Information & Management 37 (2000) 257269

What small business executives have learned about managing information technology
Cynthia K. Riemenschneidera,*, Peter P. Mykytyn Jr.b,1
a b

Computer Information Systems and Quantitative Analysis Department, University of Arkansas, Fayetteville, AR 72701, USA Department of Information Systems and Management Sciences, University of Texas at Arlington, Arlington, TX 76019, USA Received 23 November 1998; received in revised form 2 May 1999; accepted 26 September 1999

Abstract In this study, 308 small business executives were interviewed and asked to identify the single most important thing they had learned about managing the use of information technology (IT) in their rms. The most common response was staying current/ keeping up with changing IT. The training/education of end users, the ability to get information quickly, and accurate data were also given as things the executives had learned. The small business executives interviewed were from a variety of industries including the computer industry, the health care industry, engineering, consulting, manufacturing, insurance, accounting, and law. Ninety-two percent of the executives had acquired new hardware and 89.9% had acquired new software for their rms since their rms had rst started using computers. In approximately 90% of the rms, the number of users of computers had increased and the majority of the new users were classied as both managerial and clerical. Again, approximately 90% of the rms had increased the number of functions for which computers were used within their rms with applications in accounting having the greatest increase. # 2000 Elsevier Science B.V. All rights reserved.
Keywords: Small business; Information technology management; Computer usage

1. Introduction Information technology (IT) has formed an integral part of the operational and competitive environment of large organizations for many years. IT perspectives have evolved from mainframe environments of the 1960s and 1970s, to the small, so-called minicomputer era of the latter 1970s and early 1980s, to the PC era of today. And even the PC phenomenon has been transCorresponding author. Tel.: 1-501-575-6120; fax: 1-501-575-4168. E-mail addresses: criemen@comp.uark.edu (C.K. Riemenschneider), mykytyn@uta.edu (P.P. Mykytyn Jr.) 1 Tel.:1-817-272-3537; fax: 1-817-272-5799.
*

formed from the standalone models of the mid 1980s to the integrated, network-based systems found today. Indeed, the continuing evolution in hardware and software technologies has brought about a spiraling decline in costs for all organizations, such that even the smallest of business organizations can afford to purchase needed IT. Therein, however, lies part of the problem. The majority of IT research has been done with large rms [1,14]. And although hardware and software costs are signicantly lower today, thereby making it possible for organizations of any size to purchase IT, the research ndings, i.e., problems, solutions, benets, etc., that relate to the larger organization may not necessarily apply to smaller rms. Small

0378-7206/00/$ see front matter # 2000 Elsevier Science B.V. All rights reserved. PII: S 0 3 7 8 - 7 2 0 6 ( 9 9 ) 0 0 0 5 2 - X

258

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

businesses employ 54% of the private working population, and they contribute 52% of all the sales in the US [27]. Admittedly, small businesses play a vital role in the economy of the US, and therefore, warrant more study tied to IT than has been conducted previously. Many smaller organizations contain many of the same functions and activities as their larger counterparts, albeit on a lesser scale. These include sales and marketing, manufacturing, accounting, etc. It should be of interest to information systems (IS) researchers and to the business executives themselves to learn more about how these rms have acquired IT, or perhaps upgraded their systems, as well as to gain a deeper understanding of many important problems and managerial issues that have evolved. It should also lead to additional research that could provide for comparisons with larger organizations; similarities, if any, as well as markedly different areas could be identied. The overall purpose of this research is to assess how IT is used in smaller organizations. This examination includes the identication of the different functional areas of rms. Additionally, the results of what small business executives say they have learned about managing IT are presented. In the next section of this paper, we discuss some of the previous research dealing with smaller businesses, drawing attention to the fact that it does not provide either IS researchers or business executives with signicant information about IT uses. Following that, the research method is presented. The paper concludes with a discussion and suggestions for additional research. 2. Small business research Prior to 1988, IT research relevant to small businesses fell into three primary categories: studies which gave advice for purchasing computer hardware and software, studies which reported on computer usage, and studies which reported on the use of computers to make managerial decisions. Inasmuch as the technology has changed dramatically since then, i.e., one study [21] examined the nature and selection of minicomputers, and the software and applications in use then were predominately accounting, inventory control, and word processing, there seems to be little to be gained by examining the research in detail. Since 1988, much of the IT-related research that has examined small business perspectives has been

industry specic. A number of studies, such as those by Raymond [22], DeLone [7], Montazemi [16], Cronan [5], Evans [9], and Cragg and King [4] present some interesting perspectives. Table 1 reviews each of these studies, identifying, for the most part, the number and type of subjects, the research focus, and the ndings/observations/issues. In general, however, the following points about post 1988 research are noted:     Accounting and financial activities account for a large portion of IT usage by small businesses. It is important that businesses examine the nature and content of training programs directed at managers in small businesses. Top management support and involvement, including that from CEOs, is crucial if IT implementations are to succeed. Consistent with the findings of most IT-related research, end user involvement is crucial if user satisfaction is to be achieved. In turn, user satisfaction can lead to system success and, ultimately, to successful business efforts.

