and highly centralized structures with the chief
executive officers (CEOs) in which, in most cases, owner and chief manager are one and the
same person (Ghobakhloo et al., 2011a). Some surveys have revealed that when the SME
owner/manager as the key decision maker makes a decision or appoints a high significance and
value upon internal or external duties, the organization will also be inclined to respond in an
analogous fashion (Chau, 1995; Lybaert, 1998). A number of studies have revealed that in SMEs,
the role of CEOs (top management or owner/manager) is central to enterprise since their decision
influences all firms activities, both in current and in future (Fuller-Love, 2006; Smith, 2007).
This also refers to IT adoption decision from planning stage to the implementation, maintaining,
and system upgrade stages (Bruque and Moyano, 2007; Fuller and Lewis, 2002; Nguyen, 2009).
These decisions are mainly based on their experiential knowledge derived from comERPnation
of existing competencies of knowledge, personal experience, judgment, and their communication
skills (Carson and Gilmore, 2000). However, Keh et al. (2002) discuss that CEOs knowledge and
experience required for identifying opportunities is mostly attained by social relationship
network rather than individualistic psychological traits.
According to the literature, several factors including managements perception of and
attitude toward IT, support and commitment, IT knowledge and experiences, innovativeness,
perceived behavioral control over IT, desire for growth, and familiarity with administration
directly impact the process of IT adoption is SMEs (Drew, 2003; Lybaert, 1998; Premkumar,
2003; Qureshi and York, 2008; Thong et al., 1993; Thong and Yap, 1995).
Accordingly, the characteristics of the CEOs should be taken into consideration in the
investigation of strategic activities, such as the adoption of innovations including IT as a new
technology, and other novel technologies as well (Lefebvre and Lefebvre, 1992). Studies by
Thong and Yap (1995) and Thong (1999) found that small businesses those have adopted IT are
more likely to have CEOs possessing more positive attitude towards IT adoption. This view is
reinforced by Caldeira and Ward's (2003) study confirming that positive attitude of top
management has brought about the relative success of IS/IT adoption in SMEs, especially in
manufacturing ones. In addition, it is argued that greater intention to adopt IT solutions is
directly attributable to the more positive attitude of small minority business owners toward IT
adoption (Qureshi and York, 2008). Consequently, if the CEO perceives that benefits of IT
adoption outweigh its risks, then the business is more likely to adopt IT (Thong and Yap, 1995).
Prior literature suggests that when the management has been highly willing to implement IT
application, SMEs do not perceive management priority on IT as a major barrier in adopting IS
applications (Bhagwat and Sharma, 2007). In addition, positive attitude of top management
toward using IT (as the users of IT in SMEs) will result in IT acceptance and subsequently
success in SMEs (Al-Gahtani and King, 1999; Davis, 1993; Ghobakhloo et al., 2010).
On the other hand, IT adoption literature has provided evidence that top management
support and commitment towards IS/IT adoption is one of the key cornerstone of higher levels of
success and satisfaction with IS/IT adoption and use in SMEs (Fink, 1998; Ghobakhloo et al.,
2010; Premkumar, 2003; Thong, 2001). Cragg and Zinatelli (1995) identified insufficient
attention by management to IS as one of three main problem areas for computing in small firms.
They argued that management can directly impact IS evolution and sophistication, since top
management support and commitment is a key factor contributing to the IS success within small
firms. For success of IT in Malaysian SMEs however it was found that anticipated benefits of
computerization in SMEs can only be achieved by existence of five conditions including strong
top management support as the key condition (Foong, 1999). In a similar context, and
interpreting the successful adoption and use of IS/IT from the resource based theory, Caldeira
and Ward (2003) and Ghobakhloo et al. (2011b) demonstrated that management support towards
IS/IT adoption significantly participates in the IS/IT adoption success within SMEs. Opposite of
what has been stated, Thong et al. (1993) and Thong et al. (1997) argued that there is no relation
between the level of IS effectiveness and level of CEO support. Thong et al. (1997) defined top
management support based on 5 elements (Table 2). They discussed that there is no difference in
the level of IS effectiveness between small businesses with high levels of top management
support and small businesses with low levels of top management support. The authors however
believe that the role of top management support in IT adoption within SMEs in consequential
and the Thong et al. (1993) and Thong et al. (1997) inconsistency in providing the support for
this factor can be attributed to their definition of top management support and its measurement
construct in their research.
CEOs IT knowledge and experience of IT is another trait affecting IT adoption in SMEs
(Drew, 2003; Fink, 1998; Ghobakhloo et al., 2011a; Lybaert, 1998). A study by Thong et al.
(1995) demonstrated that small businesses with CEOs who are more knowledgeable about IT are
more probable to adopt IT. They discussed that greater knowledge of CEOs will reduce the
degree of uncertainty entangled with IT which will result in lower risk of IT adoption (Thong,
1999). Moreover, Palvia and Palvia (1999) found that in SMEs, CEOs with higher levels of
computing skills are more satisfied with the implemented IS rather than those having inferior
skills while based on the literature, satisfaction with IS/IT is one of the most applied measures of
IT success in organizations (Adamson and Shine, 2003; Jayasuriya, 1998; Palvia, 1996). These
views are consistent with the findings of other studies which found that sufficient knowledge of
IT and its consequent influences over organization could be provocative and supportive for IT
adoption in SMEs (Fink, 1998; Lybaert, 1998; Sarosa and Zowghi, 2003).
Another influencing factor attributable to the top management characteristics is CEO
innovativeness, both in general and IT-specific terms (Ghobakhloo et al., 2011a, 2011b).
Personal Innovativeness in IT (PIIT) has been revealed to be a reliable predictor of users
attitude about the simplicity of use and effectiveness of new technologies (Nov and Ye, 2008).
Agarwal and Prasad (1998) have defined PIIT as the willingness of an individual to try out any
new information technology. They discuss that PIIT is a major determinant of IT acceptance by
moderating in perceived usefulness (PU), compatiERPlity, and perceived ease of use (PEOU).
Here, it should be considered that in most of IT acceptance model such as Technology
Acceptance Model (TAM) (Davis, 1989), Decomposed Theory of Planned Behaviour (DTPB)
firstly introduced by Taylor and Todd (1995) and the Unified Theory of Acceptance and Use of
Technology (UTAUT) by Venkatesh et al. (2003), as well as in majority of models of users
satisfaction including End User Satisfaction (EUS) model (Adamson and Shine, 2003), Model of
Small Business User IT Satisfaction (Palvia and Palvia, 1999) and Wixom and Todd (2005)
integrated model of user satisfaction and technology acceptance with IT, PU and PEOU are two
key constructs of user behavioral intention and subsequently IT usage behavior. An empirical
research by Thatcher and
Perrewe (2002) demonstrated that highly innovative individuals, having higher levels of
PIIT, are more likely to look for stimulating experiences, as well as having more confidence in
their competence to use IT. On the other hand, individuals possessing lower levels of PIIT are
more probable to present general computer anxiety; also they might have less tolerance for risk.
Findings of their empirical study illustrated the significant direct effects of PIIT on computer
self-efficiency while computer anxiety partially mediated PIIT's effect on CSE.
In general terms however and in SME context, studies by Ghobakhloo et al. (2011a),
Thong and Yap (1995), and Thong (1999) revealed that movement toward IT adoption in small
enterprises with innovator CEO are more probable. Innovative CEOs would prefer to apply
distinctive and risky solutions such as IT that change the structure in which the problems are
generated. Thus CEOs desire of being more innovative will expedite the process of IT adoption
(Thong and Yap, 1995). Accordingly, the authors suggest that above mentioned studies and
researches stress the significance of innovativeness in both general term and in term of PIIT on
user perception and system acceptance where according to Scott and Walczak (2009), individuals
with higher levels of PIIT will possess greater cognitive absorption and show higher computer
self-efficiency. In SMEs, where users of a new information system are both employees and
owner/managers, innovative owner/managers will have a better attitude toward IT adoption.
Desire for growth is another characteristic of CEOs that deserves our attention as an
important influencing factor over adoption of IT. Lybaert (1998) discusses that firms size is
positively related to the decision to accumulate additional information, and growth of a firm is
coupled with the gathering of additional information. They found that SME s owner/manager,
who makes most of the critical decisions and allows the firm to grow, uses more information
when possesses greater desire for growth. Moreover, they argued that familiarity with
administration is other important CEO-related determinant which influences the use of
information and IS within SMEs. Lybaert (1998) study showed that comparing to CEOs not
possessing knowledge of administration, CEOs with high familiarity with administration will use
more information and subsequently IT.
2. Resources
SMEs have generally been distinguished by and are suffering from their restricted access
to particular recourses compared to ERPg organizations (Igbaria et al., 1997; Nieto and
Fernndez, 2005). according to the literature of IT adoption and due to SMEs unique
characteristics, financial resources, technical and managerial resources, information resources
accessiERPlity, internal and external expertise, market accessiERPlity, and in-house IT
knowledge and experience are resources with aERPlity to hinder or simplify the adoption of IT
in SMEs, and to positively or negatively influence this process as well (Caldeira and Ward, 2003;
Cragg and Zinatelli, 1995; Dutta and Evrard, 1999; Fink, 1998; Lybaert, 1998; Nguyen, 2009;
Southern and Tilley, 2000; Thong, 2001). A study by Dutta and Evrard (1999) investigating the
strategic management of IT and organization within small enterprises in six different European
countries suggests that the differences between small firms which are capable to make the use of
IT and those enterprise which are not is partially attributable to quality of the internal resources,
predominantly manpower, and initially the control of technological information. They also stated
that innovation is often impeded through an insufficiency of financial resources required for
RandD.
Financial resources are one of the most considerable critical resources which are known
as the key SMEs performance requirements and subsequently critical success factors based on
resource-based theory (Rangone, 1999). In general, most SMEs are suffering from not having
sufficient financial resources and most owner/managers invest their own personal assets (FullerLove, 2006). Limited financial resources compel SMEs to be cautious about their investment and
capital spending (Ghobakhloo et al., 2011b). An imprecise IT investment decision can impose
drastic financial consequences for SMEs and in extreme circumstances; it may lead to an
insolvency and economical failure (Sarosa and Zowghi, 2003). As implementation of new IT
system and its components requires long term investment (Nguyen, 2009) and concerning the
high cost of IT infrastructure (Walczuch et al., 2000), only SMEs having adequate financial
resources would regard adoption of IT as a feasible project to undertake (Thong and Yap, 1995),
so that SMEs owner/managers who have access to necessary financial resources are more
capable to establish desired IS (Lybaert, 1998). However, and despite a number of studies have
revealed that the financial restriction of SMEs regarding IT adoption is attributable to the high
cost of IT tools and infrastructure (Chau, 1995; Premkumar, 2003; Walczuch et al., 2000),
Dibrell et al. (2008) and Wu et al. (2006) suggest that; as the price of computer hardware and
software has been considerably declined in recent years, IT implementation expenses are not
major factor hindering IT adoption process in SMEs regarding their limited financial resources.
Nevertheless, it should be considered that along with the initial cost of computer hardware and
software, other IS/IT implementation expanses including the cost of users training and
development and the post deployment costs should be undertaken by SMEs during different
phase of IT adoption (Nguyen, 2009). With regard to this view, Ein-Dor and Segev (1978)
supposed that throughinvesting sufficient financial resources, the probaERPlity of IS
implementation success within organizations will be increased. This view is empirically
reinforced by Thong (2001) who demonstrated that after external expertise, IS investment is the
second most significant determinant of IS implementation success in Singaporean small
business. Their study demonstrated that higher levels of allocation for IS investment will amplify
the possiERPlity of IS implementation success in small businesses, while through this allocation
for investment, small businesses will be able to hire more experienced external experts and/or
implement better IS that meet their goals. Furthermore, due to abovementioned restrictions and
regardless of decrease in the price of preliminary IT tools, SMEs are generally unable to meet the
expense of other IT adoption costs such as taking expert professionals into service (Ghobakhloo
et al., 2011b); therefore, SMEs are facing great difficulty hiring IT specialist to successfully
implement IT with regard to financial constraints (Caldeira and Ward, 2003; Sarosa and Zowghi,
2003). This view is supported through a study by Pontikakis et al. (2006) of adoption of Internetenabled Personal Computers (IEPCs) by Greek SMEs suggesting that when companies are
traditionally facing with limited access to finance, a small number of SMEs are capable to
rationalize costs of IT adoption, even as these costs encompass purchasing technology expenses
(e.g. hardware and software) along with the costs of employee training, organizational
restructuring and upgrading existing facilities.
On the other hand, and comparing to large organization, it has been acknowledged that
SMEs are suffering from lack of in-house IT expertise which might negatively influence the
process of IT adoption (Chau, 1995; Cragg and Zinatelli, 1995; Fink, 1998). As a result, SME are
facing significant risks and problems with their computerization regarding their inadequate
knowledge of IS/IT implementation (Igbaria et al., 1997). Cragg and Zinatelli (1995) conducted
a longitudinal study over an eight year period of IS sophistication and evolution in eighteen
small firms and demonstrated that evolution and sophistication of IS within small firms will be
drastically inhiERPted when small enterprises are suffering from lack of internal expertise. This
view is supported through a study by Caldeira and Ward (2003) who revealed that internal
expertise consisting of employees, supervisors, or those from top management are powerful
determinants of IT adoption. In addition, Southern and Tilley (2000) categorized SMEs into three
main groups based on level of ITC utilization; low users, medium users, and high users. They
further found that the levels of IT (technological) expertise existing within the medium small
firm users of ICTs are greater than low users of ICTs, while high small firm users of ICTs are
more tendentious to have technological expertise than low and medium users.
In addition, knowledge of IT is another vital resource influencing IT adoption in SMEs.
Development of internal IS/IT knowledge and skills is one of the most important basis required
for providing superior levels of IS/IT adoption and satisfaction in SMEs (Caldeira and Ward,
2003). In general, lack of IT knowledge in SMEs can be regarded as a barrier to IT adoption
since CEOs of SMEs might be bewildered by swift development of IT tools and countless variety
of choices (Sarosa and Zowghi, 2003; Venkatesh and Brown, 2001). Therefore, with regard to
this fact that SMEs generally lack IT resources and skills (e.g. IT knowledge and computing
skills) (Chan and Chung, 2002; Igbaria et al., 1997; Levy et al., 2001), theses business can
provide themselves with potential resources from networking and also benefit from it when it
comes to adopting IT (Fletcher, 2002; Nguyen, 2009). In SMEs, networking can be defined as a
number of interaction between organizations, counterparts, suppliers, customers, and vendors so
that, they could be either personal network or business network (Palvia and Palvia, 1999). Hence,
the networks are a crucial ways for acquiring access to external knowledge required for
successful implementation of IT (Nguyen, 2009).
3. End users
In most of organizations, employees are regarded as significant assets which along with
the role of owner/manager, the firms survival and success seriously depend on them (Melville et
al., 2004; Nguyen, 2009). These assets as the users of IT within SMEs are another precious
resource of firms (Caldeira and Ward, 2003) which needs to be developed to contribute to the
success of business (Egbu et al., 2005; Zhou et al., 2009).
Prior literature suggests that characteristics of IT users including knowledge of IT,
training, attitudes and intention toward IT, and participation and involvement in adoption process
could impact IS/IT acceptance or its adoption process as well (Caldeira and Ward, 2003; Fink,
1998; Fisher and Howell, 2004; Lybaert, 1998; Robey and Zeller, 1978; Thong, 2001). Limited
use of IT and a lack of success in reaping benefit from computer hardware and software in
organizations, those issues that have negatively affected IS/IT in SMEs is attributable to the lack
of training and skills in organizations where the successful adoption of IT needs sharing of
knowledge, training, and higher levels of skills by the employees who are users of IT (Egbu et
al., 2005; Ghobakhloo et al., 2010). To facilitate the successful implementation of IS in SMEs,
and to avoid adoption failure, these businesses should also augment the level of IS knowledge
among potential IS users through providing firms staffs with computer education and training
courses (Thong, 2001). Sarosa and Zowghi (2003)and Ghobakhlooet al. (2010) argue that IT
acceptance within users of IT as a part of firms employee will impose positive impacts on IT
adoption. According to these authors, level of IT adoption and usage by users will be affected
through provided IT course and training while higher knowledge of IT among users would help
them in implementing the new technology.
Premkumar and Roberts (1999) suggest that increasing users awareness of the benefits
of information telecommunication technologies will also positively influence the process of these
technologies adoption while this awareness could be amplified through improved education and
training. Correspondingly, a study by Kleintop and Blau (1994) investigating impact of end users
training on electronic mail system implementation demonstrate that end users practice with new
IT system before its implementation will result in higher level of IT system acceptance. In
addition, their research suggests that increase in amount of training among end users before IT
implementation might lead to higher level of perceived ease of using IT, as well as perception of
IS usefulness. Moreover, it is suggested that positive change or improvement of business
functionality through new system may not be believed by some employees (Anderson and
Huang, 2006). Regarding this pessimistic attitude, Bruque and Moyano (2007) suggested that
employing new staffs instead of training current employees might be more effective way. This
view is supported by more recent literature recommending that training should be provided to
current staffs if cost of hiring new staff is higher than providing training to the existing
employees and if there would be a substantial change in the IT through providing training
(Ghobakhloo et al., 2011a; Nguyen, 2009).
A number of prior studies have demonstrated that employee acceptance and usage of and
satisfaction with IT might be immoderately problematic regarding adoption success (Davis,
1993; Igbaria et al., 1997; Zhou et al., 2009) where according to Bull (2003), more than half the
computer systems implemented in western countries are underused or not utilized at all. The
acceptance of IT by users including managers, professionals, and operating level personnel,
which is an essential condition for its success, can be regarded as the success measures including
user attitudes, usage, and satisfaction (Al-Gahtani and King, 1999). Lack of user acceptance has
long been confirmed to be an impediment to the success of new IS, so user acceptance is
regarded as the key factor determining success or failure of IS/IT projects (Davis, 1993). In
SMEs, Employees attitude toward IT adoption might have significant impact on system
acceptance and adoption success so that negative attitude of some users toward IT could
negatively affect successful implementation of IT (Nguyen, 2009). They may not perceive that
new IT can change or improve business function and when it comes to adopt IT, they might be
worried about consequences such as threat of losing job (Irani et al., 2001). Nonetheless,
employees attitudes toward use of the IS will be encouraged through evident top management
support which will bring about a more tolerable conversion from the existing work practices and
company operations (Thong et al., 1997). Moreover, Davis, (1993), Igbaria et al. (1997), Straub
et al. (1995), and Szajna (1996) found that attitude toward using, along with PU and PEOU can
fully affect the acceptance of IT by its users. PU refers to the degree to which a person believes
that using a particular system would enhance his or her job performance (Davis, 1989) while
Davis (1989) defines PEOU as the degree to which a person believes that using a
particular system would be free of effort. Above mentioned view was validated in small
businesses through a study by Igbaria et al. (1997) who demonstrated that users IT acceptance
in small businesses is directly affected by PU and PEOU. In addition, the contribution of PU in
promoting personal computing acceptance in small businesses is mediated by PEOU.
On the other hand, employees (as the users of IT) satisfaction with IT is another
dimension of IT adoption success in SMEs (Adam Mahmood et al., 2000; Adamson and Shine,
2003; Al-Gahtani and King, 1999; Palvia, 1996; Palvia and Palvia, 1999; Yan et al., 2007).
Contrary to technology acceptance literature focusing on individuals behavior and beliefs,
system and information characteristics have been regarded as core concepts in the user
satisfaction literature (Ghobakhloo et al., 2010). Adam Mahmood et al., (2000) argue that enduser information satisfaction is strongly affected by perceived benefit and expectations
characteristics, user background and involvement and organizational support and encouragement,
as well as by subcomponents of these three factors. On the other hand, Palvia (1996) and Palvia
and Palvia (1999) discuss that regarding unique characteristics of SMEs such as specific
computing environment, mandatory environment, and resource constraints, as well as concerning
this fact that employees and managers of SMEs as the users of IT are inclined to be specialist in
various aspects of IS, rather than being very well qualified or expert in different IT roles,
attributes of user satisfaction with IT in SMEs tends to be quite different from large
organizations. Consequently, Palvia (1996) formulated the SBUSIT model to evaluate IT impact
over SMEs based on IT user satisfaction measure. Afterwards, this model was developed by
Palvia and Palvia (1999) through adding business related factors and owner/manager
characteristics as two other determinants of users satisfaction with IT in SMEs.
Despite SBUSIT and its developed version address the user satisfaction in small
businesses in connection with their particular characteristics, this model has excluded user
involvement as a determinant of user satisfaction in small business, while user involvement in
IS/IT development has been largely considered as a significant mechanism leading to successful
implementation of a new system (Amoako-Gyampah, 2007; Baroudi et al., 1986; Cynthia et al.,
1997), specifically in SMEs (Fink, 1998; Foong, 1999; Thong, 2001, ghobakhloo et al., 2011b).
In general, when a firm initiates to change to a new information and computer system, it may
causes doubts over job security and makes employees worried about the adoption outcomes such
as threat of losing job (Bull, 2003; Irani et al., 2001). As previously mentioned, positive progress
or improvement of organization functionality through new IS may not be believed by some
employees (Anderson and Huang, 2006), thus, it should be assured by owner/manager that
employees are aware and have an understanding of the effects of changes to a new computer
system on organization (Bull, 2003; Nguyen, 2009). Moreover, managers should keep employees
aware that new IS/IT will enable them to make the best use of the resources that can help them
be more productive (Premkumar and Roberts, 1999). In such circumstances, involving
employees as a part of new projects and systems will make them believe that; as the members of
a family, team or organization itself, they are very important to and responsible for new projects
success in organization. Hence, involving employees in the adoption process will result in higher
levels of success (Amoako-Gyampah, 2007; Baroudi et al., 1986). Stewart et al. (2000) suggest
that this user involvement should be initiated from the commencement of IT project feasiERPlity
studies, should continue throughout design phase, and must keep in deployment and testing
stages.
On the subject of evaluating the role of user involvement in information system success,
Thong (2001) demonstrated that user involvement in IS implementation is one of the most
important factors for successful IS implementation and user information satisfaction. This view
supports an empirical study by Foong (1999) on effect of end-user and systems attributes on
computer-based IS success in Malaysian SMEs which demonstrated that satisfaction and systems
usage can be improved through a higher level of user involvement in IT development. If end
users could be encouraged to be involved with IS/IT implementation through having time-off
form routine responsiERPlities, advantages such as better fit of IT to users expectations,
easiness of using the IT applications due to achieved IT knowledge and learning experience
during the design phase, strong sensation of ownership, and decreased resistance to change could
be achieved (Fink, 1998; Thong, 1999). These factor could increase the probaERPlity of
successful IT implementation as well (Thong, 2001).
In sum, it could be inferred that CEOs of SMEs are not the only users of IT who
contribute to the success of the implemented IT. Employees as the valuable assets of firms also
have a drastic influence over adoption and successful implementation of new IT. Therefore,
development of these resources seems to be necessary for the success of the business (Egbu et
al., 2005; Ghobakhloo et al., 2011b).
4. IT Solution (Computer Application)

