INFORMATION SYSTEMS ADOPTION AND IMPLEMENTATION IN SMALL BUSINESS IN SINGAPORE

Abstract

This thesis examines the factors leading to information systems (IS) adoption and implementation effectiveness in small businesses. Two studies were conducted. The first study aimed to identify factors that determine whether a small business adopts IS or not, and factors that determine why some small businesses adopt more IS than others. The second study was concerned with identifying the key factors of IS effectiveness and examining their relative importance; as well as comparing the relative effectiveness of two common approaches to engaging external IS expertise for IS implementation in small businesses. The two approaches were: (I) engaging separate consultant and vendor (consultant-vendor approach) and; (2) engaging only a vendor who performs the duties of a consultant (vendor-only approach). In the first study, an IS adoption model for small businesses was proposed and tested in a questionnaire survey of 166 CEOs of small businesses in Singapore. Based on a review of the technological innovation literature, the model incorporated seven factors identified as relevant antecedents to IS adoption in small businesses. The factors included CEO innovativeness, CEO attitude toward IS adoption, CEO IS knowledge, employees IS knowledge, business size, competitiveness of environment, and information intensity. The second study focused on the factors that may lead to IS effectiveness. Based on a review of IS implementation literature in small businesses, eight variables were identified as potential determinants in the research model. They are CEO support, user involvement, level of IS planning, information technology (IT) investment, custom developed applications, users computer knowledge, vendor support, and consultant effectiveness. The model was tested in a questionnaire survey of 114 small businesses. Responses from multiple managers in each small business were solicited. Interviews were also conducted with managers in 67 small businesses to include qualitative data in the analysis. Data from the interviewed small businesses were also used to compare the effectiveness of the consultant-vendor approach with the vendor-only approach to engaging external IS expertise for IS implementation. The first study showed that besides business size and employees IS knowledge, small businesses are more likely to adopt IS when they have CEOs who are innovative, have positive attitude toward IS adoption, and are more knowledgeable about lS. Another finding is that small businesses that are larger, possess greater employees IS knowledge, and have high information intensity tend to adopt more IS. The second study showed that external IS expertise, in the forms of vendors and consultants, is a more important determinant of IS effectiveness in small businesses than CEO support, user involvement, level of IS planning, IT investment, use of custom-developed applications and users' computer knowledge. High quality external IS expertise is critical in an environment of resource poverty, low uncertainty avoidance, less individualistic culture, and a come-from-behind use of IT. A supplementary finding was that perceived system usage is not an appropriate measure of IS effectiveness in small business IS implementation. Finally, this study showed that the vendor-only approach to engaging external IS expertise can produce more effective operational and transactional IS than the consultant-vendor approach. Implications of the findings are discussed.