As stated above, most of the prior cited research since 1988 is industry specic; in addition, some of the research is dated. Therefore, this supports our research which includes a heterogeneous sample of businesses from different industries and which examines IT usage in dynamic situations and environments. 2.1. Questionnaire items The instrument used for this research, attached as Appendix A, contained seven questions related to IT usage. Most of the questions were based on the previous study of Cragg and King [4], which also allows for certain comparisons between that research and the current study. Questions dealt with: acquisition of new hardware/software, usage of the new hardware/software to extend the range of applications, number of functional areas of computer use, and the number of users. Other researchers have also examined a number of these issues as well. Regarding the number of functional areas using computers, Raymond and Magnenat-Thalmann [25], Nickell and Seado [18], and Farhoomand and Hrycyk [10] found accounting to be the most common application for small businesses (See Table 1).

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269 Table 1 Summary of prior research Researcher(s) [25] Research focus Computer usage Subjects Small and medium sized manufacturing firms Findings/observations/issues

259

[10]

Computer usage

Small businesses

[18] [22] [7]

Computer usage Computer training IT effectiveness

Small businesses 34 small manufacturing facilities 98 small manufacturing firms

[16]

User satisfaction

83 small firms (47 service industry and 36 manufacturing industry)

[5]

Computer usage

71 small professional organizations (i.e. doctors, lawyers, accountants)

[9]

Purpose of IT implementation

68 small firms

Applications which use computers: -accounts receivable -payroll -accounts payable -sales analysis Highest percentage of application of computers in small businesses: accounting Software most or second most important consideration in computerization Accounting most common application which used computers Computer training did positively influence small business managers Effectiveness linked to: -CEO involvement in computerization -on-site computers -coordinated implementation of planning and controls Generated higher user satisfaction: -end-user participation in systems design -end-user literacy -formal information requirements analysis -decentralized organizations -number of analysts in the firm Four variables significant in computer usage: -net income -number of vendors considered before acquiring the system -total assets -estimated savings from the computer system Success of the computer system was dependent on: -a higher investment in maintenance -employee involvement with the new system -higher estimates of cost savings Purpose of computer implementation: -solve problems in accounting, data processing time, inventory -solve organizational problems, record keeping, and data storage Systems were also used to contain: -overall operating costs -cost associated with time -inventory costs -data access costs -personnel costs -reporting costs Expectations of the system were improvements in efficiency and time-savings

260 Table 1 (Continued ) Researcher(s) [4]

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

Research focus Applications growth

Subjects Six small manufacturing firms

Findings/observations/issues Motivators of growth of systems: -relative advantage -competitive pressure -consultant support -managerial enthusiasm Inhibitors of growth: -inadequate financial resources -inadequate managerial time -lack of internal expertise

3. Research method 3.1. Sample selection Using guidelines from the Small Business Administration, a `small' business was dened as one that employed fewer than 500 employees. This categorization is consistent with the Small Business Administration (SBA) which denes small businesses based on Standard Industrial Classication (SIC) codes, most of which employ 500 as the upper boundary. Firms were randomly selected from a database of over 1500 organizations, which were located in a large southwestern metropolitan area. The database represented rms from major industries, including manufacturing, defense, oil and gas, agriculture, nance, and not-for-prot. It should also be emphasized that the database contained rms of all sizes, including some Fortune 500 companies with home ofces located in this metropolitan area. Appropriate query construction enabled the researchers to identify relevant rms based on size. Thus, the small businesses selected were not chosen from some restricted database, such as an association of family-owned businesses. The database contained the rm name, the address, the name of at least one senior executive, the rm size, and the telephone number. Firms that were branch ofces or where it was not possible to contact a senior executive were excluded. This was deemed appropriate because, during preliminary discussions with other small business executives, it was noted that branch ofces of smaller businesses usually did not engage in IT purchase and use activities; such decisions were made by the main ofce. In addition, it was also ascertained that, for the most part, senior-level indi-

viduals in smaller organizations usually were responsible for IT decisions. 3.2. Procedures During a 30-day period, 309 randomly selected rms were contacted by telephone. As was stated previously, the commercial database used for this research contained the names of at least one senior executive in each rm. We contacted senior executives (i.e. CEOs, presidents, managers, vice presidents) to ensure that we would be getting information from someone in the organization who had the authority to make decisions regarding IT. The individual contacted was told that the researchers were from a large southwestern university (the subjects were provided with the name of the institution) and the purpose of the project. The researchers ensured the subjects that condentiality and anonymity would be maintained and that individual responses would be aggregated and compared with those from other smaller businesses. Neither rm names nor identication of individuals would be used by anyone other than the researchers. The development of the survey instrument (see Appendix A) was discussed previously. The questions asked by the researchers were designed to provide for open-ended responses by the subjects; this can lead to a much richer treatment of the issues. This type of research has been used effectively by a number of IS researchers [8,11,19]. If the individual was unavailable at the time he/she was called, note of this was taken, and the individual was contacted at a later time. In several instances, messages were left by the researchers to have the individual contact us back; this too proved to be effective.