Process of IT adoption within SMEs also depends on characteristics of implemented
IS/IT itself which consist of a cluster of factors including type, process compatiERPlity, user
friendliness and popularity of implemented IS/IT, quality of software available in market, the
costs of IT, and perceived impacts and benefits of IS/ITs on organization (Caldeira and Ward,
2003; Cynthia et al., 1997; Foong, 1999; Premkumar, 2003; Salmeron and Bueno, 2006;
Walczuch et al., 2000). A study by Shin (2006) of adoption of enterprise application software
reveals that easy-to-understand, and relatively long-experienced enterprise applications are more
effective in SME as compared to hard-to-understand and brand-new applications. In addition,
quality of IS/IT available in market and its type could be an important factor affecting IS/IT
adoption and use among SMEs (Caldeira and Ward, 2003) where regarding IT as a major
resource required for achieving satisfactory performance for business, its quality refers to
attributes of selected IT, its reliaERPlity, and usefulness (Sardana, 2008).
Another factor that affects adoption of IT within SMEs is cost of IS/IT. Fink (1998)
suggests that it is imperative that managers should consider elements of IT costs (hardware and
software costs) closely during IT adoption process within SMEs. From a same perspective,
Walczuch et al. (2000) studying internet adoption barriers for small firms in the Netherlands
argue that the high costs are the important reason for Dutch small firms for not having internet
access and their own Website. Moreover, most of American businesses have significant difficulty
affording the costs of ICT tools while 90% of these businesses consider lack of financial
resources and skills as the main barriers to ICT adoption (Duncombe and Heeks, 2001). With
regard to the financial constraints of most SMEs, as well as concerning the high start-up cost of
ICT or very expensive software or ready-to-use online package, it is expected that SMEs
generally cannot afford adopting ICT or reap benefits from it through effective use of ICT in
short or medium period of time (Ghobakhloo et al., 2011b; Thong, 2001). Premkumar (2003)
however argue that IT adoption cost is not a significant factor in determiningadoption within
SMEs. This view is empirically supported through a study by Tan et al. (2009) who discuss that
despite IT costs in one of the major risks perceived by Malaysian SMEs, there are no significant
associations between high costs of ICT infrastructure and ICT adoption in these businesses.
Here, the authors suggest that although the prices of hardware and software have been noticeably
decreased and have become more affordable, however, difficulty in estimating costs of IT
adoption leading to uncertainty about anticipated IT benefits are a significant barrier to IT
investment in SMEs (Love et al., 2005). According to Love et al. (2005), although IT direct costs
are resulted from the implementation of new technology, these direct costs are usually
underestimated and are regarded as cost of hardware, software and installation, those costs that
have been declining recently (Dibrell et al., 2008; Porter and Millar, 1985; Premkumar, 2003),
while it is suggested that beside initial costs of software and hardware, costs of IT
implementation should include personnel training and development expenses, as well as costs of
post implementation (Nguyen, 2009). In addition, indirect costs of IT adoption may be more
significant that the direct costs (Love et al., 2005). Indirect costs also comprise the early cost of
temporary loss in firms productivity (Love and Irani, 2004), costs of human factors (e.g.
training), organizational costs raised from transformation from former system to new work
practice, and costs of any changes to the systems and business procedures (Hochstrasser and
Griffiths, 1991), whilst management time is the main considerable indirect cost in various
organizations (Love and Irani, 2004). Here, with regard to aforementioned perspectives, it could
be inferred that cost is still regarded as an essential issue when it comes to adopting and
implementing IT in SMEs (Nguyen, 2009). The rationale behind is that in spite of decrease in
initial and direct costs of IT adoption such as costs of hardware, installation and configuration,
software and/or licensing in recent years, SMEs, characterized by restricted financial resources
are typically experiencing difficulty estimating and affording total and long-term expenses
entangled with IT adoption. It should be noted that in addition to direct costs such as hardware,
software and installation costs, IT adoption expenses also go beyond indirect costs including
costs of staff training and motivation, transformation from old systems, procedures and
organizational structure to new ones, as well as post IT implementation expenses, cost of
management time and effort, productivity losses, and finally expenses encompassing costs of
maintenance and development (Hochstrasser and Griffiths, 1991; Love and Irani, 2004; Love et
al., 2005).
In addition, subsequent organizational impact and benefits of an IS/IT could influence IT
adoption decision is SMEs. perceived benefits of IT is mostly considered as a managerial belief
affecting adoption process, however, we address it here as we aim to inclusively discuss the
nature of IT benefits and its impacts over IT adoption and use. As stated previously, perceived
benefits, risks, costs and usaERPlity of IT affect the acceptance of and satisfaction with IT (Love
et al., 2005; Palvia, 1996; Palvia and Palvia, 1999; Thong, 2001). A number of categorization of
IT benefits could be found within the rich literature of IT adoption. As stated by Love et al.
(2005), authors such as Demmel and Askin (1992, 1996) argue that IT benefits can be
categorized as strategic, tactical and pecuniary. On the other hand, other researchers discuss that
benefits of IT can be generally classifies as three types: strategic, tactical, and operational
benefits (Farbey et al., 1995; Irani and Love, 2000 and 2002), however Peters (1994) suggested
that IT benefits fall under three classification including enhanced productivity, business
expansion and risk minimization. Love et al. (2005) argue that despite the benefits of IT could be
evaluated with simpler methods, with the appearance of new inter-organizational systems such as
electronic customer relationship management (E-CRM), and ERP, the process of IT benefits
evaluation, as well as benefit identification and qualification has become more sophisticated. In
general, IS/IT is regarded as a crucial resource required for better communication and integrating
business functions (Bhagwat and Sharma, 2007). Gaith et al. (2009) suggest that IT generally
improves the overall performances of SMEs. IT could brings about decrease in documentation
errors (Ahuja et al., 2009), decline in production and labour costs (Levy et al., 2001; Nguyen,
2009), process and organization flexiERPlity (Ghobakhloo et al., 2011a and 2011b), discovery of
new business opportunities and access to market information (Tan et al., 2009), and enhancement
of competitive advantage and position of business (Carbonara, 2005; Lai et al., 2006; Pavic et al.,
2007; Porter and Millar, 1985; Powell and Dent-Micallef, 1997). Moreover, Thong (2001)
pointed out that organizational impacts of IT are characterized as the effects of the IS on the
performance of the small business. These authors suggest that IS impacts might be resulted in
improvement in decision-making, making more money by adding worth to products and services,
and increased sales revenue. Likewise, a study by Riemenschneider et al. (2003) on IT adoption
decision in small businesses revealed that anticipated benefits or satisfactory outcomes to
organization are significant contributor factor to the decision process of web site adoption. A
recent study by Love et al. (2005) on benefits of IT in Australian SMEs investigated benefits of
IT based on three different categorizations (strategic, tactical and operational) and found that
benefits of IT vary through different industry factors.
In a similar context, a recent study by Tan et al. (2009) on Internet-based ICT adoption
within Malaysian SMEs demonstrated that identification of new business opportunities, better
access to information and knowledge about market, and finally reliable and quick business
communications are three highest ranked benefits of IT adoption by SMEs. However, and most
importantly, prior literature goes beyond the direct effect of ITresources arguing that it is not
generic IT, per se, that directly impact relative firm performance, rather, higher-order process
capaERPlities act as the mediators between IT resources and firm performance and provide
better justification of IT created benefits (e.g., Benitez-Amado et al., 2010; Bharadwaj et al.,
2007). IS-enabled organizational capaERPlities perspective explains that firm's IS resources can
augment critical organizational capaERPlities, which can result in improved firm performance
(Bharadwaj, 2000; Bharadwaj et al., 2007). In this regard, physical and managerial capaERPlities
such as supply chain capaERPlities (Byrd and Davidson, 2003; Rai et al., 2006; Wu et al., 2006)
are some critical organizational capaERPlities investigated as mediator between IS resources and
firm performance. It has been suggested that through the use of related and complementary IS
resources and subsequently by creating cross-unit business synergies, IS-based coordination
mechanism can be created and organizational capaERPlities would be enhanced (Tanriverdi,
2005).
On the other hand, it should be considered that in spite of several benefits of IT for
SMEs, risk of IT and its consequences could negatively impact organizational profitaERPlity and
survival. It is imperative to consider the appropriate application for their business when deciding
whether or not to implement new IT (Nguyen, 2009). Deficient IT investment decisions can
impose significant impact on organizational profitaERPlity (Ghobakhloo et al., 2011a). It can
participate in enhancing SMEs performance, nevertheless, with no effectual IT adoption and
development strategy in right place, the anticipated and demanded performance enhancement
may not be materialized and therefore, revealing its counterproductiveness, IT might be
considered as an asset sinkhole (Ghobakhloo et al., 2011b). According to Love et al. (2005), IT
risk refers to exposure to such outcomes as failure to achieve some, or all, of the anticipated
benefits as a result of:
Implementation costs being higher than expected;
Technical systems performance significantly below the estimate;
IncompatiERPlity of the system with selected hardware and software.
Tan et al. (2009) found that high costs of IT tools and expensive software in addition to
ICT security concerns are the major risks of ICT adoption perceived by Malaysian SMEs. These
findings are consistent with a study by Love et al. (2005) who discus that Security issues,
uncertainty about how to evaluate potential benefits of IT, and capital outlay with no guarantee
of likely returns, respectively are three main risks of IT adoption identified in Australian SMEs.
With regard to the above mentioned findings, it could be inferred that IT security has become
one of the most concern of SMEs when it comes to adopting IT. It is found that according to
International Intellectual Property Alliance (IIPA), and owing to insufficient copyright protection
over the internet, copyright-based industry, which includes SMEs, has suffered a loss of $10.7
ERPllion (Kazi, 2007). It is suggests that main threats in the use of ICT by SMEs such as
security problems and hacking could bring about drastic setbacks to business and their trade and
subsequently might result in extreme loss of trust in such trade (Kazi, 2007). Furthermore, Tan et
al. (2009) explain that security issues such as sense of insecurity and vulneraERPlity about
performing transactions through the internet, as well as the risk of information loss and digital
thievery about putting information online are some of the main concerns hindering IT adoption
within Malaysian SMEs. As a result, it could be suggested that through passing cyber law by
governments to regulate and secure the online transaction activities, and also through providing
appropriate anti-virus and/or firewall/security protocols for SMEs by vendors and service
providers to prevent and solve the risks of hackers, viruses and spy ware, the perceived risk of IT
adoption by these businesses would be alleviated (Tan et al. 2009).
Another influencing factor attributable to the process of IT adoption itself is IS/IT
planning. Through IS planning, the chance of successful implementation of IS within small firms
might be higher (Thong, 2001). IT planning means that SMEs should determine why and how IT
can enhance their business processes and profitaERPlity, and then develop a strategy and
objectives to obtain the anticipated results (Love et al., 2005). SMEs owner/manages should
assign the resources and dedicate significant time and attention to manage adoption process
(Sarosa and Zowghi, 2003). They must understand that IT, requesting long-term commitment and
sizeable investment, also having high strategic importance can significantly have a major
influence over organizational capacity, validity and survival. Planning of IT is perceived to be
even more essential with regard to the speed at which technological innovations take place, along
with the continuous efforts required by the SMEs' internal environments to absorb them (Thong,
2001). Therefore, SMEs can fully benefit from adoption of IT through IT planning to evaluate
the threats and opportunities created by IT (Blili and Raymond, 1993). In addition, IS planning in
SMEs, requiring integration with business strategy, has become more crucial as IS becomes more
central to the SMEs' future success and growth, and business strategy and IS strategy became
intertwined (Levy and Powell, 2000). When IS/IT adoption is not planned strategically, for
example when SMEs invest in IS with the aim of only improving production processing and
without integrating other systems, IT based competitive advantages are typically accidental
rather than planned (Levy et al., 2001). According tothe literature, IS planning includes five
phases; financial resources planning, human resources planning, information requirements
analysis, implementation (software development, installation, and conversion) and post
implementation (operation, maintenance, future needs) (Yap et al., 1994). In addition, a review of
IT adoption literature by Ayman et al. (2008) places emphasis on IT projects management
arguing that highly regarded IT projects can be badly delivered if they are not properly
managed. Accordingly, short-term strategic decision making cycle and lack of planning in some
SMEs may bring about particular problems in implementation of IT (Blili and Raymond, 1993;
Rice and Hamilton, 1979). The importance of planning is so central to IT project in order that
notwithstanding the popular believe that barrier to IT adoption is mostly because of
inaccessiERPlity to funds and technology, the main and recently found barrier among US small
business is the lack of information system plan (Arendt, 2008).
On the other side, time-permanency is another characteristic of IT tools which might
impact the IT adoption process in SMEs. Salmeron and Bueno (2006) stress that positive role of
time-permanency factor in isomorphic application of IT tools is manifested within SMEs; in
particular between those belonging to the same industry. A possible explanation for this
isomorphism is that most of SMEs managers are interested in old, safe and vastly applied IT
solutions, those IT tools that lower risk of failure. It should be considered that the majority of
SMEs are facing with limited financial resources (Ghobakhloo et al., 2011b; Nguyen, 2009) and
subsequently, deficient IT investment decisions can impose momentous impacts on the
organizational profitaERPlity or even survival while, investment in newly presented technology
often involve a lot of risk and accordingly might imperil SMEs survival (Ghobakhloo et al.,
2011a). However, it is imperative for managers to know that pioneers in adopting new
information technologies, for example, in the banking industry, pioneer banks in adopting new
technology or in developing new applications for existing technologies, are organizations
achieving the most benefits from their risky investment (Palvia and Palvia, 1999). Consistent
with the resource-based view of the firm suggesting the complementarities of firm resources in
value creation (Tippins and Sohi, 2003), and due to wide availaERPlity of generic IT in the
market, simple IT alone cannot be a source of competitive advantage (Kim et al., 2006), and
adoption of state-of-the-art IT applications ahead of competitors will make IT resources firm
specific and imperfectly moERPle across firms, providing the adopting firm with additional
business value not achievable by late users (Wu et al., 2006).
5. Organizational Characteristics
Numerous studies carried out on the adoption of IS/IT within SMEs have revealed a
number of organizational characteristics affecting adoption process including SMEs strategies,
business size, type of industry, information intensity, organization culture and technological
maturity (Acar et al., 2005; Caldeira and Ward, 2003; De Burca et al., 2005; Drew, 2003; Levy et
al., 2001; Love et al., 2005; Mole et al., 2004). Strategically, IT tools are employed within SMEs
in order to achieve pre-determined business strategy, therefore, SMEs investments in IT are
strongly affected by their strategic context such as cost reduction versus value added strategies
(Levy et al., 2001). According to Nguyen (2009), many businesses adopt new IT just for rivaling
with other SMEs which have implemented these technologies. This author argues that under such
circumstances, lack of definition or strategy of the purposes of IT adoption will lead to project
failure. In addition, a study by Lybaert (1998) of 208 Belgian SMEs found that SMEs having
minor family ownership and less intervention in strategic management as well as
owner/managers with a greater strategic awareness will use higher information.
According to the prior literature on IT adoption in SMEs, business size definable by

