Competitive advantage through effective management of information technology: a case of small, medium and micro-sized enterprises (smmes) in southern turkey

Thesis submitted in fulfilment of the requirements for the degree Master of Technology: Information Technology in the Faculty of Informatics and Design at the Cape Peninsula University of TechnologyIn both developed and developing countries, small, medium and micro-sized enterprises (SMMEs) play a role in the economic growth of the country. The number of SMMEs and the contribution they make to national economies have been growing rapidly in recent years. The concept of trade globalisation has accelerated during this period from a national perspective to reaching international dimensions. This period is therefore a clear indicator for entrepreneurs to be more aware of new opportunities. In today’s information age it is important not only to obtain information, but also to use information effectively to create value. Information technology (IT) increases the importance of information. SMMEs need to consider IT as an important factor to achieve success in globalisation, competitiveness and innovation. Although some SMMEs use IT efficiently to improve their business and value adding processes to create a competitive advantage, SMMEs in Turkey do not effectively leverage their IT to create this advantage. This leads to low productivity among SMMEs and a subsequent low contribution to the Turkish economy. The aim of this research is to explore the challenges of adopting IT within Turkish SMMEs and the ways in which Turkish SMMEs can use IT to gain a competitive advantage. The research focuses on the importance of IT in the insurance sector in order to propose a set of guidelines to small insurance service providers on how to utilise IT to create a competitive advantage in their enterprises. The research objectives are to investigate the challenges of IT adoption and determine what role IT plays in creating a competitive advantage in Turkish SMMEs. This research consists of two basic components: firstly a qualitative methodology is used which includes employing a literature analysis, and secondly an empirical study is conducted which consists of primary research and interviews to collect data through an interview questionnaire. Qualitative data is collected from 25 SMME owners and managers in Southern Turkey through semi-structured interviews. Data is analysed using descriptive qualitative analysis. The research indicates a low usage level of IT software products by SMMEs because IT is not seen as an important tool to create a competitive advantage. Although IT enables the integration of business processes when used effectively, most SMMEs do not tap into the capabilities IT has to offer. The most common barrier for SMMEs wanting to use IT in their businesses is the high cost of IT adoption. Although there are free IT software products available for SMMEs and funding is provided by the government and other institutions, SMMEs seems not to be aware of this. The research suggests that the effective use of IT has a positive impact on SMMEs. IT provides enhanced product development and service quality to cultivate an improved level of productivity in SMMEs, and this enables SMMEs to secure a competitive advantage. As a result of using IT, SMMEs provide increased employment, grow their production, and make a significant contribution to the national economy. The outcome of the research is a set of guidelines to assist SMMEs in focusing on IT adoption and the effective use of IT to gain a competitive advantage. The research provides an improved understanding of how SMMEs adopt IT in order to gain this advantage. The challenges facing SMMEs wishing to adopt IT include a lack of information and resources to explore opportunities for IT adoption, managerial ignorance of IT, and a lack of qualified staff