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

261

The researchers found the executives to be generally cooperative and responsive. Thus, very few rms/ individuals refused to participate in the project once the researchers explained the project and its importance. In fact, only 35 rms refused to participate. 4. Results Of the 309 rms originally contacted, one was dropped since the rm employed more than 500 employees. The rms ranged in size from 7 to 400 employees with an average size of 92.3 employees and a standard deviation of 73.9. The titles of the 308 participants are shown in Table 2. Only those titles, which appeared 3 times or more, are shown. Thirtyve percent of the respondents were either presidents, vice presidents, or a chief ofcer while 24% of the respondents were managers and 15% were MIS directors. Overall the respondents were senior executives who were responsible for IT decisions within their organization. Table 3 illustrates the types of businesses in which the respondents were employed. Only those business types, which occurred 3 times or more, are delineated. The two industries with the most respondents were health care and computer software/hardware sales. As illustrated in Table 3, this study included small business executives from a wide variety of industries and was not limited to a particular industry as other studies have done [3,4,7,1517,20,2225]. However, since the rms that participated in this study were not selected from all regions of the US, it is not possible to say with certainty that all small businesses are similar to those we studied. But, since our rms were of varying size
Table 2 Titles of executives participating in the study Title President/Owner/CEO Vice President COO/CFO Director of MIS Controller Manager Administrator LAN Administrator Other Total Number 56 49 3 47 10 73 13 7 50 308

Table 3 Participating businesses or firms Industry Number of firms Median size 26 46 23 85 168 30 48 90 30 95 100 43 45 65 95 150 25 85 77 55 94 75 90 75 140 140 105 80 Range of size 1080 20220 7120 25225 50200 1230 15400 40180 8400 78130 35200 20200 2590 12205 25390 24400 1630 28400 23210 32250 35200 70250 15300 40150 31175 80200 95300 10340

Accounting 12 Advertising 7 Architecture 8 Automotive 4 Banking 5 Civil engineering 3 Computer Software/hardware/sales 22 Construction 12 Consulting 15 Distribution 5 Education 10 Engineering 17 Environmental services 5 General/electrical contractor 9 Health care 22 Insurance 14 Land surveying 3 Law 12 Manufacturing 18 Non profit 6 Oil & Gas 4 Publishing 3 Real estate 7 Sales/marketing 6 Telecommunication 4 Transportation 3 Wholesale distribution 4 Other 68 Total 308

and represented a number of diverse industries that are found throughout the US, there is no apparent reason to doubt the representativeness of our sample. The respondents were also asked if they had acquired new computer hardware or software since their rm started using computers. Ninety-two and one-half percent of those responding had acquired new hardware, and 89.9% had acquired new software. Of those acquiring new hardware, 30.8% had acquired it to extend the rm's range of applications/uses, 24.7% had acquired it to replace old hardware and 44.5% had done both. Of those acquiring new software, 15.3% had acquired it to replace existing software, 35.2% had acquired it to extend software applications/uses, and 49.5% had done both. In Cragg and King's [4] study of six rms, four had acquired new hardware primarily to extend their range of applications. Three of the six

262

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

rms had acquired new software to totally replace what they had previously. The other three had acquired little or no software. Another question asked if the number of users of computers in the rm had increased since the rm rst started using computers. Of those responding, 89.6% said yes, there were more computer users within their organization. The new users were then classied as clerical, managerial, or both. Thirty-nine percent of the new users were classied as clerical, 20.8% of the new users were classied as managerial, and 40.2% of the new users were classied as both. Cragg and King [4] found the three largest rms in their study had more computer users, which were mostly managers or professionals. The respondents were also asked if the number of functional areas in their business using computers since the initial use had increased; 89.6% responded positively. They were then asked to state the number of new functions and the area of the new function. The mean number of new functions was 3.6 with a median of 3 and a mode of 2. Table 4 shows the most common responses for the number of additional functions for which the company was using IT. Of those executives that stated 1, 2 or 4 additional functions, the areas of usage were the same. There was one difference for those stating three additional functions, as shown in Table 4. Three of the six rms in the Cragg and King [4] study were using computers in at least one new functional area, while two rms were using computers in two new functional areas. Only one rm was using computers in three new functional areas. Overall, the most commonly stated area for use of the function was by far accounting, then marketing and sales, shipping, personnel, production and inventory, administration, and nally, nance. Lastly, the respondents were asked, `What is the single most important thing you've learned about managing the use of information technology in your rm?' Even though the respondents were asked to state the single most important thing, some gave more
Table 4 Number of functions and their usage Number of functions stated 1, 2, or 4 3 Most common usage area Accounting Accounting