turnover and/or number of employees is one of the most important determinants of IT adoption
(Fink, 1998; Love et al., 2005; Premkumar, 2003; Premkumar and Roberts, 1999; Thong and
Yap, 1995). The importance of firm size is partly because of its role as the source of
firmscapaERPlities (Mole et al., 2004). Another reason however is the fact that firms resources
including financial and human capital might be an approximation of firm size (Thong, 1999).
Thong and Yap (1995) survey points out that business size is the most important discriminator
between adopters and non-adopters of IT within Singaporean small businesses. Likewise, an
investigation by Premkumar and Roberts (1999) of rural small businesses revealed that even
within the small business category, firm size is the most important determinants to the adoption
of IT. This finding is reinforced by a study of Premkumar (2003) on IT adoption within 207
SMEs who indicate that larger firms in the small business group have a higher inclination to
adopt communication technologies than smaller ones. In addition, Acar et al. (2005), studying
use of ICT by SMEs in Turkish building construction discuss that as firm size becomes larger,
higher impact of ICTs on construction performance will be perceived by building contractors.
Likewise, concerning the level of usage of ICTs; these technologies will be used more
intensively by contractors in many fields. This view is supported through a recent study by Ahuja
et al. (2009) who demonstrated that; defining SMEs size in term of annual turnover, Indian
construction SMEs possessing higher turnover will have higher ICT adoption. These authors
discuss that these businesses do not perceive initial costs of IT set-up and IT infrastructure
updating expenses asthe major barriers to effective IT adoption while these costs have been
perceived as major barriers by other SMEs. Conversely, these results are inconsistent with a
study by Gremillion (1984) on the size of organizations and IS usage which demonstrated that
there is insignificant relationship between sizes of organizations and IS use. An investigation by
Love et al. (2005) of IT investments from 130 SMEs in Australia have also shown that
organizational size in terms of both turnover and number of employees has not affected IT
investment levels among SMEs.
Another organizational characteristic that affect the adoption of IT in SMEs is
specification of industry sectors that they belong to. Prior literature provides support for type of
business and information intensity as determinants of IT adoption in SMEs (Ghobakhloo et al.,
2011a). IT is suggested that consistent with other researches on IT adoption in different countries
such as US, Malaysia or Singapore, IT adoption in Bruneian SMEs is significantly affected by
type of business (Seyal, 2000). Likewise, it has been reported that structure of IS/IT in
organizations is considerably influenced by the types of business. Salmeron and Bueno (2006)
hypothesized that SMEs in a same industry sector tend to implement the similar IS/IT, have
similar attitudes towards technological changes and have personnel with the similar attitudes
toward using new technology. Porter and Millar (1985) suggest that the importance and the role
of IT in various industry sectors are different due to type of company and information intensity.
This view is reinforced by Love et al., (2005) who demonstrated that the level of IT investment
made by Australian SMEs form different industry sectors will be significantly different.
consistent with these views, Thong and Yap (1995) suggest that companies from different
industries have dissimilar information processing requirements and those SMEs in more
information-intensive sectors might have more propensity to adopt IT than those in less
information-intensive environment. Similarly, Malaysian service industries are making more use
of IT and are more integrated with the IT in comparison to distribution and manufacturing firms
as they are active in more information intensive environment (Valida et al., 1994). Drew (2003)
suggests that the high-tech/knowledge intensive SMEs are considerably more influenced by
internet technologies than other types of firms, as well as are more sophisticated in use of
internet technologies. Their study also found that high-tech SMEs are highly regarding internet
as supporting force of future growth. Thus, SMEs must assess their IT maturity to determine
their IT readiness and whether the available IT tools could be satisfactorily implemented
regarding the current organizational and environmental conditions (Sarosa and Zowghi, 2003).
Organizational change is another significant influencing factor over IT adoption.
Business growth forces SMEs to adopt novel and more effective technological solution (Bruque
and Moyano, 2007). The use of ICTs in small firms is because of many internal factors such as
business expansion, down-sizing or relocation, and finding and captures new markets which
bring about change in organizations. Owner/managers may regard IT or ICTs as an essential tool
to help managing changes (Southern and Tilley, 2000). This view is supported by Drew (2003)
who demonstrated that industry changes and trends and opportunities for growth are some of the
major driving forces pushing SMEs toward adoption of IT. Consistent with these views, Bruque
and Moyano (2007) explain that since in SMEs, in particular within family ones, the concept of
business growth requires and is associated with deployment of total quality system and
professionalization processes as well, IT adoption might be regarded as a rational response to
these alterations from managers. In the light of aforementioned findings, it could be suggested
that change management could have significant impact over decision to adoption IT (Ayman et
al., 2008). Company-wide change management program is required to train employees to accept
change and operating in an entirely new way; otherwise they will be caught by competitive
convergence and finally defeated by their competitors (De Burca et al., 2005). Here, it should be
noted that IS/IT implementation is SMEs may require organizational and structural changes
(Levy et al., 2002; Markus and Robey, 1988), change in existing work practices or culture of
organizations (Nguyen, 2009) while these requirements can be simplified regarding SMEs
simple organizational structure (Lin, 1998). Since SMEs typically have simple and highly
centralized structures with the chief executive officers, this centralization might be regarded as
an enabler and success factor in adoption and implementation of IS in SMEs through decreasing
complexity. Supporting this view, Blili and Raymond (1993) suggest that One particular
advantage of a simpler structure is that it should facilitate the tasks of needs identification and
tailoring of the IS to the firm's strategy, which basically emanates from the owner-managers.
Currie (1996) comprehensively studied the relationship between structure and the use of IT by
conducting a survey and review of literature and suggested that structural incompetencies of
organizations may negatively influence how IT is utilized. As a result, and with regard to the fact
that huge amount of financial investment in IT is typically unsupported by existing structural or

