Strategic Information System Small Business Groups

Question: Discuss about the Strategic Information System for Small Business Groups. Answer: Introduction It is highly researched topic that tries to motivate the small business groups for adopting Information Technology. There is very less research emphasizing over different factors of motivation for adopting the system of computerized accounting within small companies, though lot of research is already done in adoption of IT (Baren 2010). However, many accounting software in small business believes that it is a significant sub-set of complete small business in Information Technology research. Accounting software is the highest application package that is used and its the most dominant factor existing behind the decision of IT hardware acquisition (Baren 2010). To view the motivating factors in adopting the software of accounting, it will be quite practical to review the comprehensive literatures on complete adoption of IT. Therefore, this literature review will start with the discussion based on the primary IT adoption and try to review different studies that mainly emphasize over the adoption of accounting software (Baren 2010). Literature Review Accounting software/packages used in Australia There are few specific industries that are highly suited towards computerizing the record keeping services as compared to others as discussed by many researchers. All these findings are mainly supported by the Australian Bureau of Statistics 1999-2000 report based on the business use of IT (ABS (Australian Bureau of Statistics) 2000). The highest use of computers is done in the firm in different areas like business services, material goods, gas, electricity and industries of water supply (Elliot and Elliot 2006). Simultaneously, the less use of computers is done in the private and various other services such as cafes, housing, construction, transport, retail trade and storage (Elliot and Elliot 2006). Therefore, it is highly suitable for implementing CAS within the industries in which there exist more trading dealings as well as transaction processing that could facilitate the day to day business running (Elliot and Elliot 2006). Development and adoption Gorton (1999); Gelinas, Sutton and Hunton (2005) that had research about the small business adopting IT had now explored various motivating factors. Elliot and Elliot (2006) had attempted and tried to strengthen the IT adoption myriad through developing the integrated information model approval system (Elliot and Elliot 2006). This model is quite helpful in reviewing the variable that could affect the owner decision of small business in adopting IT (Elliot and Elliot 2006). There are four components into it such as, organizational characteristics, management characteristics, technological innovation characteristics, and business environment characteristics (Elliot and Elliot 2006). Current market size Gorton (1999) had quoted that the literature on technological innovation had explored that huge company holds more capital and infrastructure that could facilitate in adopting a system of computerized accounting. However, Gelinas, Sutton and Hunton (2005), mentions that both small and medium business had to face the considerable challenges like shortage of internal expertise of information system, restricted resources of money, and many that are less likely to adopt the IT system as compared to huge business (Elliot and Elliot 2006). Supplementary literature by Greuning (2006) disagree with the fact that small business, large business are most likely to be more able in employing people holding specialized skills, for instance, information system knowledge. Therefore, there are many opportunities for moving from the manual system and then adopting the digital one (Greuning 2006). Market leaders Small business consumers are referred as the main reason behind implementing Information Technology, more than the competitors pressure recommended by Greuning (2006). It is quite lucky that public practice accountants are holding the high position of offering the system analysis, implementation, and design and help advice to the clients as a much small business lacks in resources for adopting CAS (Greuning 2006). Furthermore, by introducing goods and services tax is referred as the external influence overs mall business managers decision for selecting CAS (Elliot and Elliot 2006). There are many other small businesses that would like to take benefit of government provided incentives for supporting the transition cost of GST (Greuning 2006). There are many small business computerized accounting systems that are adopting the GST introduction, as accounting for GST manual records highly approved as even more complicated. As the GST introduction, it can be depicted that many business ha d accepted that are price included are offset through the record keeping and had result into better management of business, but the basic consensus had moved towards the computerized records as even more positive for small business group sector (Greuning 2006). Competitive advantage Kimunya, Fishstein and Gaul (2000) had confirmed that it can be assumed that competition will improve all the possibilities in adoption of innovation. Head (2000) had also pointed out that competition will most likely to lead towards the insecurity of environment and will enhance the requirement and the innovation adoption rate. Head (2000) had advised that business will compete in around three different ways towards adopting IT. It includes IT can easily create the competitive benefits through minimizing the cost and enhancing differentiation. IT will try to change the structure of industry and will change the competition rule (Head 2000). It will also generate the new business through creating derived expectations from new product that are existing