INHIBITING FACTORS FOR COMMUNICATION AND
INFORMATION TECHNOLOGIES USAGE
Five Colombian SMEs Study
Olga L. Giraldo V. and Eduardo Arévalo S.
Systems and Computing Engineering, Los Andes University, Calle 19 No 1-37 Este, Bogotá, Colombia
Keywords: Information and Communication Technology- ICT- inhibiting factors, ICT strategic use, small and medium-
sized enterprises –SME- in Colombia, SME competitiveness, ICT inhibiting factors in Colombian SMEs.
Abstract: Small-to-Medium sized enterprises, SMEs, are the main development engine of economy, particularly in
countries in development, as is the case in Colombia. SMEs must use information and communication
technologies, ICT, as strategic tools to find their place in the global market; nevertheless, this is not a
common situation for Colombian SME. In this work we present the results of a project that attempts to find
factors inhibiting five Colombian SMEs toward strategic usage of ICT. Through this study we have looked
at the structure and strategy of those enterprises, their value chains, ICT support to value chain activities -
how and where they exploit ICT-, managerial attitude toward technology, and appropriation of ICT into
business, looking for inhibiting factors. Results show that the most common inhibiting factors are: poor
organizational planning; inability to identify strategic use of ICT or no ICT leadership; no funding for ICT
projects; lack of ICT expertise and lack of proper ICT usage by final users; and lack of technical support.
Even though findings are not conclusive they show an existing trend, and highlight the main ICT inhibitor
factors-IF- to be surpassed to attain local sustainable industries.
1 INTRODUCTION
Currently Colombia is establishing free trade
agreements with its main commercial partners,
which is changing the local economic environment,
creating new threats and opportunities. Colombian
SMEs, Table 1, are not familiar with direct foreign
competition. A SME must find factors inhibiting
proper ICT utilization to build successful strategies.
Table 1: Colombian enterprise classification.
Type Employees
number
Assets in minimum
present established wage
Micro 1-10 Lees than 501
Small 11-50 Between 501 and 5000
Mediu
m
51-200 Between 5001 and 3000
Big 201 or more
More than 3000
To achieve competitiveness in an open economy,
proper ICT usage is mandatory. Most SMEs are not
analyzing their business, neither strengths nor
weaknesses, to find sources of competitive
advantage to maintain present benefits and create
new ones. Instead they are trying to maintain
artificial barriers to protect their market.
Huang and Brown (1999) found that there has
not been much research of SME´s problems,
although there is an increasing interest in developed
countries (Majocchi and Zucchella 2003; Bell et al.
2004; Williams and Chaston 2004; Fukugawa 2005;
Gray and Mabey 2005; McKeiver and Gadenne
2005). Research in Latin American SME behavior
cover topics as financial, human resources, culture,
regulation, and ICT condition (Berry 2002;
Finquelievich 2003; Zevallos 2003; FUNDES 2004),
but none specialize in ICT use. Hunter (2004)
suggests as an interesting research subject the
application of information systems in SMEs
particularly for countries in development. Kyobe
(2004) found as main IF of IT usage in South
African SMEs: lack of top management vision;
failure to keep up with new technologies, lack of
computer expertise and usage; lack of economic
scale in IT use; lack of technical support; and, poor
planning and inability to identify strategic use of IT.
We begin this paper describing the present
situation of Colombian SMEs emphasizing their
main problems. Afterwards, section 3 and 4, present
111
L. Giraldo V. O. and Arévalo S. E. (2007).
INHIBITING FACTORS FOR COMMUNICATION AND INFORMATION TECHNOLOGIES USAGE - Five Colombian SMEs Study.
In Proceedings of the Ninth International Conference on Enterprise Information Systems - HCI, pages 111-116
DOI: 10.5220/0002360201110116
Copyright
c
 SciTePress

the methodology we use and a vision of each
company studied. Section 5 analyzes, for each
company, factors causing proper or improper ICT
use. Finally, section 6, exposes our conclusions and
future works.