than one response. Responses were given by 257 different individuals resulting in 329 different units being coded. Content analysis was used in order to code the responses. Content analysis has been used in IS research previously. In 1995, Todd et al. [28] analyzed job advertisements to determine the state of the job market for systems analysts, programmers, and IS managers. Jarvenpaa and Ives [13] used content analysis to analyze letters, which CEOs had written, to determine the tendency toward IT as a competitive advantage. One of the premises for their study was that if IT plays a signicant role to the strategy of the corporation, that signicance should be reected in the letter to the shareholders. By analyzing the IT related phrases in the letter written by the chairman in the annual report, they found support for using this data to give information about IT in the organization. In a similar fashion, we are analyzing the comments made by senior executives to summarize collectively what they have learned about managing IT. Initially, two raters coded the 329 units creating their own categories for the responses. Then the raters came together to compare their coding and reach a consensus on the placement of each response into a category. A third rater was then asked to code the responses using the categories supplied by the previous raters. This was done in order to insure accuracy of the categories. The three raters were in 90% agreement. Table 5 shows the different categories as well as the percentage of responses, which fell into each category. Additionally, a specic example of a response, which fell into each category, is provided. The 10 categories (excluding non response) from Table 5 with the largest percentage responses were analyzed further to see if the response was different based on the size of the rm. The responses which fell into the top 10 categories account for 193 of the total 329 units coded (59% of the responses). Table 6 shows the breakdown for the 10 `important thing' categories, which occurred the most often and the size of the rm. It is interesting to note that those rms which

Next common usage area Marketing Marketing

Third common usage area Sales Shipping

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269 Table 5 Responses to `Most Important Thing' question Category Other Staying current/changing IT Training/Education of end users Get information quickly Accurate data Non response Purchasing current systems Productivity Costs Customer/end user support Maintenance/running of system Efficiency Backups & disaster recovery planning Software compatibility/consistency Ease of use IT necessity/importance to firm Manage people Computers are tools Decision making Management of IT Matching business requirements Networks/networking Speed Time Communication Competition Data versus information Did not use IT Documentation Knowledge of market/business Overcome fear/intimidation Security Keep information simple Limited capacity Organization of records/computers
a

263

Percentage of responses 0.120 0.112 0.097 0.076 0.070 0.070 0.040 0.040 0.036 0.033 0.030 0.021 0.018 0.018 0.015 0.015 0.015 0.012 0.012 0.012 0.012 0.012 0.012 0.012 0.009 0.009 0.009 0.009 0.009 0.009 0.009 0.009 0.006 0.006 0.006

Example response from a small business manager E-mail allows efficient use of time Initial installment of system a Going from proprietary system to open system IT is constantly changing Training is key to effective IT use Able to get information more quickly with computers Accuracy of data helps reduce mistakes Can't think of anything Buy biggest and fastest IT you can afford Increased productivity Cost effectiveness is most important element Supply the user's needs Must have full time maintenance and support Efficiency for faster feedback Back up your work Integrated software uses Ease of use IT is the most important aspect for successful growing companies Ability to manage people is important The computer is just a tool Better decisions Managing technology correctly Technology expertise and functional business blend Need for reliable networks Speed is essential Time consuming Good communications between functional areas Keeping a step ahead of our competition Difference between data and information Did not use IT Keep good documentation Stay on top of the market Don't be intimidated by new hardware or software Security of data Keep IT simple Too small, capacity is limited Keeping records well organized in the computer
a a

Three different comments are given as explanation for the other category.

Table 6 Size by `Important Thing'a 1 <101 101200 201300 301400 Total

a

3 5 6 2 0 13

4 24 9 2 1 36

8 9 1 0 0 10

9 6 0 2 0 8

16 17 3 1 0 21

17 8 2 1 0 11

22 8 1 0 1 10

34 19 9 2 1 31

35 21 8 1 0 30

Total 133 44 12 4 193

16 5 1 1 23

Legend: 1 Accurate data; 3 Purchasing current systems; 4 Staying current/changing IT; 8 Costs; 9 Customer/end user support; 16 Get information quickly; 17 Productivity; 22 Maintenance/running of system; 34 Training/education of end user; 35 Other.

