Friday, April 16, 2010

Small firms and information Technologies (II)

The theory of representation might be considered as a restriction for the implementation of new technologies, as long as it cares mainly with the enforcement of every employee contract. Besides, it might also rules out the implementation of the planning process, a basic requirement for information technology to be useful, as long as the contract does not allow any new task other than the one already set in.
However, the real issue with this approach, deals with the handling of risk. In fact, contracts reduce the propensity to risky behaviour of managers, the same way it reduces the necessity of planning. Given that new information technologies by definition, are friendly with risk behaviour,(more information imply better risk control), those contracts will allow only the risk which the firm can pay for ,restricting the potential of information technology to be fully implemented .A different matter is the profit maximization process , in this case subject to a different constraint, which is a set of contracts to enforce, aside from the financial resources available, make in this view ,the maximization process a more limited target.-
Back to the study of these Greeks economist , they classified the IT within the following categories: Enterprise system(ERP,CRM,SCM),Information system (TPS,MIS,DSS,ESS), Digital technologies(E–Business, E-Commerce), telecommunications net works (Wired, wireless).-
Some finding concerning information systems indicates that small firms prefer MIS(Management Information System) ,rather than DSS (Decision Support System), which is used by 34,8% of all small firms ,whereas 50% of small and 77,8 % of medium firms prefers MIS. The enterprise resource planning(ERP) system, is used by 59,1% of small firms ,and 88,9% of medium size firms. This applications, is consistent with the representation theory, as long as it deals with a better picture of human resources performance, inventory levels and information needs ,both at the horizontal and vertical levels.-
The customer relationship management (CRM), is applied at a rate of 45,5% by the small firms, and 55,6% by the medium size firms. These percentages are low for the standard of any firms customer - led management approach , but they reflect the focus of many small firms , mainly the short run and daily needs of cash flow.
On the other side, the Supply chain management(SCM), is used by a very low percentage of firms.28,6% of small firms, and 28,6% of medium size firms.
The overall picture indicates that SCM is used by 32,3% , while CRM is used by 42,6%, and ERP is used by 44,4% of small firms. No matter this percentages, the implementation of ICT, is not too much linked to firm size, but more to the functions and goals each firms might set for these instrument . However, the bigger the size of firms, the better the chance of implementing these technologies, taking full advantage of their potential. In such a case ,the determinant factor for success , will be to have a proper ICT strategy, coupled with the right market focus.
In Greece, small firms, do not have a clear policy concerning implementation of new information technology. Whether this is a global characteristic of small firms, it is a worrisome situation , given the fact that most of the globalization dynamics lay down on the ability of small firms to adapt to new market conditions at a global scale. If they do not have a more aggressive stand on this new technologies, it might be more difficult for them to consolidate new markets opportunities.