The influence of information technology innovations on the performance of organisations : a case study of selected SMEs in the Western Cape

Abstract

Diverse attempts have been made to ascertain the benefits of adopting digital technologies for Small to Medium Sized Enterprises (SMEs). Despite the significant role of SMEs in the economy of a country, most SMEs are lagging behind in digital transition due to high costs of information technology (IT) acquisition, frequent modification of IT tools by service providers, and lack of necessary digital skills amongst employees, etc. Previous research conducted on the influence of IT has not offered a clearer insight in respect of organisational performance. This study gauges the relationship between the adoption of IT innovation by SMEs and influence on organisational performance. It explores different models and theoretical perspectives such as Technology Acceptance Model, Diffusion of Innovation Theory and Theory of Dynamic Capabilities, amongst others. The study used qualitative and quantitative research methods with multiple case study design to attain the study’s objectives and aim. Several studies have highlighted the significance of IT for SMEs in general without precision to some industries. This study was carried out at 12 selected SMEs, in 12 industries in the Western Cape province of South Africa. Convenience sampling was used to select the SMEs while purposive sampling was used to select the 47 participants that were interviewed. The data collected was transcribed, coded by adopting open coding, analysed and interpreted utilising content analysis to give transparency to the findings. The findings indicated that SMEs depend on some IT innovations to manage and market their services. IT innovations are tools for competitive advantage by helping SMEs to configure better products and services for their customers. IT innovation when adopted and used enhances efficient communication and speed delivery at the workplace. Therefore, the researcher is convinced that there is a positive correlation between IT innovations and organisational performance. As a result, it is recommended that SMEs visualise and prioritise IT innovative tools for enhancing their business operations. Modern IT skills and training for SME employees cannot be undermined in today’s digital economy.