A Meta-Analysis of Research On Information Technology Implementation in Small Businesss15327744joce1302 - 2

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A Meta-Analysis of Research on Information Technology Implementation in Small Business

G. Premkumar Version of record first published: 18 Nov 2009
To cite this article: G. Premkumar (2003): A Meta-Analysis of Research on Information Technology Implementation in Small Business, Journal of Organizational Computing and Electronic Commerce, 13:2, 91-121 To link to this article: http://dx.doi.org/10.1207/S15327744JOCE1302_2
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JOURNAL OF ORGANIZATIONAL COMPUTING AND ELECTRONIC COMMERCE 13(2), 91121 (2003)
A Meta-Analysis of Research on Information Technology Implementation in Small Business

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G. Premkumar
College of Business Iowa State University
The small business sector is one of the fastest growing sectors of the economy. The firms in this sector are becoming increasingly dependent on information systems (IS) for their operations. Traditional research in IS has primarily focused on large corporations. The problems, opportunities, and management issues encountered by small business in the IS area are unique, and research is too limited to provide useful guidelines. This study compares the research literature on IS implementation and research on IS in small business, examines the commonality and differences, and identifies research gaps. An overall research framework is developed to review the research in the two areas and determine areas of opportunity. As a follow-up of this analysis, a research model is developed to explore the factors influencing the adoption of computer-mediated communication technologies in small business. The model incorporates some of the innovation factors that are identified as potential gaps in the earlier analysis. The research model evaluates the impact of 6 factorsperceived usefulness, cost, compatibility, top management support, competitive advantage, and sizeon the adoption of computer-mediated communications technologies. A telephone interview was used to collect data from 207 firms. The results of data analysis reveal that competitive advantage, top management support, and size are important determinants of adoption of computer-mediated communication technologies. IT adoption, innovation adoption and diffusion, IT implementation, small business, communication technologies
1.
INTRODUCTION
Computer and communication technologies play a critical role in the transformation of our economy to a digital economy. Most research studies have focused on information technology (IT) implementation in a large corporate setting, and very little research has focused on use of information and communication technologies
The author acknowledges the support provided by the Rural Development Initiative at Iowa State University and James Quinn for help in the collection of data. Correspondence and requests for reprints should be sent to G. Premkumar, 300 Carver Hall, College of Business, Iowa State University, Ames, IA 50011. E-mail: prem@iastate.edu
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in the small business sector and the issues related to IT implementation and use in small businesses. Traditional theories on organizations and information systems may not be directly applicable to the small business sector [1]. Researchers in small business have been pointing this out for more than two decades, as highlighted by Dandridge [2] in his title, Children are not little grown-ups: Small business needs its own organizational theory. A few studies have pointed out that IS theories and practices developed for large businesses may not be suitable for small ones [3, 4]. Small firms are different from large firms in a number of ways. For example, in small businesses, decision making is centralized in one or two persons, bureaucracies are minimal, standard procedures are not well laid out, there is limited longterm planning, and there is greater dependence on external expertise and services for information systems (IS) operations. The problems, opportunities, and management issues encountered by small business in the IS area are unique, and research is too limited to provide useful guidelines. This study attempts to review the research in this area and identify the research gaps. Organizations, both big and small, have become critically dependent on information systems for their daily operations. Traditionally, small businesses have been the slowest in adopting modern information technologies [5]. However, in recent years, they have invested a significant amount of resources in IT implementation. Investment in IT as a proportion of sales revenue for small firms is comparable to that for large firms [6]. A recent study indicated that small firms were expected to spend as much as $90 billion in information technology products and services [6]. Case studies and the trade press highlight the benefits of IT for small businesses including cost reduction, improved profitability, better customer service, enlarged market scope, and tighter interorganizational relationships with their trading partners. Information communication has become the predominant driving force in the Internet age. Computer-mediated communication technologies such as e-mail, the Web, interorganizational systems (IOS), and electronic data interchange have dramatically changed business processes. The latest trend toward integrated supply chain management has highlighted the importance of communication technologies and IOS for businesses [7]. Research on the adoption of these communication technologies by small businesses is very limited. The main objectives of this study are: To develop a research framework for IT implementation and map prior empirical studies to that framework. To analyze past research on IT in the small business area, identify major findings, and map to that research framework. To examine major differences between the two research streams and identify potential areas for future research. To present the results of an empirical study that examines one of the research areas. The primary objective of the article is an analysis of past research, and the next three sections focus on that analysis. The article is organized as follows. Section 2 presents the research framework for evaluating research on IT adoption and implementation; Section 3 uses the same framework to map IT research in
INFORMATION TECHNOLOGY IN SMALL BUSINESS
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small business; Section 4 compares the two research streams; Section 5 presents the research model and the research methodology for the empirical study; and the last section presents the results and discussion.
2.
IT IMPLEMENTATION RESEARCH
Since the focus of this research is to develop a framework for IT implementation in small business, we will borrow from other researchers who have done extensive meta-analysis of IT/IS implementation research in corporate settings [811]. Researchers have emphasized the similarity between IT adoption and innovation adoption/diffusion, and borrowed heavily from the diffusion of innovation literature [11, 12]. Information systems were considered as new technology adoptions in organizations, and the field of diffusion of innovation adoption provided a rich set of theory and findings that could be directly applied to study IT adoption. Since IT implementation is a very broad field, it is necessary to define the scope of this analysis. There are two broad areas of study, organizational and individual adoption/diffusion of IT [9]. This study focuses only on organizational adoption/ diffusion of IT. Innovation adoption/diffusion studies have used various stage models, ranging from a simple two-stage model of initiation and implementation [12] to a six-stage model of initiation, adoption, adaptation, acceptance, routinization, and infusion [13]. This study includes all stages of IT use in its review of past studies, but focuses on the adoption stage for its research model. Studies examine IT implementation from various perspectives including factors influencing adoption/diffusion [8], political undercurrents that cause irrational behavior and roadblocks to implementation outcome [14], and processes used for implementation and their impact on implementation success [15, 16]. Since the focus of this study is to evaluate the factors influencing IS implementation in a small business context, only studies from the factors research stream in IS implementation research will be used for the review. Although the earlier review [8] did not differentiate between information systems and management science models, this study will only consider studies dealing with information systems.
2.1
Research Framework
The study proposes a research framework, based on Leavitts [17] organizational model, for reviewing and comparing the research on IT implementation with IT in small business. The organizational model identifies four major domains in an organizationtask, technology, people, and structurethat work within the context of an external environment. The model has been refined and used in various IT studies [8, 10, 1820]. Kwon and Zmud [8], in their review of IT implementation, identified five broad categories of factorsindividual, structural or organizational, technological, task, and environmental factors. The MIT study on information technologies in the 1990s was patterned using Leavitts organizational model [19]. That study included a fifth domain, external socioeconomic and technical environment, in its framework because the external environment plays a very critical role in influencing
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the four internal domains. Alavi and Joachimsthaler [10] used a similar framework, along with the environment domain, in their meta-analysis of research on decision support systems. Hence, we propose using these five domains in our framework. The five major domains are illustrated in Figure 1. We have slightly renamed these domains to be consistent with contemporary research in the IT area. For example, strategy and structure are combined to reflect the broader context of the organizational domain. Although strategy and structure are important constructs in organizational theory and strategic planning, they have been combined into a single organizational domain in recent IT studies [8, 10]. The five major domains are individual, task, innovation/technology, organization, and environment. The domains can be considered as different layers of the environment that influence the design and use of information technology. The primary purpose of information technology in an organization is to enable people to complete various work-related tasks. Hence, at the core of the framework we have the individual and the task that needs to be completed. The technology domain provides the tools and information to aid the individual in his or her task, and therefore it is shown at the next layer. Because the technology is implemented in an organization, various characteristics of the organization influence IT implementation. Often the decision to use a particular technology may be taken by a person who may not be actually using the system to complete the task. Organizations can be considered as a collection of individuals working to accomplish a business objective with a common set of rules, procedures, and value systems. We need to differentiate the organization from the individual environment since the collective vision and belief system may not be the same as that of the individuals within the organization. Hence, the organizational environment is captured as a separate domain. Organizations react to external environment and their decision making on innovations is influenced by the strategic necessity to compete in the marketplace using resources from the internal and the external environment. Hence, the external environment is shown as a separate domain. Table 1 presents a summary of major studies on IT implementation that appeared in leading IS research journals including MIS Quarterly, Information
