Analysis of business process management capability and information technology in small and medium enterprises in the garment industry (multiple case studies in East Java, Indonesia)

Abstract

AbstractThis research explores the interrelationships between internal and external factors, business process management (BPM) capability of garment‐based SMEs, and the IT that matches this capability. Multiple case studies are conducted in three SMEs in East Java, Indonesia. The data is collected using in‐depth interviews with the owners and employees of SMEs. A grounded theory approach is used to analyze the findings. Analysis of the three cases found two main factors that affect the BPM in the garment SMEs. The first is the owner's business aptitude and expertise, and the second is the connection between external factors, business context and business strategy. Business strategy is closely related to the way SMEs define their business process, organize their employees, and develop culture. The BPM capabilities needed by SMEs in Indonesia include business process documentation and business process improvement. The business process and business process capability determine the IT needs of garment SMEs. IT is used to support sales, marketing, and payment processes in the three case companies. SMEs are very careful about their IT investment decisions due to resource constraints. SMEs will choose IT systems requiring minimal investment which are less risky to implement, such as social media and the e‐marketplace.