Educational Technology & Society 6 (1) 2003
ISSN 1436-4522

Small company attitude towards ICT based solutions: some key-elements to improve it

Giovanni Fulantelli and Mario Allegra
Institute for Educational Technologies
Italian National Research Council
Palermo, Italy
fulantelli@itd.cnr.it
allegra@itd.cnr.it

 

ABSTRACT

In this paper we illustrate some research results concerning the attitude of small companies towards ICT based solutions (specifically Distance Communication, Training and Consultancy); in addition, we introduce some key-elements to overtake theobstacles to introducing ICT in small companies for new business processes; amongst others, we highlight the need for training about technological innovation as well as about organizational and cultural changes that must occur within a company. The concepts illustrated in this paper are the results of the research activities undertaken in two EU funded projects.

Keywords: ICT, SME, Distance training and consultancy


Introduction

Information and Communication Technologies (ICT) offer enterprises a wide range of possibilities for improving their competitiveness: they provide mechanisms for getting access to new market opportunities and specialized information services such as distance consulting, continuous training, new advisory modes, etc.; organizations can exchange real-time information and build closer relationships with their customers, suppliers and business partners; immediate customer feedback allows companies to react fast to changing customer demands and recognizing new market niches. This means that organizations that are able to exploit the potentials offered by ICT can handle innovative processes, such as Supply Chain Management, Customer Relationship Management, Knowledge Management, more effectively.

However, if we analyze the present situation of the introduction and use of information technologies in enterprises, and in particular in Small and Medium sized Enterprises in Italy, we can see that in a lot of cases they are used only for basic functionalities, and not to improve internal and external communication, or to activate new information services. In particular, concerning the use of computers and the Internet in SMEs, statistics for 2001 (Eurostat, 2002) reported that 86.4% of firms in Italy use information technologies; of these, 84% are connected to the Internet, mainly by means of ISDN. Of course, we have to distinguish among the different uses of Internet, in relation to the size and the activity of the enterprise. While the percentage of enterprises with their own web site is about 40.1% of computerized enterprises (Eurostat, 2002), we have to emphasize that the web site is mainly used to describe the firm and the products/activities and it is rarely used to manage the relationships with customers; in fact, only one in twenty sites also offers the opportunity of interacting and communicating with the enterprise. According to these statistics it emerges that, up to now, the Internet has been little used by Italian enterprises to activate innovative processes of management. Another important factor influencing the use ICT is the size of the enterprise; in fact, statistics show that in enterprises with more than 200 employees an effective use of information and communication tools is more frequent (Assintel , 2001).

The concepts illustrated in this paper are the results of the research activities we undertook in two EU funded projects. Many results come from an investigation we carried out within the framework of a transnational European network named Neeps (New Eco Enterprises, Products and Services); the network included 9 organizations from 5 European countries (Italy, Germany, Great Britain, Denmark, Spain), and was established within the context of the European ADAPT initiative (European Commission , 1997). Each organization was in turn a consortium of partners at a national level, and was responsible for an ADAPT funded project. In total, 20 public and private organizations joined the Neeps network. Our Institute was part of an Italian consortium that submitted a project, named SOLARE (Support On-Line to Regional Enterprises).

The SOLARE project itself is presented in this paper, since many considerations concerning the attitude of SMEs towards ICT-based solutions arose during the activities related to this project.

Further insights come from a pilot project we carried out, aimed at analyzing the communication, social and technological obstacles to the implementation of effective Supply Chain Management strategies in SMEs. The study was carried out within the framework of a EU funded project named “Supply Chain Partnership”.

 

Insights from a European framework

The Neeps network involved a diverse range of professionals: human resource development consultants, vocational training agents, research and educational institutions. Some of the partners had experiences of introducing and using ICT in SMEs, and established, in the context of the Neeps partnership, a Focus Group aimed at investigating the perceived advantages and disadvantages of using ICT in SMEs, as well as the barriers to entrepreneurs/managers/workers utilizing these technologies. With this aim, the Focus Group conducted an international survey among the SMEs involved in the national ADAPT projects through a three-page questionnaire to collect necessary data, containing 18 Likert-scale statements.

As far as the perceived benefits are concerned, the improvement of information flow and communication both inside the enterprise and towards the external world is considered a benefit by almost all of the respondents. High consideration has also been given to the creation of competitive advantage provided by ICT, to the reduction of time and space constraints and to the improvement of services to existing customers and suppliers. There were positive responses, though with less enthusiasm than to the previous issues, about the growth of external prestige in the market, the increase in profitability and the reduction of existing core costs. Finally, the increment of motivation and/or satisfaction for employees is perceived as a benefit by 42% of interviewed people, 47% are not able to answer and 11% do not consider it as a real benefit.

