Management Information System Integration and Performance of Small and Medium Enterprises in Embu County, Kenya

Abstract

Firms need to use of Information Systems (IS) in order to increase efficiency of operations within the enterprise. Survival of businesses to beat competition depends on their ability to use information systems. Those SMEs that use information systems are able to compete with their rivals in larger firms. Information systems allow SMEs to cut down costs, make better products and offer quality service to customers. SMEs that have integrated information systems are able to cut down on cost and provide better services to customers. SMEs in developed economies have exploited the full benefits of information systems unlike those in developing countries like Kenya. This is so because of the slow development of information systems within SMEs in developing countries. There are a number of challenges experienced by SMEs in developing countries that impedes the adoption and use of information system. These challenges include; poor ICT infrastructure, lack of management support, inadequate user expertise and poor information storage. This study sought to investigate how these challenges affect performance of SMEs in Embu County, Kenya. The study targeted 250 SMEs with a total of 400 employees. Stratified random sampling was employed to select 80 employees from the target population. Primary data was collected using closed and open-ended structured questionnaires with reliability coefficient of 0.6 and above. Data was collected using drop and pick method. Data was analyzed using both descriptive and inferential statistics using SSPP 20. Descriptive analyses was done using frequencies, percentages, mean and standard deviation. Inferential analysis was based on multiple regression model. The study revealed that SMEs had adequate ICT infrastructure that enabled them to communicate easily; the management of the SMEs supported the firms by investing in IIS projects by providing necessary resources and training of staff; SMEs staff had adequate Skills and knowledge in ICT that allowed them to use ICT tools efficiently; Information systems within SMEs enabled the firms to communicate, store, access and share information easily with their stakeholders. The study concluded that ICT infrastructure, Management support, user expertise and information storage influenced performance of SMEs in Embu County. The study recommended that management of SMEs in Embu County should provide sufficient ICT infrastructure; provide training to their staff to acquire skills in ICT.The study also recommended that the government of Kenya should waive taxes on ICT gadgets to enable SMEs procure the devices at low cost.