Information needs, information seeking behavior and use of ICT in knowledge-based South African growth SMMEs Dr Shana Ponelis 15th Annual IS Conference: “Informetrics and Information Seeking Research in Africa” Peermont Metcourt Hotel at Umfolozi, Empangeni September 3-5, 2014
Outline
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Key concepts
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Background and motivation for the study
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Theoretical framework
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Objectives of the study
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Methodology
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Results
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Conclusion and recommendations
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Comments? Questions?
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Key concepts
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SMMEs – Small, medium and micro-enterprises – Ntsika Enterprise Promotion Agency (2001), established by the South African Department of Trade and Industry (dti, 1995) to provide wholesale non-financial support services for development of micro, small and medium enterprises, uses the following thresholds: • Businesses with less than ZAR 50,000 (approx. US$5,000) in turnover are considered micro-enterprises. • Small enterprises are enterprises with between ZAR 50,000 and ZAR 5 million (approx. US$ 500K) turnover. • Enterprises with turnover between ZAR 5 and 50 million (approx. US$ 5m) are medium-sized enterprises.
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Key concepts
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SMMEs (continued): – South African National Small Business Act, No. 102 of 1996 as amended in 2003 (South African Government, 2003) • stipulates varying definitions for different industry sectors in terms of total annual turnover (in Rm), and total gross asset value excluding fixed property • total full-time equivalent of paid employees, however, remains constant with: – Micro-enterprises have 5 or fewer employees; – Very small enterprises have between 5 to 20 staff; – Small enterprises have from 21 up to 50 employees; and – Medium enterprises have 51 to 200 employees (except agriculture with a limit of 100 employees)
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Key concepts
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SMMEs (continued): – Different forms (sole proprietorship, partnership, etc.) – Defined by number of employees, annual turnover and/or total assets with industry-specific threshold – Working definition: • businesses in South Africa with fewer than 200 employees
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Key concepts
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Knowledge-based SMMEs: – have systemic, knowledge-based resources as its prime competitive tools (Duhan et al., 2001) – offer products and services based on the knowledge and experience held within individuals and systems – continually gather information, develop skills and use experience to enhance their products and services (Levy and Powell, 2005:267-268)
– Expect that these enterprises would be more likely to use information for decision-making and have knowledge and experience of ICT
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Key concepts
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Owner/manager(s): – Majority of managers of small businesses are also owners – Significantly control daily operations – Primary decision-maker(s) (Gibcus and Van Hoesel, 2008; Martin, 1998)
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Key concepts
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Information need – In such a business context information needs arise as a result of “a specific task that is associated with one or more of the work roles played by the professional” (Du Preez & Fourie, 2010:69)
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Information seeking behaviour – Information need drives the professional to seek information (Choo, 2006): “the purposive seeking for information as a consequence of a need to satisfy some goal. – In the course of seeking, the individual may interact with manual information systems (such as a newspaper or a library), or with computer-based systems (such as the World Wide Web)” (Wilson, 2000: 49)
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Background and motivation for study •
SMMEs play an important part in all economies but is particularly important in developing economies: – United States • over 25 million micro-enterprises • encompass 88% of all businesses (Kamal, 2014) – South Africa • Estimated 2.2 million SMMEs employ an estimated 55% of the country’s labor force (Herrington, Kew, & Kew, 2009) • Majority of SMMEs are considered survivalist micro- and small enterprises
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Background and motivation for study •
Whilst survivalist SMMEs play an important role to alleviate poverty and provide a source of income, non-survivalist or growth SMMEs drive economic growth and international competitiveness
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Although resources are particularly scarce for survivalist SMMEs, growth SMMEs also have limited resources that need to be utilised for maximum return
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To do so, timely information about the organisation, its processes, its customers, its business partners and its environment must be available to inform decisions and actions to achieve or maintain a competitive advantage in the marketplace
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Informed decision-making is limited by capacity to access timely, current, relevant and adequate business information (Mutula & Van Brakel, 2006)
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Background and motivation for study •
Access to information is an important component of SMME competitiveness (Fuellhart & Glasmeier, 2003)
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Corporate information competence is a critical success factor for SMEs (Sen and Taylor, 2007) – “information management skills and systems to support business strategy and operations: generate, gather, analyse, disseminate and use the appropriate information effectively, ensuring information security, validity and integrity.”
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Ensuring that high-quality information is consistently available and disseminated to those who need it in any organisation is – a challenging task – “one of the most under appreciated contributors to high performance and competitive advantage” (Neilson et al., 2010)
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Background and motivation for study
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The ability to utilise computer-based systems to meet information needs is a key influence upon the competitiveness of SMEs (Levy and Powell, 2005:vii) – with even micro-enterprises hindered from growth and efficient functioning by an inability to use information and communications technology (ICT) effectively (Kamal et al., 2011)
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Capita selecta of research in Africa •
Banda, C., Mutula, S. M. & Grand, B. (2004). Information needs assessment for small scale business community in Zambia: Case study of Chisokone Market, Kitwe. Malaysian Journal of Library & Information Science, 9(2): 95-108.