Environment Organization Technology/Innovation Task Individual
Figure 1. Research framework.
Table 1 Review of Research in Information Systems (IS) Implementation Variable Environment Competition Power/interfirm dependence Description References
Vertical interaction and climate Supplier incentives
Competition in terms of price, scope, quality, etc. Power of trading partners, economic dependence on partner Extent of interactions with customers/suppliers Incentives through price, service support, etc., from the innovation supplier to adopt the innovation Extent of commitment and resource support from top management for the innovation Existence of a high-level individual to sell the innovation within the organization Organizations size in number of employees or sales revenue Channels available and extent of use of various channels Level of centralization of decision making in organization Use of formal procedures for operation and rule observance Perceived usefulness of the new technology Level of ease of use Organizational compatibility with beliefs and value systems and technical compatibility with the task and work practices Ability to experiment before adoption Ability for others to observe results of innovation Relative cost to benefits of the technology Level of education Length of service in firm Extent of user participation in analysis and design Prior experience in IS Cognitive and decision-making style of individual Usage
[30, 25, 21] [23, 59, 21, 72, 24] [25, 24] [25]
Organization Top management support
[39, 73, 21, 40, 24]
Product champion
[30, 74, 26]
Size Communication channels Centralization Formalization Technology Relative advantage (perceived usefulness) Complexity (ease of use) Compatibility
[75, 27] [76, 28] [30, 29] [30, 29]
[35, 32, 33, 77, 58] [33, 32, 77, 58, 13] [32, 33, 77, 58]
Trialability Observability Cost Individual Education Job tenure User Involvement IS expertise Cognitive style User training Computer self-efficacy
[32, 77, 58] [32, 77, 58] [33, 23]
[39, 30] [30, 39] [4143] [42, 40, 43] [38, 78, 79] [42, 43, 37] [80, 81] (continued)
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Table 1 (Continued )
Variable Task Task autonomy/responsibility Task structurability Task interdependence Task standardization Task uncertainty Task complexity
Description
References
Personal control over tasks Level of structure to task
Deterministic, probabilistic, random decisions Availability of well defined procedure to solve tasks
[40] [40] [40, 45] [40] [43, 20] [43, 20]
Note.
IS = information systems.
Systems Research, Journal of MIS, Decision Sciences, and Management Science. They are listed under the five domains. A detailed analysis of the factors studied in each domain is now presented.
2.2
Environmental Domain
In the early 1980s IS were primarily used to support back-end operations. Therefore, environmental factors were not considered critical for research on IT implementation. In the 1990s the use of IS to gain competitive advantage and the growth in IOS spanning organizational boundaries highlighted the impact of environmental factors on IT implementation. IS are catering no longer to just an internal audience, but also to the firms customers, suppliers, and other trading partners. Hence, it is not surprising that external environmental factors are increasingly being studied in IT implementation. Studies have examined the impact of competitive advantage in initiating the implementation of IOS [21]. Many studies on IOS have examined the role of interorganizational dependence and power on adoption of these systems because in most cases the powerful trading partner in the dyad influences IT implementation [2224]. Researchers have also examined the role of incentives and the transaction climate between the trading partners in facilitating the implementation of IOS [25].
2.3
Organizational Domain
Since most IT implementation is in an organizational context, researchers have examined the impact of various organizational factors on IS implementation. The organizational factors that have been extensively studied are degree of top management support, existence of a product champion, organizational size, communication channels, centralization, and formalization [8, 21]. There are other factors, such as user training and user involvement, which are individual factors but are measured at the organizational level, that have been found to be related to IT implementation. The importance of top management support and commitment
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cannot be overemphasized. This support sends strong signals within the organization, reduces any political roadblocks, and ensures adequate resources for implementation [21]. Product champions play a critical role in marketing the innovation to the decision makers, developing an implementation plan, facilitating resource allocation, and removing roadblocks to implementation [26]. The impact of organizational size on IT implementation is mixed. Although some studies have found it to be important, others have not found it to have a significant effect. It seems like there is a threshold level beyond which size is not an important factor [27]. Larger organizations have more resources and IS expertise to facilitate IT implementation, but could be bogged down with more bureaucratic practices and resistance to change that smaller organizations may not have. A few studies have examined the use of various communication channels to get information for adoption, but these have not been examined in terms of their impact on adoption/diffusion [28]. Centralization and formalization, two variables extensively studied in early research on IT implementation [29, 30], have not found much support in recent IS research [21]. Organizations have become too complex to fit neatly into the categories defined by centralization and formalization.
2.4
Technology Domain
Innovation adoption research has focused heavily on evaluating the impact of various innovation/technology characteristics on adoption/diffusion. Tornatzky and Klein [31], in their meta-analysis of innovation research, identified three variables compatibility, complexity, and relative advantageto be consistently related to adoption. These characteristics have been extensively used in IT implementation research [21]. Recent studies have also included other variables such as cost, trialability, and observability [32, 33]. Compatibility of an innovation is the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of the receivers [34]. Compatibility in the context of IS includes both organizational and technical compatibility; that is, the innovation should be compatible with the organizations values and belief systems as well as with the work practices and system interfaces. It has been found to be positively related to adoption [13]. Relative advantage is the degree to which an innovation is perceived as better than the idea it supersedes [34]. Although some researchers have criticized this as a catch-all variable [31], it has been extensively used in IT adoption studies and found to be positively related to IT adoption [23, 32, 33]. Complexity is the degree to which an innovation is perceived as relatively difficult to understand and use [34]. Ease of use of computer systems has been extensively studied in IT implementation and has been found to be positively related to adoption [23, 32, 33]. Recent studies have used the technology acceptance model (TAM) and examined the impact of ease of use (or complexity) and perceived usefulness (or relative advantage) on IT adoption and usage [3537]. Trialability is the degree to which an innovation may be experimented with on a limited basis[34] and observability is the degree to which the results of an innovation are visible to others [34]. The last two factors, trialability and observability, have been problematic for researchers in terms of articulation as well as measurement
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[32]. Some studies have found the cost effectiveness of the innovation to be a significant variable [23, 33].
2.5
Individual Domain
Factors in the individual domain have always taken a secondary role in studies dealing with organizational-level IT implementation. Since the technology is implemented across multiple individuals, it becomes difficult to clearly delineate the effect of individual characteristics on IT implementation. Studies on individual factors such as demographics have been more useful in studying individual-level IT implementation and in the design of systems and user interfaces. Various demographic factors such as education, job tenure, cognitive style, and IS expertise and experience have been examined [30, 3840]. Many studies have examined the relationship between user involvement and system success [41], but the results have been inconclusive. Whereas some studies considered it as an individual variable, others operationalized it at the organizational level. Similarly, user training has also been conceptualized at the user and the organizational level by different studies depending on the context of the study [42, 43].
2.6
Task Domain
Factors in the task domain, like individual factors, have been studied to only a limited extent. Most studies have been in the context of decision support system (DSS) research, examining the impact of task structure, task autonomy, task uncertainty, and task interdependence on DSS implementation [10, 20, 40, 44]. There have been some studies examining the tasktechnology fit [45]. The use of a single IS across multiple tasks makes it difficult to clearly delineate the effects of task factors on organizational-level studies of IT implementation. Task factors are very valuable for determining the fit among the system, the user, and the task characteristics. However, these are of interest for studies on system design rather than for studies on IT implementation.
3.
RESEARCH ON IT IMPLEMENTATION IN SMALL BUSINESS
Research on IT adoption and implementation in small firms has been rather limited, with most studies focusing on various factors influencing system usage and user satisfaction. A detailed review of research in leading management information system (MIS) journals (Journal of MIS, Information Systems Research, MIS Quarterly, Decision Sciences, Information and Management) for the last 10 years was performed to identify all articles related to IT adoption and implementation in small business. A summary of the major studies in this area is provided in Table 2. A casual observation of the research indicates that the studies are widely divergent and not comprehensive enough to create a cumulative research tradition. An important question to answer is whether this research field has adequate research
