ICT - Sinfree Gono

1
Challenges of ICT Adoption by South African SMEs:

A study of Manufacturing and Logistics Firms

Sinfree Gono (Phd Research Candidate)
School of Management, Royal Holloway University of London
Egham, Surrey
TW20 0EX, United Kingdom
Mobile: 07984845957
Email: Sinfree.Gono.2009@live.rhul.ac.uk

Dr. G. Harindranath

Dr. Gl Berna zcan
Abstract
Objectives
This paper investigates the impact of ICT adoption and use among South African SMEs in the
manufacturing and logistics sectors. South Africa is an emerging economy as seen by its recent
admission to the BRICS group of countries. The manufacturing sector provides a locus for stimulating
growth and use of emerging technologies in other sectors. The logistics sector is integral to the
movement of goods and supply chain linkages. The study identifies key ICT attributes and explores
how they influence adoption and use in Johannesburg.
Prior Work
The study draws on the Framework of e-commerce technology adoption by SMEs (Rashid and Al-
Qirim, 2001) as an overarching framework along with influences from other key approaches; the
diffusion of innovations (Rogers, 2003), Technology Acceptance Model (Davis, 1989) and the
Resource Based View (Barney et al, 2011) that help us to understand ICT adoption and use in SMEs
Approach
The study uses both quantitative and qualitative research techniques. A total of 130 firms were
surveyed (66 in logistics and 64 manufacturing) and 52 interviews conducted (46 owner-managers
and the rest representing institutional representatives, academia and consultancy).
Results
Results show that the power of the supply chain drives growth and use of ICT (supply chain slavery)
in addition to internally driven firms, individuals and owner-managers. Also, most SMEs studied have
a high ICT skills shortage and rely on outside ICT vendors and consultants for their needs.
Interestingly, cost of ICTs was not seen as a constraint to ICT adoption. There is evidence that firms
in the logistics sector have to adopt government specified ICTs before trading (adoption through
policy).
Implications
The RBV approach infers that the key differentiators for ICT deployment in firms reside within the
internal context of an organisation. Because of the new technologies and prospects of external
knowledge transfers, the study shows that capabilities that are important to the organisation may
reside (externalised) outside the firm e.g. an effective ICT consultant or ICT vendor may play a role in
matching firm ICT needs and organisational objectives. As an emerging economy, South Africa is
primarily concerned with wider economic empowerment of the native population taking into account
its apartheid past. Notwithstanding the historical past (particularly race and gender disparities), this
study proposes the need to address sectoral challenges that foster competitiveness (targeted training,
funding, policy and empowerment initiatives).

2

Value
The study contributes to the broadening of our understanding of the impact of ICT adoption and use in
SMEs especially from a firm, sector and developing country perspective. It also avails knowledge that
is of use to owner-managers, researchers and policy-makers by providing insights on the two sectors
and SMEs in general. Additionally, it provides current and up to date assessment of the impact of ICT
on SMEs in South Africa. Critically, this calls for consolidating on existing knowledge and extend
research to shed light on the transfer of specialised ICT knowledge to SMEs.
Key Words: ICT Adoption, ICT use, SMEs, South Africa, Johannesburg.
1.0 Introduction
Information and Communication Technology (ICT) use in organisations has taken centre stage more-
so in SMEs where its critical role and emergent challenges has led to increased support from
governments and sector organisations alike. Though there is a growing repertoire of research in this
area in developing countries, including South Africa, the literature suggests the need for creating a
significant targeted body of research on ICT/SMEs in developing country contexts. Furthermore,
cross-sector research study is still under-researched in this context despite its existence in extant
literature in other parts of the world.
Companies differ in size, location, sector, age, ownership structure, financial performance, maturity,
and management style. In literature, there exists definitional differences of what constitute an SME,
and this is compounded by geographical, contextual and sectoral differences. Without ignoring the
idiographic nature of SMEs (Davos et al, 2013), it is ideal to clearly define an SME in context of the
research. The European Commission defined an SME in terms of microeconomic characteristics,
such as turnover (not exceeding 50 million euro), annual balance sheet total (not exceeding 43 million
euro) and headcount (fewer than 250 persons).In South Africa, SMEs can be classified as micro, very
small, small or medium enterprises (also referred to as SMMEs) with varying sets of thresholds for
each individual sector. We have adopted the National Small Business Act of 1996 definition with an
upper threshold of 200 employees for both study sectors and R20 million and R40 million for logistics
and manufacturing sectors respectively (DTI, 2008). ICT incorporates primary digital technologies like
mobile phones, computers and other digital communication media designed to collect, organise,
store, process, analyse and communicate both internal and external to organisations (Ritchie and
Brindley, 2005, Barba-Sanchez et al, 2007). Other researchers have defined ICT as any technology
used to support information gathering, processing, distribution and use (Beynon-Davies, 2004, 2012;
Beckinsale and Ram, 2006, 2009; Porter and Keynes, 2012).
This paper investigates the impact of ICT adoption and use among South African SMEs in the
manufacturing and logistics sectors, specifically the Johannesburg SMEs. This paper draws upon the
Framework of e-commerce technology adoption by SMEs (Rashid and Al-Qirim, 2001) as an
overarching framework with influences from extant ICT/SME approaches to identify factors influencing
ICT adoption and use. These approaches are: Diffusion of Innovation theory (DOI), the technology
acceptance model (TAM), Resource-based Theory (RBT). The manufacturing sector harbours a
diversity of activities and acts as a ground for owner-managers with new innovative business ideas
while the logistics sector provides impetus to the functioning of the supply chain. It is on this basis that
this paper acts as a means of investigating and identifying factors at play: industry/sector, firm size
(as measured by number of employees and annual revenue), age of the firm as it influences ICT
adoption and nature of firm relationships, training and ICT expertise and the role of the owner-
manager among others. Such interrelationships and other variables were analysed to determine their
impact on ICT adoption.
Based on empirical findings gained by a survey of 130 SMEs and 52 interviewees in the
Johannesburg metropolitan area, this paper uses quantitative and qualitative analysis as a means of
identifying the potential for relationships between variables. Data was gathered from firms on the
basis of two industrial sectors (manufacturing and Logistics) in a vibrant and highest GDP contributing
region (33.7%) of South Africa (www.southafrica.info). Non-parametric statistical analysis on the
survey data and interview analysis transcripts suggest that impact of ICT and use cannot be

3

explained on the basis of single variables as it is a result of a variety of inter-relationships of multiple
factors.
Admittedly, ICT/SME research in South Africa is still growing with relatively few adoption studies
compared to developed countries. Of note, is a report on ICT and Entrepreneurship (Kew and
Herrington, 2009), and academic studies that have recently been undertaken and provided some
insights into the research context ; Obstacles to the growth of new SMEs in South Africa (Fatoki and
Garwe, 2010), ICT Adoption and Development of E-business among SMEs in South Africa (Mpofu et
al, 2010), the Role of ICT within Small and Medium Enterprises in Johannesburg (Modimogale and
Kroeze, 2011), and Investigating the key factors influencing ICT adoption in South Africa (Kyobe,
2011). Our research study specifically focused on Johannesburg, a hub of South African economic
activities.
There is extensive debate in literature regarding the advantages (or disadvantages) firm location has
on a business. Porter (1998) argued for the competitive advantage of clusters allowing knowledge
sharing and generating innovation. The development of clusters derives from their ability to
concentrate economic activities in a particular location. Critical mass helps drive further development
and outstrips the abilities of individual enterprises to develop competitiveness. Owner-manager of Log
173, a specialist logistics firm commented on the benefits of location to his firm:
We are situated in the Johannesburg (now called Oliver Tambo) airport area because there are a lot
of other logistics companies, good for our exports as we are close to the airport. This area is the
logistics city of Gauteng.
While location may enable an SME to leverage itself by using local knowledge about the sector,
competitors or market opportunities; Fatoki and Asah (2011) noted that geographical proximity to
either critical buyers or suppliers produces a form of enhanced environmental scanning that enables
SMEs to more easily identify and exploit growth opportunities in the market. Bennett and Smith
(2002) view locational differences as having little relationship with competitive conditions or
competitive advantage. This contradicts Porters argument that competition is highly locational
specific but confirms the view of Dunning (1998), Rugman et al (2012) and Rugman and Hoon Oh
(2012) who found that firms become competitive through specialisation, exporting or other means
irrespective of location and that economic geography is now much less relevant for business strategy.
To compete in the burgeoning nature of global competition SMEs need to explore issues pertaining to
their internal and external environment, technological, and individual attributes of the owner-manager.
To complement existing evidence regarding these attributes, this paper applies approaches grounded
in ICT/SME and innovation literature in order to analyse the impact of ICT adoption and use through
answering the following research questions:
1. What is the impact of ICT adoption and use in the South African Manufacturing and Logistics
sectors?
2. How are the identified attributes influencing ICT adoption and use among SMEs in the
Manufacturing and Logistics sectors in Johannesburg?
3. What are the challenges confronting owner/managers of SMEs in the Manufacturing and
Logistics sectors of Johannesburg, in their efforts to develop a strategic approach to the
adoption and use of ICT in their businesses?
4. What internal capabilities and processes are used for managing ICT within SMEs in the
Manufacturing and Logistics sectors in Johannesburg?
The paper first outlines the literature review relevant to ICT/SME literature using the adapted research
framework as a guide. Then, the main results of the empirical study are presented and discussed, and
finally conclusions and managerial implications are proposed.
2.0 Analysis of Relevant Literature on ICT and SMES

There is an on-going debate within and outside the academic community about the value of ICT to
SMEs despite conflicting support for the significance of the factors of ICT adoption and use (Parker

4

and Castleman, 2007a). Previous studies on ICT adoption report that SMEs in developing countries
have not fully capitalised on technological developments to extend their businesses beyond traditional
borders: off-line identification of customers, use of multiple intermediaries and marketing channels
constrained by distance (Humphrey et al, 2003; Molla and Licker, 2005; Shemi and Procter, 2013).
There is a need for a better understanding of the determinants of ICT usage (Taylor and Todd, 1995)
and factors that drive or constraint its adoption and use (Harindranath et al, 2008; Mpofu et al, 2010).
With specific reference to our context, this research aims to improve our understanding of firm, sector
and country specific context of ICT adoption processes by SMEs with policy implications.

