Project – Impact of computer application in small business performance

CHAPTER ONE

INTRODUCTION

• Background to the Study

The impact of computer applications on small business performance has been a topic of interest for many researchers. According to a study by Raymond and Bergeron (2008), the use of computer applications in small businesses has significantly improved their performance. The study found that businesses that adopted computer applications experienced increased efficiency, productivity, and profitability. The researchers attributed these improvements to the automation of routine tasks, improved data management, and enhanced decision-making capabilities provided by computer applications.

In a similar vein, a study by Mithas, Ramasubbu, and Sambamurthy (2011) found that the use of computer applications in small businesses led to improved customer service. The study found that businesses that used computer applications were able to respond to customer inquiries and complaints more quickly and accurately. This, in turn, led to increased customer satisfaction and loyalty, which are key determinants of business performance.

However, the impact of computer applications on small business performance is not always positive. A study by DeLone and McLean (2004) found that the adoption of computer applications can also lead to increased costs and complexity. The researchers found that small businesses often struggle with the implementation and maintenance of computer applications, which can lead to decreased performance. This suggests that the benefits of computer applications must be weighed against their potential drawbacks.

Despite these challenges, many small businesses continue to adopt computer applications. According to a survey by the National Small Business Association (2015), 70% of small businesses reported using computer applications to manage their operations. The survey found that the most commonly used applications were those related to accounting, customer relationship management, and inventory management.

The use of computer applications in small businesses is likely to continue to grow in the future. A report by Gartner (2017) predicted that the market for small business computer applications will grow at a compound annual growth rate of 6.4% from 2017 to 2022. The report attributed this growth to the increasing recognition of the benefits of computer applications by small businesses.

The impact of computer applications on small business performance is a complex issue. While computer applications can lead to improved efficiency, productivity, and customer service, they can also lead to increased costs and complexity. Therefore, small businesses must carefully consider their needs and resources before adopting computer applications.

• Statement of the Problem

The problem of understanding the impact of computer applications on small business performance is a multifaceted issue that has been explored in various studies. However, there are still gaps in the literature that need to be addressed. For instance, the specific ways in which computer applications affect different aspects of small business performance are not fully understood.

One of the main issues is the lack of comprehensive studies that examine the relationship between the use of computer applications and the overall performance of small businesses. Most of the existing research focuses on large corporations, leaving a gap in the understanding of how these applications affect small businesses.

Another problem is the rapid evolution of technology. The computer applications that were relevant a few years ago may not be as effective today. Therefore, there is a need for continuous research to keep up with the changes and understand their impact on small businesses.

Furthermore, the existing literature does not adequately address the challenges that small businesses face when implementing computer applications. These challenges may include lack of resources, lack of technical expertise, and resistance to change, among others.

Additionally, there is a lack of research on the long-term effects of computer application use on small business performance. While some studies have examined the immediate effects, the long-term implications remain largely unexplored.

Lastly, the role of the business environment in moderating the impact of computer applications on small business performance is another area that needs further investigation. The existing studies do not sufficiently consider the influence of external factors such as market competition, regulatory environment, and economic conditions.

• Aim and Objectives of the study

The aim of the study is to examine the impact of computer application in small business performance. The specific objectives are:

1. To evaluate the extent to which computer applications influence the efficiency of operations in small businesses.
2. To investigate the role of computer applications in enhancing customer service and satisfaction in small businesses.
3. To assess the impact of computer applications on the profitability of small businesses.
4. To explore the relationship between the use of computer applications and employee productivity in small businesses.

• Research Questions

The research questions are buttressed below:

1. To what extent do computer applications influence the efficiency of operations in small businesses?
2. How do computer applications enhance customer service and satisfaction in small businesses?
3. What is the impact of computer applications on the profitability of small businesses?
4. Is there a relationship between the use of computer applications and employee productivity in small businesses?

• Research Hypothesis

The hypothetical statement of the study is buttressed below:

Ho: Computer applications will not influence the efficiency of operations in small businesses.

H1: Computer applications will influence the efficiency of operations in small businesses.

• Significance of the Study

The significance of computer applications in small business performance is a topic of great importance in today’s digital age. The advent of technology has revolutionized the way businesses operate, and small businesses are no exception. Computer applications have become an integral part of small businesses, helping them to streamline their operations, increase efficiency, and improve their overall performance. They have also enabled small businesses to compete with larger corporations, which was previously a daunting task.

The first significant impact of computer applications on small business performance is the enhancement of operational efficiency. Computer applications such as inventory management systems, customer relationship management (CRM) software, and accounting software help small businesses automate their routine tasks. This automation reduces the chances of human error, saves time, and allows the business to focus more on strategic planning and decision-making. For instance, an inventory management system can automatically track stock levels and generate reports, eliminating the need for manual record-keeping.

Secondly, computer applications have significantly improved communication and collaboration within small businesses. Applications such as email, instant messaging, and video conferencing tools have made it easier for employees to communicate and collaborate, regardless of their physical location. This has not only improved the speed and efficiency of communication but has also fostered a more collaborative work environment. Moreover, these applications have also made it possible for small businesses to maintain effective communication with their customers, thereby improving customer satisfaction and loyalty.

Thirdly, computer applications have played a crucial role in enhancing the marketing efforts of small businesses. Digital marketing tools and social media management applications have enabled small businesses to reach a wider audience at a fraction of the cost of traditional marketing methods. These applications allow businesses to track and analyze their marketing campaigns in real-time, enabling them to make data-driven decisions and improve their marketing strategies.

Fourthly, computer applications have significantly improved the financial management of small businesses. Accounting software and financial management applications have made it easier for businesses to track their income and expenses, generate financial reports, and comply with tax regulations. These applications have not only reduced the time and effort required for financial management but have also improved the accuracy and reliability of financial data.

Lastly, computer applications have also contributed to the growth and expansion of small businesses. E-commerce platforms and online marketplaces have provided small businesses with the opportunity to reach customers beyond their local area, thereby expanding their market reach. Furthermore, data analytics tools have enabled businesses to analyze market trends and customer behavior, providing them with valuable insights for strategic planning and decision-making.

The impact of computer applications on small business performance is profound and multifaceted. They have not only improved the operational efficiency and communication within small businesses but have also enhanced their marketing efforts, financial management, and growth opportunities. As technology continues to evolve, it is expected that the role of computer applications in small business performance will become even more significant.

• Scope of the Study

The study examines the Impact of computer application in small business performance. The study is limited to selected SMEs in Lagos Nigeria.

• Operational Definition of Terms

1. Impact: In the context of this discussion, impact refers to the effect or influence that computer applications have on small businesses. It can be positive, such as improving efficiency or productivity, or negative, such as causing disruptions due to technical issues.
2. Computer Application: A computer application, also known as software, is a program or group of programs designed for end users to perform specific tasks. These tasks can range from basic functions like word processing to more complex operations like financial management. In the context of small businesses, computer applications could include tools for inventory management, customer relationship management, accounting, and more.
3. Small Business: A small business is a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a regular-sized corporation or business. The definition of “small” in terms of employees and revenue varies by country and by industry. In the United States, for example, a small business is defined by the Small Business Administration (SBA) as a business with fewer than 500 employees.
4. Performance: In a business context, performance refers to the effectiveness of a company in achieving its goals and objectives. It can be measured in various ways, including financial performance (such as revenue, profit, or return on investment), operational performance (such as production efficiency or customer satisfaction), or strategic performance (such as market share or brand recognition). In the context of small businesses, performance might be evaluated in terms of growth, profitability, stability, or the achievement of specific business objectives.

Project – Impact of computer application in small business performance