Adoption of information technology and its impact on organizational performance: a study of small and medium-sized enterprises

Abstract

Studies evaluating the impact of information technology (IT) on organizational performance have received a lot of attention in the last few years. However, almost all have only studied large companies. As IT acquisition has become cheaper, its popularization has grown faster, enabling small and medium-sized enterprise (SME) to adopt IT in their business. In this study, we examined 123 SMEs with a view to analyzing the relationship between IT adoption and its impact on perceived organizational performance. We found that both external pressures and organizational readiness are the main enablers of IT adoption in the small companies investigated. Internal needs are the most influential adoption factor, determining perceived organizational performance. We also found that companies that have planned their IT investments consistently had better perceived performance than the others - especially with regard to cost reduction benefits. Overall, we expect this study to help managers to plan their IT investments more efficiently.