Gagnon and Toulouse (1996) ascribe the use of ICT in business as no longer a matter of choice but
rather one of survival, with a better understanding of the process of adopting new technologies as
both essential and urgent. Similarly, a research carried out in Portugal by Caldeira and Ward (2002)
showed that SMEs that were doing well locally (i.e. in the protected home market) were losing out to
outside firms that were employing more aggressive business methods and tactics and hence saw
their market share eroded. A similar argument was put forward by Lawson et al (2003) attributing that
organisations that do not embrace new technologies will be left behind and encourages the use of e-
commerce, an idea supported by Al-Qirim (2005). Kotelnikov (2007) also suggested that SMEs who
have not yet adopted ICT will have trouble surviving and will lose out to competition.

The research stream examining the adoption and use of new ICT has evolved into one of the richest
and most mature research streams in the information systems field (Venkatesh et al, 2003). Along the
way, researchers have identified a variety of factors that affect technology adoption in SMEs and use
differing models in determining reasons why firms adopt ICT (or not). Much of the earlier literature is
based on Rogers (1995) Diffusion of Innovation theory (DOI), which highlights the characteristics
pertinent to the decision to adopt and diffuse information technology. Other streams focused on the
acceptance of technology in organisations (TAM); perceived ease of use and perceived usefulness
constructs (Davis, 1989); while other approaches focused on the internal capabilities of the firm as
being essential for survival and achieving competitive advantage, the Resource Based View (Barney,
2011). Other factors put forward in literature include; cost of ICT, the role of owner-manager and their
characteristics (literacy level, experience, and ICT knowledge), regulatory requirements,
customer/supplier pressure, and supply chain. Goode and Stevens (2000) indicated six
characteristics as consistently associated with the adoption of technology; business size, age,
industry, use of an IT support unit and IT budget, and degree of technology experience. However,
these factors impact ICT adoption and use differently in different contexts, hence treating SMEs as a
collective entity (Parker and Castleman, 2009) has meant that there is a lack of depth in
understanding and appreciating how individual firms are impacted by the process of adoption. In this
light we posit that factors influencing ICT adoption and use are complex and in many cases subjective
to the SME(s) in question. With the benefit of these theories, new approaches emerged in different
contexts; a framework for EC technology adoption by SMEs (Rashid and Al-Qirim, 2001) which forms
the framework of our study.
3.0 Theoretical Approaches
The ICT/SME adoption and use argument is multi-pronged, hence this section gives a brief
introduction to the theoretical approaches used in this study and how they relate to the framework in
Figure 4.1 below.
3.1 Diffusion of Innovation
The DOI approach has its primary focus on how potential adopters perceive an innovation in terms of
relative advantage/disadvantage (Rogers, 1995); hence some of the factors of the DOI approach help
form our framework: innovativeness, complexity, compatibility and relative advantage. Furthermore,
firms that intensely use a particular technology are often prime candidates for early adoption of the
next generation of that technology (Shih et al, 2013). The diffusion of innovations approach in our
study is important to understanding the dynamics at play in relation to adoption and use of ICT in
SMEs. There are discourses focusing on adoption by organisations and also by individuals. These
two types of adoption both play a role when investigating the diffusion and adoption of ICT by SMEs.
After all, in SMEs many of the primary decisions are made by the owner-manager. The organisational
decision to adopt technology becomes intertwined with personal perceptions and attitudes of the
owner-manager towards that technology (Akkeren and Cavaye, 1999). Diffusion in SMEs is largely by
way of interpersonal/inter-firm networks.

5

3.2 Resource-based Theory
Barney (2011) argues that the RBT approach has evolved from a nascent, upstart perspective to one
of the most prominent and powerful theories for describing, explaining, and predicting organisational
relationships. The resource-based view (RBV) of the firm as one of the research approaches has
been widely used by a variety of researchers (Melville et al, 2004; Wade and Hulland, 2004; Saraf et
al, 2007; Grover et al. 2009; Nevo and Wade, 2010; Duhan et al, 2010). In its original form, RBV
emphasises the internal resources of the firm as the source of performance and competitive
advantage, rather than the external environment. However, findings from our empirical study reveal
that these capabilities (ICT expertise, firm networks, supply chain involvement etc.) could also be
generated from the external context of the firm necessitated by the developments in technology.
Hence, in view of this explanation, the following factors can be viewed as forming bundles of firm
assets important to the firm and for inclusion in the framework: resources and capabilities, top
management support, cost of ICT, human capital and networks and supply chain.

3.3 Technology Acceptance Model
The most widely employed model of IT adoption and use is the technology acceptance model (TAM)
that has been shown to be highly predictive of IT adoption and use (Davis, et al, 1989; Venkatesh and
Davis, 2000; Venkatesh and Morris, 2000 and Venkatesh and Bala, 2008). TAM was designed to
explain computer usage through two cognitions: perceived usefulness (PU) and attitude (PEOU
1
) as
determinants of intention (Davis et al, 1989). Hart (2010) stated the need for TAM to be integrated
with other IT approaches that incorporate decision-makers' social and idiosyncratic characteristics.

Though these approaches contributed to ICT/SME literature and influenced the formation of our
framework, they also harbour some shortcomings. TAM is criticised for not accounting for the
influence and personal control factors on behaviour, including the lack of consideration to other
factors such as external influences from the environmental attributes, suppliers, customers and
competitors (van Akkeren and Cavaye, 1999; Manueli et al, 2007). On the other hand, DOI fails to
take into account a firms resources or social support to adopt new ICT. Regarding RBV approach, it
mainly focuses on the internal aspects of the firm, however, as we have observed SMEs make use of
their external context; their supply chain and reliance on external expertise, factors not currently
addressed by the RBV.

A stream of SME/ ICT adoption literature and empirical analysis has emerged over the years in
different contexts (Levy et al, 2001; Rashid and Al-Qirim, 2001; Caldeira and Ward, 2001 and 2002;
Wymer and Regan, 2005; Kew and Herrington, 2009; Oliveira and Martins, 2011; Neirotti et al, 2013;
Elbeltagi et al, 2013). These studies followed different research paths/streams. Our approach adapts
the Framework of Rashid and Al-Qirim (2001) to the South African context. Given that the framework
originally focused on a developed country (New Zealand), the application of this framework in a
developing country may be required to help us study contextual factors of the sample firms.
4.0 Research Methodology

To fulfil the objectives of the study, the authors followed an explorative-interpretive approach utilising
surveys and interviews as the primary data collection methods. We propose that by combining
qualitative and quantitative methods in one study, research questions can be informed by both
approaches and help develop rich insights into various phenomena of interest that cannot be fully
understood using only a quantitative or a qualitative method (Venkatesh et al, 2013).

Chin et al (2012) believe that quantitative methods can be used to explore and generate new
understanding, opening the door for qualitative methods to dig deeper into the research area, as well
as complement existing research (Wolf, 2001; Langmia, 2006; Mutula and Brakel, 2007; Kew and
Herington, 2009; Fatoki and Garwe, 2010). This highlights the "complementarity effect" between
survey and interview approaches to studying ICT. As well, complementarity (seeking elaboration and
clarification) of the results from one method with the findings from the other method will enhance,
expand and seek to extend the extensiveness and range of inquiry (Azorin and Cameron, 2012).