2 COLOMBIAN SME BUSINESS
ENVIRONMENT
After a long period of economic crisis, Colombian
SMEs have once again flourished. They are
significant employment generators and efficient
redistributors of wealth.
2.1 SME Significance in Colombia
Semana (26 May 2003, pp. 73-74) points out that in
2002, Colombian micro enterprises and SMEs
comprise 96% of local industry, generate about 40%
of gross product, 34% of added value, 60% of
industrial employment, and 25% of non traditional
exports. According to the Administrative National
Department of Statistics, DANE, Encuesta Anual de
Manufactura (annual manufacturing survey), 75% of
manufacture establishments are SMEs, which
generate about 34% of the gross product, 45% of
employment and 28% of added value. On the other
hand, Rodríguez (2003) shows that in 2001 out of all
the Colombian SMEs 37% were services companies,
34% were retailers, 22% were industrial, and 6%
were agro industries; 87% had 6 years or more since
their creation; during 2002 and 2003, 60% of them
decreased their annual utilities; 50% of management
have been working in the same business for more
than 15 years; 72% of them have undergraduate
studies, 16% postgraduate; and 66% of managers are
aged between 25 and 45 years.
2.2 Main Problems of Colombian SME
The main problems found by Rodríguez (2003) for
Colombian SME are: economic and public order
instability; low access to financial markets; legal
issues; difficult access to marketplaces; no
governmental support; low human resource quality;
bad transport infrastructure and public services;
gremial and SME incompatible interests; and
difficult access to technology. Rodríguez (2003) also
discovered as main issues delaying SME access to
technology: high costs; low public or private
funding; no capacity or high cost for customization;
low access to ICT products and information
services; and high costs of external consulting
services. However, 66% of SME have invested in
technology in the last two years: 30% on IT; 28% in
business equipment; 12% in product improvement;
and 10% in management decision support systems.
Managers claim that the main benefits of these
investments are: time savings, quality product
improvement, and cost reduction.
BDI- ACOPI- DNP (1997) shows that the main
problems are: lack of knowledge about ICT potential
advantages; negative attitude of managers towards
new technologies; and, lack of economic scale to
invest in research, appropriation or transfer ICT.
3 METHODOLOGY
In order to assess what factors inhibit the
appropriation and use of adequate ICT in SMEs we
researched five enterprises. The study was divided in
four stages: theoretical investigation; selection,
analysis and diagnosis of individual SMEs; search
for IF, if any; and development of a strategic
proposal for ICT appropriation at individual
enterprises.
During the first stage we identified previous
studies (Huang and Brown 1999; Berry 2002;
Finquelievich 2003; Kyobe 2004; Gray and Mabey
2005; Fukugawa 2005) to discover frequent IF of
ICT usage in SMEs. To understand SME current
situation, we want to identify organizational
structure; internal drivers and strategy- mission,
vision, values; value chain- VC-, products and
services; distribution channels; and ICT
infrastructure, architecture and applications.
The second stage began with choosing
enterprises to be studied. We decided not to
concentrate in a specific industry, neither a typical
size, nor a particular composition; companies were
randomly selected: different sectors, sizes and
characteristics, but all of them have in common an
interest in this research. We took this decision to
avoid having a bias on our first approach. The only
pertinent attribute was that they were SME. Later we
found other common features: they are less than 12
years old, have no export profiles and low export
potential, and are family owned companies. Their
sectors are: Services S-, Commercialization C, and
Manufacture M.
The main data collection methods were: review
of company internal documentation particularly the
web site if available, in site observation, and
personal interviews with management and
employees. We identified strategy, structure and
VC: strategy was inferred from declared objectives
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matched with business units’ tactics; structure was
built based on corporate resource distribution,
decision making processes, and information flow
and relationships; VC was depicted by us when they
did not have one. ICT data was used to identify how
it supports VC activities (Porter 1998) and its level
of appropriation in business according to (Andreu et
al. 1996; Laudon and Laudon 2004; Kyobe 2004).
