The enigma of evaluation: benefits, costs and risks of IT in Australian small–medium-sized enterprises

Abstract

The evaluation of information technology (IT) is fraught with misconception and there is a lack of understanding of appropriate IT evaluation methods and techniques. The benefits, costs and risks of IT need to be identified, managed, and controlled if businesses are to derive value from their investments. This paper presents findings from an exploratory study that used a questionnaire survey to determine the benefits, costs and risks of IT investments from 130 small-to-medium-sized enterprises (SMEs) in Australia. The analysis revealed that organizations from different industry sectors significantly differ in the amount they invest in IT but that firm size (in terms of turnover and number of employees) does not influence IT investment levels. Second, strategic benefits vary across different industry sectors. Third, the way employees adapt to change as a result of IT implementation depends on the size of the organization. Based upon the findings, a series of benchmark metrics for benefits, costs, and risks of IT are presented. It is posited that these can serve as a reference point for initiating a quality evaluation cycle in which benchmarking forms an integral component of the strategic process. #

Electronic Government Procurement Adoption Behavior amongst Malaysian SMEs

“…This positive and significant correlation value shows that there is a positive and significant relationship between trust on information technology and e-procurement adoption amongst SME. This finding is parallel to the research conducted by Chan and Lee (2003) who had respectively verified that trust on the technology is a significant factor that affects the intention to adopt e-procurement, as well as Love et al (2004) which claimed that security is the number one risk factor associated with IT investments for SME, Chang and Wong (2010) who stated that trust was the fundamental element that affected firms' willingness to participate and Islamy (2002) who claimed that there is a need to ensure that users online privacy is protected, both legally and technologically as this assurance will make them feel comfortable to surf the internet and more importantly to submit their data and spend their money online.…”

“…If they used electronic means to accomplish procurement, they have to suffer the possible risk of, for example, confidential information being eavesdropped on the network (Friedman B. et al, 2000). On the other hand, Love et al (2004) stated that security is the number one risk factor associated with IT investments for Australian SME. In a similar study,, according to Islamy (2002) there is a need to ensure that users online privacy is protected, both legally and technologically as this assurance will make them feel comfortable to surf the internet and more importantly to submit their data and spend their money online.…”

Financial constraints and the failure of innovation projects

“…Hence, small firms may show a larger propensity to fail innovation projects because they do not have access to these tools and, consequently, they have less capacity to screen those projects. For instance Love et al (2005) point out for the case of the IT projects that "the lack of risk identification and management is a major contributing factor to project failureespecially for SMEs "frequently suffer from limited IT competencies and poor understanding of IT capabilities and the risks involved. Finally, the higher failure propensity of small firms may be explained by the lower capacity of small and young firms to appropriate the investment in innovation projects.…”

Estimating the Benefits and Risks of Implementing E-Procurement

“…Most importantly, the benefits, costs, and risks of IT implementation need to be identified, managed, and controlled if businesses are to derive value from their investments [18]. Despite the greater attention paid to the P2P, most companies are still unsure of the benefits and the ways to measure the value of the informatization of procurement, and which factors affect this value [19].…”