Table 2 Information Systems Research in Small Businesses Study Igbaria et al. (1997) Dependent Variable Individual system usage Independent Variable Direct: perceived usefulness and ease of use; indirect: internal and external computing support, internal and external training, and top management support Attitude, subjective norm, perceived behavioral control Top management support, consultant effectiveness, vendor support Results Perceived usefulness, ease of use, external training, external support, and top management support are significant
Harrison et al. (1997) Thong et al. (1996)
Intention to adopt User satisfaction, organizational impact, overall IS effectiveness
Palvia et al. (1994)
Usageyes/no, amount of use (hr/day), number of software systems used
Lai (1994)
Usage
Size, education, managers IS skills and IS experience, training, age of business, number of years of computing at home, number of years of computing, profitability Size, age of business, IS experience, in-house development, MIS ranking
Intention related to all three independent variables Top management support related to organizational impact, IS effectiveness; consultant effectiveness related to all three (satisfaction, impact, effectiveness); vendor support related to all three Sales, number of employees, education, IS experience, skills, age of business, years of computing at home are significant
Cragg and King (1993) Case study
Growth
Raymond and Begeron (1992) Soh et al. (1992) Yap et al. (1992)
DSS satisfaction
System usage Satisfaction
Type of application, origin, tool type, task variety, task autonomy, training, experience Use of consultant Vendor support, consultant effectiveness, experience, resources, top management support, user participation, number of applications IS expertise
IS experience, IS rank, age of business related to computer use Top management involvement, relative advantage were positive relationships and inadequate resources was a negative relationship Task autonomy, experience, application type, tool, and origin significant Firms with consultant have more system usage All variables significant except number of applications and expertise
(continued )
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Table 2 (Continued ) Study Raymond (1990) Dependent Variable Use (offline and online), satisfaction, IS sophistication Independent Variable Size, organizational maturity (formalization), resources, planning time horizon Results Size, maturity, time horizon, sophistication related to satisfaction; sophistication related to offline usage; size and time horizon related to online usage; resources and maturity related to sophistication Top management, in-house operation, IS knowledge associated with computer success
Delone (1988)
Raymond (1988)
IS experience, age of operations, training, top management, involvement, number of complaints, planning, control, applications (in-house/ external), operations (in-house/external) User comprehension, Computer training, computer user participation, experience usage (batch and online) IS satisfaction Presence of system analyst, level of analysis, user involvement, computer literacy, proportion of online systems (IS sophistication), proportion of specialized software, duration of CBIS, decentralization IS experience, development (in-house or packaged), processing (in-house or external), IS sophistication (number of applications, interactive applications), rank, location (remote or urban) IS experience, in-house/ external, resources (budget as proportion of sales)
Use (time and frequency), impact (success score importance score)
Montazemi (1988)
Training related to comprehension and usage (batch and online); experience related to user participation Systems analyst, level of analysis, involvement, literacy, online, and decentralization are related to satisfaction
Raymond (1985)
Satisfaction, utilization
Delone (1981)
Size
In-house operation, greater applications, online applications, rank related to satisfaction; in-house operation, greater applications, online applications, rank are related to utilization Less IS experience, more externa l support, and smaller resources are associated with smaller firm size
Note. IS = Information system; MIS = management information system; DSS = decision support system; CBIS = computer-based information system.
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potential for a separate research stream. This study attempts to answer this question by reviewing existing studies, comparing them with IT implementation research, and evaluating whether there are potential areas for research. Most studies on IT implementation in small business have used satisfaction or system usage as the primary dependent variable. Surprisingly, very few studies have examined the adoption of new information technologies by small businesses. A study on IT adoption by Harrison et al. [46] examined use of the theory of planned behavior to evaluate the relationship among attitude, subjective norms, and perceived control, and the intention to adopt IS. Raymond [4, 5, 47] conducted a series of studies on computer usage in small business. He examined the factors influencing user satisfaction and system utilization using data from a survey of 464 small manufacturing firms [4]. He found that IS sophistication in terms of number of in-house, online, and total applications and the rank of the top IS executive are related to user satisfaction and utilization. He also found that various IS-related factors such as IS experience, in-house operation, larger number of IS applications, and lower MIS rank were related to the firm size. The relationship of organizational factors with the two dependent variables also varied based on size. Raymond [5] examined the impact of computer training and experience on usage, user comprehension, and user participation. Training was found to be related to usage, highlighting the importance of training users. He also examined the influence of size, resources, time frame, maturity, and the mediation effect of IS sophistication on user satisfaction and usage [47]. IS sophistication and time frame have a direct effect on both dependent variables, and the effect of size, time frame, and maturity is mediated by IS sophistication. Montazemi [48], in an empirical study of 83 firms, found that user involvement, IS expertise (literacy), IS sophistication in terms of online systems, and detailed requirement analysis were all related to IS satisfaction. Delone [49] surveyed 98 small businesses and found that involvement of top management, in-house operation, and IS expertise/knowledge were related to computer success, a joint index of computer use and impact. He did not find any relation between computer success and external support, supporting the findings of Raymonds [4] study. Yap et al. [50] empirically examined the relationship between a large number of environmental and organizational variables and system satisfaction. They found that vendor support, consultant effectiveness, experience, top management support, and user participation had a significant relationship with satisfaction. Raymond and Bergeron [51] studied the impact of a few task-related variables and found task autonomy to be related to satisfaction in the context of use of DSS in small businesses. Cragg and King [52] used case studies to examine IS growth in organizations and found that whereas top management involvement facilitated growth, resource constraints inhibited growth. Palvia et al. [53] found that size, education, IS experience, and age of business were related to system use. Lai [54] also found that IS experience and age of business were related to usage. Igbaria et al. [44] surveyed 358 small business users and found, using TAM, that perceived usefulness and ease of use had a significant impact on system usage. They also found that top management support and external support had an indirect impact through these two variables on system usage. Harrison et al. [46] used
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TAM and the theory of planned behavior model to find that IT adoption is related to attitude, subjective norm, and perceived behavioral control. In summary, an analysis of Table 2 indicates that researchers have been studying IT implementation in small business on a regular basis starting from 1981 when computers were being introduced in small business in a limited fashion. We have had a wide range of studies examining the relationships between various dependent and independent variables. User satisfaction and system usage are the two most common dependent variables in many studies. A wide range of operationalization has been used on these two variables. Usage has been measured with a variety of objective measures including frequency of use, length of use, and range of software used, and as a dichotomous variable (yes/no). A few studies have used subjective measures of usage. Studies have used their own measures for user satisfaction, even though a few validated measures such as that of Ives and Olson [41] were available. Perhaps these measures, developed for corporate settings, were not appropriate in a small business environment. Most studies have used a contingency framework of a wide range of independent variables without a clear development of theory specific to small business. There have been limited attempts to validate theories. Only recently have studies used well-tested theories in the context of small business and found them to be equally applicable [44, 46]. It should be noted that IT implementation research in corporate settings was also developing during this period and new developments in the IT area have contributed to a state of flux in IT research. In spite of limitations, these studies have contributed significantly to our understanding of IT implementation in small business by identifying critical factors for successful implementation. Some of these factors are IS expertise, availability of an IS consultant, sufficient firm size, vendor support, perceived usefulness, ease of use, appropriate level of IS education, resources, and training. A detailed comparison of the two research streams is provided in the next section.
4.
COMPARISON OF RESEARCH
Table 3 compares and maps IT research in small business with similar variables identified in IT implementation. A cursory analysis of the table indicates many empty cells where IT research in small business is nonexistent. Although some empty cells may indicate the irrelevance of the factors in the context of small business, other empty cells may indicate the potential for future research. A detailed analysis of the different domains is now provided.
4.1
Environment
There is very limited research on the impact of environmental factors on IT in small business. Only one variable, vendor support, was examined in prior studies. This variable bears resemblance to the variable supplier incentives in IT

