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

© 2014 DIS 2014

Outline

•  Key concepts

•  Background and motivation for the study

•  Theoretical framework

•  Objectives of the study

•  Methodology

•  Results

•  Conclusion and recommendations

•  Comments? Questions?

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Key concepts

•  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

•  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

•  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

•  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

•  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

•  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)

•  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

•  Although resources are particularly scarce for survivalist SMMEs, growth SMMEs also have limited resources that need to be utilised for maximum return

•  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

•  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)

•  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.”

•  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

•  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.

•  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.

•  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.

•  Jorosi, B.N. (2006). The Information Needs and Information Seeking Behaviours of SME Managers in Botswana. Libri, 56:97-107.

•  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.

•  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.

•  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).

•  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).

•  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

•  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

•  Leckie et al.’s (2005) general model for information-seeking 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

!-16- 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 owner-mangers’ information needs

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Methodology

•  Research paradigm and approach –  Interpretive, qualitative

•  Sampling –  Owner/managers of knowledge-based growth SMMEs in Gauteng, SA

–  Selected through purposive and snowball sampling

•  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)

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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 -20-

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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 -22-

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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

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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)

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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

•  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?

ponelis@uwm.edu shanaponelis http://www.linkedin.com/in/sponelis @ShanaPonelis

© 2014 DIS 2014

References

1.  Case, D.O. (2002). Looking for information: a survey of research on information seeking, needs, and behavior. San Diego, CA: Academic Press.

2.  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.

5.  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.

6.  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.

7.  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.

8.  Herrington, M., Kew, J. & Kew, P. (2009). Tracking Entrepreneurship in South Africa: A GEM Perspective.

9.  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.

10.  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.

15.  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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