What small business executives have learned about
managing information technology
Cynthia K. Riemenschneider
a,*, Peter P. Mykytyn Jr.
b,1aComputer Information Systems and Quantitative Analysis Department, University of Arkansas, Fayetteville, AR 72701, USA bDepartment 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 classi®ed 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
trans-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 soft-ware costs are signi®cantly lower today, thereby mak-ing it possible for organizations of any size to purchase IT, the research ®ndings, i.e., problems, solutions, bene®ts, etc., that relate to the larger organization may not necessarily apply to smaller ®rms. Small *Corresponding author. Tel.:1-501-575-6120;
fax:1-501-575-4168.
E-mail addresses: [email protected]
(C.K. Riemenschneider), [email protected] (P.P. Mykytyn Jr.) 1Tel.:1-817-272-3537; fax:1-817-272-5799.
businesses employ 54% of the private working popu-lation, 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 counter-parts, 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 man-agerial 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 identi®ed.
The overall purpose of this research is to assess how IT is used in smaller organizations. This examination includes the identi®cation of the different functional areas of ®rms. Additionally, the results of what small business executives say they have learned about mana-ging 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 signi®cant 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 busi-nesses 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 technol-ogy 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 speci®c. 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 man-agers in small businesses.
Top management support and involvement,
including that from CEOs, is crucial if IT imple-mentations 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 satis-faction can lead to system success and, ultimately, to successful business efforts.
As stated above, most of the prior cited research since 1988 is industry speci®c; 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: acquisi-tion 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 exam-ined a number of these issues as well. Regarding the number of functional areas using computers, Ray-mond 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).
Table 1
Summary of prior research
Researcher(s) Research focus Subjects Findings/observations/issues
[25] Computer usage Small and medium sized
manufacturing firms
Applications which use computers: -accounts receivable
-payroll -accounts payable -sales analysis
[10] Computer usage Small businesses Highest percentage of application of
computers in small businesses: accounting Software most or second most important consideration in computerization
[18] Computer usage Small businesses Accounting most common application which used
computers [22] Computer training 34 small manufacturing
facilities
Computer training did positively influence small business managers
[7] IT effectiveness 98 small manufacturing
firms
Effectiveness linked to:
-CEO involvement in computerization -on-site computers
-coordinated implementation of planning and controls
[16] User satisfaction 83 small firms (47 service industry and 36 manufacturing industry)
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
[5] Computer usage 71 small professional
organizations (i.e. doctors, lawyers, accountants)
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
[9] Purpose of IT
implementation
68 small firms 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
3. Research method
3.1. Sample selection
Using guidelines from the Small Business Admin-istration, a `small' business was de®ned as one that employed fewer than 500 employees. This categor-ization is consistent with the Small Business Admin-istration (SBA) which de®nes small businesses based on Standard Industrial Classi®cation (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 repre-sented ®rms from major industries, including manu-facturing, defense, oil and gas, agriculture, ®nance, and not-for-pro®t. It should also be emphasized that the database contained ®rms of all sizes, including some Fortune 500 companies with home of®ces located in this metropolitan area. Appropriate query construction enabled the researchers to identify rele-vant ®rms based on size. Thus, the small businesses selected were not chosen from some restricted data-base, such as an association of family-owned busi-nesses.
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 of®ces or where it was not possible to contact a senior executive were excluded. This was deemed appropri-ate because, during preliminary discussions with other small business executives, it was noted that branch of®ces of smaller businesses usually did not engage in IT purchase and use activities; such decisions were made by the main of®ce. In addition, it was also ascertained that, for the most part, senior-level
indi-viduals in smaller organizations usually were respon-sible 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 south-western university (the subjects were provided with the name of the institution) and the purpose of the project. The researchers ensured the subjects that con®dentiality and anonymity would be maintained and that individual responses would be aggregated and compared with those from other smaller busi-nesses. Neither ®rm names nor identi®cation of indi-viduals 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 unavail-able 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.