Table 3 Mapping Research in Small Business with Information System Implementation Research Variable Environment Competition Power/interfirm dependence Vertical interaction and climate Supplier incentives Vendor support Organizational Top management support Products champion Size Communication channels Centralization Formalization IS sophistication/IS experience Rank of IS Age of business Resources IS Support Technology Perceived usefulness (Relative advantage) Ease of use (complexity) Compatibility Trialability Observability Cost Individual Education Job tenure User involvement IS expertise Cognitive style User training Task Task autonomy responsibility Task structurability Task interdependence Task standardization Task uncertainty Task complexity Note. IS = information systems. Study
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[44, 55, 53, 82, 83, 49] [4, 75] [44, 55, 52, 50, 49] [75, 47, 53]
[4, 4850] [4, 54] [54, 53] [50, 52] [47, 39] [46, 44] [44]
[53] [48] [4, 5, 47, 54, 53, 48] [5, 51] [51]
implementation, which examines the incentives provided to the firm by the supplier for adopting the innovation. Interestingly, although earlier studies indicated that external support is not a significant variable and in-house support and operations lead to greater usage and satisfaction [4, 49], later studies indicated that external support is a significant variable influencing system satisfaction and usage [44, 55]. It is not clear whether the significance of vendor support is a recent
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phenomenon. Perhaps the increased sophistication of IS and the scarcity of IS staff is forcing small businesses to depend on external support for their IS operations. Newer communication technologies and innovative IT service models are increasing the significance of this variable. The ability to provide some IT services over the Web through application service providers may make outsourcing a compelling alternative. The lack of research on environmental variables does not necessarily indicate that they are not relevant for small businesses. Factors such as competition, power, and interfirm dependence have been researched in the last 10 years in the context of IOS and have been found to be significant in influencing IOS adoption [21, 24]. Anecdotal evidence in the trade press has documented the pressure exerted by large firms on small trading partners to adopt new communication technologies such as electronic data interchange (EDI). The lack of studies specific to small businesses may have resulted in many of the empty cells in this category. Perhaps the initial focus on development of internal information systems may have motivated users and researchers to ignore the external factors, which come into greater prominence with systems focused on external constituents such as suppliers and customers. This is an area that has great potential for future research.
4.2
Organization
The variables in the organizational domain seem to be the primary focus of many studies in small business. Among the organizational factors in Table 3 we notice that centralization, formalization, and product championing have not been researched in small businesses. The first two are not very relevant for small businesses because most decision making is centralized in a few senior people and small firms do not normally have very rigid rules and procedures. The concept of product champion may be more relevant in large organizations, where a number of people have to be sold on the technology before the adoption decision. Decision making in small firms is less complex and more centralized, and therefore may not require extensive championing within the organization. There are a few variables that are more popular in small business research compared to IS implementation research. They are IS expertise/experience, age of business, rank of IS executive, resources, and level of IS support. It is surprising that the rank of the IS executive is a common research variable. Given that small businesses tend to have a flatter organizational structure, one would not expect the rank of the IS executive to be a major variable. Perhaps this signifies the existence and significance of a separate IS department and thereby indirectly indicates the sophistication of the IS function. Many small businesses start with paper-based systems or a simple computer system and therefore may not have a formal IS department. Hence, they may feel constrained in terms of internal IS expertise when it comes to evaluating and adopting new technologies. Hence, they are more likely to get these services from external vendors rather than developing in-house expertise. The importance of vendor support confirms that trend.
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4.3
Technology
Very few studies have examined the impact of technology innovation characteristics on IT in small business. The variables in this category are primarily derived from the IT adoption literature. Unfortunately, there have not been many studies that have examined IT adoption in the specific context of small business and perhaps this may be a reason for the empty cells in this category. The closest study to IT adoption is by Harrison et al. [46], who examined the impact of attitudes (or behavioral beliefs), subjective norms (or normative beliefs), and perceived controls on intention to adopt IT. The category of behavioral beliefs of what the technology can do to the organization is very similar to perceptions of relative advantage, a variable that is found in IT adoption literature to be a predominant determinant of adoption. Various studies using TAM have found perceived usefulness to be a significant variable influencing IT adoption [35, 37]. Compatibility and complexity are two critical variables in IT adoption that need to be studied in more depth in the small business area. Small firms, due to lack of a formal structure and greater flexibility, may have fewer organizational compatibility problems with new technologies. On the other hand, lack of in-house IS expertise and large IS staff may make new ITs seem more complex and difficult to implement, thereby inhibiting adoption. TAM models employ ease of use, which is very similar to complexity, in the specific context of system interface. Igbaria et al. [44] found it to be a significant variable. Another important factor is the cost of innovation, since typically small firms have very limited budgets. Trialability and observability have had mixed results in IT adoption and it is not clear whether the results would be any different in the small sector.
4.4
Individual
Among the individual factors, education and user training have been found to be related to IS implementation. Some of the variables such as user involvement and IS expertise can be considered in either the organizational or the individual category, depending on the measurement context. They can be considered as organizational variables if IS expertise is measured as a variable based on overall assessment of expertise within the organization. It is an individual variable if it is used to measure an individuals IS expertise and relate it to his or her satisfaction or usage. Researchers studying organizational-level IS implementation normally use a single respondent from a firm to answer questions about organizational-level variables, and therefore do not analyze in depth the individual variables and their effect on usage. The respondent, normally a senior IS executive, reflects the organizational perspective on IS implementation by aggregating the various characteristics of the organization. If however, one needs to do a microlevel study (e.g., study system usage in depth), one needs to study individual organizations with multiple respondents within the same firm (to control for organizational and environmental factors). Some studies do not differentiate between organizational- and individual-level adoption.
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Task
Task characteristics have not been extensively researched in the small business area. The primary research stream that contributed much of the findings in this area is the research on decision support systems, an area which has not been extensively researched in the small business field. The focus on organizationallevel analysis in most studies has reduced the emphasis on individual and task characteristics. In summary, based on the analysis of research in small business and comparing it with studies in IS implementation, we can infer the following. There has been very limited research on adoption of IT. From Table 3 we notice that very little research has been done on the impact of technology factors on IT adoption. This area has great potential as evidenced by the number of studies in the traditional IT literature on IT adoption. Similarly, research on the impact of environmental characteristics has also been limited. The need for interconnectivity with suppliers, customers, and other trading partners brings a new dimension to the influence of external forces on IT adoption. Hence, research on the influence of external forces on IT adoption will bring some new insights to the process of IT adoption in small business.
5.
EMPIRICAL STUDY
The extensive analysis of past research on IT implementation identified some of the research gaps in the small business area. This empirical study addresses one of the many research gaps identified in the analysis. Because IT adoption in small business has not been extensively studied, this empirical study focuses on IT adoption. Although the impact of innovation characteristics has been widely studied in traditional IT adoption/diffusion studies, the reviews of past studies reveal that such research is surprisingly limited in the small business context. Hence, this study proposes to examine the impact of innovation characteristics on IT adoption. Widespread adoption of computer-mediated communication technologies by large firms motivated us to study its adoption in small businesses.
5.1
Computer-Mediated Communication Technologies
The dramatic growth of the Internet has created a shift from using computers as a pure computing device to using them as a combination of communication and computing devices. The proportion of time an end-user spends in using the computer to communicate or receive information has steadily increased in the last 5 years and in some cases exceeds the time spent on computing. Although computers have been adopted extensively in large firms to better manage complex operations and facilitate communication, their use in small businesses has yet to be empirically examined. Hence, this study provides an opportunity for understanding the changing nature of computing devices and the factors influencing their adoption.
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The characteristics of communication among firms vary along many dimensions including the richness of the medium [56], the type of information communicated, the mode of communication (synchronous or asynchronous), the need for further processing of communicated information, and the geographic location of the parties [57]. A variety of communication channels are available including face to face, telephone, fax, U.S. mail, online data access, e-mail, EDI, and Internet access. The last four communication technologies can be termed computer-mediated communication technologies. EDI provides computer-tocomputer communication of business transaction communications without any human intervention. It may use a direct line or a value-added network for communication. Typically, it is used for communicating standard business transactions such as purchase orders, sales invoices, and so on, using predefined format standards. E-mail enables communication of both structured and unstructured information, and is normally between two end-users. Whereas e-mail and EDI are asynchronous in their communication characteristics, online data access enables a user to directly retrieve and enter information in another firms computer, normally using a direct line for communication. Such systems are common among firms that are tightly linked with a common IS and are often seen in parentsubsidiary or franchiserfranchisee links. However, this is typically limited to only a few proprietary applications. Internet access provides the opportunity for two firms to communicate using open standards. Although primarily focused on information dissemination, the growth in e-commerce has triggered the use of the Internet for a wide variety of communication requirements. Each channel has its own advantages and disadvantages. For example, whereas a face-to-face communication would be appropriate for rich unstructured communication, EDI would be a better choice for structured communication that needs to be further processed in a computer (e.g., a sales invoice). E-mail is very useful for asynchronous communication. Internet access using the Web provides a richer channel for disseminating a wide variety of information.
5.2
Research Model
The research model examines the influence of seven variables on the use of computer-mediated communication technologies. The innovation factors that have been found to have a major impact on adoption of innovation are perceived usefulness, compatibility, ease of use, cost, trialability, and observability [32, 35, 57, 58]. The last two variables, trialability and observability, have exhibited inconsistent results [32, 58], and therefore are not included in this study. Studies on diffusion of innovation [31] and IT adoption [58] have found perceived usefulness to be a significant determinant of innovation adoption. In the context of small business, Harrison et al. [46] and Igbaria et al. [44] found that belief about the usefulness of the technology influences the intention to adopt. Some small firms embrace these technologies as a strategy to automate their operations and reduce dependence on labor, which is a scarce and expensive resource for small businesses. Hence, we can expect that firms with greater perceived usefulness for
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these technologies are more likely to use it. Compatibility is another factor that is found to consistently influence adoption of innovations. Studies on EDI adoption have found that small trading partners resist adoption of communication technologies such as EDI because it is not compatible with their paper-based systems [33]. Many small businesses that use a paper-based process or a simple computer-based system may find that computer-mediated communications technologies create significant changes in processes and are incompatible with their business practices and value systems. In general, firms that perceive compatibility of these technologies with their value systems and business processes are more likely to use them. Ease of use of technology has been found to be a significant factor influencing adoption of innovation [32, 33, 35, 58]. Small businesses are often concerned about implementing complex technologies [44]. They normally do not have extensive inhouse IS expertise for experimenting with new technologies or training their employees in these technologies. Hence, ease of use can have a positive influence on a small businesss decision to adopt the technology. The cost of an innovation has been found to be a significant deterrent to adoption [12]. However, some researchers have also found, especially in the context of computers, that cost is not a significant factor [53]. In many cases, it can be expected that small businesses, normally constrained in financial resources, find cost to have a significant negative influence on adoption of new technologies. Studying the use of new technologies without considering the organizational and the environmental context does not provide a complete understanding of the decision process. Hence, we included a select set of environmental and organizational factors in the research model to better describe the adoption of IT. The research model includes two organizational variables, organizational size and top management support, and one environmental variable, competitive advantage, which have been found to be important in prior research. Top management support has been found to be a significant factor in most studies on IT adoption [21]. In small firms it becomes more important because decision making is mostly centralized in a few key persons in the organization [50]. Their vision on the use of IT influences what innovations are adopted. Many studies in small businesses [50, 52, 55] have found top management support to be critical for IT implementation. Organizational size is another important variable that has been extensively researched in IT adoption/diffusion. Although our studies only focused on small firms, we wanted to determine whether size is still an important determinant among small firms. Results from prior studies on the impact of organizational size have been mixed. Whereas Raymond [47] and Palvia et al. [53] found it to be a significant variable, Lai [54] did not find it to be an important variable. It can be argued that small firms have relatively simple operations, which may not require extensive use of IT. On the other hand, they are nimble at trying new technologies and may not face the same level of resistance to change that is faced by large firms. However, within the small business sector it is not clear whether size will be a major issue. We believe that larger firms within the small business sector are more likely to implement new technologies. Recent studies on IT implementation in large firms have highlighted the significance of competitive advantage, particularly in the context of communication technologies that facilitate IOS [21, 24]. Even small firms may use these technologies if they are suppliers to large firms who insist on using these technologies for doing business with them [59]. Firms that
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perceive the possibility of gaining competitive advantage from using these technologies are more likely to adopt them.
5.3
Measurement
The variables were measured using multi-item indicators. All the items, except size, were measured using a 5-point Likert-type scale ranging from strongly disagree to strongly agree. A single item was used to determine whether the respondents adopted one of the four communications technologies, online data access, e-mail, Internet access, or EDI. Perceived usefulness was measured using three items, adapted from Premkumar et al. [33], that assessed the perceived benefits of these communications technologies to the firm. Ease of use had to be dropped from the research model due to measurement problems. Process compatibility was assessed by two items that determined whether these technologies were compatible with the firms beliefs, value systems, and work practices. Cost was measured by two items that determined the cost of implementing the technology relative to its benefits. Top management support was assessed using three items that determined the level of support for the technology. Competitive advantage was measured by three items that assessed the strategic necessity of these technologies for competing in the market. Size of the firm was determined by the logarithm of its sales revenue.
5.4
Data Collection
The data were collected from 207 small business firms. This study used a telephone survey to collect information from the owner or a senior officer in the company. Telephone survey, although more expensive and time-consuming, is very effective in eliciting information from the respondents because the data collection process is interactive and there are opportunities for both sides to clarify any doubts. The richer communication medium helps to collect more reliable data. However, telephone interviews are constrained by time and therefore questions have to be carefully crafted with minimum redundancy to reduce the burden on the interviewee. In our study each interview lasted 20 to 30 min. The respondents were informed that their participation was voluntary and the information they provided was confidential. The multi-indicator items for each construct were framed into questions and structured along with other questions into a single survey that blended various aspects of our study. The questions were pilot-tested with a few small businesses. The questions were modified to remove ambiguities and restructured to provide continuity in the telephone conversation. The interviewers were experienced personnel who had been trained in telephone survey and had done many similar surveys. The researchers discussed in detail with them the questions in the survey. A random sample of 311 small business firms was chosen in the midwest region. We considered firms with fewer than 100 employees as small businesses. A letter was mailed to each firm informing them of the study and asking for their participation. Then these firms were contacted over the telephone. Firms were
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unreachable if they could not be contacted after trying multiple times on different dates. Of the 311 firms, more than 50 were not reachable due to various reasons including not answering the phone or business closure or wrong phone number. The telephone interview was completed with 207 firms, resulting in a response rate of 81% for firms that were reached by phone.
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Sample Characteristics
The characteristics of the sample are shown in Table 4. The sample included firms of varying sizes and from several industry sectors.
5.6
Validity and Reliability
The constructs were tested for two psychometric properties, validity and reliability, to ensure that the measurement was accurate and sound. Whereas validity assesses the degree to which the items measure the theoretical construct, reliability assesses the stability of the scale based on an assessment of the internal consistency of the items measuring the construct [60]. Validity was assessed through content, convergent, and discriminant validity. Content validity assesses whether the measurement covers the complete domain of the construct; convergent validity evaluates whether all the items measuring the construct cluster together to form a single construct; and discriminant validity measures the degree to which a concept differs from other concepts and is indicated by a measure not correlating very highly with other measures from which it should theoretically differ [60]. Content validity was established through the extensive process of item selection and refinement in the development of the instrument. Convergent and discriminant validity were evaluated using confirmatory factor analysis available through the CALIS procedure in the SAS program. Convergent validity is assessed using the measurement model shown in Figure 2. The significance of the
Table 4 Sample Characteristicsa Number of Firms Industry Manufacturing and construction Retail sales and wholesale trade Service Professional Finance, insurance, or real estate Other Annual sales revenue Less than $0.5 million $0.5 to $1 million Greater than $1 million
aN
Percent
21 62 54 34 23 13 94 83 30
10.0 31.0 26.0 16.0 11.0 6.0 45.4 40.0 14.6
= 207.