Table 7 Position by `Important Thing'a Title President/Owner/CEO Vice President COO/CFO Director of MIS Controller Manager Administrator LAN Administrator Other Total 1 2 5 5 0 3 1 4 2 0 3 23 3 4 5 0 0 0 0 1 1 0 0 1 3 6 1 1 0 0 0 1 0 0 0 3 7 1 1 0 0 0 2 0 0 0 4 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Total 2 0 0 1 0 0 0 0 0 3 1 1 0 0 1 1 0 0 0 4 1 0 0 0 0 0 0 0 2 3 0 0 0 0 0 2 0 0 1 3 2 1 0 1 0 1 0 0 0 5 2 5 2 1 6 2 0 0 0 0 3 0 0 0 1 3 3 4 0 3 1 0 1 1 1 4 2 7 25 13 1 1 0 0 0 1 2 0 0 5 0 1 0 0 0 1 0 0 0 2 0 1 0 0 0 0 0 1 1 3 0 0 0 1 0 0 0 3 0 1 2 1 0 0 0 1 0 3 2 10 0 2 0 0 0 1 0 1 1 5 1 0 1 0 2 0 0 0 0 4 1 0 0 0 0 2 0 0 1 4 0 3 2 4 0 0 0 1 0 0 2 7 0 3 0 0 0 5 4 23 1 0 0 0 0 0 0 0 1 2 0 1 0 0 0 1 0 0 1 3 0 0 0 1 1 1 0 0 0 3 0 1 0 0 0 3 0 0 0 4 1 0 0 1 0 1 2 0 1 6 0 4 8 58 1 3 6 52 0 1 1 3 1 6 2 41 0 0 3 13 0 9 8 75 1 3 0 20 1 1 1 11 0 5 9 56 4 32 38 329

1 1 4 0 0 7 0 0 0 2 2 9 1 0 1 1 3 8 0 1 1 1 2 0 0 4 7 6 13 37

6 4 1 2 0 0 1 4 0 0 1 0 1 0 0 0 2 1 12 11

a Legend: 1 Accurate data; ; 2 Backups & disaster recovery planning; 3 Purchasing current systems; 4 Staying current/changing IT; 5 Communication; 6 Competition; 7 Computers are tools; 8 Costs; 9 Customer/end user support; 10 Data vs. information; 11 Decision making; 12 Did not use IT; 13 Documentation; 14 Ease of use; 15 Efficiency; 16 Get information quickly; 17 Productivity; 18 IT necessity/importance to firm; 19 Keep information simple; 20 Knowledge of market/business; 21 Limited capacity; 22 Maintenance/running of system; 23 Manage people; 24 Management of IT; 25 Matching business requirements; 26 Networks/networking; 27 Non response; 28 Organization of records/computers; 29 Overcome fear/intimidation; 30 Security; 31 Speed; 32 Software compatibility/consistency; 33 Time; 34 Training/education of end user; 35 Other.

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

265

employed 100 or fewer employees gave the majority of the responses except for the category of `purchase current systems'. Due to major violation of assumptions, a w2 test for independence could not be performed. However, Reynolds [26] suggests that proportional-reduction-in-error (PRE) logic may be employed `to avoid the weaknesses based on chi square' (p. 32). One of the PRE measures is Goodman and Kruskal's lambda, which indicates how much the classication error of the important thing would be reduced by knowing the size of the rm. The value of the lambda was 0.0, which indicates that the classication error is not improved by knowing the size of the rm. Therefore, knowing a rm's size does not indicate what important thing learned would apply to that rm.
Table 8 Industry by `Important Thing'a 1 Accounting Advertising Architecture Automotive Banking Civil engineering Computer software/hardware/sales Construction Consulting Distribution Education Engineering Environmental services General/electrical contractor Health Care Insurance Land surveying Law Manufacturing Non profit Oil & gas Other Publishing Real estate Sales/marketing Telecommunication Transportation Wholesale distribution Total
a

To be sure that a respondent's position was not biasing his/her response, we conducted some additional analyses. Table 7 shows the categorization of all 35 of the important things and the position of the respondent. Again, Goodman and Kruskal's lambda, which indicates how much the classication error of the important thing would be reduced by knowing the respondent's position, was analyzed. The value of the lambda was 0.045 with a 95% condence interval of 00.09. Therefore, the classication error is only minimally improved by knowing the respondent's position. This shows strong support for the fact that all subjects regardless of their position had something signicant to say. Additionally, the responses of the top 10 `important things' are shown by industry in Table 8. The indus-

