Adoption of information communication technology on business performance: A case of small and medium enterprises in Nakuru central business District, Kenya
In Kenya, the Small and medium enterprises (SMEs) sector plays an important role in economic development and job creation. The SMEs find themselves in an environment of constant technological change especially in ICT and need to adopt these changes in their businesses operations. These changes may become significant threats when ignored, but they may well become valuable opportunities when anticipated and appropriately adopted since the adoption and assimilation of ICT is recognized as an important factor in the growth equation. However, close inspection reveals that most of the SMEs in the country make only minimum use of the ICT resources at their disposal. Hence, this study was undertaken to determine the status of ICT adoption in the business operations of SMEs in Nakuru CBD and the attendant effect on their individual performances. This was pursued under specific objectives such as the influences of ICT literacy, infrastructure, business networks and availability of funds for ICT adoption on the businesses performances which were also variables of ICT adoption. The purpose of this study was to establish the relationship between these variables and business performance of SMEs in the area. The unit of analysis was the individual business owners and descriptive survey design was adopted for the study. Probability sampling was used to obtain a sample of 226 respondents who were then selected for the study using systematic sampling technique. Questionnaires with both closed and open-ended questions were used for collection of primary data. The data was then analyzed for descriptive statistics i.e. frequencies and percentages, while the hypotheses were computed using the Pearson's Product Moment Correlation with the aid of the Statistical Package for Social Sciences (SPSS). The findings revealed there was near gender parity among the business owners and that most of them were in their prime ages between 21 and 40 years. They also had high levels of education with majority 96% having high school education and above. Most of the businesses had only been operating for the last 2 to 3 years and were sole proprietorships not more than five employees. Slightly more than half (51%) were computer literate although only to the basics level. Tests of hypotheses indicated that, ICT literacy as a variable of adoption had a rather weak correlation with business performance of SMEs in Nakuru town with similar results but in an opposite direction observed in terms of ICT infrastructure. Use of ICT in business networks had a very weak association with the performance indicators while availability of funds for adoption .of ICT posted a strong degree of association with the same indicators. Following these findings, the study recommends that: The Government of Kenya should consider mobilizing resources geared at creating awareness on latest information technologies for business performance; and creating an environment through policy that enables SMEs to procure ICT equipment with relative ease by partnering with banks and other financial institutions to offer to the SMEs ICT oriented products. ICT training should also focus on adopting the technologies to the businesses. The management of these businesses should consider scanning the environment to find the latest ICT equipment that could be useful in promoting service delivery efficiency and / or proper product mix / choice that suits customer needs. There is need to reposition themselves by. forming or joining major business networks in Nakuru and utilize existing forums to share and exchange business ideas related to aspects such as marketing strategies and identification of new opportunities. The findings are expected to contribute to a better theoretical understanding of the factors that promote ICT usage among the SMEs.