In less explored research contexts like South Africa, ICT researchers often encounter situations in
which existing theories and findings do not sufficiently explain or offer significant insights into a

1
PEOU: Perceived Ease of Use

6

phenomenon of interest. Mixed methods design strategies provide a powerful mechanism for IS
researchers to deal with such situations and subsequently make contributions to theory and practice
(Venkatesh et al, 2013).The authors suggest that in the context of this research, use of both
quantitative and qualitative approaches is more appropriate as such a holistic approach can be used
to investigate little-known phenomena like examining in depth complex firm relationships and the
phenomenon in its natural setting (i.e. learn from owner-managers) using our adapted framework in
Figure 4.1 below.
4.1 A framework for EC technology adoption by SMEs
This approach is focused on the investigation of the direct and indirect influences of technological,
owner-manager/Individual, organisational and environmental (TOOE) factors on the SMEs adoption
process (Rashid and Al-Qirim, 2001). Based on Rogers (1995) and Tornatzky and Klein (1982) and
other researchers who have used similar approaches with references to these approaches; Scupola,
2006, 2009, 2010) we deemed this approach suitable for an explorative-interpretive research in a
developing country context. Importantly, for its emphasis on the importance of the owner-managers
role (Individual characteristics such as education, age, and experience have been found to strongly
influence ICT adoption); the technological, organisational, and environmental contexts. Thus the
framework should be based on the insights gained on ICT/SME studies that would assist in enriching
our research study.
Building on the framework and various other inter-organisational approaches (DOI, TAM, and RBV)
briefly highlighted above, we propose that this framework postulates that a set of TOOE factors will
have synergistic effects (i.e. benefits as a result of interactions between a focal firms and its partners
factors (Venkatesh and Bala, 2012) on ICT adoption within the industry/sector/supply chain context.
While the traditional economic structure favours size and physical matters; the new economy is
earmarked by relationships, networks and information (Tse and Soufani, 2003; Clear et al, 2013).
With the rise in the number of firm networks in the new and emergent economies, these approaches
do not fully capture the nuances pertinent to network participation. We propose that the key tenets of
these theories are particularly relevant to the SME sector as they assist in explaining the relationship
between different variables. Drawing from multiple approaches in this research study creates a
balanced view of SMEs as each approach has strong explanatory power that relates to knowledge,
competencies and attributes relevant both to the SMEs/ICT adoption discourse. It is from this
background we argue that using all four attributes will deepen our understanding of the growing
research in this context.
With the assistance of the adapted framework, insights from chosen approaches, factors from existing
literature and SME idiosyncrasies, the formulated research framework presented in Figure 4.1 brings
four themes together. Also this brings into light two very important attributes to SMEs: the owner-
manager and the location and size of the firm in relation to our context of study.
Figure 4.1 The Research Framework (TOOE)

Source: Adapted from Rashid and Al

Use of the mixed-method approa
extraction of contextually rich nuances that help explain ICT adoption in South Africa.
uniqueness of South Africas economic structure (i.e. viewed as a developed and developing
economy), diversity of nationalities and the richness of its geo
apartheid, we have added human capital, infrastructure and location, resources and capabilities and
individual traits of owner-managers. Also, cross
to the framework.
4.2 Data Collection
The process is carried out in three steps. First, a sample of
Johannesburg metropolitan area
from Brabys business directory and
(CILTSA) data base for logistics firms
registered for proposed interviews
acceptable for analysis. The responses were composed of 66 firms (51%) from the logistics sector
and the rest 49% (64 firms) were from the manufacturing sector.
actual fieldwork, an initial e-mail was sent out to explain the purpose of
invitation to participate. In all, we held
Figure 4.1. The interviews were
organisation's ICT adoption initiatives, preferably
possible someone at managerial/decision making level

Third, we held 6 interviews with
academia (see Figure 5.1 below).

Empirical evidence of how SMEs adopt and use ICT was gathered on the basis of industry sector,
firm size and age and other pertinent characteristics that
and use reality, thus contributing
purposes of this study however, firms with no employees (i.e. single operators or one
noted by Clear et al, 2013) have been excluded.
semi-structured interviews. SPSS quantitative data analysis software was used to identify
relationships within the data collected.

Organisational Context
Size and Sector
Resources and Capabilities
Management Support
Cost of ICT

Adapted from Rashid and Al-Qirim (2001)
method approach and guided by the adapted framework above
extraction of contextually rich nuances that help explain ICT adoption in South Africa.
my), diversity of nationalities and the richness of its geo-political history dominated by
managers. Also, cross-sector analysis necessitates that firm sector be added

The process is carried out in three steps. First, a sample of 500 SMEs was targeted
Johannesburg metropolitan area in the manufacturing and logistics sectors. The firms were selected
and the Chartered Institute of Logistics and Transport of
for logistics firms. The e-mail and physical addresses and contact name
for proposed interviews. A total of 134 questionnaires were received, of which 130 were
. The responses were composed of 66 firms (51%) from the logistics sector
and the rest 49% (64 firms) were from the manufacturing sector. Second; two
mail was sent out to explain the purpose of the
In all, we held 46 interviews (26 logistics and 20 manufacturing)
The interviews were designed to be conducted with someone familiar
initiatives, preferably the owner-manager and whenever this was not
at managerial/decision making level were made available.
with sector institutions representatives; those in consultancy and
academia (see Figure 5.1 below).
firm size and age and other pertinent characteristics that help provide richer pictures of I
ing to SME/ICT debate and informed ICT investment decisions. For the
purposes of this study however, firms with no employees (i.e. single operators or one
noted by Clear et al, 2013) have been excluded. Data was collected using survey questionn
SPSS quantitative data analysis software was used to identify
relationships within the data collected.
ICT
Adoption
and Use
Owner-Manager Context
ICT Knowledge and Involvement
Individual traits
Decision making attributes
Innovativeness
Environmental Context
Infrastructure and Location
Government role & Policy
Networks and Supply Chain
Human Capital
Technological Context
Complexity
Compatibility
Relative Advantage
Quality of ICT
Organisational Context
Resources and Capabilities

7

and guided by the adapted framework above enables the
extraction of contextually rich nuances that help explain ICT adoption in South Africa. Because of the
political history dominated by
necessitates that firm sector be added
targeted in and around the
he firms were selected
ransport of South Africa
es and contact name were
were received, of which 130 were
. The responses were composed of 66 firms (51%) from the logistics sector
two weeks prior to the
the study along with an
(26 logistics and 20 manufacturing) as shown in
designed to be conducted with someone familiar with the
manager and whenever this was not
representatives; those in consultancy and
help provide richer pictures of ICT adoption
to SME/ICT debate and informed ICT investment decisions. For the
purposes of this study however, firms with no employees (i.e. single operators or one-man-bands as
survey questionnaires and
SPSS quantitative data analysis software was used to identify
Manager Context
Knowledge and Involvement
Decision making attributes

Logistics
Sector
26 firms

Figure 4.1 Interviews by Sector

Source: Author
The interviews were one-to-one
Related Services Sector Education and Training Authority
organisation was established to facilitate skills development in the manufacturing and plastics
industries. The interviews were
and time constraints. In cases where further information or clarification was required, follow ups of
telephone calls and e-mails were used. The interview
corresponding to the survey questionnaire covering
technical, owner-manager and the
qualitative coding and analysis
interview was left for ad-hoc questions and open discussions
covering.
5.0 Findings from Data Analysis

5.1 Location and Background information of Sample firms
Our research centres on SMEs in the Johannesburg metropolitan area,
South Africa with more than 4.5 million people
the smallest province by land area but it is the most vibran
economy than any other province.
below.
Figure 5.2 Map of Johannesburg

2
MerSETA: Manufacturing, Engineering and Related Services Sector Education and Training Authority was
established to facilitate skills development in the manufacturing industry.

Sector
Institutions,
Academia &
Consultancy
6
Manufacturing
Sector
20 firms
Interviews by Sector
one and face-to-face, apart from the Manufacturing, Engineering and
Related Services Sector Education and Training Authority (MerSETA
2
) with 2 interviewees. This
was established to facilitate skills development in the manufacturing and plastics
varied in length depending on the interviewees
. In cases where further information or clarification was required, follow ups of
mails were used. The interview schedule was structured into sections
questionnaire covering all the research study constructs:
manager and the environment. Sections or themes were
analysis of data using Atlas.ti qualitative software. The open part of the
hoc questions and open discussions for areas that interviewees felt
Findings from Data Analysis
Location and Background information of Sample firms
Our research centres on SMEs in the Johannesburg metropolitan area, the most populated city in
South Africa with more than 4.5 million people. Of the nine South African provinces, Johannesburg is
the smallest province by land area but it is the most vibrant contributing more to the GDP of the
economy than any other province. Most of the specific research locations are shown on the map
Map of Johannesburg

Manufacturing, Engineering and Related Services Sector Education and Training Authority was
established to facilitate skills development in the manufacturing industry.