3 1 0 0 0 0 0 1 1 0 0 0 1 0 1 1 1 0 0 1 1 0 3 0 0 0 0 1 0 13

4 2 4 2 1 1 0 0 2 1 0 3 4 0 0 2 2 0 3 1 2 0 5 0 1 0 0 0 0 36

8 1 0 0 0 0 0 3 0 1 1 0 1 0 1 0 0 0 0 0 0 0 2 0 0 0 0 0 0 10

9 0 1 0 0 0 0 1 0 1 0 0 0 0 0 0 2 0 1 1 0 0 1 0 0 0 0 0 0 8

16 0 1 1 0 0 0 1 1 2 0 0 0 0 0 2 2 1 1 2 0 0 5 0 1 0 1 0 0 21

17 0 0 1 0 0 0 0 0 0 2 0 0 0 1 1 1 0 0 1 0 0 3 0 1 0 0 0 0 11

22 0 0 0 0 0 0 2 0 1 0 1 0 0 1 2 0 0 0 0 1 0 2 0 0 0 0 0 0 10

34 2 0 3 0 1 0 1 1 2 0 2 1 1 0 5 0 0 0 3 1 0 3 0 1 1 0 1 2 31

35 0 0 0 0 0 1 2 0 0 0 2 2 0 2 1 1 0 1 3 0 2 7 2 0 3 1 0 0 30

Total 8 6 7 2 2 1 16 5 9 3 8 10 2 6 15 10 1 6 13 6 2 37 2 4 5 2 2 3 193

2 0 0 1 0 0 5 0 1 0 0 1 1 0 1 1 0 0 1 1 0 6 0 0 1 0 0 1 23

Legend: 1 Accurate data; 3 Purchasing current systems; 4 Staying current/changing IT; 8 Costs; 9 Customer/end user support; 16 Get information quickly; 17 Productivity; 22 Maintenance/running of system; 34 Training/education of end user; 35 Other.

266

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

tries which had the majority of the respondents stating one of the top 10 categories of most important thing were computer software/hardware/sales, health care, manufacturing, insurance, and engineering. The Goodman and Kruskal lambda value was 0.204 with a 95% condence interval of 0.120.288. This indicates that the classication error is improved by knowing the respondent's industry. 5. Discussion This study is one of the rst projects, if not the rst, which has examined extensively the expanding uses of IT in a wide range of industry types within the small business community. It is strengthened by the fact that only senior executives in each rm, e.g., CEO, President, Manager, and Director of IS, provided information about their organizations. That too is important because it is generally regarded that these are the same individuals who decide on IT investment decisions, or at least are the ones who participate in this decision process. One of the purposes for conducting this research was to investigate possible differences between smaller and larger organizations related to acquiring and using IT. It is apparent that even smaller rms experience similar pressures related to IT investment decisions, as reported above. In itself, this is enlightening for both IT researchers and small business executives because it has not been examined extensively before, nor has it dealt with the topic from the directions addressed in this research. The issue related to the growth in the number of computer users is probably not too surprising. It is, however, revealing that, compared with the study by Cragg and King [4], the extent of growth of users involved with clerical activities has increased in just a few short years. Executives and IS researchers must not exclude any groups of users today as they investigate the many factors that impact rms today, such as system success, competitive advantage, and globalization. In part, this has no doubt occurred because hardware and software costs have declined dramatically since the so-called PC revolution began in the mid 1980s. In addition, the expanding range of applications, their ease of use, and the increased general IT knowledge by many individuals today would tend to

give rise to large numbers of new users. However, what is perhaps more important are the reasons for this growth and the possible implications of it to the rms. Are smaller rms experiencing operational pressures to increase the number of computers and computer users? Perhaps like their larger counterparts, competitive pressures, such as the need to increase or at least maintain customer satisfaction, could be a driving force behind this growth. The implications to the smaller rm could be dramatic. In general, smaller rms may lack the extensive IT infrastructure and support structure that larger organizations have, and they may experience pressures for extensive training and retraining of older employees. Training issues could also extend to the population of potential new hires as well who, because of a lack of a strong IT support infrastructure in some smaller rms, might be expected to acquire specic new skills on their own prior to entering the job market. It is probable that the term `computer literate' has escalated to the point that, to be considered literate, a new hire must have extensive knowledge in products such as Microsoft Ofce, nancial modeling tools extending beyond today's spreadsheets, and web page authoring and development tools to support the fast increasing pace of electronic commerce. Support for this may be found in the fact that nearly 45% of the responding rms both replaced older hardware as well as purchased new hardware to add to the rm's portfolio of uses. At the same time, nearly 50% of the respondents had replaced and enhanced software as well, and more than 40% of the organizations experienced growth in both clerical and managerial users. Correspondingly, smaller rms could also investigate the newer forms of IT training, such as general types of computer-based training (CBT) or even CBT that is more intelligent, such as products that contain expert-like capabilities, to guide the trainee. The attention to additional training provided by smaller rms could also act as a marketing mechanism to help them to attract new hires as well. The ndings of this study relate to the training of end users and the importance of the end users being able to use systems successfully. Montazemi [16] too found that end user literacy generated higher user satisfaction, and the training of end users denitely plays an important role in improving end user literacy.

