The Implementation of Information System Technology for Micro, Small
and Medium Enterprise in South East Asian Countries
Hamzah Ritchi The University of Melbourne
Abstract
The pressure of a more active participation of micro, small and medium enterprise (MSME) regional and global alliance, puts stress on Information System Technology (IST). The purpose of this paper is to examine potential benefits and risks of the use of IST to MSME sector in South East Asia countries post crisis. A literature study was conducted from a number of South East Asian-related research papers and other relevant literature. It was found that due to the unique characteristics, as reflected in culture and size, there are considerable advantages to be derived from employing IST in MSME. However, some risks appear to be of major concern to deploy IST thoroughly. It is concluded that prudent IST implementation would generally deliver significant impact to the development of MSME sector.
INTRODUCTION
Nevertheless, the euphoria of bringing thoroughly IST into application is facing an unenthusiastic endorsement from some experts regarding the achievement of IST. Blili & Raymond (1993) support this view by asserting that disregarding the ability to synergize both computer technologies and conventional activities would potentially result in disastrous exposure. This essay will examine the IST implementation to the MSME sector in the post monetary crisis in South East Asia economies in general. It will be argued throughout this paper that IST practice will deliver a constructive outcome. It will have a snowball effect assisting MSME in playing their role in the global market after the post crisis particularly in expanding market share and smoothing transaction processing.
MICRO, SMALL AND MEDIUM ENTERPRISE: THE SCOPE
The definition of MSME clearly reflects what short of business they are undertaking to in relation to the IST usage rate. The business nature of these companies tends to put small concern of the IST adoption, and place a great interest to manage bottom line profit. This figure leads to the difference of adoption degree of IST among company size. In their sensible examination, Chau & Jim (2002) declare that there was a correlation between firm size and the level of adoption of information technology. DeLone (December 1981), rigorously fostered the former statement by elucidating his hypothesis that the characteristics of computer use vary according to firm size. Additionally, the age of the firm’s computer operation and the portion of revenues allocated to electronic data processing (EDP) are other factors that constitute positive correlation with the size of a firm. Based on findings above, it can be assessed that MSME magnitude factor gives a lucid contribution of how much the allocated fund is spent for information system development or purchase. Due to this divergence, it would not be appropriate to create generalisation and to assume the same IST adoption result with MSME.
the approach to develop fusion between IST and this prospective sector will be optimised. Taking Katz (1999) observation into consideration on specified efforts taken to overcome crisis in Thailand, Indonesia, South Korea, Malaysia, and other famous-awarded Asian Economic Miracle, it is apparent that only vague priority has been given to draw attention to a more promising MSME sector, which has obviously demonstrated unquestionable role as nation economy backbone to get up from fall over.
POTENTIAL BENEFITS
The evolution of information system and information technology does not pass benefit not only to large company but MSME sector as well. Among of those benefits offered are categorised into three main points. Firstly is the utilisation of electronic commerce and its partner, World Wide Web (www). Jentzsch & Miniotas (Dec 1999) assert that with the use of e-commerce it is said that geographic boundaries are removed, new global opportunities can be exposed and the internet is the vehicle in which to do e-commerce. Seyal & Rahman (2003) clearly support that e-commerce could minimize cost of transaction and provide better communication. Furthermore, Bonk (1996) also clarifies that the subsistence of e-commerce could accommodate this sector the ability to take role in inter-company cooperation and global trade which include free trade alliance in there.
Inter-Organisational System conveys a speedy, accurate, and efficient means to exchange information. The work of Premkumar & Ramamurthy (1995), Bergeron & Raymond (1997) and Masseti & Zmud (1996) have unveiled the benefit can be derived from the using of EDI as well as the using of Electronic Commerce. More from his results, Yap et al., (1992) affirms that a well organized general transaction processing system which is enclosed in computer-based information system (CBIS) would construct customer satisfaction in the absence of company size. And finally, Chen & Williams (1998) explores the capability of EDI not only to improve customer services in addition to stabilizing trading relationships, but also in some cases as an essential tool for administration, operation, and manufacturing
Thirdly, as the cost of information technology keeps decreasing and instant worldwide communication becomes increasingly available, the cost barrier shall not be number one issue anymore. McLeod & Schell (2003) has confirmed “the Moore” theory that the cost of processor is declining one third while its speed is inclining as three fold every year. Bonk (1996) also supports the decreasing cost of information technology and the accessibility of hardware peripherals as opportunities for MSME around the world.
THE RISKS
significant problem that may arise in dealing with the relatively unstructured way in which largely MSME are managed. The strong resistance also may occur when the implementation of IST is confronted to the work behaviour in existing circumstances might be altered in order to keep it in line with the implementation of IST.
CONCLUSION
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