Pu1 Pu2 Pu3 Cst1
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Perceived Usefulness
Cost
Cst2 Co1 Co2 Mgt1 Mgt2 Mgt3 com1 com2
Compat ibility
Mgmt. support
Competitve Advantage
Figure 2. analysis.
Confirmatory factor
com3
overall model ensures that the measures load on a priori-defined constructs. It is also useful to check whether the individual factor loadings of the measures are significant. The results of the measurement model are shown in Table 5. The results indicate that the overall fit of the model is very good. Because the chi-square value is dependent on sample size, the ratio of chi-square to degrees of freedom is normally used and a value below 2 is considered as a good fit. In our case the chi-square value was below 2. The probability level associated with the chi-square statistic indicates the probability p of attaining a large chi-square value given that the hypothesized model is supported. The higher the value of p, the better is the fit and a value of p .1 is considered an indication of satisfactory fit [61]. Exclusive reliance on chi-square can be problematic [62]. Therefore, other fit indexes are considered to evaluate the model fit. The goodness-of-fit index was above .9 and the root mean square residual was very low. The Bentler and Bonnet index, another fit index, is normally expected to be above .9 [63]. In our case it was .92, indicating that the model is a good fit. Factor loading is another indicator of convergent validity. All the factor loadings are significant at p .001, indicating the items are significantly loading on the construct. Discriminant validity, which assesses whether the measures of different constructs are different from each other, is tested by evaluating whether the correlation
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Table 5 Convergent Validity
Variable PU1 PU2 PU3 Cst1 Cst2 CO1 CO2 Mgt1 Mgt2 Mgt3 Com1 Com2 Com3
M 2.24 2.76 2.17 3.03 2.85 3.12 3.36 2.50 3.03 2.63 3.11 2.83 3.58
SD 0.82 0.98 0.86 1.03 0.98 1.04 0.98 0.81 0.95 0.98 1.11 1.06 0.87
ML Estimate 0.56 0.66 0.56 0.89 0.54 0.73 0.83 0.59 0.54 0.65 0.90 0.98 0.43
T value 8.8* 8.5* 8.26* 9.09* 6.36* 9.48* 11.56* 9.52* 7.07* 8.51* 11.79* 14.32* 6.49*
Note. Goodness of fit 0.921; root mean square residual 0.04; 2 (55) 93.66, Bentler index .92. *p .001.
between any two constructs is significantly different from unity [64]. This can be tested by comparing two models, an unconstrained model where the correlation is free and a constrained model where the correlation is fixed to one. The difference in chi-square between these two models is also a chi-square variate with degrees of freedom equal to one [61, 65]. A significant chi-square difference implies that the unconstrained model is a better fit for the data, supporting the existence of discriminant validity between the two constructs [66]. Table 6 presents the results of pairwise testing of discriminant validity of the five constructs. Each construct is compared with every other construct, resulting in 10 unique comparisons. The results indicate that the chi-square difference is significant for all the comparison tests, thereby providing support for the discriminant validity of the constructs. The reliability of the constructs was assessed using Cronbachs alpha. The results in Table 7 indicate that four of the five variables have alpha values greater than the cutoff value of 0.7 suggested by Nunnally [67]. The value for cost is .64. The slightly lower value can be attributed to the fact that Cronbachs alpha tends to be lower for constructs with few items. Because Cronbachs alpha is based on the restricted assumption of equal importance of all indicators, researchers have used other measures of reliability such as composite reliability [68, 69]. Composite reliability considers the ratio of nonrandom variation associated with all measures of a subscale to total variation in all these measures. (Li)2 composite reliability (Li)2 + (1 Li2) Normally a value above .6 is considered acceptable [68]. The composite reliability for all our constructs were above .6, thereby indicating that our measures exhibit adequate reliability.