8
Manufacturing, Engineering and
) with 2 interviewees. This
was established to facilitate skills development in the manufacturing and plastics
exact circumstances
. In cases where further information or clarification was required, follow ups of
ctured into sections
all the research study constructs: organisational,
Sections or themes were necessary for the
. The open part of the
r areas that interviewees felt needed
the most populated city in
Of the nine South African provinces, Johannesburg is
t contributing more to the GDP of the
locations are shown on the map
Manufacturing, Engineering and Related Services Sector Education and Training Authority was

Source: www.roomsforafrica.com
The diagram above shows some of the localities that formed our research context.
representation of each locality is shown in Table 3.1 below.
5.2 Sample Characteristics

5.2.1 Owner-manager
The Table below shows some characteristics of the firms studied
age, role etc.
5.2.2 Firm Characteristics
Innumerable characteristics define what an SME is and what they represent. The definition is
influenced by country, industry and other variables but mainly the constraining effect of
using number of employees (Neirotti et al, 2013)
revenue as an additional determinant of firm size. Other characteristics that have been found to
influence adoption in SMEs are firm age, se
Stevens, 2000; Clear et al, 2013). Furthermore, firm size (Neirotti et al, 2013), age and the industry of
the firm have been found to significantly influence adoption of technology (Ashrafi and Murtaza, 2
Mpofu et al, 2010).
The following table gives brief background information on our sample firms.
Table 3.1 Firm Summary Statistics

www.roomsforafrica.com
diagram above shows some of the localities that formed our research context.
representation of each locality is shown in Table 3.1 below.
Sample Characteristics
manager
The Table below shows some characteristics of the firms studied including those of owner
Firm Characteristics
influenced by country, industry and other variables but mainly the constraining effect of
using number of employees (Neirotti et al, 2013) is used. In our research study we also used annual
Es are firm age, sector, financial resources and experience (Goode and
the firm have been found to significantly influence adoption of technology (Ashrafi and Murtaza, 2
brief background information on our sample firms.
Firm Summary Statistics

9

diagram above shows some of the localities that formed our research context. The percentage
including those of owner-managers:
influenced by country, industry and other variables but mainly the constraining effect of size especially
. In our research study we also used annual
and experience (Goode and
the firm have been found to significantly influence adoption of technology (Ashrafi and Murtaza, 2008;

Source: Survey Data
As could be observed in the table above, the highest number of survey respondents were based in
Randburg (16%), followed by Johannesburg city and Kempton Park with 15% each. The rest are
spread evenly across research localities.
(number of employees and annual revenue) and age of the firm wit
and above. This shows that most of them are mature firms.

The empirical data revealed a range of
challenges resulting from the process of acquiring new
several factors that affect the adoption of ICT in firms; i.e. financial resources,
support, supply chain involvement, pressure from suppliers or customers, government policy,
ICT expertise and knowledge and
significant relationships tabulated in Table 5.1 and 2 below.
some of the results and findings

Table 5.1 Firm Size (i.e. revenue

dburg (16%), followed by Johannesburg city and Kempton Park with 15% each. The rest are
spread evenly across research localities. The table also shows the definitional characteristics of size
(number of employees and annual revenue) and age of the firm with 75% of the firms being 10 years
and above. This shows that most of them are mature firms.
revealed a range of factors that influence firms to adopt and use ICT, and also the
challenges resulting from the process of acquiring new systems for the organisation
several factors that affect the adoption of ICT in firms; i.e. financial resources,
, supply chain involvement, pressure from suppliers or customers, government policy,
knowledge and vendor support. From these factors our analysis uncovered
significant relationships tabulated in Table 5.1 and 2 below. Given in the following subsection
identified.
Firm Size (i.e. revenue) vs Working relationship with large firms

10
dburg (16%), followed by Johannesburg city and Kempton Park with 15% each. The rest are
The table also shows the definitional characteristics of size
h 75% of the firms being 10 years
to adopt and use ICT, and also the
systems for the organisation. There are
several factors that affect the adoption of ICT in firms; i.e. financial resources, top management
, supply chain involvement, pressure from suppliers or customers, government policy, lack of
From these factors our analysis uncovered
Given in the following subsections are

11

Variables
p Values (p.05) = significant
Trading partner
.036

Supplier for large companies

.089

Purchase products from large company

.020

Supply chain

.010

Training and development

.046

Other
.142
Source: Author
Table 5.2 shows some significant relationships between variables identified through SPSS data
analysis software.
Table 5.2 Significant Relationships
Variables Kruskal-Wallis Test
- Sig (p=<0.05)

AccFinApp6 .030 Relationship Significant
AccFinApp6 .035 Relationship Significant
Trading partner .028 Relationship Significant
Database Management Software .030 Relationship Significant
Purchase products from large company .000 Relationship Significant
Supply Chain (knowledge sharing) .002 Relationship Significant
ICT costs .049 Relationship Significant
Annual revenue vs age of the firm .000 Relationship Significant
Purchasing/Invoice .026 Relationship Significant
Stock/Inventory Management .000 Relationship Significant
Logistics Management .000 Relationship Significant
Employee suggestions .048 Relationship Significant
Source: Author
Table 5.1 and 5.2 above show some significant relationships of the variables that formed our survey
questionnaire. Some of the results are discussed singularly and others in combination in the following
sections. Though the adapted framework (Figure 4.1) shows four individual themes, we are going to
present the key findings of the individual variables: financial resources, management support, and
human capital as representing the internal attributes of the firm.
5.2.3 Financial Resources
Many researchers examining ICT adoption in SMEs however attest to financial constraints having
critical influence on SMEs adoption efforts. More so in developing countries, finance from friends and
family is perceived to play a much more significant role than industrialised countries. In our research,
however, most of the enterprises were medium SMEs hence this mode of financing featured
minimally.
The lack of financial resources was not found to be a significant constraint to ICT adoption. From the
perspective of the interviewees, the cost related to ICT related investments (software and hardware)
was not an issue. It is also interesting to note that though most of the SMEs interviewed indicated of
no financial concern, when it came to large ICT investments some expressed a need to look for
external financing (Log 6, 10, 40, 135, 154, 185 and 246; Man 304, 339, 372, 440, 500). However,
the firms that had internal ICT experts, such as Log 040, 072 and Man 256, 304, 307, 333, 339 and
440; they indicated a more precise idea about the percentage of expenditure that they had spent on

12

ICT investments and what plans regarding future investments they had. Other firms (for example Man
285) appear to bundle the ICT costs with other administrative overheads making it difficult to precisely
account for ICT costs. This negatively reflects on some owner-managers as not having a clear idea
about the cost of implementing ICT solutions to fit the needs of their business (Caldeira and Ward,
2002). Hence benefits to costs remained vague for such businesses with the final ICT investment
being either above or lower than expected.
In both developed and developing countries SMEs have been found to be financially constrained due
to lack of access to external financing. Some studies attributed this to weak and absence of well-
developed institutions (Beck and Demirguc-Kunt (2006). In South Africa, this is said to be the result of
inadequate policies that seek to re-balance the policies of apartheid that appear to be favouring black-
owned firms. However, despite institutional and market failures and owner-managers airing their
sceptical views challenging the efficacy of pro-SMEs funding policies; representatives of the support
institutions insist owner-managers are not fully utilising available resources and support structures.
More generally, SMEs in many developing countries get around financing, market failures and lack of
formal institutions by creating private governance systems in the form of long-term business
relationships (Biggs and Shar, 2006), a factor that was clearly evident in a lot of firms studied. And
also shown by a significant relationship of p<0.028 for trading partners shown in Table 5.2 and
p<0.000 for purchasing from large companies. These networks help overcome most immediate
financing requirements as they are assured of continued business within the supply chain network. In
our study we discovered that while networks with some institutional support systems existed to help
SMEs overcome deficiencies in their environment; they were perceived to have a discriminatory effect
on firms that are outside the supply chain (Johanson and Vahlne, 2009). Furthermore, a firm that
does not have a position in a relevant network is an outsider. And this has implications for the ways
in which it can exploit opportunities. Johanson and Vahlne refer this as the effect of outsidership
3
.
5.3 Management support
Management support refers to the degree to which an individual believes that management has
committed to the successful implementation and use of a system (Caldeira and Ward, 2002). It is
considered to be a critical factor (Sharma and Yetton, 2003) and an important antecedent of ICT
adoption in SMEs (Jeyaraj et al, 2006; Duan et al, 2012). Ramdani et al (2009) believes it ensures the
limited resources and technical expertise are allocated for the adoption of new technology. Most of
the owner-managers interviewed revealed the critical role played by top management and their
inclusion in most decisions taken within the firm evidenced by their increasing influence in primary
decision making.
Extant literature reports on the key role played by the owner-manager, however, without negating
his/her role, our findings reveal that the owner-manager in consultation with the top management (i.e.
top-management approach) had a vital role in ICT adoption decision making (Log 6, 21, 42,
95,135,146, 173, 237, 246; Man 1, 339, 363, 440 and 455). In other SMEs, the ICT initiatives were
the responsibility of the top manager(s) in consultation with the owner-manager(s) i.e. the collective
participative approach (Log 20, 29, 32, 69, 95, 188, 342, Man 277, 285, 302, 454, 455, 468 and 495).
In Man 468, top management and board of directors played an integral part.
Once the decision is made to acquire the needed ICT the top management team are fully supportive
of the initiatives (Man, 468).
Since most of the firms in our research sample are mature SMEs, we increasingly see the delegation
of authority from the owner-manager to top managers who are becoming an integral part of the firm.
5.4 Supply Chain Slavery

3
Outersidership: It is a firm-level concept that relates to a position occupied by a firm that does not have a
position in a relevant network (Johanson and Vahlne, 2009).