The second main goal of the survey was to assess the importance of some issues perceived as obstacles to using ICT in SMEs. Surprisingly, the results suggest that some of the barriers expected by the research team were not perceived as real difficulties by most respondents. In fact, internal corporate problems (e.g. board/staff/union resistance to issues) are not considered a real barrier by most of the interviewed people; similar conclusions can be drawn about fears of ongoing changes and of bad investment; however, the people interviewed have expressed a more decisive opinion on the first issue then on the second one. On the other hand, the lack of initial capital and staff support for implementation and the lack of availability of training services and products (concerning both the technology and its application for enterprises) have been indicated as the main barriers. The first issue indeed indicates two different problems: lack of money coupled with staff support for implementation; however, by considering the second issue, the most important barrier seems to be the lack of training courses and support to use ICT solutions in SMEs. This is confirmed by other answers (Fulantelli, Allegra 2001) that show that the lack of information and advice on relevant ICT solutions and benefits is still considered a major problem.

 

Technologies for cooperation: the Supply Chain Partnership project

The main objective of the Supply Chain Partnership project was to analyze the communication, social and technological obstacles to the implementation of effective Supply Chain Management (SCM) strategies in SMEs (Beamon, 1998). Specifically, the project investigated whether these obstacles depend mainly on the limited use of the potentials of ICT in SMEs, or if there are further and even more important elements that can seriously hinder the implementation of SCM.

The project involved partners from three European countries: Germany, Great Britain and Italy. A common research methodology was agreed between all the partners: small samples of companies from two different industrial branches were selected in each country; through national workshops with the SMEs, each partner gathered information on the SCM strategies adopted in the selected industrial branches, in order to identify the main obstacles to the application of effective SCM strategies. Afterwards, three one-day training sessions were organized in the SMEs in order to overtake some of the obstacles identified in the workshops; a final national workshop was organized to assess the organizational changes (if any) in the companies related to the training sessions. Transnational meetings among the European partners were scheduled in-between the national workshops in order to compare the different European realities as well as to agree on the common methodological approach to the problem.

In this paper, we focus on the results from the Italian situation, and specifically from two industrial districts located in Sicily that are highly representative of the industry in the southern part of Italy: the marble industry and the clothing industry. It should be said that common conclusions have been reached in Germany and, to some extent, in the UK.

The project has shown different problems; firstly, micro-enterprises (enterprises having fewer than 10 employees, according to the Commission Recommendation of 3 April 1996 concerning the definition of small and medium-sized enterprises) and SMEs do not have full awareness about the potentials of the new technologies, even if the project has shown a very positive trend towards better results: for example, several entrepreneurs are aware that ICT can provide a powerful means for reducing the geographical distance between Sicily and the most industrialized part of the country and that can be extremely useful for fostering the development of SCM strategies. Moreover, in the industrial district that we have analyzed there are several approaches to the use of ICT and, of course, this is related to the different kinds of activities: in the clothing industries there is awareness that ICT, and in particular B2B solutions, can improve the effectiveness of communication with suppliers, improving in general the supply chain and their production. This positive attitude is greatly weakened by the fact that ICT-based solutions are still viewed with suspicion: financial transactions, electronic payments and privacy are perceived as the main obstacles to the diffusion of ICT solutions in SMEs.

Another major obstacle is that SMEs undergo serious problems in introducing ICT into their organization processes: micro-enterprises and SMEs suffer from ICT skill-shortage problems and do not have the capabilities to perform the organizational changes that are necessary to activate ICT-based processes.

The shift of the focus on the problems towards social factors rather than technological ones has become increasingly clear during the project: a systematic use of ICT for business is a direct consequence of trust and cooperation between SMEs. A common European outcome of the project has been that cooperation between SMEs in general seems to be a serious problem: cooperation is extremely limited, and usually it is aimed at defining marketing consortia;actually, the cooperation at production level is still restricted to a very small number of enterprises. The lack of trust in other SMEs’ capabilities is a serious obstacle to cooperation and, therefore, to the adoption of ICT- based solutions; the social factors underpinning the relational and communication interfaces between SMEs are the main obstacle to the boosting of SCM strategies: a systematic use of ICT for business is a direct consequence of trustiness and cooperation between SMEs ((Fulantelli, Allegra, Vitrano 2001).