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Chiware, E. R. T. and Dick, A. L. (2008). The use of ICTs in Namibia’s SME sector to access business information services. The Electronic Library, 26(2): 145-157.
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Jiyane, V. & Mostert, J. (2010). Use of Information and Communication Technologies by Women Hawkers and Vendors in South Africa, African Journal of Library, Archives & Information Science, 20(1): 53-61.
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Jorosi, B.N. (2006). The Information Needs and Information Seeking Behaviours of SME Managers in Botswana. Libri, 56:97-107.
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Migiro, S. O. & Ocholla, D. N. (2005). Information and Communication Technologies in Small and Medium Scale Tourism Enterprises in Durban, South Africa. Information Development, 21(4): 283-294.
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Mutula, S. M. and P. Brakel. (2006). E-readiness of SMEs in the ICT sector in Botswana with respect to information access. The Electronic Library, 24(3): 402-417.
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Okello-Obura, C., Minishi-Majanja, M. K., Cloete, L. M. & Ikoja-Odongo, J. R. (2008). Sources of Business Information and Means of Access used by SMEs in Uganda: the case of northern Uganda. LIBRES, 18(1).
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Shokane, J. K. (2003). The use of business information by small and medium-sized enterprises in Acornhoek. South Africa Journal of Library & Information Science, 69(1).
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Wamuyu, P. (Accepted). The Impact of Information and Communication Technology Adoption and Diffusion on Technology Entrepreneurship in Developing Countries: The case of Kenya. Information Technology for Development, 15(2).
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Capita selecta of research in Africa
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In South Africa many studies have been conducted according to one or more of the following: – Size of the enterprise (Mpye et al, 2007) – Characteristics of the owner/manager (Jiyane & Mostert, 2010) – Industry such as tourism (Migiro and Ocholla, 2005) and e-government (Mitrovic & Bytheway, 2009)
– Geographic location (Cloete et al, 2002; Jacobs & Herselman 2006; Migiro & Ocholla, 2005; Mitrovic & Bytheway, 2009)
– Specific type of ICT, for example, Internet-related technology and the associated e-commerce (Cloete et al, 2002)
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Theoretical framework
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Leckie et al.’s (2005) general model for informationseeking behavior of professionals – encompasses work-related information seeking based on the tasks arising from the work context – professionals such as engineers, doctors and lawyers – Case (2002:116, 128) considers Leckie et al’s model to be more general than the authors themselves imply who limit the model to professionals. – Implication is that Leckie et al’s model can be used to examine the information seeking of owner-managers of SMMEs as well
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Theoretical framework
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Source: Leckie et al. (1996:180)
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Objectives of the study
1. To determine the information needs of owner/managers in knowledge-based SMMEs in South Africa 2. To identify the characteristics of the information needed by these SMME owner/managers 3. To identify the sources of information consulted by these SMME owner/managers to meet their information needs 4. To determine these owner/managers’ awareness of information and information sources available to them 5. To determine the role of ICTs in meeting these SMME ownermangers’ information needs
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Methodology •
Research paradigm and approach – Interpretive, qualitative
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Sampling – Owner/managers of knowledge-based growth SMMEs in Gauteng, SA – Selected through purposive and snowball sampling
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Data collection method – Semi-structured interviews
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Results
1. To determine the information needs of owner/managers in knowledge-based SMMEs in South Africa – Professional work role • Industry trends – Owner work role • Legislative and regulatory requirements – revenue service (SARS): taxation – registrar of companies (CIPC): registration and ongoing filing requirements • Financing and credit – Investors (venture capitalists, business angels) DIS 2014
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Results
1. To determine the information needs of owner/managers in knowledge-based SMMEs in South Africa (continued) – Managerial work role • Financial information, forecasts/projections • Performance data, benchmarking • Customer information • Market research and intelligence, e.g. economic conditions • Competitive intelligence and technology watch • Competitor information • Recruitment/Potential employees • Legal information – contracts, collection DIS 2014
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Results
2. To identify the characteristics of the information needed by these SMME owner/managers – Availability/Accessibility • Low investment of time and effort – Ease of use – Credibility/reliability – Relevance
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Results
3. To identify the sources of information consulted by SMME owner/ managers to meet their information needs – Own knowledge and prior experience – Trusted third parties • Financial advisor / accountant • Family and friends – Printed media and Internet • Blogs • Trade publications and books – Broadcast media – Nearby university’s multimedia centre – Other SMME owner/managers DIS 2014
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Results
4. To determine owner/managers’ awareness of information and information sources available to them – No mention of: • Libraries • SMME-specific consulting services – e.g., Amalgam IT Partners, Genesis Management Consulting and Space Age Technologies, which offer “virtual chief information officers”) – Identified need for: • tender database for SMMEs • competitive intelligence and technology watch DIS 2014
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Results
5. To determine the role of ICTs in meeting SMME owner-mangers’ information needs – Office productivity software (Excel, Google Apps) – Project management (BaseCamp, Teambox, Trac) – Configuration management (CVS) – Data management (Talend) – Marketing (Campaign Monitor) – Accounting (Pastel, Quickbooks, Freshbooks) – Internet banking – Disaster recovery management services (Mozy) DIS 2014
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Results
5. To determine the role of ICTs in meeting SMME owner-mangers’ information needs (continued) – Cloud-based, software-as-a-service (SaaS) and open source solutions preferred • Cost-effective, limited in-house IT skills required • but reliable internet connectivity / bandwidth – Time is a limiting factor • Don’t have sufficient time to investigate ICTs and often to test those recommended by trusted parties
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Conclusion and recommendations
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Confirmed previous findings, both from South Africa and globally, with regard to growth-based SMME information needs, seeking behavior and ICT use are still valid: – Both information and ICT play an important role in the selected knowledge-based growth SMMEs – Increase SMME awareness of available information sources – Expand available information sources to SMMEs – Provide support and guidance to ensure that ICT is used to fully exploit available information for decision-making
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Thank you for your time Comments? Questions?