13

The business environment is viewed as a web of relationships; a network joined by suppliers and
customers. Previous studies have shown that regardless of firm size ICT investments produce more
value in SMEs when they facilitate supply chain integration as opposed to solely focusing on
efficiencies (Shin, 2006, Neirotti et al, 2013). With the existence of this scenario, inevitably pressure
from within the supply chain (from large and strategic customers/suppliers) towards ICT adoption is
more likely for SMEs given their size, resources and capabilities and less bargaining power. Our
findings show a significant trading relationship between SMEs and large organisations (p<0.036)
supporting the premise of supply chain collaborations. Furthermore, most these firms indicated that
they are regular suppliers to large organisations and without the supply chain relationships; they
would face challenging operating conditions in a mature market.
Interestingly, a Kruskal-Wallis test analysis (p<0.011) revealed that the firms with a large number of
employees (medium SMEs with 100 employees and above) tend to trade regularly with large
organisations than those with fewer numbers. While this shows the importance of firm size within the
supply chain, Petterson et al (2003) also found firm size to have a significant impact on the pace of
technology adoption. However, firm relationships within the supply chain are not always equitable with
large organisations exerting influence on SMEs. This situation was evident in South Africa, a mature
market as characterised by most interviewees, hence reliance on long term supply chain relationships
paramount.
we sell to other firms and individuals but largely we have been in partnerships that have been in
existence since the last 25 years (Man 001, owner-manager).
The existence of long-term relationships creates a market maturity scenario where firms survival will
depend on maintaining long term contracts, making it difficult for new entrants to compete (similar to
Porter, 2008). We refer to the position SMEs find themselves in as supply chain slavery where they
are forced by the nature of relationships and desire to maintain contracts and grow their business into
adopting ICT. This is symptomatic of the views aired by the IT operations manager of Log 072;
...the business as a whole is driven to seek new frontiers. However if we win a contract with one of
the large organisations or government departments and they wish us to adopt some ICT we will
streamline our systems or seek upgrades to facilitate customer demands.
Arend and Wisner (2005), in their study of SMEs and supply chain management observed that at
times a larger supplier or customer may force the SME to join the supply chain with any failure leading
the larger counterpart finding another partner. This may be one method for a larger firm to bully a
smaller partner into a closer relationship, where the larger firm can more easily exploit the smaller
partner, e.g. by learning its innovative methods (page 410).This view is supported by Kew and
Herrington (2009) where SMEs see themselves as submissive partners that will have to accept
technological changes forced on them by larger partners; the notion of supply chain slavery. Other
researchers reached similar conclusions on the importance of network relations in SMEs: (Tse and
Soufani, 2003, p. 306); Beckinsale and Levy (2004); Biggs and Shar (2006) and Neirotti et al (2013).
5.5 Training and Human Capital
Prior research has suggested the critical role of training in enhancing ICT adoption and use
(Venkatesh and Bala, 2008).Training or skills development is not only the duty for the SME but an
initiative that governments pursue. The level of education in the SME, cost of ICT and related training,
and the lack of skills in the country are all factors that put weight on SMEs owner-managers in
making decisions regarding ICT adoption. The availability of trained employees within an
organisation and more so within the country facilitates the acceptance of new ICT. We found that
those firms that had highly trained individuals within their firms displayed a deeper understanding and
informed perceptions of new ICT (i.e. ability to evaluate what was suitable for their firms).

While other SMEs within the study sectors could and employed qualified ICT personnel (Log 44; Log
72), other owner-managers experienced shortages of qualified employees as exemplified by the
manager of Man 454:

We lack human skills in more technical areas of the systems; if the systems go down we rely on
external ICT provider or consultants to assist in solving the problems.

14

Training has been suggested to be one of the most important interventions that lead to greater user
acceptance and system success (Sharma and Yetton, 2007). Most of firms studied, however, adopted
on-the-job training approach to minimise the cost (Windrum and Berranger 2002; Mpofu et al, 2010)
associated with training. This was important and necessary in our study context where blacks who
form the majority of employees were previously marginalised and refused formal education pre-1994.
There is also the issue of gender divide. We observe a strong association between gender and the
importance of training (i.e. female owner-managers put more emphasis on training than their male
counterparts (a high female mean rank) shown by a significant relationship between gender and
importance of training variables; p<0.031 for chi-square and p<0.014 Kruskal-Wallis analysis result.
With no significant relationship between gender and education, it appears from the analysis of
interview responses of female owner-managers that they believe in training to equip staff with
necessary skills (Man 454). And also critical for the smooth running of the business (Log 228) to
enable them to meet firm needs.
A few firms had internal training facilities while others had enough financing to afford external training
for their employees. We suggest that the role of training will be even more important in the context of
complex systems (e.g. emerging CRM, EDI and other integrated systems) that are more central to
employees work life. Owner-manager of Man 454 noted that in addition to in-house training and that
provided by the ICT vendors, they also seek other external training organisations to equip their
employees with the necessary ICT skills. These findings indicate that training can be used to help
users develop favourable perceptions of different determinants of perceived usefulness and perceived
ease of use.
Some firms reported of difficulties in finding ICT expertise, a factor that was disputed by GC1
(government consultant) noting that;
As regard human capital or specifically ICT staff: lets say you cannot look for one and not find one.
There may not be enough but we have a lot of qualified people to serve the industry. If you cannot get
one immediately you are assured of getting someone to assist shortly. The problem we have is some
of the systems are specific to the organisation hence finding someone with that specialist knowledge
may take time but certainly not days.
As ICT evolves there is an increase in the complexity of the applications and their subsequent
management. One of the key reasons for training to be an important intervention is that different
modes of training can be used to manipulate different determinants of ICT adoption (Venkatesh and
Bala, 2008). Only with this learning and assimilation through training is the firm likely over time to
achieve new capabilities and benefits that justify the innovations adoption (Swanson, 2010).
5.6 ICT vendor support and Availability of External Expertise
ICT vendor support refers to the expertise or technical support for sourcing, implementing and using
ICT applications that a business obtains from external sources (Bradshaw et al, 2012). One benefit of
having ICT knowledge in-house is better management of the relationships with ICT suppliers (this
may be viewed as a competency under RBV) and also offers the firm the ability to decide which ICT is
suitable for their firm. This was clearly stated by interviewees especially those who had internal
expertise such as Log 044, 072 and Man 001 etc.
We have very capable staff capable with implementation of both in-house ICTs and those acquired
off the shelf (Log, 072).
Our findings show that the main reasons for engaging external ICT consultants were a lack of ICT
knowledge and skills, especially accounting knowledge which shows a positive association with ICT
usage in firms and technology assessment as noted by Swanson (2010).
We lack qualified ICT personnel and rely on ICT vendors/providers for more technical
problems/issues (Man, 495)

15

5.7 Pressure to adopt ICT
An interesting observation of being part of a supply chain in a competitive environment is the pressure
that some of the firms come under from their customers to use inter-organisational information
systems. Some of the firms interviewed indicated that if they win a long term contract with a large
organisation or government department they adopt needed ICT, streamline their systems or seek
upgrades to facilitate customer demands.
Our findings show that customer and supplier pressure plays a huge role in the adoption of ICT with
63% of SMEs believing this to be true. With the exception of government guidance, all examined
factors influencing adoption (employee suggestions, availability of new technologies, being part of the
supply chain, ICT vendor pressure etc.) indicate that the logistics sector firms on average are
influenced more than those in the manufacturing sector. This may be a result of a high homogeneity
of products in the logistics sector as opposed to a wide variety associated with the manufacturing
sector. It is rare in literature or in practice to find cases of a relatively small supplier suggesting the
use of inter-organisational systems to its larger customers (Caldeira and Ward, 2002), with the
reverse usually the case (Iacovou et al, 1995). However, the case of Log 044 and 072, who in
addition to their main activities also develop software applications for the industry believe that they are
mainly more innovative than their (larger) business partners.
Our findings confirm the view that SMEs are driven by the needs of their clients, consistent with
earlier studies by Levy and Powell (2005) Poon and Swatman (1996) and Parker (1997), found small
businesses were often forced to use ICT by large companies. While other researchers found no
supplier influence on ICT adoption (Al-Qirim, 2003, Alam and Noor, 2009); the differences may be
attributed to the frequency of interaction with suppliers/customers.
5.8 Adoption through Policy
Researchers have varying views on the role played by the government. Smallbone and Welter (2001)
argued that direct support measures are not the main role for government, however, bearing in mind
the legacy of apartheid in South Africa, the government of South Africa (GOSA) has a triple role in the
SME/ICT environment: as a policy regulator through DTI, supporting agent (through SEDA, Business
Partners, MerSETA) and telecommunications infrastructure provider (Telkom). Though this
relationship should foster a beneficial relationship through formalising SMEs, encouraging ICT
adoption (adoption through policy) and policy administration, at times the government has been
accused of stifling competition through its interests in Telkom.

Cost of connectivity especially for data transfer is prohibitive as these connections are via the
internet. The current bandwidth cannot support our requirements and is too expensive. Bandwidth is
priced locally in Rand but is purchased from outside providers in US dollars; as a result exchange
rates make it very expensive especially for us small companies (Log 044).