strategic initiatives, organizational restructuring might thus develop the level of effectiveness and
usage of the IT resource (Currie, 1996; Davenport and Short, 2003). Furthermore, Currie (1996)
concludes that restructuring IT services in organizations into centralized structure will lead to
improvement in levels of IT services and decrease in operation costs since differentiation and
decentralized IT structure may result in poor service levels, decreased management control, and
increased business costs. However, it should be noticed that this view is moreacceptable to large
organization, those usually have a IT or management information systems (MIS) department
while, having limited resources, SMEs users deal with the all spectrum of IT instead of MIS or
IT department (Palvia, 1996).
In addition, organizational culture in another significant determinant of IS/IT
implementation in organizations (Bruque and Moyano, 2007; Cooper, 1994; Kanungo, 1998;
Riolli and Savicki, 2003). A number of organizational culture definitions can be found within the
body of literature. According to Carmeli et al. (2008), Hofstede et al. (1990), Jones et al. (2005),
and Stewart et al. (2000) there is no clear and unanimous definition of organizational culture.
However, Jones et al. (2005) stress that Scheins (1990) definition of organizational culture have
been used by various researcher in area of IT adoption. This three dimensional view explains that
organizational culture consists of three concepts: assumptions, values, and artefacts (Schein,
1990). Marquardt (2002) defines the culture as an organizations values, beliefs, practices,
rituals, and customs .Based the definition of Hodges and Hernandez (1999) culture in
organizations can be thought of as the beliefs, values, and meanings shared by members of an
organization. Culture can also be regarded as the way of doing and sharing things for individual
through complying firms beliefs values, and attributes (Nguyen, 2009) or can be defined as
indigenous characteristics of organization including level of openness to change and
characteristics of human resources (Hall et al., 2001). Stewart et al. (2000) suggest that
characterizing of organizational culture is necessitated since the culture and its various impacts
are the key to success of IT projects (e.g. ERP, those projects that are entangled with significant
organizational change. These authors argue that many ERP failures can be attributed to paying
inadequate attention to the culture of the organizations while it is imperative to notice that in
most of the time, desired and the actual organizational culture are differentiated (Bliss,
1999). In light of organizational readiness to change, Jones et al. (2005) suggest that
organizational culture having more supportive climate and flexible structures might be more
advantageous to successful deployment of new technologies in organizations than less flexible
and mechanistic cultures. In addition, constructs of organizational culture including perceived
norms, values, and attitudes predominant in organizations might affect the behavior of
employees toward ICT in organizations (Carmeli et al., 2008). Regarding these findings, Jones et
al. (2005) assert that employees perceiving the culture of their organization as open system are
more inclined to have positive attitude toward organizational change and subsequently will
perceive more readiness for changes before deployment of new technology in organization.
These authors demonstrated that employees who perceive strong human relations values in their
area have shown higher readiness for change prior to the deployment of the new computing
system.
In SMEs, culture is highly affected by owner/manager attitude, perceptions and
characteristics (Nguyen, 2009). Thus, it is imperative for managers to know that employees
usage of ICT might be affected by supervisors(managers in different levels) behavior toward
work and IT (Carmeli et al., 2008). Moreover IT conflict with organizational culture can result in
user resistance to IT adoption (Cooper, 1994). Culture in SMEs can be defined as internal factor
including individuals (firms human resource) characteristics and levels of openness to change
(Minguzzi and Passaro, 2001). Nonetheless, Graham and Nafukho (2007) ascertain that small
businesses should be regarded as organism influenced by both internal and external factors in
order to clearly understand their culture. A study by Kanungo (1998) on organizational culture
and network-based computer use in both large and small organizations demonstrated that user
satisfaction with information system use is significantly affected by both dimensions of
organizational culture; task-oriented culture and people-oriented culture. This view is empirically
reinforced by Jones et al. (2005) who found that success of IS in organizations which is
measured by user satisfaction and system usage is significantly affected by types (human
relations, open systems, internal process, and rational goal) and dimensions (character,
leadership, cohesion, emphases, and rewards) of organizational culture. As stated previously,
openness to change is an important characteristic of organization culture (Hall et al., 2001;
Minguzzi and Passaro, 2001). Thus, and in light of the fact that IT deployment will often bring
about significant change in SMEs, the authors suggest that SMEs possessing adaptable and
flexible organizational culture with higher levels of openness to change will be more inclined
and prepared to accept IT-related changes, those changes that might result in IT project success
(Arroyo et al., 2007; Nguyen, 2009; Riolli and Savicki, 2003). From the other point of view, it is
suggested that the examination of SMEs culture should also be addressed through studying
organizational learning and the learning organization pattern (Graham and Nafukho, 2007) since
interrelationship between SMEs culture and learning process might be resulted in enhancement
of firms competitive capacity (Minguzzi and Passaro, 2001). Newell et al. (2000) suggest that
knowledge required for adoption of complex IT projects which is vastly distributed need to be
integrated within the organization through a process of networking and knowledge sharing, while
the effectiveness of this process is rooted in SMEs culture. Moreover, the adoption process
requires the integration of internal and external knowledge within the firm.
Furthermore, Family involvement and intervention in firm management could have
significantly impacts upon IT adoption (Bruque and Moyano, 2007; Lybaert, 1998). It has been
largely confirmed that in family businesses, the tenure of senior managers which are members of
family is much higher than those in non-family organizations (Davis, 1993; Jorissen et al., 2005;
Moores and Mula, 2000). According to Jorissen et al. (2005), family firms managers are less
inclined to have higher educational level than those in non-family firms. Family firms have also
been characterized by smaller management team while larger management team can be resulted
in more effective business management (Van den Berghe and Carchon, 2002). However, this
view is not consistent with the results of studies by Smith (2007) and Westhead et al. (2001) who
found that there is no significant difference between family and non-family business in term of
size of management team. Nevertheless, Smith (2007) provided evidence that size of firm is
dominant determinant of managerial differences since these differences between micro, small
and medium enterprises have been found to be more significant than between family and nonfamily businesses. In light of above mentioned findings, as well as, contingent upon the
characteristics of family businesses such as lack of professionalization, more informal
organizational structures, and relying on informal internal control systems, the objective of IT
adoption as well as implementation process might be highly different in family SMEs (Bruque
and Moyano, 2007; Smith, 2007). In addition, involvement and intervention of family members
in day-to-day activities and management of family business may bring about organizational
issues where in most small businesses, family members are being hired to possess vital positions
(Bruque and Moyano, 2007; De Lema and Durendez, 2007; Lybaert, 1998; Smith, 2007).
Compare to hiring external staffs that are better fitted for positions in the business, family
members non-qualification often results in management problems such as ineffective IT usage
(Nguyen, 2009). A study by De Lema and Durendez (2007) on managerial behavior of small
and medium-sized family businesses found that when SMEs are managed by family members, in
addition to the lack of importance to personnel training and management qualifications,
commitment to family well-being might be resulted in inefficiency in the decision making
process. Moreover, in some family SMEs, more informal organizational structure and lack of
professionalization, and using more autocratic management method may impede the proper
management of IT adoption process (Bruque and Moyano, 2007). Likewise, an empirical study
by (Lybaert, 1998) found that less significant family ownership and intervention in strategic
management, higher level of information use in SMEs is anticipated.
6. External & Competitive Pressure