As a result we had an “instant photo”, a mirror
image, of each company. No reflection or
suggestions were made at this point; management
approval was required to begin the diagnosis.
Table 2: SMEs studied.
Specific Industry
Direct
employees
C1
Automotive, aeronautical
and industrial paints
15
S1 Civil engineering consulting 20
S2
Public services consumption
measurement
66
M1
Construction material
supplier
75
M2
Retailer communication’s
software & hardware
11
Meanwhile we moved to the next stage, seeking
recurring IF using organizational visions to obtain
manager attitude toward ICT strategic usage and IF.
Finally, after manager’s feedback, we designed
an ICT adoption proposal for each company to
aggregate value to participating SMEs; results are
outside of the scope of this paper.
4 CASE STUDIES: FIVE SME
DEPICTED
This section describes the five companies we
studied, emphasizing on ICT support to VC
activities, to find ICT utilization inhibitors factors.
4.1 C1: Automotive, Aeronautical and
Industrial Paint Retailer
C1 is a family owned company that provides paints
for automotive, aeronautical and industrial sectors,
and technical advisory services about their use. C1
wants to be the distribution leader for its main
provider.
Its main focus is customer satisfaction
maintaining acceptable profits for shareholders and
employees. The company builds their external
reputation with honesty, loyalty, and respect to
stakeholders and clients. Its strategy is continuously
improving customer painting processes through
direction and consulting: advice on better utilization
to improve final paint quality and training staff; this
service is supported by software developed in-house,
Syscolor and Sphera. They have no distribution
channels other than a direct sales force. The VC,
figure 1, shows that the main value creating
activities are those related to Syscolor and Sphera:
starting with software installation at customer
location to gather data about paint utilization;
afterwards, performing periodical data collection
and analysis to generate knowledge about costumer
painting practices; and finally, giving advice and
training to achieve enhanced paint usage.
Figure 1: C1 Value Chain.
Internal IT infrastructure and information
systems are small enough to support primary
activities of its VC; financial and human resource
processes are outsourced. Inbound logistic,
production, and outbound logistic, are partially
outsourced but are well supported according to
management. Post sales are very well supported by
Syscolor. The software was developed by the
manager’s son and associate. He has fundamental
skills in software development and deep business
knowledge. Four years ago, when the company was
running out of business, he entered the company; at
this time they decided to provide a new service to
their customers as a strategy to gain preference.
Syscolor gathers data from salespeople visits; the
system is not connected to the Internet. Nowadays
they are planning an upgrade to improve service.
4.2 S1: Civil Engineering Consulting
Created in 1993, S1 offers consulting services in
engineering development of public or private
infrastructure. Its main values are generating
positive social impact and benefits for the
community, and customer satisfaction. Their 5-year
Order
process
Product
deliver
Sphera
analysis
Primar
y
p
rocesses
Cus
t
omer
order
re
q
ues
t
Syscolor
data
g
atherin
g
Syscolor
consulting
& trainin
g
Post sale
p
rocesses
Syscolor
installation
Syscolor
data
anal
y
sis
INHIBITING FACTORS FOR COMMUNICATION AND INFORMATION TECHNOLOGIES USAGE - Five
Colombian SMEs Study
113

vision is to be recognized due to the benefits
delivered to communities.
S1 offers consulting for infrastructure design,
and construction project execution and control. The
company strategy is to create customer satisfaction
based on best practices; frequently benchmarking is
done, but, paradoxically, performance measurement
criteria are not clearly defined. They do emphasize
in effective use of technological consulting tools. By
2003, S1 obtained the System & Services
Certification, SGS, quality certification on all of
their services.
Figure 2: S1 Value Chain.