Though there is a high number of SMEs who are either not aware of the support given by the
government (81%) or did not get the support; at the heart of the concerns was the complex
application process. Furthermore the software implementation requirements by GOSA led to some
owner-managers accusing the GOSA of placing a ceiling and preventing SMEs from operating in an
open market environment. Some owner-managers were more worried about the impact of policies
than with costs. Of note are the BB-BEE
4
policies that seek to re-dress the economic past by
encouraging the emergence of black-owned businesses.

On the other hand, the government encourages adoption of using ICT by enacting policies requiring
firms to adopt certain technologies. Evidently, in the logistics sector freight companies are required to
implement systems that are linked to the South African Revenue Services before they start operating.
This concept is viewed as representing adoption through policy. However, while this practice is
viewed as encouraging SMEs to adopt ICT, other owner-managers view it as a barrier as it entails
more expenditure before a business even starts trading.

4
BB-BEE: Broad Based Black Economic Empowerment

16

5.9 Discussions

The paper seeks to investigate the impact of ICT adoption and use among South African SMEs. The
most cited influencing factors for adoption were supply chain, top management support, availability of
internal ICT skills, customer/supplier pressure and affordability of investment costs.

Bradshaw et al (2012) noted that SMEs recognise that they do not have the appropriate ICT skills and
abilities to select and implement major new systems thus they engage ICT vendors or consultants
due to a lack of ICT competences. In general, ICT vendors can assist firms to bridge knowledge gaps
related to ICT adoption and use (Delone, 1988; Nevo et al, 2007), critical for SMEs without adequate
ICT expertise.

We argue that since the Johannesburg industry/sector is being viewed as a mature market,
competitiveness is presumed to be intense and the importance of maintaining the strong existing links
is paramount, ICT knowledge transmitted from vendors/consultants is a major driver of ICT use and
productivity gains. However, the provision of these services by mediating institutions does enable
user organisations to adopt complex technology without (initially) having to acquire a full range of
technical knowledge in-house.

Within the context of our study, it appeared that it was unlikely that some SMEs will cease to rely on
consultants as a result of resource constraints (i.e. training and lack of ability to employ qualified
experts). Nevertheless, it is apparent that SMEs need to develop their ability to manage this
relationship in order that their investment yield desired results (Cragg et al, 2011). Having seen that
most of the SMEs studied rely on external sources of expertise for ICT (Thong, 2001; Al-Qirim, 2007),
a lack of external technical support can inhibit ICT adoption in the SMEs concerned (Simpson and
Doherty, 2004).
5.10 Conclusion and Recommendations

The findings identified and discussed in this paper assist in the investigation of the impact of ICT
adoption and use in South African SMEs. Importantly, though relying on the themes identified in
extant literature, the fieldwork led to a more detailed understanding of the context; important for the
identification of causal factors of ICT adoption.

Most of the SMEs in this study did not have appropriate ICT expertise to decide on which ICT to
invest in and to implement the new system. They relied on external expertise, external sources of
advice and engagement of ICT consultants due to a lack of internal ICT competences. It seems that
the ICT consultants compensated for a lack of competences within the SMEs (Nevo et al, 2007;
Bradshaw et al; 2012). This also reflects the resource-poverty of some SMEs, a fact highlighted in
extant SME literature.

SMEs were found to rely heavily on supply chain relationships. The ability to manage this relationship
and keep up with developments in technology was found to be paramount. Additionally, the gap
between government support and SME/ICT needs was identified. It should be noted that this study
was limited to Johannesburg, an economically active metropolitan area, thus any inference and
replication of the study in other areas might throw different results. The explorative-interpretive
approach of this study called for a multiple-theoretical approach to identify contextually rich
perspectives of South African SMEs ICT adoption behaviours.

Findings in this research study give a slightly different perspective that challenges extant literature
which suggests the inability of SMEs to invest in ICTs as a result of limited resources: the issue of
cost, the resource based view of the firm as not only internalised but externalised as a result of
effective networks, existence of SMEs through supply chain relationships. Yet, only few mature,
medium SMEs in our sample have exhibited to be better positioned to adopt ICT. Hence, we propose
for further research into other contexts and sectors to shed light into the contextual ICT adoption
peculiarities of SMEs.
6.0 Implications for Theory and Practice

17

6.1 Implications for Theory
The RBV approach infers that the key differentiators for ICT deployment in firms reside within the
internal context of an organisation. Because of the new technologies and prospects of external
knowledge transfers, the study shows that capabilities that are important to the organisation may
reside (externalised) outside the firm e.g. an effective ICT consultant or ICT vendor may play a role in
matching firm ICT needs and organisational objectives.
6.2 Implication for managers
From the point of view of findings and discussions, the results serve SME owner-managers for
confirming the importance of developing a systemic view on ICT that allow their firms to use ICT as
an effective lever for continuous innovation in business processes.
6.3 Implications for policy
The study will act as a point of reference for policy-makers. Notwithstanding the historical past
(particularly race and gender disparities), this study proposes the need to address sectoral challenges
that foster competitiveness (targeted training, funding, policy and empowerment initiatives). Drawing
on the views of Neirotti et al (2013), the findings call for the development of SME tailored ICT suitable
for simpler organisational structures and resource constraints with a greater emphasis on SMEs
viewed for their reluctance to commit to ICT budgets.

The prevalence of supply chain activities calls for policy makers to play a sustaining role in promoting
supply chain integration that reduces the ability of large organisations to suppress SMEs.
6.4 Research Limitations
The study sought to investigate the impact of ICT adoption and use with the help of four identified
themes in two sectors. There are other factors that may assist in explaining this phenomenon; hence
attention should be paid not just to the developing country context or other sectors, but non-economic
factors like the legacy of apartheid, culture, or exploration of SMEs within BRICs. However, caution
should be exercised as differences might exist between sectors, provinces especially in South Africa
where Johannesburg in the most economic vibrant province, hence, might not be representative of all
provinces within the country.

References

AKKEREN, J.K.V. and CAVAYE, A.L.M., 1999. Factors affecting entry-level internet technology
adoption by small business in Australia - evidence from three cases. Journal of Systems and
Information Technology, 3(2), pp. 33-48.

AKKEREN, J.V. and CAVAYE, A., 1999a. Confusion with Diffusion? Unravelling IS Diffusion and
Innovation Literature with a Focus on SME'S. Australasian Journal of Information Systems, 7(1),.

AL SHARJI, Y., ELBELTAGI, I., HARDAKER, G. and ELSETOUHI, A., 2013. The Role of Owner-
Manager in SMEs for the Adoption of Information and Communication Technology in United Arab
Emirates. Journal of Global Information Management.

ALAM, S.S., 2009. Adoption of internet in Malaysian SMEs. Journal of Small Business and Enterprise
Development, 16(2), pp. 240-255.

ALLAN, C., ANNEAR, J., BECK, E. and BEVEREN, J.V., 2003. A Framework for the Adoption of ICT
and Security Technologies by SME's, 16th Annual Conference of Small Enterprise Association of
Australia and New Zealand., 28 September 1 October 2003 2003, University of Ballarat, Ballarat,
Australia, pp. 1 - 10.

ALLINSON, G., BRAIDFORD, P., GREWER, N., HOUSTON, M., ORANGE, R., SEAR L and STONE,
I., 2004. Ethnic Minority Businesses and ICT. UK: Dept for Business, Innovation and Skills.

AL-QIRIM, N., 2003. E-commerce in the aerial mapping industry: A New Zealand case study. Journal
of Systems and Information Technology, 7(1), pp. 67-92.

18

AL-QIRIM, N.A.Y., 2005. An Empirical Investigation of an e-commerce Adoption-Capability Model in
Small Businesses in New Zealand. Electronic Markets, 15, pp. 418-437.

AL-QIRIM, N., 2007. The adoption of e-Commerce communications and applications technologies in
small businesses in New Zealand. Electron. Commer. Rec. Appl., 6(4), pp. 462-473.

ALSHAWI, S., MISSI, F. and IRANI, Z., 2011. Organisational, technical and data quality factors in
CRM adoption SMEs perspective. Industrial Marketing Management, 40(3), pp. 376-383.

ASHRAFI, R. and MURTAZA, M., 2008. Use and Impact of ICT on SMEs in Oman. Electronic Journal
of Information Systems Evaluation, 11(3), pp. 125-138.

AYYAGARI, M., BECK, T. and DEMIRGUC-KUNT, A., 2007. Small and Medium Enterprises across
the Globe. Small Business Economics, 29(4), pp. 415-434.

AWA, H.O., 2010. The Uptake of Electronic Commerce by Smes: A Meta Theoretical Framework
Expanding the Determining Constructs of Tam and Toe Frameworks. Journal of Global Business and
Technology, (#6#1).

AZORN, J.M. and CAMERON, R., 2010. The application of mixed methods in organisational
research: a literature review. Electronic Journal of Business Research Methods, 8(2), pp. 95-105.

BARBA-SANCHEZ, V., DEL PILAR MARTINEZ-RUIZ, M. and JIMENEZ-ZARCO, A.I., 2007. Drivers,
Benefits and Challenges of ICT Adoption by Small and Medium Sized Enterprises (SMEs): A
Literature Review. Problems and Perspectives in Management, 5(1), pp. 103-104-111.

