Application of information systems in small and medium enterprises in sri lanka

Abstract

SMEs have become an important factor in the developing economies in the world, especially to economies like Sri Lanka. It contributes largely to the socioeconomic stability and poverty reduction process of the Sri Lankan economy in terms of employment generation while contributing to the GDP, equitable distribution of income, embarking on innovations, balancing regional development, lowering transaction cost and inspiring other economic activities. SMEs are the most dynamic businesses as they play a critical role in achieving socio-economic goals in developing countries with a low level of investment. Globally, information technology has become a key element in the economic development of many countries in the world. The objectives of the study were to explore the types of information technology/information systems existing in small and medium-scale enterprises in Sri Lanka, examine the advantages of the use of integrated systems by owner-managers of small and medium-scale enterprises in Sri Lanka, investigate the benefits of information systems to the small and medium-scale enterprises in Sri Lanka, and identify any problems encountered by small and medium-scale enterprises in exercising information systems. The response rate was 59.9%, which represented 91 manufacturing SMEs in the Colombo District of Sri Lanka. The study employed a questionnaire for owner-managers of SMEs. The stratified sampling technique was applied to obtain the sample size of the study and descriptive statistics were used for the analysis. The findings of the research revealed that e-mail is the most popular method of communication among SMEs in Sri Lanka and that SMEs are well aware about the benefits of information systems/information technologies. This study found that almost all SMEs are looking for government support for creating basic infrastructure, training and technical support.