Project quality is sensible to technical skills of
the team, and methodology and tools used. ICT
supporting primary activities, figure 2, focuses on
team selection and project execution; elicitation and
financial control activities are not supported.
The company’s financial and inventory activities
are supported by HELISA, a local ERP; desktop
applications support project documentation;
Microsoft Project is used for project management;
and specialized applications are used for technical
activities during project execution.
4.3 S2: Measurement of Public Service
Consumption
S2’s services are consumption measurement and
courier delivery for public service companies. We
elaborated its organizational chart and VC; the VC is
not yet approved by management, so is not presented
here. At present time, its main client is Gas Natural,
the biggest natural gas local distributor.
Its strategic objective for 2010 is to have 5% of
the Colombian market offering high quality services
and specialized human skills. Currently they do not
have information about market share; neither do they
have clear criteria about selection of commercial
goals. Management is aware of their lack of a
strategy, and is searching for an external consultant
to develop a marketing plan.
Financial data processing is done using HELISA.
Consumption measurement of Gas Natural uses
SAL, a proprietary software; data is entered in
mobile terminals, and then transferred to the
customer’s database; client measurement reports and
billing source are done using Microsoft Excel.
4.4 M1: Construction Materials
Supplier
M1, a family owned company, produces and
commercializes construction materials. Its mission is
to become the first option in ceramic glues in the
local market. Its strategy is centered on innovation,
based on market trends, knowledge and technology.
It has two business units: ceramic glues and indoor
paints. Its commercial objective for 2010 is to reach
30000 gallons of paint and 30000 tons of ceramic
glues sales per year. Their main distribution
channels are a proprietary sales force, alliances with
strategic business partners and arrangements with
corporate clients.
Figure 3: M1 Value Chain.
M1´s primary activities, Figure 3, start with sales
and commercialization. Production and purchase
plans use historical sales data, monthly sales
forecasts and product stock data. The main value
creating activity is post-sale customized attention.
Internal IT infrastructure and architecture is
small, but supports several primary value chain
activities. Financial processes are supported by
SIIGO, another local ERP. The acquisition of SIIGO
had as main purpose organizing financial processes;
the production and sales modules were not
appropriately parameterized. Nowadays, M1 is not
effectively exploiting the ERP’s capabilities because
they do not have technical support or help desk for
SIIGO.
4.5 M2: Retailer of Software &
Hardware for Communication
M2, also a family owned company, develops and
commercializes software and hardware for retailer
telecommunication activities. M2’s objective is to be
the market leader in telecommunication solutions
Primar
y
p
rocesses
Public/private
elicitation search
Elicitation
response
Contract
sign
Team
selection
Project management,
execution and control
Project delivery and
postmortem
Primar
y
p
rocesses
Sales &
Commercializat
ion
Production
planning
Production
Purchase
planning
Distribution
& delivery
Pos
t
sale
service
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but does not have an explicit business strategy or
business plan. Through observation we defined its
strategy as “Product innovation to seize market
opportunities at competitive prices”. Customer
satisfaction and quality are not internal drivers.
Their products are: SETTI, a billing system for
communication rooms and Internet cafes; SETTI
Upgrade, that fixes some of the product’s bugs; and
SIFRA, a back office Internet based system to
control geographically distributed communication
rooms and Internet cafes. Its distribution channels
are a proprietary sales force and external commercial
agents; recently M2 opened commercially
autonomous operations in Peru and Ecuador, but
they do not have a clear strategy for expansion.
Technology development, figure 4, is the value
chain’s main process. No standards are used for
product design and development, thus bugs are
frequently found by customers during use.
Figure 4: M2 TDP Value Chain
ICT applications are: HELISA to support
financial process; SAS, an in-house developed tool,
to manage customer requests; and SAE, currently
under development, to improve internal process, but,
on the one hand, users do not input required data
and, on the other hand, development is continuously
interrupted.