BARNEY, J., 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management,
17(1), pp. 99-120.

BARNEY, J., KETCHEN, D.J. and WRIGHT, M., 2011. The Future of Resource-Based Theory:
Revitalization or Decline? Journal of Management}, .

BARNEY, J., WRIGHT, M. and KETCHEN JR., D.J., 2001. The resource-based view of the firm: Ten
years after 1991. Journal of Management, 27(6), pp. 625-641.

BECK, T. and DEMIRGUC-KUNT, A., 2006. Small and medium-size enterprises: Access to finance as
a growth constraint. Journal of Banking \& Finance, 30(11), pp. 2931-2943.

BECKINSALE, M. and RAM, M., 2006. Delivering ICT to ethnic minority businesses: an action-
research approach. Environment and Planning C: Government and Policy, 24(6), pp. 847-867.

BECKINSALE, M., LEVY, M. and POWELL, P., 2006. Exploring Internet Adoption Drivers in SMEs.
Electronic Markets, 16(4), pp. 361-370.

BECKINSALE, M., RAM, M. and THEODORAKOPOULOS, N., 2011. ICT adoption and e-business
development: Understanding ICT adoption amongst ethnic minority businesses. International Small
Business Journal, 29(3), pp. 193-219.

BEYNON-DAVIES, P., 2012. Business Information Systems. 2nd Edition edn. Palgrave Macmillan.

BIGGS, T. and SHAH, M.K., 2006. African SMES, networks, and manufacturing performance. Journal
of Banking & Finance, 30(11), pp. 3043-3066.

BRADSHAW, A., CRAGG, P. and PULAKANAM, V., 2012. IS Consultants and SMEs: A Competence
Perspective, 6th European Conference on Information Management and Evaluation, 13-14
September 2012 2012, Academic Conferences and Publishing Internatinal Limited, pp. 25 - 32.

CALDEIRA, M.M. and WARD, J.M., 2001. Using Resource-Based Theory to Interpret the Successful
Adoption and Use of Information Systems & Technology in Manufacturing Small and Medium Sized

19

Enterprises, Global Co-operation in the New Millennium, The 9th European Conference on
Information Systems, Bled, Slovenia, June 27-29, 2001 2001, pp. 1159-1169.

CALDEIRA, M. and WARD, J.M., 2002. Understanding the successful adoption and use of IS/IT in
SMEs: an explanation from Portuguese manufacturing industries. Information Systems Journal, 12(2),
pp. 121-152.

CANT, M.C. and WIID, J.A., 2013. Establishing The Challenges Affecting South African SMEs.
International Business & Economics Research Journal (IBER), 12(6), pp. 707-716.

CHANG, Y.B. and GURBAXANI, V., 2012. Information Technology Outsourcing, Knowledge Transfer,
and Firm Productivity: An Empirical Analysis. MIS Quarterly, , pp. 1043-1053.

CHIN, W.W., JUNGLAS, I.A. and ROLDN, J.L., 2012. Some considerations for articles introducing
new and/or novel quantitative methods to IS researchers. EJIS, 21(1), pp. 1-5.

CLEAR, F., WOODS, A. and DICKSON, K., 2013. SME Adoption and Use of ICT for Networked
Trading Purposes: The Influence of Sector, Size and Age of Firm. Small and Medium Enterprises:
Concepts, Methodologies, Tools, and Applications. IGI Global, pp. 774-791.

CRAGG, P., CALDEIRA, M. and WARD, J., 2011. Organizational information systems competences
in small and medium-sized enterprises. Inf. Manage., 48(8), pp. 353-363.

CRAGG, P., KING, M. and HUSSIN, H., 2002. IT alignment and firm performance in small
manufacturing firms. The Journal of Strategic Information Systems, 11(2), pp. 109-132.

DAVIS, F.D., 1989. Perceived Usefulness, Perceived Ease of Use, and User Acceptance of
Information Technology. MIS Quarterly, 13(3), pp. pp. 319-340.

DAVIS, F.D., BAGOZZI, R.P. and WARSHAW, P.R., 1989. User acceptance of computer technology:
a comparison of two theoretical models. Manage. Sci., 35(8), pp. 982-1003.

DEPARTMENT OF TRADE AND INDUSTRY SOUTH AFRICA, 2008. Annual Review of Small
Business in South Africa 2005 - 2007. South Africa: Department of Trade and Industry South Africa.

DEVOS, J., VAN LANDEGHEM, H. and DESCHOOLMEESTER, D., 2012. Theoretical Foundations
for Information Systems Success in Small- and Medium-Sized Enterprises. Measuring Organizational
Information Systems Success: New Technologies and Practices. IGI Global, pp. 80-100.

DUAN, X., DENG, H. and CORBITT, B., 2012. Evaluating the critical determinants for adopting e-
market in Australian small-and-medium sized enterprises. Management Research Review, 35(3/4),
pp. 289-308.

DUHAN, S., LEVY, M. and POWELL, P., 2010. Exploring the Role of IS in Dynamic Capabilities.
IJSITA, 1(2), pp. 19-37.

ELBELTAGI, I., AL SHARJI, Y., HARDAKER, G. and ELSETOUHI, A., 2013. The Role of the Owner-
Manager in SMEs Adoption of Information and Communication Technology in the United Arab
Emirates. IGI Global.

EUROPEAN COMMISSION, 01/01/2005, 2005-last update, The New SME definition: User Guide and
Model Declaration [Homepage of EU Publications Office], [Online]. Available:
http://ec.europa.eu/enterprise/policies/sme/files/sme_definition/sme_user_guide_en.pdf [December
15th, 2010].

EXPLORE SOUTH AFRICA, November 2010, 2010-last update, Image of South Africa [Homepage of
Google Images], [Online]. Available:
http://www.google.co.uk/imgres?imgurl=http://www.exploresouthafrica.net/images/provmap.jpg
[November 12th, 2010].

20

FATOKI, O.O. and ASAH, F., 2011. The impact of firm and entrepreneurial characteristics on access
to debt finance by SMEs in King Williams Town, South Africa. International Journal of Business and
Management, 6(8), pp. p170.

FATOKI, O. and GARWE, D., 2010. Obstacles to the Growth of New SMEs in South Africa: A
Principal Component Analysis Approach. African Journal of Business Management, Vol. 4(5), pp.
729-730 - 738.

GAGNON, Y. and TOULOUSE, J., 1996. The behavior of business managers when adopting new
technologies. Technological Forecasting and Social Change, 52(1), pp. 59-74.

GHOBAKHLOO, M., MOHAMMAD, S.S., TANG, S.H. and AMIRIZADEH, K., 2011. Electronic
commerce-enabled supply chain process integration and business value. Journal of Systems and
Information Technology, 13(4), pp. 344-368.

GOODE, S. and STEVENS, K., 2000. An analysis of the business characteristics of adopters and
non-adopters of World Wide Web technology. Information Technology and Management, 1(1-2), pp.
129-154.

HARINDRANATH, G., DYERSON, R. and BARNES, D., 2008. ICT Adoption and Use in UK SMEs: a
Failure of Initiatives? Electronic Journal of Information Systems Evaluation, 11(2), pp. 91-96.

HASHIM, J., 2007. Information Communication Technology (ICT) Adoption among SME Owners in
Malaysia. International Journal of Business and Information, 2(2), pp. 221-240.

HERRINGTON, M., KEW, J. and KEW, P., 2010. Global Entrepreneurship Monitor. London Business
School, Regents Park, London: Global Entrepreneurship Research Association.

HUMPHREY, J., MANSELL, R., PAR, D. and SCHMITZ, H., 2003. Reality of e-commerce with
developing countries.

IACOVOU, C.L., BENBASAT, I. and DEXTER, A.S., 1995. Electronic Data Interchange and Small
Organizations: Adoption and Impact of Technology. MIS Quarterly, 19(4), pp. pp. 465-485.

JOHANSON, J. and VAHLNE, J., 2009. The Uppsala internationalization process model revisited:
From liability of foreignness to liability of outsidership. Journal of International Business Studies,
40(9), pp. 1411-1431.

JASPERSON, CARTER, P.E. and ZMUD, R.W., 2005. A Comprehensive Conceptualization of Post-
Adoptive Behaviors Associated with Information Technology Enabled Work Systems. MIS Quarterly,
29(3), pp. 525-557.

KEW, J. and HERRINGTON, M., 2009. ICT and Entrepreneurship. Cape Town, South Africa: Small
Enterprise Development Agency.

KOTELNIKOV, V., 2007. Small and Medium Enterprises and ICT. Asia-Pacific Development
Information Programme, 1(1), pp. 3-4-22.

KYOBE, M., 2011. Investigating the key factors influencing ICT adoption in South Africa. Journal of
Systems and Information Technology, 13(3), pp. 255-267.

LAFORET, S., 2012. Organizational innovation outcomes in SMEs: Effects of age, size, and sector.
Journal of World Business.