within the business operations (Rose and Hudgins 2008). Current gaps and challenges There are certain reasons that are regularly given in the literatures for explaining why the small companies that are not yet adopted by the Information Technology, explored by the main key barriers in acquisition of IT (Kimunya, Fishstein and Gaul 2000). Lack of computer knowledge and skills Nair and Fisshab (2010) had reported that drains over the money and time tries to characterize over the significant limitations. Computer technology works to infuse the business in both the large and small business; the requirement for the staff having the relevant IT knowledge is quite dangerous (Nair and Fisshab 2010). There are around two solutions, first it is the devoted employment of IT staff. However, this might exceed the small association budget and is quite expensive. Next is that IT training is next choice and it might be also costly. The small firm course, will include the professional practice, in which clients are paid more as per time, and the time used while undertaking the training is referred through various owner managers to lose the income as proved to be costly (Nair and Fisshab 2010). On the other side, (Nair and Fisshab 2010) mentioned that there are many favourable relation existing among the training level and measures that could affect the IT. At place where workers feel disappointed with the availability of training level, it is noticed that literacy of computers, approval of IT, and end user fulfilment is weak as compared to better-trained counterparts. Along with this, Nair and Fisshab (2010), accounted that the training is helpful for all the small companies. The research also clearly depicts the training related to the effectiveness of IT and to apply without any challenge (Nair and Fisshab 2010). Lack of time Romney and Steinbart (2009) mention that the analysis undertaken in the vast business had tried to reveal consistently the IS planning to come at the top priority of IS and business managers for managing the time. However, Proudlock, Phelps and Gamble (1999) had reported that previous studies had put forward the small companies to fade towards pursuing the model through massive counterparts in context of modern practices of management. Whilst, it is explored that Romney and Steinbart (2009) mention that the techniques of official planning of huge business are not importantly suitable for small companies as investigation suggests that the small businesses adopt more system of formal planning across the less information system issues (Romney and Steinbart 2009). Lack of financial resources Romney and Steinbart (2009) explores that both the small and medium companies require to have the constant supply of sufficient resources of finance in order to flourish the CAS adoption. The money views the installation cost, cost of maintenance, and various other present cost, which might crop the complete course of system operations. However, Nair and Fisshab (2010), mention that not every small and medium companies hold enough financial resources require for helping the CAS adoption and in that case financial limitation become big challenge. Conclusion The overview of the previous research studies clearly depict the set criteria that could create influence on the factors for adopting IT in the profession of accounting for both the medium and small business. Nevertheless, many previous research studies had tried to lift many problems in the literatures. In result of that, there is no contrast existing in the business, which make sue of system of computerized accounting. This assessment is quite practical in the reason for applying or not applying the computerized records, along with what factors could persuade the business for adopting Information Technology irrespective of dimensions. Moreover, as per the literatures, all the characteristics could create influence on owner and decision of managers for implementing IT in the field of accounting to the varying relying over the industry and economy in which the business is operated. References ABS (Australian Bureau of Statistics). 2000. Catalogue 8129.0 Business Use of Information Technology. Australia: Commonwealth of Australia Baren, V. 2010. The Importance of a Computerized Accounting System. [Online]. Available on: https://www.ehow.com/facts_6786562_importance-computerizedaccountingsystem.html#ixzz10yS7obSs [Accessed on: 24th August 2016]. Elliot, B., and Elliot, J. 2006. Financial Accounting and Reporting, 11th ed. England: Pearson Education Limited Gelinas, U., Sutton S., and Hunton, J. 2005. Acquiring, Developing and Implementing Accounting Information System, 6th Ed. Thomson South-Western Education College Gorton, M. 1999. Use of financial management techniques in the UK-based small and medium sized enterprises: Empirical research findings. Journal of financial management and analysis, 12(1), pp. 56-64 Greuning, H. V. 2006. International Financial Reporting Standards; A practical guide, 4 the. The World Bank Head, B. 2000. Small Business Should Log On and Write Off. Business Review Weekly, 22(11), pp. 1-12. Kimunya, A., Fishstein, P., and Gaul, N. 2000. Guide to computerising your accounting system. The Manager, 8(4), pp. 1-14. Nair, A., and Fisshab, A. 2010. Rural Banking: The case of Rural and Community Banks in Ghana. International Food Policy Research Institute and the World Bank Proudlock, M., Phelps, B., and Gamble, P. 1999. IT Adoption Strategies: Best Practice Guidelines for Professional SMEs. Journal of Small Business and Enterprise Development, 6(3), pp. 240-252 Romney, M., and Steinbart, P. 2009. Computer Fraud and Abuse, Fraudulent Financial Reporting; Accounting Information Systems, 11th ed. New Jersey: Pearson Education, Inc. Rose, P., and Hudgins, S. 2008. Bank Management and financial services; 7th Ed. New York: McGraw-Hill