For many firms, pressures to keep up with the competition, providing a means to enhance
survival and/or growth, managing changes, promoting services to customers, and staying
competitive and/or enhancing innovation aERPlities have forced SMEs to adopt IT (Drew, 2003;
Mole et al., 2004; Nguyen, 2009; Premkumar, 2003; Premkumar and Roberts, 1999;
Riemenschneider et al., 2003). Prior literature suggests that as small businesses are susceptible to
customer pressure, theses firms adopted IT as a result of demand from customers to develop the
efficiency of their inter-organizational dealings (Levy et al., 2003). Hence, it has become an
indispensable strategy for firms to have these technologies (Premkumar and Roberts, 1999)
while others suggest that the main driving forces to move toward IT tools in SMEs are internal
factors including industry changes and trends, maintaining current market, finding new market,
opportunities for growth and the necessity to keep up with competition (Drew, 2003; Southern
and Tilley, 2000). Nguyen (2009) argues that firms move toward adoption of IT for dissimilar
reasons due to various functions of firms in different environments and their operation in
different ways. According to their study, firms movement to IT is:
In response or reaction to an event;
In response to the pressures from the internal and external environment;
Resulted from the pressure from customers and emphasis on improving efficiency.
A more inclusive view on the innovation literature draws attention to relevancy and
importance of both internal and external drivers for change (Morel and Ramanujam, 1999;
Siggelkow and Levinthal, 2005). Mehrtens et al., (2001) discuss that issue of crediERPlity has
risen as a significant motivator for adopting IT tools within SMEs.
These authors argue that this crediERPlity could be achieved through fulfilling customers
and suppliers pressure and significantly their expectation of receiving better services as well. A
study by Dutta and Evrard (1999) on European small enterprises shows that the main focus of
European small enterprises is to make use of IT to deliver a superior level of customer service
and better communication with distant partners/customers. Moreover, a study by Premkumar and
Roberts (1999) on rural small businesses suggests that external pressure and competitive pressure
are important determinants to the adoption of ICTs. Likewise, it is suggested that clients and
suppliers pressure to adopt IS/IT is an important factor influencing the levels of IS/IT adoption
and success in Portuguese manufacturing SMEs (Caldeira and Ward, 2003). These results are
consistent with studiesby De Burca et al. (2005) and Mole et al. (2004) who suggest that
customers, suppliers and larger counterpart demand are significant determinant of IT tools
adoption.
On the other hand, and according to prior IS literature, drivers for IT/IS adoption in
SMEs are also attributable to the firms desire and need to stay competitive and innovative as
necessity for their survival (Ghobakhloo et al., 2011a). The expression competitive advantage
is one of the most lasting topics in the business strategy and strategic management literature and
its theories have been well-founded (Barney, 2000; Dierickx and Cool, 1989; Porter, 1986;
Porter, 1998). Porter (1986) defines competitive advantage as a direct consequence of the
strategies implemented by a firm intended for adding value to customers. It has been
demonstrated that the competitive pressure will affect the adoption of new technologies when
SMEs perceive that these technologies possibly will support their competitive position, therefore,
SMEs adopt IT to gain competitive advantage (Ghobakhloo et al., 2011b). Porter and Millar
(1985) argue that nature of competition might be change through adoption of IT. They found that
IT has changed the rules of competition through changing the industry structure, creating
competitive advantage by delivering businesses new ways to outperform their competitors, and
spawning new businesses by making new businesses technologically feasible, creating demand
for products and regenerating old businesses. SMEs active in industries having high rate of
innovation and intense competitive challenge are probable to perceive IT tools as a stronger
driver for strategic change than those in other types of industries (Drew, 2003; Gunasekaran et
al., 2000; Migiro and Ocholla, 2005; Premkumar and Roberts, 1999; Tye and Chau, 1995). The
study by Pontikakis et al. (2006) investigating IT adoption within Greek SMEs suggests that
highly competitive industries are often technologically intensive and SMEs operating in
innovation-intensive industries might face intense competition initiated by innovations those are
generally inclined to be more risk-averse. These authors found that SMEs which perceived their
industries as highly competitive were more than six times more probable to adopt IT solutions.
IS/IT utilization could brings about more effective SMEs both internally and externally, so SMEs
consider IT as a essential tool with the purpose of compete for the organizational adaptation as
well as environmental changes (Ghobakhloo et al., 2011a). Furthermore, IS/IT enhances SMEs
survival rate where they are functioning in a competitive environment with higher rate of failure
risk (Levy et al., 2001). Nevertheless, Thong and Yap (1995) disagree with this view and suggest
that competitiveness of the environment and information intensity do not directly affect the
decision of Singaporean small businesses to adopt IT since in their study, small businesses those
have implemented IT do not adopt it as a result of their environment. From the other perspective,
a recent study by Loukis et al. (2009) suggests that since IT tools (hardware, packaged software
and networks) are obtainable to competitors as well, they cannot offer a sustainable competitive
advantage (SCA). So, SCA could be achieved through IT comERPnation with other resources
and capaERPlities of the firm. This argument supports an empirical study in the retail industry by
Powell and Dent-Micallef (1997) who found that IT alone cannot afford sustainable performance
advantages, but rather competitive advantages can be attained only through using IT and its
integration with the firms infrastructure of human and business complementary resources. Here,
it should be considered that if SMEs do not perceive the relative advantage of IT for their
business comparing to their competitors, they may be reluctant to adopt IT (Sarosa and Zowghi,
2003).
External Factors
1. External IT Consultant & Vendors
There is a body of research that show assistance of external IT expertise, consultants, and
vendors, and their quality is one of the most important aspects of the IT adoption process within
SMEs (Ghonakhloo et al, 2011b). Their professional aERPlities could have positive impacts
upon IT adoption process while most SMEs are suffering from lack of IT experts and hiring
external consultants (Gable, 1991; Morgan et al., 2006; Nguyen, 2009; Premkumar and Roberts,
1999; Soh et al., 1992; Thong, 2001; Walczuch et al., 2000). Cragg and Zinatelli (1995) pointed
out that lack of internal expertise has seriously hindered IS sophistication and evolution within
small firms, therefore, they must overcome this problem through either seeking help from
external sources or developing their own internal end-users computing skills (DeLone, 1981).
Shin (2006) found that SMEs are moving toward adoption of enterprise application (EA)
software to survive in competitive global market while consultant often have greater share in
providing EA than vendors (e.g. up to 60% of ERP project cost is devoted to services provided
by outside consultants). According to the Thong et al. (1997) and Thong (1999), external
consultants and vendors are main sources of external IS expertise regarding IS implementation
within small businesses. They suggest that there are some advantages to hiring a consultant in
place of employing an internal IS employee;
There will be no necessity to pay for expensive employees when IS deployment is done;
Expensive professional training for system analysts and professional programmer for system
maintenance will not be needed;
It is hard to employ rare qualified system analysts and programmers attributable to limited
career advancement prospects in a small business;
Increasingly sophisticated technology requires the engagement of various specialists, which
is not possible for a small business.From a similar perspective, Gable (1991) cited that small
businesses seek external IS assistance with a diversity of objectives:
Saving through cost cutting study or avoiding hiring full-time staff;
Improving the chances of successful computer usage through increasing computer knowledge
or abating lack of knowledge by use of external expertise;
Handling increasing complexity of managing and outlasting competitively in global markets.
Owing to the importance of external assistance to SMEs, these business are facing
difficulties as IT vendors often devote their marketing at larger organizations and generally do
not understand SMEs unique needs(Stockdale and Standing, 2004). Consequently, if powerful
technology suppliers develop their marketing strategies and become more aware of issues
including quality, training provision, and maintenance regardingSMEs needs, this will
encourage SMEs to implement IT for improving their performance (Southern and Tilley, 2000).
In general, The duties of external expertise comprise IS project management, encouraging
employees to accept new system and overcome fear of new technology, fulfilling information
requirements analysis of business needs, IS user training, and recommending suitable computer
hardware and software (Thong and Yap. 1995; Thong et al., 1997). These external consultants act
as intermediaries to compensate for the absence of IT knowledge in SMEs and diminish the IS
knowledge barrier to successful and effective IS/IT implementation (Thong, 2001). Cragg and
Zinatelli (1995) argue that although lack of internal expertise seriously has hindered IS
sophistication in small business and small business are heavily depend on outside sources for
technical expertise, there are some possible reasons for SMEs not seeking external help
including;
Firms perceive that they cannot afford the external support;
Firms do not possess sufficient internal expertise to make an informed choice about taking
advantage of external support;
Firms perceive lack of trust in outside sources and deficient service;
Firms observe that any training or advice seeking needs a time commitment while time is a
restricted resource in the small firm.
It is crucial for management to consider the fact that external supports provided by
vendors are essential for SMEs having no sufficient IT expertise to implement these new
technologies (DeLone, 1981). A study by Soh et al. (1992) of 96 Singaporean small businesses
revealed that level of IS usage within small businesses hiring consultants is higher than those of
small businesses without consultants. This result is reinforced by Thong et al. (1997) who
demonstrated that SMEs with high levels of external IS expertise have higher level of IS
effectiveness. In the similar context, effectiveness of external expertise is also an influencing
factor of process of IT adoption within SMEs (Fink, 1998; Morgan et al., 2006; Thong, 2001).
Thong (2001) study revealed that small businesses with higher level of IS consultant
effectiveness have higher level user satisfaction and overall IS effectiveness. In fact, the use of
ICT among SMEs is also affected by marketing strategy of ICT suppliers (Southern and Tilley,
2000). These views are sported by Caldeira and Ward (2003) who suggest that IS/IT vendors
support is an important factor influencing IT adoption success within SMEs.
Based on the above-mentioned viewpoints and studies, the authors conclude that
regarding lack of IT knowledge and internal IT/IS experience and skills, SMEs could fill this gap
of knowledge through using external assistance such as engaging external expertise and use of
vendor assistance. The authors suggest that because of unique characteristic of SMEs knowing as
resource and financial poverty, SMEs should precisely consider the financial resources available
for hiring external consultants since they generally entail considerable expense. Moreover, in
should be considered that external expertise recommendations and suggestions may not be
always practical to and fit with SMEs requirements if strategies and objectives of businesses is
not sufficiently clear to understand. As a result, a clear objective and definition of new IT
implementation within SMEs seems to be necessary (Nguyen, 2009).
2. Government
According to the literature, the significant positive relationships could be found between
IT adoption and government support (Ahuja et al., 2009; Southern and Tilley, 2000; Tan et al.,
2009; Yap et al., 1994). Because of their size and lack of resources, SMEs are generally more
dependent than other companies on external resources and supports (Sarosa and Zowghi, 2003).
According to Fink (1998), government support for facilitating information transfers to SMEs is
incrementally increasing. This author argues that these transfers are fundamentally accomplished
through networks, usually informal (e.g. membership of the Small Enterprise Association of
Australia and New Zealand), however sometimes formal. Government initiatives and
policiescould directly and/or indirectly stimulate the development of IT infrastructure and
information provision to energize faster technology diffusion (Ghobakhloo et al., 2011a).
Nevertheless, the literature suggests that governmental assistances are generally not
advantageous. A study by Dutta and Evrard (1999) on small businesses in six different European
countries indicate that despite governments have tried to assist SMEs in adopting IT through
increasing public spending on technology projects, in a campaign to improve innovation and
reinforcing the performance of companies, there are adoption barriers in the governmental
agencies mechanisms to help these businesses. This unsuitableness is attributable to the gap
between what is really required for SMEs and what is provided by the government (Sarosa and
Zowghi, 2003). This result is supported by a study by Yap et al. (1994) of computerization
experience of 40 small businesses computerizing through the government incentive program
with that of 40 small businesses which have computerized without government assistance, which
shows that participation in a government computerization program has not resulted in more
effectual IS, however, this program has encouraged small businesses which suffer from lack of
financial resources and technical expertise to computerize their operations. From a similar
perspective, Fink (1998) study found that government grants does not appear to be a significant
factor supporting IT adoption within Australian SMEs.
Despite above mentioned results show that government assistances havent generally
found to be helpful, recent studies, particularly in developing country have revealed that IT
adoption in SMEs have been significantly improved through government policies and initiatives.
In light of this view, Fathian et al. (2008) explain that Iranian government plan of ICT
development (TAKFA) has resulted in significant improvement in IT adoption and e-readiness
within Iranian SMEs. From a similar perspective, a recent study by Tan et al. (2009) found that
in Malaysia, SMEs generally disagree with this view that cost in significant determinant of ICT
adoption. These authors discuss that since most of SMEs are aware of financial supports and
incentives provided by government, ICT costs is not regarded as major barrier by Malaysian
SMEs. This view is empirically supported by Alam and Noor (2009) who demonstrated that ICT
adoption in Malaysian SMEs is not directly affected by perceived ICT costs. According o theses
authors, the rationale behind is that all types of financial supports to these businesses have been
provided by government for ICT adoption. For example, Malaysian SMEs do not perceive the
costs of training required for successful IT adoption as a barrier since the government agencies
have provided and offered a number of necessary training programs (Tan et al., 2009). As a
result, it could be concluded that; with regard to the supportive policies and comprehensive IT
support provided by Malaysia government, for example through Malaysian Technology
Development Corporation, Multimedia Super Corridor (MSC), newly established SME Bank and
Small and Medium scale Industries Development Corporation (SMIDEC), the IT adoption
process seems to be considerable simplified for Malaysian SMEs (Alam and Noor, 2009; Tan et
al., 2009).
Conclusion, Suggestions & Future

Research
IT has critically become indispensable tool for daily operations of organizations. SMEs
are now investing significant amount of financial resources in IT to strengthen their competitive
positions (Premkumar, 2003). Due to large-scale application of IT among SMEs, they have been
exposed to several associated risks within the adoption and development of IT solutions (Kazi,
2007). Prior literature on IT adoption in SMEs show that approximately most of failures and
dissatisfaction were the result of one or more of the subsequent reasons (Arendt, 2008; Caldeira
and Ward, 2003; Cragg and King, 1993; Cragg and Zinatelli, 1995; Levy et al., 2001; Lybaert,
1998; Nguyen, 2009; Qureshi and York, 2008; Sarosa and Zowghi, 2003; Tarafdar and Vaidya,
2005; Thong and Yap, 1995):
Inappropriate connection of adopted IT to the enterprise strategies;
Inadequate realization of organizational issues;
Inadequate realization of end users necessities;
Lack of required resources (knowledge, skills, financial, managerial);
Inadequate teaching and preparation of end users;
Business size and fund limitations to employ IT specialists;
Unqualified management in highly centralized CEO structures;
Inappropriate government assistance role and supportive regulation;
Dissatisfaction with IT created competitive advantages due to improper interactions with

competitors, suppliers and customers;
Particular characteristics of organization, culture, and family involvement in business.
Toward a better understanding of an appropriate way to well organized deployment and
efficient application of IT, SMEs must precisely realize their need for it and proportionate
advantages of IT for their business. SMEs ought to judge costs and benefits associated with
utilizing IT. In addition, they should find out existingobtainable external aid and incentives
supplied by government related agencies, advisors, vendors, and their counterparts; those
external sources that might assist them with adopting IT. SMEs need to consider what predictable
impacts could be imposed by adopting IT on their business situations, customers, supplier,
competitive position as well as their competitors. Thus, SMEs have to consider these expressed
drivers, barriers and issues that might affect the successful adoption of IT solutions. It is
imperative that SMEs should precisely evaluate their capaERPlity to reap benefits from IT
adoption and do not underestimate it. They should know that IT has competence to act as a
strategic tool to assist them to compete with their larger counterpart in the globalized market
(Tan et al., 2009). However, it should be considered that deficient IT investment decision and
imprecise IT adoption strategy may imperil the survival of businesses Ghobakhloo et al., 2011a).
In addition, and as suggested in literature, external assistance is imperative for successful
IT implementation in SMEs since these businesses are generally suffering from lack of IT
knowledge, skills and training resources (Chau, 1995; Cragg and Zinatelli, 1995; Fink, 1998;
Igbaria et al., 1997). As a result, external consultants and vendors are main sources of external IT
knowledge and skills in SMEs (Thong et al., 1997). Accordingly, higher levels of external
consultants and vendor effectiveness and support will be resulted in increase in IT effectiveness
in SMEs (Chau, 1995; Thong, 2001). Nevertheless, regarding the fact that SMEs typically do not
have sufficient financial resources to afford costs of hiring external experts and IT training
campaigns expenses, as well as concerning this fact that some SMEs do not trust in using the
assistance of external expertise and consultant (Caldeira and Ward, 2003; Igbaria et al., 1997; La
Rovere, 1998; Nguyen, 2009), the role of governments support and initiatives to help and
encourage to adopt IT is much more significant in the context of SMEs (Southern and Tilley,
2000; Tan et al., 2009). According to the literature, it could be suggested that it is very important
that governments precisely consider what is demanded to support IT adoption in SMEs to avoid
the gap between supports provided by government and what is really required for SMEs (Sarosa
and Zowghi, 2003). Moreover, in spite of some reports of governmental disadvantageous and
ineffective assistances, a number of studies have demonstrated that IT adoption in SMEs has
been significantly improved through supportive policies and initiatives provided by both
developed and developing governments, especially in recent years, thus, governments should
provide a comprehensive policies and supports to encourage small and medium enterprises to
develop and use IT, those should be periodically re-evaluated regarding the dynamic
characteristics of SMEs, IT tools and dynamism of global economy, and market conditions.
Prior IT literature suggests that endless variety of conducted studies in the case of IT
adoption have intended to gain clear understanding of numerous pitfalls and challenges
associated with IT adoption awaiting SMEs, as well as evaluation of factors affecting successful
deployment of IT. The authors categorized influencing factors into two main groups which are
internal factors and external factors. Internal factors include top management, firms resources,
end users, IT solution itself, and organizational characteristics while external factors comprise
external and competitive pressure, external IT consultant and vendors, and government. The
author believes that the presented categorization of IT adoption issues and SME-related factors
through developed integrated framework can help organizations, managers and IT consultants to
achieve clearer understanding of IT adoption influencing factors, and also add further knowledge
to the literature. Although we inclusively discussed that how distinguished influencing factors
affect the IT adoption decision, acceptance, satisfaction, and usage, we did not categorized the
reviewed influencing factor in term of different adoption concepts, the issue which can be
addressed by future research. This paper might not cover all aspects of IT adoption process in the
literature. Likewise and based on unique characteristics of each organizations and its specific
conditions of technological innovation diffusion, it has not been claimed that this framework is
applicable for all firms and is able to deal with all of their issues. For this reason, these findings
require empirical testing to determine its relevancy and conformity in a practical environment.
PRIMAR
Y DATA
ANALYSI
S
Primary Data Analysis

Service of the company?
Agricultural
Electrical/Electro
Machinery
Forging &
Casting
Office Furniture /
Building
Materials
Engineering &
Fabrication & Job

Works
Plastic Industries
nics &
Telecommunicati
ons
Packing Material
Heavy
Machinery
Pharma &
Rigs / Spares &
Others (please specify)
Chemical
Services
________________________
Agricultu
ral
Machiner
y
Electrical/Electro
nics &
Telecommunicati
ons
Engineerin
g & Heavy
Machinery
Fabricati
on & Job
Works
Forgin
g&
Castin
g
Packin
g
Materi
al
Pharm
a&
Chemi
cal
Plastic
Industri
es
Office
Furniture
/ Building
Materials
Rigs /
Spares
&
Services
Othe
rs
10
10
22
17
11
11
22
Service of Company
Others
10
Rigs / S pares & S ervices
Office Furniture / Building Materials
Plas tic Indus tries
Pharma & Chemical
Packing Material
0
Forging & Cas ting
Fabrication & Job Works
Engineering & Heavy Machinery
10
Electrical/Electronics & Telecommunications
Agricultural Machinery
0
0
10
12
Interpretation
Out of the 46 companies 10 (22%) companies are from Heavy Machinery & Engineering
Industry and another 10 (22%) are from other industry that means it can be any industry
something like paper industry or food processing or some other. In our survey we have not found
any packaging industry and Agricultural Machinery. 8 (17%) fabrication companies and 5 (11%)
Pharma & Chemical and 5 (11%) Plastic companies also we have.
So its very much clear that this survey result is fully influenced by Engineering & Heavy
Machinery Industry and Fabrication & Job Works and very few by Plastic and Pharma &
Chemical companies.
Q1. Whats your current IT Infrastructure in place?