Table 6 Discriminant Validity Constrained Model Test Perceived usefulness with cost Perceived usefulness with compatibility Perceived usefulness with management support Perceived usefulness with competitive advantage Cost with compatibility Cost with management support Cost with competitive advantage Compatibility with management support Compatibility with competitive advantage Management support with competitive advantage Unconstrained Model
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2
28.46 34.5 49.32 72.97 11.93 35.35 35.81 35.20 55.30 42.10
df 5 5 9 9 2 5 5 5 5 9
2
4.57 0.91 18.72 13.49 1.84 13.51 4.99 8.4 3.31 9.69
df 4 4 8 8 1 4 4 4 4 8
Difference 23.89 33.5 30.6 59.48 10.09 21.84 30.82 26.8 51.99 32.41
p .001 .001 .001 .001 .001 .001 .001 .001 .001 .001
Table 7 Variable Statistics Variable Perceived usefulness Cost Compatibility Management support Competitive advantage M 2.388 3.171 3.212 2.731 2.918 SD 0.73 0.90 0.85 0.73 0.88 Reliability .71 .75 .78 .70 .64 Composite Reliability .62 .69 .75 .62 .83
6.
RESULTS AND DISCUSSION
Because the research model uses a dichotomous dependent variable and continuous independent variables, we decided to use a logit model to empirically validate the research model. Logit analysis is a preferred technique because it does not assume equal variancecovariance matrices across groups and multivariate normality of the variables [70]. Also, the output from the analysis is very similar to regression and is therefore easier to draw inferences. Logit uses a binomial probability function for the dichotomous dependent variable and estimates whether it is one way or the other using an odds ratio. Unlike regression, where we try to minimize the squared deviations, in logit we maximize the likelihood of a firm adopting the innovation. We can also assess the models predictive power using a classification table, which is very similar to a classification table in discriminant analysis. It determines the number of cases correctly and incorrectly classified using the logit model. The significance of the independent variables is assessed using the Wald statistic (similar to the t statistic in regression). The results of the logit analysis are shown in Table 8. The results indicate that the goodness of fit of the overall model is very good. The Cox and Snell R2 value is also sufficiently large, indicating that the overall model is significant. Among the independent variables top management support, size, competitive advantage, and compatibility are significant determinants of adoption of computer-mediated
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Table 8 Logistic Regression Resultsa
Variable Perceived usefulness Cost Compatibility Management support Competitive advantage Size
Regression Coefficient 0.0016 0.075 0.428 0.701 1.15 0.232
Standard Error 0.338 0.230 0.253 0.333 0.284 0.097
Wald Statistic 0.00 0.10 2.85 4.42 16.39 5.65
Significance .996 .743 .091 .035 .0001 .017
Classification Table Predicted Observed Adoption no Adoption yes Overall

