Computerizing Small Business Information Systems

Abstract

COMPUTERIZING SMALL BUSINESS INFORMATION SYSTEMS The computer advertisements and text in some of the popular business magazines can seem like a wish list' for managers. Desktop micros, local area networks, and sophisticated data bases seem to offer unlimited promise to the harried managers of smaller organizations, who have no shortage of advice from which to choose on how to select and install the appropriate equipment.1 1 Myron Karasnik, Selecting a Business Computer,' Harvard Business Review (Jan.-Feb. 1984), pp. 26-30; M. A. Mahood, Choosing Computer Services for Businesses,' Journal of Systems Management (July 1982), pp. 22-24; James Martin and Carma McClure, Buying Software Off the Rack,' Harvard Business Review (Nov.-Dec. 1983), pp. 32-54; and L. W. Petro, Minicomputer Systems for Business,' Journal of Business Management (July 1983), pp. 1-6. There is little doubt that recent advances in hardware and software, along with declining prices, can have a beneficial effect on the smaller firm. Technology that a few years ago was within reach of only larger companies can now be employed by many of the smallest, thereby increasing their competitive advantage. Of course, non-computerized information systems may be just as advantageous for some firms.2 2 J. M. Garris and E. E. Burch, Small Business and Computer Panic,' Journal of Business Management (September 1981), pp. 19-24. Some of the factors related to the purchase and use of computer-based information systems in the smaller company are presented in this article. The perceived effects of the information system on the organization are also discussed. Data for the article were gathered by means of in-depth interviews with owner/managers of ten retail building supply firms. Because the survey covered only a small number of firms in one segment of a particular industry, the results obviously do not provide a reliable measure of factors affecting the use of computerized information systems in that industry or small business generally. No such interpretation is intended here. Nevertheless, it is believed that the experiences of these small-company executives may be instructive for others who, like them, are making a decision about computerization of information systems for the first time. BACKGROUND In an article about organizational context and MIS success, Ein-Dor and Segev expressed a lack of optimism regarding the success of MIS in smaller organizations, as compared to larger ones. Their reservations centered on the lack of resources, lack of formalized systems, and shorter management time frames of the smaller firms.3 3 Phillip Ein-Dor and Eli Segev, Organizational Context and the Success of MIS,' Management Science (June 1978), pp. 1064-77. While this view may have had some validity five years ago, the factors cited may be less important today. First, the dramatic decreases in cost for both computing equipment and packaged software have made much of this technology available to the smallest mom and pop' firms. No longer does the hardware represent an overwhelming fixed cost, and good programming advice is available across the counter in the computer store--one need not hire consultants or maintain a computer expert on the payroll.4 4 Martin and McClure, Buying Software.' Second, many smaller firms have adopted more formal systems which make the conversion to a computer-based system less trumatic. It is possible, too, that those firms whose systems are least formal may benefit the most from the organization and discipline that computer-based information systems require. Third, Ein-Dor and Segev argued that the lack of formalization and resources can lead to time lags which imperil MIS success, but smaller firms often have the ability to implement decisions more quickly than do their larger counterparts. …