The Information Technology Adoption Process within Indonesian Small and Medium Enterprises

Sarosa, Samiaji (2007) The Information Technology Adoption Process within Indonesian Small and Medium Enterprises. Phd thesis, UAJY.

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Abstract

This thesis examines the adoption process of Information Technology (IT)-based solutions within small and medium enterprises (SMEs) in Indonesia, in the furniture and handicraft industries. As the Indonesian SMEs grew in size, they faced new problems in managing their businesses. They have tried to use IT to support their business and resolve some of these problems. Yet in their efforts to adopt IT, they often faced new problems by introducing new technology into the organisation. The thesis examines the experiences of 35 Indonesian SMEs when they adopted IT. We investigated what factors were influencing IT adoption; the process of IT adoption which covers decision making, implementation or deployment and evaluation; and how SMEs cope with and recover from failure. The participants’ experiences were compared to what has been reported in the existing literature. Analysis of the relevant research literature revealed some unexplored issues concerning IT adoption within SMEs. Most of the published research has been conducted in developed countries, with little in developing or less developed countries. From those few, only one was conducted in Indonesia and it was about IT diffusion. The focus of previous studies was mainly to explore factors influencing IT adoption and they mostly utilised survey techniques to elicit the factors. The scant literature suggests that exploring IT adoption can be approached from three different perspectives: individualist, structuralist, and interactive process. This thesis uses the interactive process approach to explore how well those factors that have been well documented in the literature actually work in Indonesian SMEs’ IT adoption. As a result of our exploration, we formulated a model of an interactive process view of IT adoption within Indonesian SMEs. A qualitative approach was used to answer research questions and explore the participants’ experiences in depth. In this thesis, we used in-depth interviews to explore participants’ experiences. These interviews enabled us to draw out not only IT adoption processes but also successes and failures in IT adoption. Semi-structured interviews were used as the data collection tool. They provided guidance so the interviews stayed well within the focus of the thesis, yet provided room to explore new and relevant issues that emerged during the interview process. Content analysis of the interview transcripts was used to extract answers given during the semi-structured interviews and to identify new themes that emerged from the data. The analysis resulted in important findings. First, it confirms some factors found in the literature as actually influencing IT adoption in Indonesian SMEs. Despite some similarities, we found some differences such as government role and competitors’ influence on IT adoption. The other findings are concerned with the failures faced by some of the participants. We then explore the differences between failed and successful participants, and how Indonesian SMEs cope with and recover from failed IT deployment. Finally, we revised the initial model of the interactive process of IT adoption. The extended model captures new insights into success and failure of IT adoption, and could provide a better understanding of IT adoption within Indonesian SMEs. The interaction between different factors in the IT adoption shows how those factors influence each other and how different stakeholders could manage their own interests related to IT adoption. The improved model could be used to guide Indonesian SME managers to manage their adoption of IT more effectively.

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