aModel:
Adoption No 119 26
Adoption Yes 13 40
Percent Correct 90.15 60.61 80.30
2(8)
2(6) 97.13, p .0001, Cox and Snell R2 .388. Hosmer and Lemeshow goodness-of-fit: 6.745, p .564.
communication technologies. The classification table, a measure of predictive power of the model, shows that the predicted frequency is very good with an overall accuracy of 80.3%.
6.1
Discussion
The most significant variable was competitive advantage. Communication technologies, unlike other innovations, are interdependent innovations, which require a firms business partners to also adopt the innovation. The utility of the innovation increases as more people adopt it. For example, the utility of e-mail increases when one has more people to interact with using e-mail. Hence, there is some incentive for the early adopter to market the innovation among its trading partners to increase the value of the innovation they adopted. Very soon it becomes a strategic necessity to have the innovation in order to compete in the marketplace. Whereas large firms realized the potential of communication technologies some years ago, smaller firms are now realizing the strategic necessity of adopting these technologies to survive in their business. The electronic integration driven by supply chain and similar initiatives is making it imperative for even small firms to adopt these technologies to participate in the chain. For example, a small trucking firm with very limited need for computer-mediated communications support installed EDI to continue their business with a large shipper. Another important factor in this study, which is consistently found to be critical in IS implementation research, is top management support. In very small firms, the primary decision maker is the owner of the business, and his or her vision for the use of these technologies determines the level of support for adoption of the
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innovation. For example, we came across two large farming operations on two extreme ends of IS sophistication. One owner did not see any benefit from the technology, considered it as a nuisance, provided little support for IT, and therefore used it primarily for simple accounting. The other firm was totally automated with computers being used to measure the feed, the weight gain of herds, and sophisticated forecasting techniques to forecast the herd output on a daily basis. They had electronic links with their customers to receive orders electronically and used the Internet to monitor prices. The owner claimed that IT has helped them to be 10% to 20% more profitable than their competitors. The results indicate that size still plays an important role and larger firms in the small business category have a greater propensity to adopt communication technologies. In our study we had some really small firms who did not perceive much benefit from these technologies. Process compatibility was only marginally significant at the .09 level. The incompatibilities in terms of business processes can be a significant deterrent to adoption. Cost was not a major factor in determining adoption. Probably the low cost of hardware and software has reduced the impact of this variable. The price of hardware has been declining for many years, and in recent years the price of software has also declined considerably to make it very affordable. Further, the cost of establishing communication links through a service provider has also come down due to competition in the telecommunications industry. However, it should be noted that firms still face many hidden costs, as in the case of EDI, where costs increase significantly if EDI has to be integrated with other internal IS applications. It was surprising that perceived usefulness was not a significant factor in predicting adoption. Most prior studies on IS implementation had found it to be significant. One possible explanation for the lack of significance is the overwhelming influence of the competitive advantage variable. Some small firms are adopting communications technologies because it has become a strategic necessity for surviving in the business rather than because they perceive any direct benefit from using the technology. We can argue that the technology required to survive in the business is in itself a key market benefit of adoption. An examination of the mean values of these variables in the two categories indicates that it is higher in the adopter category. Although stories in the trade press and studies on IOS have found these variables to be critical, we have not seen any study specifically in the small business sector.
6.2
Future Research Directions
The review of prior research identified many new factors that need to be studied. In the environmental domain researchers can examine the impact of power of trading partners and economic dependence on them on adoption of IT. The growth in supply chain management and IOS that tightly integrate a small firms operations with a larger suppliercustomer makes this a critical variable influencing adoption and diffusion of IT. Another interesting variable in the environmental domain is the external support for adopting these technologies. Whereas studies in 1980s indicated that vendor support was not related to IS use or satisfaction, more recent
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studies [44, 55] indicated that external support is a significant variable. The shortage of IT personnel in the marketplace and the popularity of outsourcing are prompting many small firms to outsource their IS operations. We need to empirically examine whether this is a significant factor. Literature on outsourcing in large firms has been inconclusive on the benefits of outsourcing [71]. Future studies could examine outsourcing in the context of small businesses. It is surprising that some of the innovation factors were not significant in this study. More research has to be conducted because these results are inconsistent with some of the traditional IS research. One major reason for the lack of significance may be due to our focus on communication technologies. Small businesses, being more reactive, are forced to adopt these technologies by the early adopters, who may be bigger and have greater power. Therefore, traditional notions of evaluating the benefits of these technologies and their compatibility with existing systems may not be relevant in these contexts. The review identified many research opportunities in the individual and task domains. Future studies could examine the impact of many of these factors in the context of both individual- and organizational-level IS implementation. This study examined only the adoption stage. Future studies could examine the diffusion of these technologies within the organization. Given that the impetus for adoption was from outside, it would be interesting to examine whether these technologies diffuse into newer applications. Studies on EDI adoption have found that many small firms use a PC just as a window or a post box to link with their trading partners without integrating the data in their internal applications. However, we have also noticed that the increasing demand and sophistication of these IOS makes it necessary for small firms to integrate the IOS data in their internal applications. The order data has to be linked up with the invoice and payment data for these IOS systems to integrate the order-processing cycle across two partners.
7.
CONCLUSION
One of the primary objectives of this study was to review the research literature on IS adoption and implementation in small business, examine the commonalities and differences with the traditional IS literature, and identify research gaps in the small business area. A research framework, adapted from an organizational model, was used to identify five major domains that influence IT adoption and use in organizations. The research on IS implementation was reviewed and the studies mapped to the research framework. A similar analysis was conducted for studies in the small business sector. A comparison of the studies in the two areas revealed the gaps in small business research and potential opportunities for future research. Most studies focused on factors having an impact on system usage or satisfaction. Very few studies examined the adoption of IT in small businesses and many factors in the technology domain were not studied. A research model was developed to explore the factors influencing the adoption of computer-mediated communication technologies in small business. It incorporated some of the innovation factors that were identified as potential gaps in our earlier analysis. The research model evaluated the impact of six factorsperceived
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usefulness, cost, compatibility, top management support, competitive advantage, and sizeon the adoption of computer-mediated communications technologies. The variables were measured using multi-item indicators and the data were collected using a large-scale field study. A telephone interview was used to collect data from 207 firms on various aspects of their organization, their use of communications technologies, and the factors influencing their adoption of these technologies. The results of statistical analysis of the data reveal that competitive advantage, top management support, and size were important determinants of adoption of communication technologies.
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APPENDIX: Measurement Items All scales are 7 point Likert-type scales ranging from strongly agree to strongly disagree. Perceived usefulness: These information technologies allow us to better communicate with our customers and suppliers. These information technologies help us cut costs in our operations. These information technologies provide timely information for decision making. Cost: The cost of adopting these technologies is far greater than the benefits. Amount of money and time invested in training employees in these technologies is very high. Compatibility: Integrating these technologies into our current procedures would be very difficult.
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Implementing changes due to the new technologies is not compatible with our firms values. Management: Management enthusiastically supports the adoption of these technologies. Management has allocated enough resources for adoption of these technologies. Management actively encourages employees to use the new technologies in their daily tasks. Competitive advantage: We will lose customers to our competitors if we do not adopt these new technologies. It is a strategic necessity to use these information technologies to compete in the marketplace. Our customers require the use of these technologies for doing business with them.