[email protected] shanaponelis http://www.linkedin.com/in/sponelis @ShanaPonelis
References 1.
Case, D.O. (2002). Looking for information: a survey of research on information seeking, needs, and behavior. San Diego, CA: Academic Press.
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Choo, C.W. (2006). The knowing organization: how organizations use information to construct meaning, create knowledge, and make decisions, Second Edition, New York, NY: Oxford University Press.
3.
Cloete, E., Courtney, S. & Fintz, J. (2002). Small Businesses’ Acceptance and Adoption of e-Commerce in the Western-Cape Province of South-Africa. The Electronic Journal of Information Systems in Developing Countries, 10(4): 1-13.
4.
Du Preez, M. & Fourie, J.A. (2010). Development of a Conceptual Model for Studying Engineers’ Information Behaviour, Mousaion, 28(1), 62-88.
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Duhan, S, Levy, M. and Powell, P. 2001. Information systems strategies in knowledge-based SMEs: the role of core competencies. European Journal of Information Systems, 10(1):25–40.
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Fuellhart, K. G. & Glasmeier, A. K. (2003). Acquisition, assessment and use of business information by small- and medium-sized businesses: a demand perspective. Entrepreneurship & Regional Development, 15, 229-252.
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Gibcus, P. & Van Hoesel, P. (2008) Strategic decision-making processes in SMEs: an exploratory study. In: Entrepreneurial strategic decision-making: a cognitive perspective, Vermeulen, P.A.M. and Curseu, P.L. (Eds.) Cheltenham, UK: Edward Elgar Publishing, pp. 89-104.
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Herrington, M., Kew, J. & Kew, P. (2009). Tracking Entrepreneurship in South Africa: A GEM Perspective.
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Jacobs, S .J. & Herselman, M. E. (2006). Information Access for Development: A Case Study at a Rural Community Centre in South Africa. Issues in Informing Science and Information Technology, Volume 3, pp. 295-306.
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Kamal, M., Andre, C. & Augustyn, M. (2011). Using Cloud-based Applications to Facilitate IT Adoption in Microenterprises. MWAIS 2011 Proceedings. Paper 4. Available: http://aisel.aisnet.org/mwais2011/4.
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References 11.
Kamal, M. (2014). ICTs in Micro-enterprises: Does it make a difference? Proceedings of the 20th Americas Conference on Information Systems (AMCIS 2014), Savannah, GA, August 7-9, 2014.
12.
Leckie, G. (2005). General model of the Information Seeking of Professionals. In: Theories of Information Behavior (ASIS&T Monograph Series), K.E. Fisher, Erdelez, S. and McKechnie, E.F. (Eds.). Medford, NJ: Information Today, Inc.
13.
Levy, M. & Powell, P. (2005). Strategies for Growth in SMEs: The Role of Information and Information Systems. Elsevier Butterworth-Heinemann Information Systems Series. Oxford: Elsevier Butterworth-Heinemann.
14.
Martin, C.J. (1989) Information Management in the Smaller Business: The Role of the Top Manager. International Journal of Information Management, 9(3):187-197.
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Mitrovic, Z. & Bytheway, A. J. (2009). Awareness of e-government related small business development services in Cape Town. The Electronic Journal on Information Systems in Developing Countries, 39(4): 1-14.
16.
Mpye, D., Osman, S. & Van Belle, J-P. (2007). Barriers to ICT adoption for micro-businesses in South Africa. Global Information Technology Management Association (GITMA) 2007, Naples, Italy, June 17-19, 2007.
17.
Mutula, S. M. and P. Brakel. (2006). E-readiness of SMEs in the ICT sector in Botswana with respect to information access. The Electronic Library, 24(3): 402-417.
18.
Neilson, G., Pasternack, B.A. and Mendes, D. 2010. The Four Bases of Organizational DNA. Strategy+Business, Autumn 2010, pp. 46-55.
19.
Sen, B.A. and Taylor, R. 2007. Determining the information needs of small and medium-sized enterprises: a critical success factor analysis [online]. Information Research, 12(4), paper 329. Available: http://informationr.net/ir/12-4/paper329.html (accessed August 16, 2014).
20.
Wilson, T. D. (2000). Human information behavior. Informing Science, 3(2), 49-55.
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