Citation
(2014), "Executive summary of “The critical success factors affecting the adoption of inter-organization systems by SMEs”", Journal of Business & Industrial Marketing, Vol. 29 No. 5. https://doi.org/10.1108/JBIM-04-2014-0083
Publisher
:Emerald Group Publishing Limited
Executive summary of “The critical success factors affecting the adoption of inter-organization systems by SMEs”
Article Type: Executive summary and implications for managers and executives From: Journal of Business & Industrial Marketing, Volume 29, Issue 5
This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.
Like many small- and medium-sized enterprises (SMEs), a Taiwanese company in the cutting and grinding machinery business carried out its information exchange with partners by e-mail, telephone or fax, which was found to be time-wasting, adding to costs, affecting operating efficiency and causing delays to production schedules. With support from a government program, the firm adopted an “inter-organization system” (also called a business-to-business information application) which connects, via the Internet, two different organizations for the purpose of data exchange.
Within two years, the company combined their upstream suppliers and downstream customers with their inter-organization systems (IOS) which covered the exchange of design diagrams, the exchange of transaction documents with suppliers and customers and the exchange of maintenance, repair and service information with agents. The result was a reduction in the cycle time for engineering change from 5 to 3 days and their procurement operations from 30 to 20 days.
While larger enterprises are more willing and able to adopt an IOS to enhance their competitiveness, there are still many barriers to adoption for SMEs, such as financial resources, time, information and skills; concerns about security, legal issues and competition; doubts about the applicability of e-business to their business practices; and cultural and infrastructure issues. Getting SMEs over these barriers has become an important issue especially because of the contribution of SMEs to a country’s economic welfare. While recognizing the lack of budget, know-how and personnel of SMEs compared with larger organizations, SMEs can be helped to understand the uncertainties they fear.
In “The critical success factors affecting the adoption of inter-organization systems by SMEs”, Professor Hsin-Pin Fu et al. undertake an in-depth discussion of the critical success factors (CSFs) for the adoption of an IOS by a case-study company. They highlight six factors – industry knowledge and experience, the degree of application of information technology within the industry, system safety, the organizational infrastructure, customer relationships and ease of use. They also list 27 possible factors that influence enterprises in their adoption of an IOS.
Interestingly, the study does not agree with previous research which maintains that the commitment of the top manager is always a CSF for the adoption of an IOS. They say that, although commitment of top management is undoubtedly an important factor, SMEs should pay more attention to allocating their limited resources to the six CSFs identified and embrace appropriate strategies for those factors when implementing the IOS.
The results also show that system security is more important than system integration in the technology context. It is better for SMEs to adopt a Web-based IOS because the interchange of information and documents with their partners can be handled efficiently, and they can focus their attention on information security and protection.
In general, the technological context and the organizational context are the more important issues in the adoption of an IOS. This study found that of the six CSFs, three are from the environmental context, two are from the technological context and only one is from the organizational context.
From a practical point of view, the most important CSF is industry knowledge and experience. There is a big difference in the capabilities of SMEs. Some do not grasp the concept of the long-term, operational benefits, seeing only the short-term benefits when the project has just been completed. Thus, the real advantages are gradually lost during subsequent operations. Enterprises should continue to strengthen their relationship with their industry partners for the long-term, and should reach a general consensus with them to adopt an IOS. When the IOS operation matures and stabilizes, the benefits will gradually emerge. Therefore, SMEs should pay more attention to the establishment and strengthening of their partnerships when adopting an IOS.
It is also very important to resolve information asymmetry. The level of the application of information technology within the industry is also a CSF. SMEs often lack information and knowledge about the adoption of an IOS and are afraid of failure, so they avoid making the commitment. SMEs must resolve this issue in order to reduce the risk of failure when they adopt an IOS. Therefore, SMEs should pay more attention to improve the information asymmetry resulting from the six CSFs, and pay special attention to good communications, education and training, in order to reduce the risk of failure.
Training and education are important in SMEs that are adopting an IOS. IOS stability is low at the beginning of an adoption. Thus, to run the IOS smoothly, SMEs should commit appropriate resources for training and education, in order to overcome most of the obstacles they face efficiently. The leading SME can use these resources to provide an online learning and feedback process. Online learning allows self-learning, reduces education and training costs and saves time. The feedback-process facilitates continuous improvement in the system, so that it becomes easy to use.
To read the full article enter 10.1108/JBIM-04-2012-0070 into your search engine.
(A précis of the article “The critical success factors affecting the adoption of inter-organization systems by SMEs”. Supplied by Marketing Consultants for Emerald.)