Servers
Desktops
Structured
Communication
Cabling
Storage
(Internet)
Current IT Infrastructure in place in no.

50
45
40
35
30
25
20
15
10
5
0
44
33
19
15
e
ag
to
r
S
tr
u
ct
ur
ed
er
ab
ve
r
lin
Count
%
Servers
Desktops
Structured
Cabling
Communication
(Internet)
Storage
15
33
44
96
19
41
33
72
9
20
Current IT Infrastructure in place in persentage
20
33
S ervers
Des ktops
S tructured
Cabling
72
Communication
(Internet)
96
S torage
41
Interpretation
Maximum company are using desktop and they have communication system as internet. 44
companies are using desktop and some of them are having structure cabling and storage facility
also. 15 companies are using servers also. 96% of 46 companies are having desktop. Normally
they want to Modem of different subscriber for their communication through internet.
Very few companies are having server and storage facility and its a clear indication of
knowledge regarding business data or Information Technology. They are not aware of losing
data. Still they are depending upon the paper and pen. Some companies had computer in earlier
days but gradually they threw them all just to cut down in operating cost.
Q2. Whats your current Operating System in place?

Windows
Linux
Windows
Unix/Solaris
Linux
Unix/Solaris
Count
%
45
98
2
2
0
0
Current Operating System in place in persentage

4
Windows
Linux
Unix/S olaris
98
Current Operating System in place in no

50
45
45
40
35
30
25
20
15
10
2
5
0
Windows
Linux
Unix/S0olaris
Interpretation
Particularly this questionis to check the security concern of companies in terms of data
hacking and any other threat that a business can be affected through some outsource something
like internet.
98% companies are using windows that is not as secure as Linux or Unix/Solaris based
system can be. SO it is very much clear from this survey result that SMEs are not at all bothering
about the security threat.
Q3. What are your current IT Applications in place?

Office
Mailing
Applications
Accounting
Application
ERP
Package
Office Applications
Mailing
Application
Accounting Package
ERP
Coun
t
40
36
33
87
78
72
20
Current IT Applications in place in no.

45
40
35
30
25
20
15
10
5
0
40
36
ER
P
e
ka
g
Pa
c
Ac
c
M
ai
ou
lin
nt
in
g
Ap
p
lic
lic
at
io
at
io
ns
Ap
p
ce
ffi
O
33
Current IT Applications in place in persentage
20
87
72
Office
Applications
Mailing
Application
Accounting
Package
ERP
78
Interpretation
The primary objective of this particular question is to find out the trends of ERP in Indian
SMEs. With 87%, 78% and 72% the Office Applications, Mailing Application and Accounting
Package respectively together prove that Indian SMEs are very much flexible with the MS Apps.
Some medium size companies are using Tally 9 that is also consider as a ERP but only 9 (20%)
companies are using any standard ERP package.
Some medium companies are using SAP B-One that is a smaller version of SAP. All the
main module of SAP something like MM, PM and many other module has been included in that
particular SAP ERP package.
Whatever report or flow of data they need about their business they are getting from their
current system means MS Office Apps or Tally 9 is able to provide them all.
Q4. Business IT alignment has become one of the most

used clichs now-a- days, are you any close to finding a
solutions?
IT alignment
16
14 14
This is priority lis 13
t of my CEO
13 cons iderable progres s

We have made
12
1010
5
5
5
Our IT team (including thos e from
s ervice Provider) is fairly matured Availability
4
4
4
4 of 4tools and technologies for4 alignment
4 4
3
2 2
2
2
2
1
1
1
1 1 1 1
1 1
0 0 0
5
-1
-2
-3
-4
-5
No Res pond
Yes
No
We have made
considerable
progress
This is priority list

of my CEO
Our IT team
(including those
from service
Provider) is fairly
matured
AvailaERPlity of
tools and
technologies for
alignment
Count
5 4
2 1
-1
-2
-4
-5
No
Respo
nd
We have made considerable progress
1
3
4 1
1
3
This is priority list of my CEO
1
0
2 3
1
4
Our IT team (including those from service

Provider) is fairly matured
1
0
1 5
1
6
AvailaERPlity of tools and technologies for

alignment
1
2
0 6
1
4
5 4
2 1
-1
-2
-4
-5
No
Respo
nd
We have made considerable progress
2
8
9 2
1
5
2
8
This is priority list of my CEO
2
2
1
1
4 7
3
0
Our IT team (including those from service

Provider) is fairly matured
2
2
1
1
3
5
AvailaERPlity of tools and technologies for

alignment
2
6
1
3
3
0
11
IT a lig nm ent
11
9
2
2
22
9 2
5
2
30
1
30
-2 28
-1
28
35
15 22
9
4 2
9
4
9
26
22
-3
11
4
4
7
11
-4
-5
No Respond
2
9
2
13
Interpretation
If we consider the IT progress only 2% says yes. But 30% says they strong disagrees this
statement. 30% says they dont have a proper IT team to take care of the IT infrastructure. 30%
companies says their CEO is also not at all interested to adopt IT system. They are very much
happy with their traditional system. 9% companies didnt responds for this question.
22% says they have not access to the perfect tool or technology what can really help
them to develop in terms of IT infrastructure. So its a considerable point that may be the number
is very less but some companies wants to implement system but due to less access of perfect
technology they are not looking for IT updation.
Q5. When did the Enterprise & IT Architecture initiatives

started with in your organization?
Prior to 2010
In 2011
Prior to
2010
Count
%
In 2012
In
2011
26
57
In 2012
2
4
5
11
In 2013
In 2013
7
15
Enterprise & IT Architecture initiatives started in persentage
15
Prior to 2010
In 2011
In 2012
11
In 2013
4
57
Enterprise & IT Architecture initiatives started

30
26
25
20
15
10
5
0
2
Prior to 2010
In 2011
In 2012
In 2013
Interpretation
Definitely its a time consuming process to implement any small or ERPg ERP package and
if any companies thought of implementing some standard ERP package then the starting year is
very much important. By this we can understand Indian SMEs also growing with the business
technology development.
26 companies that means 57% companies started thinking to implement a standard ERP
package prior to 2010. Some companies has just started thinking about ERP implementation. In
this point of time they have some very good option with them. Some Indian companies are
providing license of very sophisticated ERP package something like TCS iON is one of them.
Q6. How guilty is a companys management for not

introducing clarity at the conceptualization phase?
No responds
Count
%
Not at all
5
11
18
39
its okay
13
28
Guilty
10
22
How guilty is a companys management

20
18
16
14
12
10
8
6
4
2
0
18
13
10
5
No rs ponds
Not at all
its okay
Gulty
How guilty is a companys management
22
No rs ponds
Not at all
11
its okay
Gulty
39
28
Interpretation
Out of 46 companies 44 companies are very much happy with the MS Office Application
like word, excel and other data analyzing tools but those are not as efficient as SAP or TCS iON
a standard ERP system is.
11% companies didnt responds against this particular option that whether they are feeling
guilty or they are okay. 18 (39%) companiessays they are not feeling guilty or they are regretting.
28% companies says its okay they dont need now only but in future if it required thy will go for
a standard ERP package. 22% that means 10 companies out of 46 companies says yes they are
feeling guilty. They know the benefit of a ERP package and due to some reason they are not able
to implement.
Q7. How many people are in the centralized architecture

team with in your organization?
1-2
3-5
>10
6-9
People are in the centralized architecture team
2
11
0
No Res ponds
4
15
1 to 2
3 to 5
6 to 9
>10
61
People are in the centralized architecture team

28
30
25
20
15
10
5
0
No Res ponds
No Responds
Cou
nt
%
2
1 to 2
3 to 5
6 to 9
>10
1 to 2
3 to
5
6 to
9
>10
28
15
61
11
Interpretation
Rather investing 30L- 40L in a ERP package I will add some more new machinary or I
will update my old machinary. Said by one entrepreneure of a mediumm scale company.
Basically they need some Tally operator of some guyes who has some general knowledge about
excel and mailing application.
In 28 (61%) companies are having only 1-2 people for report generation of maintaining
transaction in Tally. Only 3 companies out of 46 company that only 7% companies has a good
size in terms of IT team.
15% company doesnt have any IT professional at all. The entrepreneure himself is
managing that part.
Q8. How real is the FEAR that the investment in

architecture will get wasted if the architect leaves the
organization?
Count
%
No Responds
8
17
Really Scared
13
28
Ok
7
15
Not at all
18
39
Level of Fear
20
18
15
10
13
8
5
0
No Res ponds
Realy S cared
Ok
Not at all
Level of Fear
17
No Res ponds
39
Realy S cared
Ok
Not at all
28
15
Interpretation
For SMEs its very much important to allocate the finance in proper way in proper place. So
what will be the impact if they invest some portion of their budget to an IT architect and the
person leave suddenly.
39% says they dont bother about all these they are not at scared but 28% says its a
nightmare for them and 15% says its ok-ok situation for them if something happen like that they
have the capaERPlity to handle the situation.
Q9. Which of the following

applicable in your organization?
architecture
roles
Yes
No
Enterprise Architect
Technical Architect
Process Architect
Business Architect
Network Architect
Security Architect
are
Architecture roles are applicable in organization

25
20
15
10
5
0
16
13
ct
Ar
ch
ity
ur
us
ec
in
Te
ch
n
No
Responds
5
11
ite
ite
Ar
ch
s
es
ic
al
Re
s
po
Ar
ch
i
nd
te
c
ct
Count
%
21
20
15
Enterprise
Architect
15
33
Technical
Architect
20
43
Process
Architect
13
28
Business
Architect
21
46
Network
Architect
9
20
Architecture roles are applicable in organization

No Res ponds
Enterpris e Architect
11
35
33
Proces s Architect 20Bus ines s Architect
Technical Architect
Network Architect
43
S ecurity Architect
46
28
Security
Architect
16
35
Interpretation
What type of business architecture is in role? 46% company says they have a perfect business
architecture in process. 11% says they dont have any business model like this. They have
develop their own system.
43% have a technical architect and 33% has enterprise architect and 28% has process
architect in process.
Challenges in doing Enterprise & IT Architecture

24
15
tip
l
N
o
gu
ve
n
ar
do
an
rs
te
e
in
of
pp
su
rd
da
st
an
M
ul
an
6
vo
lv
ed
ts
or
nd
po
Re
s
N
o
11
RO
30
25
20
15
10
5
0
La
c
of
to
o
ls
Q10. What are the challenges in doing Enterprise & IT

ARCHITECTURE?
Architecture frameworks are not complete & consistent
Lack of tools and standard supports
Cost involved
No guarantee of ROI
Multiple vendors involved
Outsourcing deals were made without such provisions
Lack of maturity in architects

No
Respond
s
Architecture
frameworks are not
complete & consistent
Lack of tools
and standard
supports
Cost
involved
No
guarantee
of ROI
Lack of
maturity
in
architects
Multiple
vendors
involved
Outsourcing deals
were made without
such provisions
Count
24
15
11
13
13
20
52
33
24
13
20
No
Res ponds in doing Enterprise & IT Architecture
Challenges
Architecture frameworks are not complete & cons is tent
13
20
Lack of tools and s tandard s upports
13
13
Cos t involved
20
24 of ROI
No guarantee
Lack of maturity in architects
Multiple vendors 33
involved
52
Outs ourcing deals were made without s uch provis ions
Interpretation
The most important question is what are the challenges that SMEs are facing in terms of
adopting IT for their business. 52% says cost involvement. As these are small and medium size
companies they are very much careful while creating budget for the business.
13% companies have not answered anything and 20% company believe in out sourcing of
whatever IT requirement they get. 33% company says they dont see any guarantee ROI in IT
investment. Sometime multiple vendor is also a problem for SMEs and says by 13% company.
Q11. The problem is that enterprise strategy is not clearly

manifested in my organization?
Strongly Agree Agree
No Responds
Count
15
Neutral
Strongly Agree
3
7
Disagree
Agree
11
24
Neutral
6
13
Strongly
Disagree
Disagre
e
11
24
Strongly Disagree
8
17
Clarity of enterprise strategy
15
17
No Res ponds
S trongly Agree
7
Neutral Dis agree
Agree
S trongly Dis agree
24
24
13
Clarity of enterprise strategy

11
12
11
10
8
6
8
6
3
1084| P a g e | Information
Technology Road Map for SMEs| Ashok Kumar
2
0
Interpretation
The IT policy of a company is not clear at organization is fully divided into two category. 24%
company agrees this statement and other 24% disagrees this statement. Remaining 17% company
strongly disagree this and out of 46 company 7 didnt responds for this question.
Q12. On one hand management want business aligned

with IT and on the other, they want to start nailing boars
immediately?
Neutral
Disagree
Strongly
Disagree
No Responds
Count
13
Strongly Agree
2
4
Agree
9
20
Neutral
12
26
Disagre
e
Strongly Disagree
13
28
4
9
Expecting result
14
12
10
8
6
4
2
0
13
12
9
6
2
Expecting result
No Res ponds
S trongly Dis agree
15 Agree13 Agree
S trongly
4
Neutral
Dis agree
20
28
26
Interpretation
28% disagrees this statement where 4% agrees these statement very strongly. 13% didnt
responds for this.
But the most important are those who says they are in neutral state. 26% says they dont
have any argument in this.
Q13. Business heads need to understand that

enterprises are not a commodity but an evolving
organism?
Neutral
Disagree
Strongly
Disagree
No Responds
Strongly Agree
Agree
Neutral
Disagre
e
Strongly Disagree
Count
20
13
17
43
20
Not commodity but an evolving organism
No Res ponds
4 2
13
S trongly Agree
Agree
Neutral
20
17
Dis agree
S trongly Dis agree
43
Not commodity but an evolving organism

25
20
15
10
5
0
20
9
2
Interpretation
43% company agrees this statement where 2% company disagrees this statement. Thant means
20 companies believe that the enterprise is not a commodity its an evolving organism.
13% didnt answer anything. 17% strongly agrees this statement.
Q14. We are going to witness another recession by 201718

