ICT for SME’s

1. ICT for SME’s Survey and Results Bjarte Ravndal

2. The research part of ICT for SME’s • We have measured Information Orientation (IO): “The capabilities of a company to effectively manage and use Information and IT” • Eight regions with a total of 552 companies are included in the survey • Question 1: How can ICT be used in SME’s to enhance business performance? • Question 2: Can IO be used as an ICT for SME’s Benchmark? • Question 3: If IO enhance business performance, how can we improve ICT capabilities in SME’s through improved IO? Bjarte Ravndal

3. ITP IO IMP Information Orientation IBV IT Practices Information Orientation (IO) Measures the capabilities of a company to effectively manage and use information Information Orientation InformationManagement Practices Information Behaviors and Values Bjarte Ravndal

4. Information Orientation is a predictor of business performance  Business Performance (BP) Business Performance refers to a company’s business development in terms of market share, financial performance, product and service innovation, and superior company reputation. Information Orientation (IO) Information Behaviors and Values (IBV) Information Management Practices (IMP) Information Technology Practices (ITP) Information Capabilities Bjarte Ravndal

5. ITP IO IMP IBV The capability of a company to deploy appropriate IT applications and infrastructure in support of operational, decision-making, and communication processes. IT Practices IT to facilitate decision-making, and analysis of market conditions IT to facilitate development and introduction of new products and services IT to facilitate management of business processes in and between companies IT to control business operations and improve business performance Bjarte Ravndal

6. ITP IO IMP IBV The capability of a company to manage information effectively over its life cycle. Information Management Practices How information about factors that can influence the business is detected and identified How information is processed into knowledge before decisions are made How information is reused and updated to remain current How information is indexed and classified How information is gathered Bjarte Ravndal

7. ITP The capability of a company to instill and promote behaviors and values in its people for effective use of information. IO IMP Information Behaviors and Values IBV The degree to which people seek and respond to information about changes in the environment The degree to which people share both sensitive and non-sensitive information The degree to which people trust each other enough to talk about failures, errors and mistakes The degree to which people disclose information about business performance The degree to to which people use and trust formal sources of information The degree to which people do not manipulate information for personal gain Bjarte Ravndal

8. The IO maturity model: Cross-capability linkages ITP IBV IT Management Support Proactiveness Sensing Processing IMP Sharing IO Maturity IT Innovation Support Maintaining Transparency Collecting Organizing Control IT Business Process Support Formality IT Operational Support Integrity (Marchand et al 2001)

9. Theoretical Spiral of Effective Information Use in Companies Under-developedinformation-related discipline Formalized information-related disciplines Good IT practices Goodinformation behaviors and values Good information management practices Effective information use is based on a spiral whereby good information usage behaviours and values drives good information management, which improves the capability to use IT to support decision making and problem solving, which in turn reinforces good information usage behaviours / values and information management.

10. The ‘SME’ results • There is substantial variation in ITP and IMP, and with good spread (high St.Deviation) • Less variation and lower spread in IBV, and • The Danish companies score higher on all categories • To use the material to help individual companies (consultancy,,), we have to go behind averages • However, the purpose in this presentation is to investigate the structures in the ‘SME’ IO Bjarte Ravndal

11. 1.45 1.25 IT Practices 1.18 1.46 0.83 1.37 1.46 1.33 Bjarte Ravndal

12. Information Management Practices 1.25 1.14 1.08 1.25 1.15 1.12 1.01 1.05 Bjarte Ravndal

13. Information Behaviours and Values 0.95 1.01 1.02 1.13 0,87 0,86 0,95 0,74 Bjarte Ravndal

14. Information Orientation 1.10 0.97 0.99 1.13 0.68 0.99 0.98 0.87 Bjarte Ravndal

15. Bjarte Ravndal

16. Descriptive statistics Bjarte Ravndal

17. ITP, and IMP Correlations Bjarte Ravndal

18. IBV and IO Correlations Bjarte Ravndal

19. A regression model of the IO dimensions Bjarte Ravndal

20. The ‘SME’ ITP maturity model ITP IBV IT Management Support Proactiveness Sensing Processing IMP IO Maturity IT Innovation Support IT Business Process Support IT Operational Support (ICT for SME’s)