 

Technologies for distance training and consultancy: the SOLARE project

In the SOLARE project we have developed an experience of Distance Consulting, an ICT-based approach to consultancy, which systematically provides companies with information, communication and training services in an effective way. The main objective of the SOLARE project was allowing a group of SMEs located in the inland areas of Sicily (Italy) to benefit from consulting services through an innovative on-line cooperative environment. Twenty enterprises were connected, through the Internet to a consulting center, to research and academic institutes, thus establishing the SOLARE laboratory. It is important to highlight that the involved enterprises were mainly family companies, not placed in any industrial district, working on traditional economic sectors and, finally, their use of ICT was restricted to PC’s for accounting and administration purposes. The ICT-based consulting approach in the SOLARE project has proved effective for the SMEs as well as for the consulting center. Most of the benefits are an immediate consequence of more general advantages from using ICT for information exchange and communication purposes. Firstly, the communication facilities activated in the SOLARE laboratory have dramatically reduced the need for face-to-face meetings and seminars and, at the same time, improved the communication mechanisms as a whole; as a consequence, entrepreneurs, company managers and consultants have cut down travel costs, keeping in touch with each other in a continuous way. In particular, through the asynchronous communication facilities in the SOLARE project, it was possible to schedule distance-consulting activities in a very flexible way. A second important benefit of the SOLARE approach has been the possibility of providing consulting services in a continuous way: the set-up of Web-based informative areas has guaranteed that the consulting process keeps on also at the end of the face-to-face meetings, especially to support companies in putting into practice the concepts acquired at the meetings. In addition, thanks to the possibility of publishing information on-line, in an economic way, the consulting activity can be tailored to the need of a single enterprise or of a sector of enterprises much better than in traditional settings; in addition, ICT-based communication tools have been associated to each area, in such a way to provide SMEs with a direct communication channel with the consulting center on each specific topic.

A side effect from using ICT to provide Distance Consulting services has been that the involved SMEs have developed awareness of e-commerce solutions as well as of the need to move towards a full integration into the emerging digital economy.

Finally, it should be noted that effectiveness of the overall consulting process has been guaranteed by the availability of several technological solutions, according to the implementation of different consultancy models (Fulantelli, Allegra, Chiazzese 2000).

Concerning the obstacles to using ICT, it should be said that it was not easy to reach the objectives of the project, because SMEs, at the beginning of the project, were not used to considering the computer as a communication medium and they did not know its potentialities for the interaction inside and outside the enterprise. This factor implied that the initial motivation in the experiment of ICT for consulting services was low, even though the participation to the project was free and the involved enterprises had already used the services of the consultancy center in traditional ways; the solution for this problem has been the definition of training/consulting paths starting from the specific needs of the involved enterprises, avoiding to develop generic or theoretic, even though interesting, consulting materials, and organizing them according to a practical view.

 

Conclusions: key elements to improve small companies awareness of ICT potentialities.

According to the direct experiences reported in this paper, some key-elements to foster the introduction of ICT-based solutions in small companies have been highlighted.

Developing a full awareness of the huge potentials of ICT is the starting point for every attempt to introduce ICT-based processes in a company. Forcing the introduction of technology is one of the main reasons behind the failure of several attempts of the SMEs to become e-business organizations or simply to use ICT effectively for new services. The path to full awareness should move from introducing concrete and short-term benefits for the companies, followed by the presentation of more general and long-term advantages. Furthermore, by bearing in mind that the introduction of ICT in SMEs can bring a real modification in the way of working, the introduction of ICT-based processes should take into account the specific culture of the company: the background of the entrepreneur and/or the managers is important as well as their openness to innovation; we learned an important lesson about this in the SCP project, where the attempts to introduce ICT in the companies to improve communication with other companies failed because of a really weak social and cultural attitude to cooperation between companies.

Another important aspect is that ICT-based solutions should be introduced gradually: sudden transformations risk to fail against unaware and unready business organizations.

A further fundamental element concerns adequate training and support. It is useful to stress that one of the main difficulty for SMEs in exploiting ICT potentials is the lack of awareness of the benefits to be derived coupled with little or no specific training on ICT (both at application and methodological levels). The smaller the enterprise, the greater this problem becomes, since most small companies are not using information technology for their activities (apart from specific accounting services, and little more). Consequently, several problems must be solved to make ICT simpler to use, reliable and well integrated in the enterprises activities.

The adoption of continuous training solutions can play an important role in increasing the awareness of the huge potentialities of ICT for concrete situations; in this way employees, managers, entrepreneurs, can acquire a learning culture, integrating the training in their work activities and understanding in depth the potentialities of communication and information tools. In our experience a key factor to success was that the provider and organizer of training was a consultancy company, which knew the informative/training/updating needs of the companies, so finding, organizing and proposing just enough learning, to be very motivating and well integrated with other activities.

To conclude, the proposed key-elements to bring ICT in a small company are based on the central idea that the introduction of ICT-based solutions should be coupled with continuous training on both technological aspects as well as on the socio-relational and cultural changes that must occur inside the company. The need for training on technological aspects is a direct consequence of the ICT skill shortage problem; training on the socio-relational and cultural aspects is extremely important to develop awareness of the social implications of the introduction of new tools and methods of work and to perform the necessary organizational changes.

 

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