Most likely
May be
No chance
Not sure
Chances of recession
13
26
No Res ponds
Mos t Likely
May be
No chance
20
Not s ure
35
No Responds
Most Likely
Count
13
20
May be
No chance
16
35
3
7
Not sure
12
26
Chances of recession
18
16
14
12
10
8
6
4
2
0
16
12
9
6
re
su
N
ot
N
o
ch
an
ce
be
M
ay
Li
t
M
os
N
o
Re
s
po
nd
ke
l
Interpretation
35% says there is a possiERPlity that in 2017-18 we may get one more recession in Indian
economy and it is also can be a reason that SMEs are scared to invest in IT infrastructure.
7% are very much confident that they will not get any more recession in 2017-18. Indian
economy will be growing by that time.
But maximum says there is a chance of recession in the year of 2017 or 2018 or
somewhere in that time.
Key focus area for investment this yearKey focus are for investment this year
28
54
11
22
Bus ines s Intelligence
Cloud Computing & Virtualization
Enterpris e Architecture
T S ecurity
Mobile interface to exis ting apps
S OA & S aaS
No Plan
Key focus area for investment this year

25
N
o
Pl
S
aa
S
&
O
A
ex
is
tin
g
fa
te
r
ce
pr
to
is
an
ps
ity
ec
S
Ar
ch
tu
a
Vi
r
&
tin
g
pu
ur
ct
ur
e
n
liz
at
io
ce
en
lig
In
te
l
s
es
in
us
B
ap
13
ite
30
25
20
15
10
5
0
in
ile
M
ob
d
lo
u
C
ERP
Cloud Computing Enterprise
& Virtualization
MoERPle
te
r
En
om
Q15. Whats your key focus area for investment this year?
T Security
Architecture
SOA &SaaS
interface to
existing apps
ERP
Cloud Computing &

Virtualization
Enterprise
Architecture
T Security
MoERPle interface to
existing apps
SOA &SaaS
No Plan
Count
13
25
28
11
54
Interpretation
One company is looking for moERPle interface to existing apps. Its a very good indication. 28%
says they want to focus of ERP system. But there is a problem with ERP system that it need
some ERP system what can capture data in transaction layer.
But 54% company doesnt have any plan at all to invest in IT.
Q16. What are the key performance indicators for your

organization in 2014?
Make the
data
available
Complianc
e to
strategic
No at all
Important
Less
Important
Important
Very
Important
Highly
Important
plan
On time
Cost
reductions
No at all Important
Less Important
Important
Very Important
Highly Important
no responds
Make the data

available
17
12
Compliance to
strategic plan
11
15
20
10
13
12
On time
Cost reductions
No at all
Important
Less
Important
Important
Very
Important
Highly
Important
no responds
Make the data

available
37
13
26
15
Compliance to
strategic plan
24
15
33
20
On time
43
22
17
15
Cost reductions
28
13
26
11
15
Percentage Wise Pie Chart of All Measures
Key performance
no res ponds
Highly Important 1 2 1 3
Very Important
3 20 5
Important
12
Les s Important
15
No at all Important
10
12
17
0
11
10
20
20
30
13
40
50
Make the data available
Compliance to s trategic plan
On time
Cos t reductions
60
70
Key performance
no res ponds
Highly Important
15
2
Les s Important
No at all Important
0%
15
Very Important
Important
20
2
26
11
33
13
17
15
37
10%
24
20%
15
30%
40%
50%
26
22
13
43
28
60%
70%
Make the data available
Compliance to s trategic plan
On time
Cos t reductions
80%
90%
100%
Interpretation
Companies are very much unaware about KPIs and they dont want to maintain all these also.
They are focusing on some daily activity only.
37% says that they dont think the availaERPlity of data is that much important. They dont
have any idea how data analysis can help them in terms of managing all business activity and
decision making.
For 28% company cost reduction is not at all important. They have some certain customer
and they are supplying to them only. Only 7% thinks that cost reduction is very important factor.
Q17. Need to establish relationship between Business ROI

& Technical ROI?
Highly
Very
important
Important
Less
important
No Responds
Highly important
important
Very important
Important
Not at all
Important
Less important
Not at all Important
Count
12
12
17
11
26
26
37
Relationship between Business ROI & Technical ROI

17
18
16
14
12
10
8
6
4
2
0
12
12
rt
an
po
im
s
Le
s
Ve
r
N
o
im
Re
s
po
po
nd
rt
an
Relationship between Business ROI & Technical ROI
No Res ponds
Highly important
11
Very important
Important
37
26
Les s important
Not at all Important
26
Interpretation
The Return on Investment is very much important for any entrepreneur it can be any type
technical or business. In spite of investing on machine if any company invests on IT adoption
they want return in term of money.
37% companies says the balancing is important. But 26% companies says it is highly and
very important.
They just dont want to keep investing on only one side it can be any of the two. They
want a definite balance.
Q18. How long before you will see maturity in enterprise

architecture adoption within your organization?
3-5 years
2-3 years
1-2 years
0-1 years
Cant say
Time to take maturity in enterprise architecture adoption

9
No Res ponds
3-5 years
30
17
2-3 years
1-2 years
0-1 years
Cant s ay
20
17
7
No
Responds
3-5 years
2-3 years
0-1
years
1-2 years
Cant say
Count
14
17
20
17
30
Time to take maturity in enterprise architecture adoption

16
14
12
10
8
6
4
2
0
14
9
y
sa
rs
t
an
C
1
0-
ye
a
rs
2
1-
ye
a
rs
3
2-
ye
a
rs
ye
a
5
3-
N
o
Re
s
po
nd
Interpretation
To adopt advanced IT infrastructure its takes some time now the question is how much?
30% companies,14 out of 46 companies says they cant say anything it may take any random
year.
But maximum company says it can take 3-5 years minimum. 20% companies says it can
take 2-3 years where 8 companies says IT adoption can take 3-5 years. The transform from old
system to a new updated system is not at all time taking for 17% company. These companies can
adopt the changes within 0-1 years.
Q19. In the coming 3 years, there are good chances that

source of revenue as well as engagement models will
change?
No Responds
Count
13
Neutral
Most Likely
11
24
Disagree
May be
No chance
26
57
Strongly
Disagree
Not sure
2
4
Strongly Disagree
1
2
0
0
Changes in upcoming 3 years

30
26
25
20
15
11
10
6
2
1
re
su
N
ot
N
o
Re
s
po
M
ay
nd
be
Changes in upcoming 3 years

4 2
No Res ponds
13
Mos t Likely
May be
24
57
No chance
Not s ure
S trongly Dis agree
Interpretation
13% says they dont have any idea so they skipped this question and from the remaining
57% companies said there is a chance that in upcoming 3 years there is a good chance to change
in source of revenue as well as model of engagement how SMEs will adopt IT infrastructure.
4% says there is no chance of that. They are pretty sure that within 3 years nothing will
change.
Q20. How does independent architecture service provider

can help you in your outsourcing efforts?
Better
Enhanced
governance
practices
Reduced IT
project
communicati
on
Better governance
practices
maintenance cost
Enhanced project
communication
Not
sure
Quality
Control
Reduced IT
maintenance cost
Quality
Control
Not sure
Count
12
13
15
26
15
28
20
Iindependent architecture service provider

Better governance practices
15
20 project communication
Enhanced
Reduced IT maintenance cos t

26
Quality Control
28
Not s ure
15
Iindependent architecture service provider

13
12
ce
re
nt
en
an
su
co
s
tic
es
ac
pr
e
nc
IT
ai
ve
rn
a
Re
d
uc
ed
go
et
te
r
B
N
ot
14
12
10
8
6
4
2
0
Interpretation
13 (28%) says it can be very much effective for quality control where 9 (20%) doesnt have
any idea regarding how can be benefited with this. 12 (26%) says they can be benefited in term
of enhancing project communication.
Q21. With a number of different ideas about enterprise

architecture around, is there a case of too many cooks
spoiling the broth in the offing?
Yes, it delays the adoption.
Not exactly, its evolving discipline.
If we would stop arguing about what enterprise architecture is and start

doing it, thats more helpful.
If you are not building models, you are not doing enterprise architecture.
Better to focus on how to build enterprises that are lean, dynamic and can
accommodate the complexities in the future.
No Respond
OP1
Count
18
17
39
OP2
OP3
OP4
OP5
15
15
Effect of too many player
17
No Res pond
OP1
OP2
15
OP3
OP4
OP5
15
39
Effect of too many player

20
18
18
16
14
12
10
8
2
0
No Res pond OP1
OP2
OP3
OP4
OP5
Interpretation
There is no proper guideline available for IT infrastructure. Entrepreneur thinks that they can
control each and everything if they adopt any ERP solution. 17% companies simply skipped this
question and 39% companies says its can create delay in IT adoption.
Those who has clear idea about ERP solution like 7% companies says without arguing if
they start implement it would be faster than anything.
9% companies says they want to start implementing to reduce future complexity which can
be dynamically addressed by IT infrastructure.
Q22. Balancing tradeoffs between long-term strategy and

short-term profits is an important skill?
Neutral
Disagree
Strongly
Disagree
No Responds
Strongly
Agree
Agree
Neutral
Disagr
ee
Count
11
22
11
24
48
15
Strongly
Disagree
0
0
Balancig tradeoff
2
11
S trongly
Agree Agree
15
No Res ponds
Neutral
Dis agree
24
S trongly Dis agree
48
Balancig tradeoff
25
22
20
15
11
10
1
re
e
ag
D
is
Ag
re
e
N
o
Re
s
po
nd
Interpretation
48% says agrees that there must be a balance between long-term strategy and short term
profit. All the short term profit together will help in the successful implementation of long-term
strategy. But 15% says that they are in neutral state.
FINDIN
GS
Findings
All the Heavy Engineering & Fabrication companies are not at all interested to invest
in Information Technology upgradesion.
Indian SMEs does not have proper knowledge about ERP systems. They dont know
how they can be benefited.
Whatever their requirement is at this current point of time all of them are fully
addressed by their current system.
After 3 years we can expect a drastic change in IT adoption by Indian SMEs.

Indian SMEs wants to use IT to improve the quality.
The main challenge for Indian SMEs is high cost of IT components.
Proper IT policy is missing.
We may get one more recession period in 2017-18.
ERP (ERP) is going to boom in SMEs.
Indian SMEs are concern about cost reduction.
Within 3-5 years Indian SMEs will be grown up.
Confused due to n-no. of solution provider.
SUGGES
TION
Suggestion
These are some suggestion that I would like provide
Information Technology awareness program can be very much helpful.