LANGMIA, K., 2006. The role of ICTs in the economic development of Africa: The case of South
Africa. International Journal of Education and Development using ICT, Volume 2(4), pp. 1 - 9.

LAWSON, R., ALCOCK, C., COOPER, J. and BURGESS, L., 2003. Factors affecting adoption of
electronic commerce technologies by SMEs: an Australian study. Journal of small business and
enterprise development, 10(3), pp. 265-276.

21

LEITO, J. and FRANCO, M., 2011. Individual entrepreneurship capacity and small and medium
enterprises (SME) performance: A human and organizational capital approach. African Journal of
Business Management, 5(15), pp. 6350-6365.

LEVY, M. and POWELL, P., 2003. Exploring SME Internet Adoption: Towards a Contingent Model.
Electronic Markets, 13(2), pp. 173-181.

LEVY, M., POWELL, P. and WORRALL, L., 2005. Strategic Intent and E-Business in SMEs: Enablers
and Inhibitors. Information Resources Management Journal, 18(4), pp. 1-20.

LEVY, M., POWELL, P. and YETTON, P., 2011. Contingent dynamics of IS strategic alignment in
small and medium-sized enterprises. Journal of Systems and Information Technology, 13(2), pp. 106-
124.

MANUELI, K., LATU, S. and KOH, D., 2007. ICT Adoption Models, SAMUEL MANN and NOEL
BRIDGEMAN, eds. In: The 20th NACCQ Annual Conference 2007, 2007 2007, CITRENZ, pp. 175-
181.

MODIMOGALE, L. and KROEZE, J.H., 2011. The Role of ICT within Small and Medium Enterprises in
Gauteng. .

MODIMOGALE, L., 2008. ICT and SMEs competitiveness in South Africa : how SMEs could use ICT
to become competitive in South Africa.

MOLLA, A. and LICKER, P.S., 2005. eCommerce adoption in developing countries: a model and
instrument. Inf.Manage., 42(6), pp. 877-899.

MPOFU, K., MILNE, D. and WATKINS-MATHYS, L., 2010. ICT Adoption and Development of E-
Business among SMEs in South Africa. The Institute of Small Business and Entrepreneurship, 1(1),
pp. 1 - 19.

MPOFU, K.C. and WATKINS-MATHYS, L., 2011. Understanding ICT adoption in the small firm sector
in Southern Africa. Journal of Systems and Information Technology, 13(2), pp. 179-199.

MUTULA, S.M. and VAN BRAKEL, P., 2007. ICT skills readiness for the emerging global digital
economy among small businesses in developing countries: Case study of Botswana. Library Hi Tech,
25(2), pp. 231-245.

NEIROTTI, P. and RAGUSEO, E., 2012. Profiting from IT-Based Capabilities in SMEs: Firm-Level
Evidence from Italy. , pp. 527-534.

NEVO, S., WADE, M.R. and COOK, W.D., 2007. An examination of the trade-off between internal and
external IT capabilities. The Journal of Strategic Information Systems, 16(1), pp. 5.

PARKER, C. and CASTLEMAN, T., 2007a. Why should small firms adopt ebusiness? A framework for
understanding the SME ebusiness context, M. TOLEMAN, A. CATER-STEEL and D. ROBERTS, eds.
In: ACIS 2007 : Proceedings of the 18th Australasian Conference on Information Systems, 5-7
December 2007 2007a, University of Southern Queensland, pp. 497-507.

PARKER, C.M. and CASTLEMAN, T., 2009. Small firm e-business adoption: a critical analysis of
theory. Journal of Enterprise Information Management, 22(1), pp. 167-182.

PARKER, C.M. and CASTLEMAN, T., 2007. New directions for research on SME-eBusiness: insights
from an analysis of journal articles from 2003 to 2006. Journal of Information Systems & Small
Business, 1(1), pp. 21-40.

PATTERSON, K.A., GRIMM, C.M. and CORSI, T.M., 2003. Adopting new technologies for supply
chain management. Transportation Research Part E: Logistics and Transportation Review, 39(2), pp.
95-121.

22

POON, S. and SWATMAN, P., 1995. The Internet for small businesses: An enabling infrastructure for
competitiveness. , 28th April 1995 1995, Internet Society.

PORTER, M.E., 2008. The five competitive forces that shape strategy. If you read nothing else on
strategy, read these best-selling articles., , pp. 25.

RAMDANI, B. and KAWALEK, P., 2007. SME Adoption of Enterprise Systems in the Northwest of
England. In: T. MCMASTER, D. WASTELL, E. FERNELEY and J. DEGROSS, eds, Organizational
Dynamics of Technology-Based Innovation: Diversifying the Research Agenda. Springer US, pp. 409-
429.

RASHID, M.A. and AL-QIRIM, N.A., 2001. E-Commerce Technology Adoption Framework by New
Zealand Small to Medium Size Enterprises. Res. Lett. Inf. Math. Sci., 2(1), pp. 63-70.

RITCHIE, B. and BRINDLEY, C., 2005. ICT adoption by SMEs: implications for relationships and
management. New Technology, Work and Employment, 20(3), pp. 205-217.

ROGERS, E.M., 1995. Diffusion of Innovations, Fourth Edition. 4 edn. Free Press.

ROGERS, E.M., 2003. Diffusion of innovations/Everett M. Rogers.

SCUPOLA, A., 2009. SMEs' e-commerce adoption: perspectives from Denmark and Australia.
Journal of Enterprise Information Management, 22(1), pp. 152-166.

SCUPOLA, A., 2006. Government Intervention in SMEs' E-Commerce Adoption: An Institutional
Approach. Global Electronic Business Research: Opportunities and Directions. IGI Global, pp. 158-
178.

SCUPOLA, A., 2010. Exploring Leadership in E-Commerce Adoption in Australian SMEs. Leadership
in the Digital Enterprise: Issues and Challenges. IGI Global, pp. 118-130.

SHARMA, R. and YETTON, P., 2007. The contingent effects of training, technical complexity, and
task interdependence on successful information systems implementation. Misq Quarterly, , pp. 219-
238.

SHEMI, A.P. and PROCTER, C., 2013. Explaining contextual factors affecting e-commerce adoption
progression in selected SMEs: evidence from Botswana. International Journal of Management
Practice, 6(1), pp. 94-109.

SHIH, E., VENKATESH, A., CHEN, S. and KRUSE, E., 2013. Dynamic Use Diffusion Model in a
Cross-National Context: A Comparative Study of the United States, Sweden, and India. Journal of
Product Innovation Management, 30(1), pp. 4-16.

SHIN, I., 2006. Adoption of enterprise application software and firm performance. Small Business
Economics, 26(3), pp. 241-256.

SMALLBONE, D. and WELTER, F., 2001. The Role of Government in SME Development in
Transition Economies. International Small Business Journal, 19(4), pp. 63-77.

SWANSON, E.B., 2010. Consultancies and capabilities in innovating with IT. The Journal of Strategic
Information Systems, 19(1), pp. 17-27.

THONG, J.Y.L., 2001. Resource constraints and information systems implementation in Singaporean
small businesses. Omega, 29(2), pp. 143-156.

TORNATZKY, L.G. and KLEIN, K.J., 1982. Innovation characteristics and innovation adoption-
implementation: A meta-analysis of findings. Engineering Management, IEEE Transactions on, (1),
pp. 28-45.

23

TSE, T. and SOUFANI, K., 2003. Business strategies for small firms in the new economy. Journal of
Small Business and Enterprise Development, 10(3), pp. 306-320.

VENKATESH, V., BROWN, S.A. and BALA, H., 2013. Bridging the qualitative-quantitative divide:
Guidelines for conducting mixed methods research in information systems. MIS Quarterly, 37(1), pp.
21-54.

VENKATESH, V., MORRIS, M.G., DAVIS, G.B. and DAVIS, F.D., 2003. User Acceptance of
Information Technology: Toward a Unified View. MIS Quarterly, 27(3), pp. 425-478.

VENKATESH, V. and BALA, H., 2012. Adoption and impacts of inter-organizational business process
standards: Role of partnering synergy. Information Systems Research, 23(4), pp. 1131-1157.

VENKATESH, V. and BALA, H., 2008. Technology Acceptance Model 3 and a Research Agenda on
Interventions. Decision Sciences, 39(2), pp. 273-315.

WINDRUM, P. and BERRANGER, P.,D.E, 2003. Factors affecting the adoption of intranets and
extranets by SMEs: a UK study. Maastricht : MERIT, Maastricht Economic Research Institute on
Innovation and Technology.

WOLF, S., 2001. Determinants and Impact of ICT use for African SMEs: Implications for Rural South
Africa, Trade and Industrial Strategies 2001, Centre for development Research, Bonn, pp. 1.

ZAPPAL, S. and GRAY, C., 2009. Impact of e-Commerce on Consumers and Small Firms. Journal
of Economic Psychology, 30(2), pp. 261-262.

ICT - Sinfree Gono

Uploaded by

Document Information

Original Description:

Original Title

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

ICT - Sinfree Gono

Uploaded by

Copyright:

Available Formats

1

Challenges of ICT Adoption by South African SMEs:

You might also like