Table 1 (Continued)
Researcher(s) Research focus Subjects Findings/observations/issues
[4] Applications growth Six small manufacturing firms Motivators of growth of systems: -relative advantage
The researchers found the executives to be gener-ally cooperative and responsive. Thus, very few ®rms/ individuals refused to participate in the project once the researchers explained the project and its impor-tance. 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. Thirty-®ve percent of the respondents were either presidents, vice presidents, or a chief of®cer while 24% of the respondents were managers and 15% were MIS direc-tors. 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 busi-ness executives from a wide variety of industries and was not limited to a particular industry as other studies have done [3,4,7,15±17,20,22±25]. 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
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 Table 2
Titles of executives participating in the study
Title Number
President/Owner/CEO 56
Vice President 49
COO/CFO 3
Director of MIS 47
Controller 10
Participating businesses or firms
Industry Number
Accounting 12 26 10±80
Advertising 7 46 20±220
Architecture 8 23 7±120
Automotive 4 85 25±225
Banking 5 168 50±200
Civil engineering 3 30 12±30
Computer Software/hardware/sales 22 48 15±400
Construction 12 90 40±180
Consulting 15 30 8±400
Distribution 5 95 78±130
Education 10 100 35±200
Engineering 17 43 20±200
Environmental services 5 45 25±90
General/electrical contractor 9 65 12±205
Health care 22 95 25±390
Insurance 14 150 24±400
Land surveying 3 25 16±30
Law 12 85 28±400
Manufacturing 18 77 23±210
Non profit 6 55 32±250
Oil & Gas 4 94 35±200
Publishing 3 75 70±250
Real estate 7 90 15±300
Sales/marketing 6 75 40±150
Telecommunication 4 140 31±175
Transportation 3 140 80±200
Wholesale distribution 4 105 95±300
Other 68 80 10±340
®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 classi®ed as clerical, managerial, or both. Thirty-nine percent of the new users were classi®ed as clerical, 20.8% of the new users were classi®ed as managerial, and 40.2% of the new users were classi®ed 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 inven-tory, 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
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 signi®cant role to the strategy of the corporation, that signi®cance should be re¯ected 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 pre-vious raters. This was done in order to insure accuracy of the categories. The three raters were in 90% agree-ment. Table 5 shows the different categories as well as the percentage of responses, which fell into each category. Additionally, a speci®c 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
Table 4
Number of functions and their usage
Number of functions stated Most common usage area Next common usage area Third common usage area
1, 2, or 4 Accounting Marketing Sales
3 Accounting Marketing Shipping
Table 5
Responses to `Most Important Thing' question
Category Percentage of responses Example response from a small business manager
Other 0.120 aE-mail allows efficient use of time
aInitial installment of system
aGoing from proprietary system to open system
Staying current/changing IT 0.112 IT is constantly changing
Training/Education of end users 0.097 Training is key to effective IT use
Get information quickly 0.076 Able to get information more quickly with computers
Accurate data 0.070 Accuracy of data helps reduce mistakes
Non response 0.070 Can't think of anything
Purchasing current systems 0.040 Buy biggest and fastest IT you can afford
Productivity 0.040 Increased productivity
Costs 0.036 Cost effectiveness is most important element
Customer/end user support 0.033 Supply the user's needs
Maintenance/running of system 0.030 Must have full time maintenance and support
Efficiency 0.021 Efficiency for faster feedback
Backups & disaster recovery planning 0.018 Back up your work Software compatibility/consistency 0.018 Integrated software uses
Ease of use 0.015 Ease of use
IT necessity/importance to firm 0.015 IT is the most important aspect for successful growing companies
Manage people 0.015 Ability to manage people is important
Computers are tools 0.012 The computer is just a tool
Decision making 0.012 Better decisions
Management of IT 0.012 Managing technology correctly
Matching business requirements 0.012 Technology expertise and functional business blend
Networks/networking 0.012 Need for reliable networks
Speed 0.012 Speed is essential
Time 0.012 Time consuming
Communication 0.009 Good communications between functional areas
Competition 0.009 Keeping a step ahead of our competition
Data versus information 0.009 Difference between data and information
Did not use IT 0.009 Did not use IT
Documentation 0.009 Keep good documentation
Knowledge of market/business 0.009 Stay on top of the market
Overcome fear/intimidation 0.009 Don't be intimidated by new hardware or software
Security 0.009 Security of data
Keep information simple 0.006 Keep IT simple
Limited capacity 0.006 Too small, capacity is limited
Organization of records/computers 0.006 Keeping records well organized in the computer
aThree different comments are given as explanation for the other category.
Table 6
Size by `Important Thing'a
1 3 4 8 9 16 17 22 34 35 Total
<101 16 5 24 9 6 17 8 8 19 21 133
101±200 5 6 9 1 0 3 2 1 9 8 44
201±300 1 2 2 0 2 1 1 0 2 1 12
301±400 1 0 1 0 0 0 0 1 1 0 4
Total 23 13 36 10 8 21 11 10 31 30 193
Table 7
Position by `Important Thing'a
Title 1 2 3 4 5 6 7 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
President/Owner/CEO 5 1 1 4 0 1 1 6 4 2 1 1 0 2 2 5 2 1 0 0 0 0 0 1 1 0 3 1 0 0 0 1 0 4 8 58
Vice President 5 0 0 7 0 1 1 1 2 0 1 0 0 1 1 6 2 1 1 1 0 1 2 0 0 2 4 0 1 0 1 0 1 3 6 52
COO/CFO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 1 3
Director of MIS 3 2 2 9 0 0 0 1 4 1 0 0 0 1 0 3 0 0 0 0 0 3 0 0 0 0 1 0 0 1 0 1 1 6 2 41
Controller 1 1 0 1 1 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 1 0 2 0 0 0 0 0 1 0 0 0 0 3 13
Manager 4 1 3 8 1 1 2 1 0 0 1 0 2 1 3 3 4 1 1 0 2 1 1 0 2 2 7 0 1 1 3 1 0 9 8 75
Administrator 2 0 1 1 0 0 0 1 0 0 0 0 0 0 0 3 1 2 0 0 0 0 0 0 0 0 3 0 0 0 0 2 1 3 0 20
LAN Administrator 0 1 2 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 1 1 1 11
Other 3 0 4 7 1 0 0 2 1 0 0 2 1 0 1 4 2 0 0 1 0 3 1 0 1 0 5 1 1 0 0 1 0 5 9 56
Total 23 6 13 37 3 3 4 12 11 3 4 3 3 5 7 25 13 5 2 3 2 10 5 4 4 4 23 2 3 3 4 6 4 32 38 329
employed 100 or fewer employees gave the majority of the responses except for the category of `purchase current systems'. Due to major violation of assump-tions, a w2 test for independence could not be per-formed. 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 classi®cation 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 classi-®cation 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.