Financial institution must come forward with exciting loan package.
Develop such ERP what can be affordable by SMEs.
More government involvement in Information technology infrastructure improvement.
CONCLU
SION
Conclusion
All the entrepreneurship based companies are very much aware about their status definitely in
terms of technology. Some of them are very much sure that they dont want to grow up. They
dont have options or opportunities are not available that is a different story but the main
considerable fact is that they are not technology ready. May be business technology has
developed and reach at the top in this couple of decades by holding the hands of some
outstanding Information Technology companies like SAP, Cubeware, TCS who has come out
with SAP, ERP and iON respectively and many more ERP packagesand some excellent Business
Analyst. There are some very sophisticated ERPs are available for SMEs and they are using also
but the ratio is very less. In this era of globalization when the world has become global market
and anybody can be your competitor, it does not even matter which country which industry the
competition has gone beyond the boundary of our nation.
This is illustrated by investigations of the various levels of IT sophistication in the services
sector. For instance, denote four levels of Internet usage in service SMEs that operate
internationally, as presented in this Figure, by increasing order of sophistication: Internet for
communication, Web site, prospecting for new markets, online service offer. These uses are
similar to what [26] call e-business capaERPlities, that is, by order of increasing prevalence in
manufacturing firms: e-communication, e-intelligence, e-commerce and e-collaboration. These
authors add that while it may seem logical to develop
these capaERPlities in that order, it may be
preferable to first develop those activitiesthat are
more aligned or in fit with the firmsstrategic
orientation.
Information technologies are called upon to
play a crucial role in enterprises that are now
engaged in a knowledge- based economy. That is
why there have been numerous studies on the
determinants of IT adoption and assimilation,
these determinants being most often regrouped under
the three categories of the technology- organizationenvironment (TOE) framework [33], namely
technology-related factors, organization-related factors and environment-related factors. In
comparison to previous research, the first contribution of the present study lies in the light it
brings to the antecedents of IT adoption and assimilation in the particular context of service
SMEs, firms that have suffered an attention deficit on the part of researchers when compared
to manufacturing SMEs. Given research results obtained in the latters context cannot be
necessarily extended to service SMEs, the formers inherent particularities must be taken into
account, and the present study sought to highlight the effects of such particularities upon the
adoption and assimilation of IT. For instance, a manufacturing SME can analyze an IT adoption
opportunity without consulting its customers because they will not come into contact with the
said technology but only with the product resulting from the process in which IT is used. A
service SME cannot always do so as its customers are often part of the service process and are
consequently exposed to the technology adopted (e.g. ATMs in the banking industry). The
research framework proposed here thus takes the contextual peculiarities of service SMEs into
account. The second theoretical contribution of this study lies in its highlighting the
predominance of organization-related factors over technology-related and environment-related
factors. We have proposed that technology-related and environment-related factors, rather than
directly affecting the adoption and assimilation of IT as most often hypothesized previously, have
only an indirect effect, that is, through the effect they may have upon the organization- related
factors. These last factors are thus presumed to be alone in directly affecting adoption and
assimilation. And among organization-related determinants, emphasis was placed on the critical
role of the SMEs owner manager in capturing, interpreting and reacting to signals emanating
from the technological and environmental contexts. In specifically targeting the services sector
and SMEs, this study suggests that IT adoption and assimilation in these firms should be the
product of an alignment between the strategic orientation and competencies that characterize
their organizational context on one hand, and specific elements in their technological and
environmental contexts on the other hand. While the present research is theoretical in nature, it
offers managers a frame of reference to analyze their firms situation before initiating an IT
project by highlighting key adoption and assimilation factors in the specific context of service
SMEs.
The proposed research framework could also be used as conceptual foundation and
methodological core to develop an instrument measuring the strategic alignment and
organizational readiness of service SMEs for IT adoption and assimilation. Such an instrument
should provide reliable and actionable insights to managers and IT practitioners in the services
sector. The twenty-two propositions resulting from this study are based on the literature and
could thus serve as hypotheses in empirical research. In this regard, three avenues of research
would seem to merit particular attention as they have yet to be explored:
1) The effect of the strategic orientation of the service SMEs owner-manager upon the nature of
IT adopted and the moment of adoption,
2) The moderating effect of this strategic orientation on the relationship between the service subsector, networking in density and commercial dependency on one hand, and IT adoption and
assimilation on the other hand, and
3) The interdependency between the owner-managers competencies, notably IT technical
knowledge and the IT control competency, and the employees IT and business competencies.
SUMMA
RY
Summary
SMEs will provide a growth impetus for the Indian software market in the period 201014. According to India information technology report Q2 2010. It said that despite the recent
economic headwinds the local market is likely to grow strongly in 2010 with more projects from
key IT spending verticals such as financial services, telecoms & consumer goods. The report said
that in recent years the SME market in India for hardware deployment has grown and this has
resulted in an increasing opportunity in this segment for applications. More demands for
solutions and hardware come from second and third tier cities. Industry reforms and
privatizations, government regulations and new global competition have encouraged SMEs to
use more technology. Recently there has been an increased enthusiasm for hosted applications
and software as a service (SaaS), which improved telecoms infrastructure makes more feasible.
In case of Pune MSMEs, along with the advantages, impact, drivers and funding for
adopting IT, we have tried to capture the reasons for not adopting certain software technologies,
their preferences to certain technologies and their willingness to adopt some specific
technologies. We have also tried to align these expectations with the solutions that can be offered
by some software service providers.
I hope this report will drive useful actions on how individual firms in SME segment and
IT industry can join hands and can together work to accelerate the adoption of IT by the
BalanagarIDA SME segment so as to stimulate its growth further.
ERPBLIO
GRAPHY
Website Referred
www.smechamberofindia.com
www.indiasmeforum.org/
www.smetimes.in/
www.moneycontrol.com/smementor/
www.cia.org.in/
http://www.justdial.com/Hyderabad/company-cherlapally
http://www.indiacom.com/yellow-pages/fabricators-and-machine-
shops/hyderabad/?
area=Cherlapally
http://hyderabad.yellowpages.co.in/cherlapally-industriesassociation/cherlapally/listing/11973855892
http://www.fundoodata.com/search_results.php
http://dir.indiamart.com/hyderabad/forgings.html
http://en.wikipedia.org/wiki/SME_Rating_Agency_of_India
http://en.wikipedia.org/wiki/Small_and_medium_enterprises
http://www.indiamart.com/company/1131463/#profile
http://yellowpages.sulekha.com/hyderabad/sri-balaji-engineering-works-nagolehyderabad_contact-address
http://hyderabad.yellowpages.co.in/t-c-r-chemicalindustries/cherlapally/listing/38102417165
http://www.tradeindia.com/Seller-3620625-mohitha-engineering-industry/
http://www.getit.in/hyderabad/nath-fly-ash-bricks-industries/cherlapally/shed-no-2-3rdphase-ida/33774957.html
http://yellowpages.sulekha.com/hyderabad/pavani-industries-chintal-hyderabad_contactaddress
http://rajashree-hyderabad.apnaindia.com/
http://www.hudku.com/search/business-list/Small%20Scale%20Industries%20in
%20Cherlapalli,%20Hyderabad,%20Andhra%20Pradesh,%20India
Book Referred
Business Analytics for Managers: Taking ERP Beyond Reporting Laursen&JesperThorlund
Data Mining for ERP - GalitShmueli, Nitin R. Patel & Peter C. Bruce
Oracle ERP 11g Developers Guide - Mark Rittman
Business Legends - Gita Piramal
Gert H.N.
Article Referred
Shifting Gears: Changing IT Adoption among Small and Medium Enterprises (SMEs)RedSeer Consulting Confidential 2011
The contribution of Information technology to Consumer forum Erik Brynjolfsson
Sloan School of Management, Massachusetts Institute of Technology, Cambridge,
Massachusetts 02139
Insight Report - The Global Information Technology Report 2014 - Rewards and Risks of
ERPg Data - BeatERPlbao-Osorio, Soumitra Dutta, and Bruno Lanvin, Editors
Understanding the IT capaERPlities of Pune SMEs A joint study by MCCIA, MITCOM
& PERSISTENT SYSTEM.
Journal
of
Service
Science
and
Management,
2011,
4,
141157doi:10.4236/jssm.2011.42018 Published Online June 2011 Copyright 2011 SciRes.
JSSM141Information Technology Adoption andAssimilation : Towards a Research
Framework forService Sector SMEs, SylvestreUwizeyemungu, Louis Raymond
ADOPTION PROCESS OF INFORMATION TECHNOLOGY (IT) INNOVATIONS IN
ORGANIZATIONS - A Thesis submitted for the degree of Doctor of Philosophy by
MUMTAZ ABDUL HAMEED, Department of Information Systems and Computing
Brunel University London December 2012
Information Technology and Productivity: A Review of the Literature Erik
BrynjolfssonShinkyu Yang MIT Sloan School of Management Cambridge, Massachusetts
Published in Advances in Computers, Academic Press, Vol. 43, pages 179-214, 1996.
Competitive Advantage through ERP for E-Commerce T.Aditya Kumar #1,
G.Sravanthi#2, Dr.D.RatnaDeepthi #3 Student#1, CSE,Geethanjali College of
Engineering and Technology Keesara ,Hyderabad , A.P , India Student#2, CSE , Guru
Nanak Institutions Technical Campus Ibrahimpatnam, Andhra Pradesh, India Professor
and HOD,CSE#3, Geethanjali College of Engineering and Technology Keesara
,Hyderabad , A.P , India, International Journal of Computer & Organization Trends
Volume 3 Issue 11 Dec 2013
International Journal of Academic Research in Management (IJARM) Vol. 2, No. 4,
2013, Page: 140-152, ISSN: 2296-1747 Helvetic Editions LTD, Switzerland
www.elvedit.com, An Appraisal of the Impact of Information Technology (IT) on Indian
Small and Medium Enterprises (SMEs) Performance.
Creating Competitive SMEs -October 2010
Growth driver for SMEs in India? SMAC the next growth driver for SMEs in India
Enhancing SME Competitiveness through Technology Monitoring, Acquisition and
Adoption - Asian and Pacific Centre for Transfer of Technology.
Reasons for information technology adoption and sophistication within manufacturing
SMEs - MortezaGhobakhloo Email: [email protected], Jose Benitez-
Amado Email: [email protected] (corresponding author), Daniel Arias-Aranda Email:

[email protected]
ANNEX
URE
List of Company
S
l
n
o
1
2
Company
Name
M/S
SoubhagyaERP
otechpvt. Ltd
Golden Streak
Turno
ver
Contact
Person
27C
Vikas V. Purohit
Dr. M N Rao
Designation
Executive Business
Development
Chairman &
Email Id
vikaspurohit0201@gm
ail.com
[email protected]
Managing Director
m
anilmuppallakumar@g
mail.com,
[email protected]
m
Indian
Genomixpvt.
Ltd
1C
M Anil Kumar
Director
Sai Deepa Rock

Drilling Tool
65C
N Sunil
CEO
[email protected]
Beaver Tracks
pvt. Ltd
10C12C
M Dinesh Reddy
Director
dineshreddy123@radiff
mail.com
Ram
Engineering &
Control
N S K Chaitanya
Senior Manager Design
nskchaitanyarec@recin
dia.in
Aarvee
Pneumatic
Service
12C13C
N. Visweswara
Rao
Manager
[email protected]
50
Lakh 1C
C V Siva Reddy
HRD
[email protected] ,
[email protected]
800C
S Ramesh
Product Engineer
ramesh.shivakoti@gma
il.com
Borwell
Equipment
Company pvt.
Ltd.
Servomax India
ltd.
1
0
Spark
Insulators Pvt
ltd
24C
P. Venkatesunra
Rao
HR - Operational
[email protected]
m
1
1
Raavela
Interiors pvt ltd
14C
P. Srinivasa Rao
CGM
[email protected]
om
1
2
Gauthama
Engineering
50
Lakh 1C
B.S.K Bhat
proprietor
gauthamaengineering0
[email protected] ,
[email protected]
1
3
Axiom Energy
Converslowpvt
ltd
30C
PrasanthVerma
K
Senior Executive
[email protected]
1
4
BST Steels pvt.

Ltd.
Ashish Sharma
Sales Manager
[email protected]
om
1
5
Fluoroshield
Equipment
S. Dasagiri
proprietor
[email protected]
m
1
6
Disto
Pharmaceutical
s pvt. Ltd.
14C
B. Ramesh
Manager - Finance
ramesh@distopharma.
com
1
7
Thriva Energy
Technologies
pvt. Ltd
20C25C
Ch. Sombabu
Director
sombabu@thriveenergy
.co.in
1
8
ERPogenex
Narayama Rao
M
Manager - Talent
Acquisition
narayana.rao@ERPoge
nex.com
1
9
AnuStructurals
18C25C
M Kesavan
proprietor
anustructurals@yahoo.
co.in
2
0
Parru
Engineering
Bs. Stubl Reddy
MD
samERPreddy.bs@gmai
l.com
2
1
Sri Sai Balaji

Industries
2.5C
P. Srinivas Rao
proprietor
[email protected]
2
2
M Power
Infratech (I)
pvt. Ltd.
Ashok Kumar
Asst . ManagerOperation
2
3
Lakshmi
Powertelpvt.
Ltd.
N. Venkata
Rama Reddy
MD
ramreddy@laxmipower
tel.org
2
4
Saitronix
electronic
equipment
4C
N. Ramakrishna
Rao
proprietor
[email protected]
2
5
Schuck Group
G. Srinivasa
GM
srinivasa.gannamani@
scuck-group.com
2C-5C
VVB Satya
Narayana
MD
[email protected]
5C
K. Sudhir Reddy
MD
sudhirkr20032@yahoo.
com
2C-3C
J. Srinivasa Rao
Director
mail@vajraautomation.
com
Ge-Tech
Equipment
International
pvt. Lid.
D. Damodor
Personal Officer
[email protected]
indusEchowater
Sagar
Purchase Officer
NSL Fabricator
1.40C
BLN. Murthi
Partner
10C12C
C.U. Rama Rao
Manager-Operation
[email protected]
2.65C
K. Raghu Varma
Director
varelectrochem@yahoo
.co.in
2
6
2
7
2
8
2
9
3
0
3
1
3
2
3
3
Kinetic
Wudplaspvt.
Ltd
Kinetic Organic
&Plasricpvt ltd.
vajra
Automation pvt
ltd.
Variturn Electro
Products pvt.
Ltd
VAR
Electrochempvt
. Ltd
[email protected]
om
[email protected]
m
3
4
KGR Industry
6.5C
A. V. Ravindra
Reddy
General Manager
[email protected]
4C
M. Rakesh
Kumar
Plant manager
[email protected]
m
6C
K. Pravean
Reddy
HR Executive
[email protected]
5C
J. Roshi Reddy
managing Partner
hitech_hydraulics@yah
oo.com
9C
RaERPndra
IT - Admin
[email protected]
3
8
Sri Asha
Forgingspvt.
Ltd
M/S Nuclurinx
System pvt.
Ltd.
Hi- Tech
hydraulic
Engineers
Areca Embeded
System pvt ltd
3
9
Vidhata Die &

Mold
Rohan
VicepresidentTechnical
[email protected]
4
0
GUTS
Electromech ltd
20C25C
R VidyaArun
Director
[email protected]
4
1
Afton Chemical
Hyderabadhpvt
ltd
Rajdev Mistry
Accountant + IT incharge
rajdevmistry@aftonche
mical.com
4
2
Angel Plast
K. Meharnath
manager incharge
meharnathkumar@hot
mail.com
4
3
Master Roofing
Shiva Prasaad
Accountant
[email protected].
in
4
4
Gayathry
mining
equipment
60L70L
Vinay Kumar
manager
4
5
Dhanalakshmi
Packaging
V. rajesh Kumar
Asst . ManagerOperation
[email protected]
m
4
6
Allied
Enterprise
50L
M. Johnson
Accountant
[email protected]
3
5
3
6
3
7

Ashok's TCS Project Report New

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ashok's TCS Project Report New

Uploaded by

Copyright:

Available Formats

A STUDY ON

INFORMATION TECHNOLOGY ROAD MAP FOR SMEs AT

Project report submitted to

POST GRADUATE DIPLOMA IN

BUSINESS MANAGEMENT prescribed by ALL INDIA MANAGEMENT

Hyderabad will be confidential.

2 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

3 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Products and services................................................................................41

4 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Conclusion, Suggestions & Future Research..................................................66

5 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

7 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

designing/implementing support measures in the field of credit, technological up gradation,

8 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

9 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Product planning, cost

Manufacturing or service delivery

Marketing and sales

Shipping and payment

10 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

A common database that supports all applications

A consistent look and feel across modules

Installation of the system with elaborate application/data integration by the Information

Financial accounting: General ledger, fixed asset, payables including vouchering,

Management accounting: Budgeting, costing, cost management, activity based costing

Human resources: Recruiting, training, rostering, payroll, benefits, 401K, diversity

12 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Manufacturing: Engineering, ERPll of materials, work orders, scheduling, capacity,

Supply chain management: Supply chain planning, supplier scheduling, product

Project management: Project planning, resource planning, project costing, work

Customer relationship management: Sales and marketing, commissions, service,

Data services : Various "selfservice" interfaces for customers, suppliers and/or

Resource planning and scheduling

Analyzing the product

External access via technology such as web services

13 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

14 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Indian SMEs [Small and Medium Enterprises]

organizational strategic outcomes and

16 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Investment in plant & machinery

Does not exceed twenty five lakh rupees

17 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Does not exceed ten lakh rupees

Indian SMEs in Technology Adoption

18 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Future Technologies for SMEs

19 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

2. Remote infrastructure Management

Key challenges faced by Indian MSME

1. High Cost of Credit

20 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

Limited Access to Equity Capital

Problems in supply to government departments and

Majority of government tenders prescribe high eligiERPlity criteria such as annual

5. Procurement of raw materials at a competitive cost

6. Problems of storage, designing, packaging and product

7. Lack of access to global markets

Inadequate infrastructure facilities, including power,

21 | P a g e | Information Technology Road Map for SMEs| Ashok Kumar

To ensure competitiveness of the MSMEs, it is essential that the availaERPlity of

Low technology levels and lack of access to modern

10. Lack of skilled manpower for manufacturing, services,