21. The ‘SME’ IMP maturity model ITP IBV IT Management Support Proactiveness Sensing Processing IMP IO Maturity Maintaining Transparency Collecting Organizing Control (ICT for SME’s)

22. The ‘SME’ IBV maturity model ITP IBV IT Management Support Proactiveness Sensing Processing IMP Sharing IO Maturity Maintaining Transparency Collecting Control Formality Integrity (ICT for SME’s)

23. The ‘SME’ IO maturity model is different ITP IBV IT Management Support Proactiveness Sensing Processing IMP Sharing IO Maturity IT Innovation Support Maintaining Transparency Collecting Organizing Control IT Business Process Support Formality IT Operational Support Integrity (ICT for SME’s)

24. IO regressed on ITP, IMP and IBV Bjarte Ravndal

25. The main categories regressed on each other IT Practices 0.64 (R2=0.46) Information Management Practices 0.45 (R2=0.46) 0.47 Information Behaviors and Values 0.65 (R2=0.47) Bjarte Ravndal

26. Spiral of Effective Information Use in the SME’s Under-developedinformation-related discipline Formalized information-related disciplines Good information management practices Goodinformation behaviors and values Good IT practices Our findings indicate that effective information use in the SME’s is based on a spiral whereby good information management drives good information usage behaviours and values, and improves the capability to use IT to support decision making and problem solving. Then the three capabilities reinforce each other.

27. Reference material • Marchand, D. A., W. J. Kettinger, et al. (2000). "Information orientation: People, technology and the bottom line." Sloan Management Review41(4): 69-+. • Marchand, D. A., W. J. Kettinger, et al. (2001). Information Orientation: The Link to Business Performance. Oxford, Oxford University Press. • Marchand, D. A., J. D. Rollins, et al. (2001). Making the Invisible Visible: How Companies Win with the Right Information, People and IT. Chichester, Wiley. Bjarte Ravndal

28. Information Orientation (IO) Measures the capabilities of a company to effectively manage and use information Information Behaviors and Values (IBV) Capability The capability of a company to instill and promote behaviors and values in its people for effective use of information. Information Management Practices (IMP) Capability The capability of a company to manage information effectively over its life cycle. Information Technology Practices (ITP) Capability The capability of a company to effectively manage appropriate IT applications and infrastructure in support of operational decision-making, and communication processes. • Sensing • involves how information is detected and identified concerning: • economic, social, and political changes; • competitors’ innovations that might impact the business; • market shifts and customer demands for new products; • anticipated problems with suppliers and partners. • Proactiveness • An organization is called “information proactive” when its members • actively seek out and respondto changes in their competitive environment and • think about how to use this information to enhance existing and create new products and services. • IT for Management Support • includes the software, hardware, telecommunication networks and capabilitiesthat facilitate executive decision-making. • It facilitates monitoring and analysis of internal and external business issues concerning • knowledge sharing, • market developments, • general business situations, • market positioning, future market direction, • and business risk. • Sharing • is the free exchange of non-sensitive and sensitive information. Sharing occurs • between individuals in teams, • across functional boundaries and • across organizational boundaries (i.e., with customers, suppliers and partners). • Processing • information into useful knowledge consists of accessing and analyzing appropriate information sources and databases before business decisions are made. • Hiring, • training, • evaluating and • rewarding people with analytical skills • is essential for processing information into useful knowledge. • IT for Innovation Support • includes the software, hardware, telecommunication networks and capabilities that • facilitate people’s creativity and that • enable the exploration, development, and sharing ofnew ideas. • It also includes the hardware and software support to develop and introduce new products and services. Transparency An organization is “information transparent” when its members trust each other enough to talk about failures, errors and mistakes in an open and constructive manner and without fear of unfair repercussions. • Maintaining • involves • reusing existing information to avoid collecting the same information again, • updating information databases so that they remain current and • refreshing data • to ensure that people are using the best information available. Control is the disclosure of information about business performance to all employees to influence and direct individual and, subsequently, company performance • IT for Business Process Support • focuses on the deployment of software, hardware, networks, and technical expertise to facilitate the management of business processes and people • across functions within the company and • externally with suppliers and customers. • Organizing • includes • indexing, classifying and linking information and databases together to provide access within and across business units and functions; • training and rewarding employees for accurately and completely organizing information for which they are responsible. Formality refers to the degree to which members of an organization use and trust formal sources of information. Depending on the size, virtualness, and geographic dispersion of an organization, this balance shifts towards more formal or informal information behavior. • IT for Operational Support • includes the software, hardware, telecommunication networks and technical expertise to • control business operations, • ensurethat lower-skilled workers perform their responsibilities consistently and with high quality and • improve the efficiency of operations. • Integrity • is an organizational value manifested through individual behavior that is characterized by the absence of manipulating information for personal gains such as • knowingly passing on inaccurate information, • distributing information to justify decisions after the fact or • keeping information to oneself. • Good information integrity results in effective sharing of sensitive information. • Collecting • consists of the systematic process of • gathering relevant information by profiling information needs of employees; • developing filter mechanisms (computerized and non-computerized) to prevent information overload; • providing access to existing collective knowledge; and • training and rewarding employees for accurately and completely collecting information for which they are responsible. Source: Making the Invisible Visible: How companies win with the right information, People and IT, New York and London: John Wiley and Sons, 2001. Bjarte Ravndal