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269

267

The other major question addressed in this research dealt with the `. . . single most important thing you've learned about managing the use of information technology in your rm.' The category with the highest percentage of responses was `staying current/changing IT,' with more than 11% of the respondents citing it. This is an issue that confronts large businesses daily, and it is apparent that even executives in smaller rms are experiencing the same difculties. Perhaps, however, the problem as it pertains to small businesses is exacerbated by the fact that many of these organizations lack much of the IT infrastructure, such as emerging technologies groups or so-called technological strategists who can identify new and forthcoming technologies and suggest ways for their implementation. Such limitations obviously can impact senior executives who must contend with competitive pressures, improving or expanding customer service, as well as with internally expressed needs and wants. The category that tied for third place in the `most important thing I've learned' rankings is, perhaps, just as signicant as the one which nished in rst place. This category is the `non response' category; it is characterized by the common response provided by the respondents: `I can't think of anything.' On the one hand, it is evident that smaller organizations are experiencing many IT pressures, such as staying current, the need for accuracy in their data, obtaining information quickly, and even having to deal with being more productive. These responses are quite similar to those discussed in the literature dealing with large organizations. However, if a small business executive responds that he/she can't think of anything related to issues or problems regarding managing its IT investments, it should be a cause for alarm. Are these executives just following the crowd, purchasing what their employees say they want or need? Do small business executives experience the socalled `airline magazine syndrome' that is often associated with larger organizations? Or perhaps some smaller rms have entered into various forms of outsourcing arrangements or have engaged consultants to help them in their IT efforts, with the result that they simply `can't think of anything' related to managing IT? The additional analyses that examined the relationships between rm sizes, industries, and the top 10 most important things learned are interesting. As

stated previously, knowing a rm's size does not indicate what important things learned would be applicable to that rm; knowing the rm's industry, however, does tell us what lessons learned might be important for a rm. Regarding size, consultants working with smaller businesses, as well as IS researchers, might nd it more difcult to focus their attention on specic issues for given rms. Said differently, regardless of size, small businesses are confronted with a diversity of issues today. In addition, this nding might also indicate some maturation perspective regarding IT lessons learned among small businesses of the sizes examined in this study. Regarding a rm's industry, business executives, consultants, and IS researchers might nd it easier, for example, to develop IS plans more closely integrated with a rm's business plan, knowing lessons learned ahead of time. Further research into these lessons learned and industries is warranted. This research has focused on a heterogeneous sample of small businesses and identied the expanding and changing role the IT serves in these rms. Our concluding remarks have led to a number of questions as well, many listed above. These questions should serve as an invitation to IT researchers to delve more deeply into the smaller business community. Inter disciplinary studies, such as those involving small business centers and entrepreneurial institutes found in some colleges and universities could be included. More theoretically based research should be applied to the small business community. For example, attitudinal research may help provide answers to some of our questions, with Ajzen's [2] Theory of Planned Behavior and Davis' Technology Acceptance Model [6] serving as appropriate theories. Harrison et al. [12] research pertaining to competitive advantage was a positive step in this regard.

Appendix IT Questions from Survey Instrument 1. Do you make decisions about obtaining and using computers and information technology in your business? 2. What computer-based system or use of computerized information that you do not currently have