5 FACTORS AFFECTING
PROPER ICT USE
All the companies we analyzed, except C1, use ICT
to sustain VC support activities, not to be
competitive.
C1’s main catalyst factor is the manager’s ability
to identify strategic use of ICT. When business was
decreasing, they created a software product and a
training service for clients. Nowadays, big industrial
consumers choose C1 due to these services. The
manager declares that funding ICT projects is not a
problem because they have skills to develop them or
to negotiate service and fair prices with providers.
Presently, they are elaborating corporate plans
oriented to new ICT based business services.
S1, the civil engineering consulting company has
as explicit strategy benchmarking, not innovation;
they imitate the best qualified consulting companies
in the market. Its manager is always busy searching
for new projects and controlling those in execution,
thus has no time for strategic activities. There is no
ICT leadership, neither are there resources,
particularly monetary, for ICT projects. Skilled
professionals are hired for specific projects;
knowledge and expertise on ICT, when acquired, is
lost. Organizational planning, if any, is reactive and
not shared. S1 is not aware of the value of
knowledge appropriation, and thus, this is not a
regular activity.
S2 has been unable to identify a strategic use of
ICT for business activities. Although research in
mobile applications is an important trend, S2 is
currently not investing in it. Its competitors are
offering fraud management and public service
reconnection services, but they do not. During our
work, S2’s management team realized that they do
not have an organizational plan; now they are
searching for professional advice. Their operative
employees have enough expertise for a proper
tactical use of ICT; nevertheless they do not have
technical support to improve their performance.
M1’s manager says he has a short term plan, but
he does not share it, and frequently changes it; his
main priority is to find new products; he has no time
to identify strategic use of ICT, and does not care.
ICT employees always work to achieve the
manager’s changing plan; not to satisfy business
activities, to take advantage of ICT, or to be ICT
leaders.
M2, a software and hardware retailer company,
paradoxically, does not have proper ICT support.
They are able to identify strategic use of ICT, fund
ICT projects, have ICT expertise and technical
support, but are unable to use it for themselves. Its
main IF is poor organizational planning. The R&D
division is not aligned with its internal plan and
management does not care; they are looking for
opportunities.
6 CONCLUSIONS AND FUTURES
WORK
The very first obstacle for ICT strategic usage, we
discovered, is that companies frequently do not have
an ICT strategy, or have a vague definition of an
Technolo
gy
develo
p
ment
p
rocess -TDP:
Client needs &
market trends
analysis
Produc
t
design
Product
development
Distribution
& delivery
Sup
p
ort &
maintenance
INHIBITING FACTORS FOR COMMUNICATION AND INFORMATION TECHNOLOGIES USAGE - Five
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ICT strategy, or it is not written nor shared with
employees.
A recurring inhibitor factor is the inability, of
both management and technological staff, to identify
strategic use of ICT and lack of ICT leadership.
Another negative factor is that there is no
funding for ICT projects, frequently because of: lack
of economies of scale for ICT use; difficulties to
access financial markets; and short vision about ICT
benefits and strategic impact.
One more recurring factor is the lack of ICT
expertise in staff and users, making hard the
appropriation and transfer of new ICT services. The
roots of this inhibitor factor, we believe, are low
wages and no investment in staff training.
The lack of technical support, internal or external
staff based, was another recurrent factor.
But the most important IF we found is poor or no
organizational planning, no sharing of organizational
plans, or short term or reactive planning. Within this
frame any effort or investment on ICT is lost.
Future works include extending this work for a
larger sample, and proposing guidelines for ICT
selection, implementation and use in strategic
activities, support and new business creation.
ACKNOWLEDGEMENTS
We would like to thank Eduardo Frías, Diana
Angélica Forero, Diego Sánchez, and Diana Velasco
for their participation in this study; Martha Inés
Cifuentes and Andrea Herrera for their support and
advice; and Nicolás López for his aid reviewing the
paper.
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