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Information Technologies in Portuguese industry: success factors in small and medium-sized enterprises

January 15, 2003

The adoption and utilization of information technologies and systems in small and medium-sized enterprises (SMEs) in Portuguese industry was the theme developed by the researcher and professor M'¡rio Caldeira of the Instituto Superior de Economia e Gest'£o - ISEG (Economy and Management Institute) in Lisbon. The object of his PhD thesis, the research was recently seen in an international publication, and will be presented at an international conference to be held next spring in Las Vegas.

The main objective of the research was the identification of factors that inhibit and that drive the successful adoption information systems and technologies (IS/IT) in SMEs of Portuguese industry, the author having analyzed companies in the mould, footwear, textile, clothing, cement tube and wine-making industries.

The IS/IT can be adopted in SMEs to restructure the organization of manufacturing activity, to improve the coordination of the workers and to strengthen the competitiveness of the company.

According to M'¡rio Caldeira, "the study establishes evidence that SMEs can use IS/IT innovatively and strategically, and achieve business benefits that might not be expected from firms that usually have very limited resources", from the results obtained by the author may constitute a real incentive to Portuguese SMEs.

The study also supplies tools so that the professionals and managers of IS/IT can act with regard to the difficulties in adopting IS/IT and make a diagnosis on how to proceed in their companies.

A systematic analysis of the data reveals a pattern: the companies most successful in adopting and using IS/IT show a similar type and combination of factors that allow one to construct a model for contemporary Portugal.

Success is associated to similar combinations of "determining factors", that are on one hand, the development of IS/IT competencies (human and cognitive resources) in the company or associated companies, and on the other hand, the perspective and attitude of the management staff toward the adoption and use of IS/IT.

Therefore, the role of those responsible for the management, administration and consultancy of the companies was revealed as a fundamental factor in the explanation of issues in the study.

The deciding attitudes were those of the top managers who provided the necessary resources for the internal development of competencies in specific IT applications for the factories.

The author verified that the personal or close involvement of the above-mentioned people responsible in the process of implementation of IS/IT was decisive in its success. As such, in the most successful companies, the person in charge of IS/IT was either the manufacturing manager or an IS/IT professional; in the unsuccessful companies the person responsible for IS/IT was the finance or the administrative manager.

Other important factors are the close, more personal business relationships - rather than contractual relationships - in the acquisition of IS/IT, and, the active involvement of the top manager in the selection, evaluation and negotiation of IS/IT solutions in collaboration with qualified professionals, both inside and outside the company.

The conclusions of the study show that the creation of solutions by the company, through the development of internal competencies, revealed itself to be a competitive advantage: the companies that were the most successful in the adoption and utilization of IS/IT were those that developed competencies that were unique (exclusive software) and hard to imitate (there being companies there were willing to sell their software to their competitors)

On the other hand, in less successful cases, managers looked for solutions outside their company and didn't develop internal competencies.

The fact that smaller firms possess the potential for flexibility and fast decision-making - which gives them some advantage over larger companies - can also be important in the adoption and utilization of innovative IS/IT solutions.

In conclusion one can say that the reasons for the success achieved by companies with limited resources are in the capacity for inter-relationship established by the company's management, and not factors of technology differences. It will be important to verify if this principle also applies to companies in areas such as tourism or in larger companies in the same industrial areas.

Observatório da CiÙncia e do Ensino Superior