268

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269 the Decision Sciences Institute, November 1991, pp. 915 917. F. Farhoomand, G. Hrycyk, The feasibility of computers in the small business environment, American Journal of Small Business 9 (4), 1985, pp. 1522. B. Hardgrave, When to prototype: decision variables used in industry, Information and Software Technology 37 (2), 1995, pp. 113118. D. Harrison, P. Mykytyn, C. Riemenschneider, Executive decisions about information technology and competitive strategy in small business: theory and empirical tests, Information Systems Research 8 (2), 1997, pp. 171195. S. Jarvenpaa, B. Ives, Information technology and corporate strategy: a view from the top, Information Systems Research 1 (4), 1990, pp. 351375. D. Leonard-Barton, D. Sinha, Developer-user interaction and user satisfaction in internal technology transfer, Academy of Management Journal 36 (5), 1993, pp. 11251139. S. Malone, Computerizing small business information systems, Journal of Small Business Management, 1985, pp. 1016. A. Montazemi, Factors affecting information satisfaction in the context of the small business environment, MIS Quarterly 12 (2), 1988, pp. 238256. A. Montazemi, An analysis of information technology assessment and adoption in small business environments, INFOR 25 (4), 1987, pp. 327340. G. Nickell, P. Seado, The impact of attitudes and experience on small business computer use, American Journal of Small Business 10 (4), 1986, pp. 3748. F. Niederman, C. Beise, P. Beranek, Issues and concerns about computer-supported meetings: the facilitator's perspective, MIS Quarterly 20 (1), 1996, pp. 122. P. Palvia, W. Jackson, Computing Practices in Very Small Businesses, Proceedings of the 1990 Annual Meeting of the Decision Sciences Institute, San Diego, CA, November 1990, pp. 10821084. L. Petro, Minicomputer systems for small business, Journal of Small Business Management 21 (3), 1983, pp. 16. L. Raymond, The impact of computer training on the attitudes and usage behavior of small business managers, Journal of Small Business Management 26 (3), 1988, pp. 913. L. Raymond, Validating and applying user satisfaction as a measure of MIS success in small organizations, Information & Management 12, 1987, pp. 173179. L. Raymond, Organizational characteristics and MIS success in the context of small business, MIS Quarterly 9 (1), 1985, pp. 3752. L. Raymond, N. Magnenat-Thalmann, Information systems in small business: are they used in managerial decisions? American Journal of Small Business, 1982, pp. 2026. H. Reynolds, Analysis of Nominal Data. Sage Publications, Beverly Hills, 1977. The Facts About: Small Business, U.S. Small Business Administration, Washington DC, January 1996. P. Todd, J. McKeen, B. Gallupe, The evolution of IS job skills: a content analysis of IS job advertisements from 1970 1990, MIS Quarterly 19 (1), 1995, pp. 127.

would you like to have to help you compete better? 3a. Since your firm first started using computers, has it acquired new computer hardware? 3b. If yes, has this acquisition typically been to extend your firm's range of applications/uses, or has it been to replace old hardware? 4a. Since your firm first started using computers, has it acquired new computer software? 4b. If yes, has this acquisition typically been to replace old software, or has it been to expand the range of applications in use? 5a. Since your firm first started using computers, have the number of functional areas using computers since the initial use increased? 5b. If yes, how many new areas? 5c. Which functions? 6a. Since your firm first started using computers, have the number of users of computers increased? 6b. If yes, are the new users more oriented toward clerical or managerial? 7. What's the single most important thing you've learned about managing the use of information technology in your firm?

[10] [11] [12]

[13] [14] [15] [16] [17] [18] [19]

References
[20] [1] R. Agarwal, C. Higgins, M. Tanniru, Technology diffusion in a centralized MIS environment, Information & Management 20 (1), 1991, pp. 6170. [2] I. Ajzen, The theory of planned behavior, Organizational Behavior and Human Decision Processes 50, 1991, pp. 179 211. [3] G. Alexander, Computing practices in small Arkansas manufacturing firms, Arkansas Business and Economic Review 26 (2), 1993, pp. 2026. [4] P. Cragg, M. King, Small-firm computing: motivators and inhibitors, MIS Quarterly 17 (1), 1993, pp. 4760. [5] T. Cronan, Computer systems in small professional organizations: a discriminant model for determining success factors, Journal of Microcomputer Systems Management 2, 1990, pp. 212. [6] F. Davis, R. Bagozzi, P. Warshaw, User acceptance of computer technology: a comparison of two theoretical models, Management Science 35 (8), 1989, pp. 9821003. [7] W. DeLone, Determinants of success for computer usage in small business, MIS Quarterly 12 (1), 1988, pp. 5061. [8] W. DeLone, Firm size and the characteristics of computer use, MIS Quarterly 5 (4), 1981, pp. 6577. [9] G. Evans, Computing Small Business: A Renewed Emphasis on Efficiency, Proceedings of the 1991 Annual Meeting of

[21] [22] [23] [24] [25] [26] [27] [28]

C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257269 Cynthia K. Riemenschneider is an Assistant Professor in the Computer Information Systems and Quantitative Analysis Department at the University of Arkansas. She received her Ph.D. in Management Information Systems from the University of Texas at Arlington. Her research publications have appeared in Information Systems Research, Journal of Computer Information Systems, and Electronic Markets: The International Journal of Electronic Commerce & Business Media. Dr. Riemenschneider's research interests include the use of information technology in small businesses and the adoption of innovative technology.

269

Peter P. Mykytyn Jr. is a Professor in the Department of Information Systems and Management Sciences at the University of Texas at Arlington. He obtained his Ph.D. in Computer Information Systems from Arizona State University. His current research interests include strategic aspects of information technology, and legal issues impacting information systems and organizations, with special emphasis involving intellectual property. He has participated actively in national and regional conferences, and in June 1978 he concluded a visiting professorship position at Agder College in Kristiansand, Norway. He is currently Associate Dean for Research and Graduate Studies in the College of Business Administration at the University of Texas at Arlington.