To be sure that a respondent's position was not biasing his/her response, we conducted some addi-tional 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 classi®cation 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% con®dence interval of 0±0.09. Therefore, the classi®cation 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 signi®cant to say.
Additionally, the responses of the top 10 `important things' are shown by industry in Table 8. The
indus-Table 8
Industry by `Important Thing'a
1 3 4 8 9 16 17 22 34 35 Total
Accounting 2 1 2 1 0 0 0 0 2 0 8
Advertising 0 0 4 0 1 1 0 0 0 0 6
Architecture 0 0 2 0 0 1 1 0 3 0 7
Automotive 1 0 1 0 0 0 0 0 0 0 2
Banking 0 0 1 0 0 0 0 0 1 0 2
Civil engineering 0 0 0 0 0 0 0 0 0 1 1
Computer software/hardware/sales 5 1 0 3 1 1 0 2 1 2 16
Construction 0 1 2 0 0 1 0 0 1 0 5
Consulting 1 0 1 1 1 2 0 1 2 0 9
Distribution 0 0 0 1 0 0 2 0 0 0 3
Education 0 0 3 0 0 0 0 1 2 2 8
Engineering 1 1 4 1 0 0 0 0 1 2 10
Environmental services 1 0 0 0 0 0 0 0 1 0 2
General/electrical contractor 0 1 0 1 0 0 1 1 0 2 6
Health Care 1 1 2 0 0 2 1 2 5 1 15
Insurance 1 1 2 0 2 2 1 0 0 1 10
Land surveying 0 0 0 0 0 1 0 0 0 0 1
Law 0 0 3 0 1 1 0 0 0 1 6
Manufacturing 1 1 1 0 1 2 1 0 3 3 13
Non profit 1 1 2 0 0 0 0 1 1 0 6
Oil & gas 0 0 0 0 0 0 0 0 0 2 2
Other 6 3 5 2 1 5 3 2 3 7 37
Publishing 0 0 0 0 0 0 0 0 0 2 2
Real estate 0 0 1 0 0 1 1 0 1 0 4
Sales/marketing 1 0 0 0 0 0 0 0 1 3 5
Telecommunication 0 0 0 0 0 1 0 0 0 1 2
Transportation 0 1 0 0 0 0 0 0 1 0 2
Wholesale distribution 1 0 0 0 0 0 0 0 2 0 3
Total 23 13 36 10 8 21 11 10 31 30 193
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% con®dence interval of 0.12±0.288. This indi-cates that the classi®cation 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, Pre-sident, Manager, and Director of IS, provided infor-mation 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 smal-ler and larger organizations related to acquiring and using IT. It is apparent that even smaller ®rms experi-ence similar pressures related to IT investment deci-sions, 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 inves-tigate the many factors that impact ®rms today, such as system success, competitive advantage, and globali-zation. In part, this has no doubt occurred because hardware and software costs have declined dramati-cally since the so-called PC revolution began in the mid 1980s. In addition, the expanding range of appli-cations, 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 speci®c new skills on their own prior to entering the job market. It is probable that the term `computer literate' has esca-lated to the point that, to be considered literate, a new hire must have extensive knowledge in products such as Microsoft Of®ce, ®nancial modeling tools extend-ing 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 investi-gate 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 de®nitely plays an important role in improving end user literacy.
The other major question addressed in this research dealt with the `. . .single most important thing you've learned about managing the use of information tech-nology in your ®rm.' The category with the highest percentage of responses was `staying current/chan-ging 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 dif®culties. Perhaps, however, the problem as it pertains to small businesses is exacerbated by the fact that many of these organiza-tions lack much of the IT infrastructure, such as emerging technologies groups or so-called technolo-gical strategists who can identify new and forthcoming technologies and suggest ways for their implementa-tion. Such limitations obviously can impact senior executives who must contend with competitive pres-sures, 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 signi®cant 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 so-called `airline magazine syndrome' that is often asso-ciated with larger organizations? Or perhaps some smaller ®rms have entered into various forms of out-sourcing 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 relation-ships 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 dif®cult to focus their attention on speci®c 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. Regard-ing 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 indus-tries is warranted.
This research has focused on a heterogeneous sam-ple of small businesses and identi®ed 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, attitudi-nal research may help provide answers to some of our questions, with Ajzen's [2] Theory of Planned Beha-vior 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?
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?
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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, Jour-nal 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.