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This article was downloaded by: [b-on: Biblioteca do conhecimento online ISCTE] On: 18 July 2012, At: 09:05

Journal of Organizational Computing and Electronic Commerce

A Meta-Analysis of Research on Information Technology Implementation in Small Business

JOURNAL OF ORGANIZATIONAL COMPUTING AND ELECTRONIC COMMERCE 13(2), 91121 (2003)

A Meta-Analysis of Research on Information Technology Implementation in Small Business

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INFORMATION TECHNOLOGY IN SMALL BUSINESS

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Figure 1. Research framework.

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Vertical interaction and climate Supplier incentives

Organization Top management support

[39, 73, 21, 40, 24]

[30, 74, 26]

[75, 27] [76, 28] [30, 29] [30, 29]

[32, 77, 58] [32, 77, 58] [33, 23]

Personal control over tasks Level of structure to task

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[40] [40] [40, 45] [40] [43, 20] [43, 20]

INFORMATION TECHNOLOGY IN SMALL BUSINESS

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RESEARCH ON IT IMPLEMENTATION IN SMALL BUSINESS

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Harrison et al. (1997) Thong et al. (1996)

Intention to adopt User satisfaction, organizational impact, overall IS effectiveness

Palvia et al. (1994)

Usageyes/no, amount of use (hr/day), number of software systems used

Cragg and King (1993) Case study

System usage Satisfaction

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Use (time and frequency), impact (success score importance score)

INFORMATION TECHNOLOGY IN SMALL BUSINESS

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INFORMATION TECHNOLOGY IN SMALL BUSINESS

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INFORMATION TECHNOLOGY IN SMALL BUSINESS

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Computer-Mediated Communication Technologies

INFORMATION TECHNOLOGY IN SMALL BUSINESS

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INFORMATION TECHNOLOGY IN SMALL BUSINESS

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Validity and Reliability

10.0 31.0 26.0 16.0 11.0 6.0 45.4 40.0 14.6

INFORMATION TECHNOLOGY IN SMALL BUSINESS

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Cst2 Co1 Co2 Mgt1 Mgt2 Mgt3 com1 com2

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INFORMATION TECHNOLOGY IN SMALL BUSINESS

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RESULTS AND DISCUSSION

Regression Coefficient 0.0016 0.075 0.428 0.701 1.15 0.232

Standard Error 0.338 0.230 0.253 0.333 0.284 0.097

Wald Statistic 0.00 0.10 2.85 4.42 16.39 5.65

Significance .996 .743 .091 .035 .0001 .017

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Classification Table Predicted Observed Adoption no Adoption yes Overall