IT governance in SMEs: trust or control?

It is believed by many scholars that a small and medium-sized enterprise (SME) cannot be seen through the lens of a large firm. Theories which explain IT governance in large organizations and methodologies used by practitioners can therefore not be extrapolated to SMEs, which have a completely different economic, cultural and managerial environment. SMEs suffer from resource poverty, have less IS experience and need more external support. SMEs largely contribute to the failure of many IS projects. We define an out-sourced information system failure (OISF) as a failure of IT governance in an SME environment and propose a structure for stating propositions derived from both agency theory and theory of trust. The theoretical question addressed in this paper is: how and why do OISFs occur in SMEs? We have chosen a qualitative and positivistic IS case study research strategy based on multiple cases. Eight cases of IS projects were selected. We found that trust is more important than control issues like output-based contracts and structured controls for eliminating opportunistic behaviour in SMEs. We conclude that the world of SMEs is significantly different from that of large companies. This necessitates extra care to be taken on the part of researchers and practitioners when designing artefacts for SMEs

Narratives of an outsourced information systems failure in a small enterprise

In this study we investigate a case of an outsourced information systems (IS) failure (OISF) within the collaborative partnership among asymmetric partners. A small and medium-sized enterprise (SME) is dealing with an independent software vendor (ISV) conducting a project of implementing an IS that fails. We used a narrative research methodology for our enquiry. In the construction of our narrative we followed the OISF framework as a theoretical touchstone. As a major conclusion we found that asymmetric collaborations with partners with inadequate managerial and technical IT capabilities are extremely prone to OISF’s. We showed that an outcome-based and fixed price contract is not an adequate instrument to conduct such a partnership and to avoid a failure

Narratives of an outsourced information systems failure in a small enterprise

In this study we investigate a case of an outsourced information systems (IS) failure (OISF) within the collaborative partnership among asymmetric partners. A small and medium-sized enterprise (SME) is dealing with an independent software vendor (ISV) conducting a project of implementing an IS that fails. We used a narrative research methodology for our enquiry. In the construction of our narrative we followed the OISF framework as a theoretical touchstone. As a major conclusion we found that asymmetric collaborations with partners with inadequate managerial and technical IT capabilities are extremely prone to OISF’s. We showed that an outcome-based and fixed price contract is not an adequate instrument to conduct such a partnership and to avoid a failure

Using bricolage to facilitate emergent collectives in SMEs

Starting a new business is often done in a realm of improvisation if resources are scarce and the business horizon is far from clear. Strategic improvisation occurs when the design of novel activities unite. We conducted an investigation of so called ‘emergent collectives’ in the context of a small and medium-sized enterprise (SME). Emergent collectives are networks of information nodes with minimal central control and largely controlled by a protocol specification where people can add nodes to the network and have a social incentive to do so. We considered here emergent collectives around an enterprise resources planning (ERP) software and a customer relation management (CRM) software in two open source software (OSS) communities. We investigated how the use of bricolage in the context of a start-up microenterprise can facilitate the adoption of an information system (IS) based on emergent collectives. Bricolage is an improvisational approach that allows learning form concrete experience. In our case study we followed the inception of a new business initiative up to the implementation of an IS, during a period of two years. The case study covers both the usefulness of bricolage for strategic improvisation and for entrepreneurial activity in a knowledge-intensive new business. We adopted an interpretative research strategy and used participatory action research to conduct our inquiry. Our findings lead to the suggestion that emergent collectives can be moulded into a usable set of IS resources applicable in a microenterprise. However the success depends heavily on the ICT managerial and technological capabilities of the CEO and his individual commitment to the process of bricolage. Our findings also show that open ERP and CRM software are not passing delusions. These emergent collectives will not take over proprietary ERP and CRM software all of a sudden, but clearly the rules of the game are slowly changing due to the introduction of new business models. The study contributes to the research of OSS as emergent collectives, bricolage and IS adoption in SMEs

Rethinking IT governance for SMEs

Purpose - The purpose of this paper is to critically rethink the concepts and the theoretical foundations of IT governance in small- and medium-sized enterprises (SMEs). Design/methodology/approach - The paper is based on multiple case studies. In total, eight cases of outsourced information system projects where failures occurred were selected. An outsourced information system failure (OISF) is suggested as a failure of governance of the IT in a SME environment. A structure for stating propositions derived from two competing theories is proposed (Agency Theory and Theory of Trust). Findings - The results reveal that trust is slightly more important than control issues such as output-based contracts and structured controls in the governance of IT in SMEs. Practical implications - The world of SMEs is significantly different from that of large companies, and therefore, the concept of IT governance in SMEs needs reconsideration. For researchers and practitioners, it would be more meaningful to focus on actual, working SMEs instead of on a version of their activities derived from those of large companies. Originality/value - The paper offers two contributions. First, it elaborates the limited research on IT in SMEs and second, it brings theoretical foundations for their IT governance. The value of IT governance in SMEs is explained

IT governance for SMES : a multiple case study

IT Governance is placing IT on the agenda of boards and CEOs. Research on the IT value proposition is broad and elaborate but mostly focussed on large enterprises. Despite the numerous successes illustrating the advantages of bringing IT/IS into organizations it is broadly accepted that the processes of designing, developing, implementing and using IS are cumbersome and not straightforward. Recent and older reports show that IS projects frequently fail. The focus of our research is the relation of IT and SMEs (Small and Medium-sized Enterprises) in an outsourced environment. We have chosen for a qualitative and positivistic IS case study research strategy based on multiple cases. Considering the current state of the research we have formulated two general research objectives: 1) to extend our knowledge of IS failures in an outsourced SME environment and 2) to clarify the link between the insights of failed IS projects and the principles of IT governance. The research was started in 2006 with the development of the case study database and an extensive literature study. We intend to finish our work by the end of 2008