Perceived performance effects of ICT in manufacturing SMEs

Abstract

Purpose. We aim to investigate whether ICT resources, including investment and use of specific types of ICT as well as innovative work practices, have a positive impact on several dimensions of firm performance, taking into account both direct and indirect effects and both short and long-term effects. Design/methodology/approach. An empirical study using data from a sample of 267 Spanish manufacturing SMEs was conducted. We have used path analysis to study direct and indirect ICT impacts. OLS regression is the estimation method employed. Findings. Our findings show a positive relationship between ICT adoption and all the measures of perceived performance analyzed, although the impact is not always immediate since the lag effects and length differ according to the type of ICT. Managers’ perceptions of ICT impact are related to the adoption of new work practices but the effects also depend positively on the number of years since new work practices were implemented. ICT impact on final performance (market share and profits and margin) takes place mainly indirectly through the improvement of internal and external communication as well as through operational performance. Originality/value. This research extends the scope of the analysis of ICT payoff literature by analyzing direct and indirect effects and by focusing on a broad range of technologies, a variety of performance measures and several time lags to study ICT adoption impacts in SMEs. Research limitations/implications. The main limitations of the research stem from the specific geographical context under consideration and restrictions relating to the cross-sectional nature of the data. Practical implications. Our results reveal the wide scope of the benefits of ICT adoption in SMEs and point to the need for persistence in use so as to obtain good results in some areas. They also stress the positive effects of adopting ICTs together with organizational innovation.