Inderscience Publishers

Small firm transformation through IS

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Courtesy of Inderscience Publishers

Globally, Small and Medium-sized Enterprises (SMEs) are encouraged, particularly by governments, to embrace e-business. Fully adopting e-business involves substantial change in firms, both internally and externally. However, there is little understanding of the mechanisms by which such business transformation occurs. While there are no tested e-business transformation models, existing Information System (IS) transformation models suggest a single, dominant path. Venkatraman's (1994) business transformation model provides a means of determining IS development that has been validated in large firms. There is little research into its applicability to SMEs, but the exploratory research in multiple SME cases reported here reveals three business transformation paths, termed prescribed, disconnected and disjointed. The research demonstrates why some SMEs ossify at certain stages of transformation and how disconnected progression may preclude SMEs from gaining the benefits of process redesign and scope redefinition. The implications of the transformation paths for e-business, for the model and for SMEs are discussed.

Keywords: business transformation, e-business, small and medium-sized enterprises, SMEs, electronic business, information systems, disconnected progression, process redesign, scope redefinition, transformation paths

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