1. Theoretical Foundations
for IS Success in
Small- and Medium-sized Enterprises
(work in progress)
Jan Devos
Ghent University Association
Department Howest, ELIT - Lab
Keywords: IS Success, IS Failures, SMEs, IS Theories, IT Governance, IT Adoption
ECIS 2011 ES & BPC - J. Devos 1

2. Small and Medium-Sized Enterprises
(SMEs)
Definitional problem
Bolton Committee (1971) defines an SME as one that:
 has a relatively small market share, is managed by its owners or part owners in a personalized
way, not by an organized managerial structure, is independent
U.S. Small Business Administration defines an SME as one that:
 depends on the industry of the SME, number of employees (<500) or the average annual
receipts, is independently owned and operated, is not dominant in its field of operation
Europe defines an SME as
 number of employees ( <10 10-50 <250), annual turnover, or annual balance sheet total
and Canada, Singapore, New-Zealand, Australia, ....
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3. SMEs
Our Focus:
– Small companies (headcount <<200)
• white collars (>10) vs blue collars
– Family owned and managed
– Turnover < €20 million
– Cross sectional
– Small (domestic) markets and export
Relevance ? (Europe = 99%)
reference: website Europe (http://ec.europa.eu/enterprise/policies/sme)
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4. IT and SMEs
Different economical, cultural and managerial
environment compared to corporate accounts
– Resource poverty (financial, knowledge, IT, ...):
• Depend heavily on external IT expertise (Verhees et al. 2004)
• Low IT capabilities and IT practices (Dibbern et al. 2009)
• Slow adopters of IT, reluctance to use advanced IT
– Centric role of CEO – owner (Cragg, 2008; Levy et al. 2004)
• Unique strategic orientations (Wang et al. 2009)
• Appetite for innovativeness depends on CEO (Dibrell et al. 2008)
– Lack of process orientation
• Too much task oriented (Antlova, 2009)
• Do not change business models if results (of IT) are unclear (OECD, 2004)
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5. IT and SMEs
• Lack of relevant IS research in SMEs
– Since 1978 (to November 2010): less then 300 refereed A1-
publications (Devos, 2010; working paper)
– IS (business) research mainly in large organisations
• Obtaining IS Success in SMES
– Implementing IT Governance
– Guidelines and methods for governing, implementing and
managing IT are not suitable for SMEs
– Why? There are no basic theoretical foundations spelling out
how IS success can be achieved by implementing IT
Governance
– IT Governance … a bridge too far for SMEs
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6. Questions
• How can we explain IS Success in SMEs?
• How can we rethink the concept of IT
Governance in SMEs?
What are the basic theoretical foundations of
IS Success in SMEs?
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7. Research Question
How can these four theories help to explain IS
success in SMEs?
• Theory of Planned Behavior (TPB)
• Transaction Cost Economy (TCE)
• Technology Acceptance Model (TAM)
• DeLone & McLean IS Success Model (D&M)
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8. Theory of Planned Behavior
Behavioral
Belief
Attitude
Evaluation
Normative
Belief
Subjective
Intention Adoption
Motivation Norm
To Comply
Control
Belief
Perceived
Perceived Control
Power
AJZEN, I. 1991. THE THEORY OF PLANNED BEHAVIOR. Organizational Behavior
and Human Decision Processes.
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9. Transaction Cost Economy
Internal
Complexity / Transaction
Bounded Frequency Costs
Rationality Production
Assets Costs Adoption
Opportunism
External
Specificity
Transaction IN / OUTSOURCED
Uncertainty
Costs
Human Environmental Transaction Production
Factors Factors Costs Costs
Bounded Asset Internal Build cost
Rationality Specificity
Opportunism Uncertainty External:
Contact,
Run cost
Contract,
Frequency /
Control
Complexity
COASE 1937. The Nature of the Firm. Economica.
WILLIAMSON 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.
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10. Technology Acceptance Model
Perceived
Usefulness
Behavioral Actual
Intention to Use System Use
Perceived
Ease of Use
Source: Davis et al. (1989), Venkatesh et al. (2003)
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11. DeLone & McLean IS Success Model
- Frequency
- Duration
- Intensity
- Nature
Information is
- clear
- accurate Information
- sufficient Quality
- up-to-date
Intention Use
- exact what is needed
To Use
- Availability Net
- Adaptability System Benefits
- Reliability Quality
- Response Time User
Satisfaction
- Assurance Service
- Responsiveness
Quality
- Empathy
DELONE & MCLEAN 2003. The DeLone and McLean model of information systems success: a ten-year update. Journal of
Management Information Systems
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12. Literature on SMEs and the theories
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13. Nomological IS Net
IT managerial,
methodological, and
IT artifact Usage Impact
technological capabilities
IT managerial,
methodological, and
technological practices
(Benbasat et al. 2003)
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14. Contribution of the theories
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15. The Complete Framework
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16. Validation of the framework
• Mapping with Cobit v.4.1 (IT Governance Institute)
– mapping of the detailed control objectives of Cobit Acquire &
Deliver domain with the framework
– Cobit are best practices – but no theoretical underpinnings
– Cobit is well used with practitioners, even in SMEs (QuickStart)
– Cobit is very normative
• Interview with CIOs-CEOs from SMEs (to do)
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17. Validation of the framework
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18. Preliminary findings
• The framework offers a possible theoretical
foundation for a majority of Cobit A&I controls
• Complementary assets
– Major issue in Cobit
– Not directly in the framework
• part of the Information Quality (D&M)
• COBIT has less attention for behavioral aspects
– PU and PEoU are absent in Cobit (TAM)
• A ‘minimal’ capability maturity level is needed
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19. Discussion and conclusions
Contribution of the framework:
- Novel, testable and empirical valid
- An unique SME perspective: egocentric role of CEO,
resource deficit, dependency on external expertise, …
- Generic, process oriented, cross-functional and not only
suitable for a particular IT or artifact (ERP, CRM, …)
- Start to rethink IT Governance in SMEs
- More ‘behavioral’ less ‘mechanical’ approach
Limitations:
- Validation over a large group of SMEs needed
- More and other theoretical perspectives are possible
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20. Discussion and conclusions
Explanatory Explanatory
High
Domain of knowledge
High
Domain of knowledge D&M
TCE
PT TAM
PT
PAT PAT
ICT ICT
OT LMT Low OT LMT
Low TPB
Low High Predictive Low High Predictive
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21. Discussion and conclusions
Questions ?
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