29. IBV IMP ITP Integrity is an organizational value manifested through individual behavior that is characterized by the absence of manipulating information for personal gains such as knowingly passing on inaccurate information, distributing information to justify decisions after the fact or keeping information to oneself. Good information integrity results in effective sharing of sensitive information. Sensing involves how information is detected and identified concerning: economic, social, and political changes; competitors’ innovations that might impact the business; market shifts and customer demands for new products; anticipated problems with suppliers and partners. IT for Operational Support includes the software, hardware, telecommunication networks and technical expertise to control business operations, to ensure that lower-skilled workers perform their responsibilities consistently and with high quality and to improve the efficiency of operations. Collecting consists of the systematic process of gathering relevant information by profiling information needs of employees; developing filter mechanisms (computerized and non-computerized) to prevent information overload; providing access to existing collective knowledge; and, training and rewarding employees for accurately and completely collecting information for which they are responsible. IT for Business Process Support focuses on the deployment of software, hardware, networks, and technical expertise to facilitate the management of business processes and people across functions within the company and externally with suppliers and customers. Formality refers to the degree to which members of an organization use and trust formal sources of information. Depending on the size, virtualness, and geographic dispersion of an organization, this balance shifts towards more formal or informal information behavior. IT for Innovation Support includes the software, hardware, telecommunication networks and capabilities that facilitate people’s creativity and that enable the exploration, development, and sharing of new ideas. It also includes the hardware and software support to develop and introduce new products and services. Control is the disclosure of information about business performance to all employees to influence and direct individual and, subsequently, company performance Organizing includes indexing, classifying and linking information and databases together to provide access within and across business units and functions; training and rewarding employees for accurately and completely organizing information for which they are responsible. Sharing is the free exchange of non-sensitive and sensitive information. Sharing occurs between individuals in teams, across functional boundaries and across organizational boundaries (i.e., with customers, suppliers and partners). IT for Management Support includes the software, hardware, telecommunication networks and capabilities that facilitate executive decision-making. It facilitates monitoring and analysis of internal and external business issues concerning knowledge sharing, market developments, general business situations, market positioning, future market direction, and business risk. Processing into useful knowledge consists of accessing and analyzing appropriate information sources and databases before business decisions are made. Hiring, training, evaluating and rewarding people with analytical skills is essential for processing information into useful knowledge. Transparency An organization is “information transparent” when its members trust each other enough to talk about failures, errors and mistakes in an open and constructive manner and without fear of unfair repercussions. Maintaining involves reusing existing information to avoid collecting the same information again, updating information databases so that they remain current and refreshing data to ensure that people are using the best information available. Proactiveness An organization is called “information proactive” when its members actively seek out and respond to changes in their competitive environment and think about how to use this information to enhance existing and create new products and services. Bjarte Ravndal (Marchand et al 2001)