Interrelationships among Information System Quality, Intention to Use, Perceived Usefulness, Technology Readiness and their Effect on E-Commerce Adoption among SMEs

Abstract

The development potential of e-commerce is being very explicitly recognized as the tool to facilitate and monitor entrepreneurial-related issues such as human capital development, technical assistance, capacity building and the access to e-commerce by Small and Medium-sized Enterprises (SMEs). The first decade of the new millennium has witnessed a profound change and dramatic increase in the way business and trade has taken place, with e-commerce playing an increasing role worldwide. There is no doubt that there exists enormous potential for using information and communication technologies (ICT) to contribute to the social progress and economic growth of SMEs. As we enter the second decade of the millennium, technological development brings forward more modern development. The Malaysian government launched in 2012 the SME Master Plan 2012-2020 which defines the policy focus for SMEs in achieving Malaysia's goal of becoming a high-income country, as entrusted in Vision 2020. Malaysia fully supports IT integration to spur SMEs' commercial accomplishment in doing their day-to-day operation and taking chances and making crucial business decisions, be it either to expand their existing business or start new viable opportunities. Malaysian entrepreneurs consider operating a small and medium-sized business to be exciting, more challenging and much more rewarding as opposed to doing the 9 to 5 rat race, be it in private or public corporations. While significant attempts had been carried out and spearheaded by the Malaysian government to assist in the flourishing and nourishment of SMEs, unfortunately e-commerce adoption rate and the benefits that can be achieved, are still far below potential. This has resulted in SMEs businesses to languish which subsequently resulted in SMEs business revenue and the pursuit of a viable SME business to grind to an almost halt. Therefore, it is imperative to recognize the factors and barriers affecting SMEs decisions on e-commerce adoption. The purpose of this study is to examine the level of e-commerce adoption among Malaysian SME entrepreneurs by using Parasuraman's Technology Readiness Index (TRI). A set of questionnaires will be supplied to SMEs entrepreneurs based in the northern state of Malaysia, Penang, which is also known as the 'Silicon Valley of the East'. This concept paper's focal point of research focuses on the Technology Readiness drivers (optimism and innovativeness) and barriers (discomfort and insecurity) that will essentially impact e-commerce adoption among SMEs. Despite the fact that there have been instances of SME success stories, there is more than meets the eye when it comes to recognize and tackle the specific controllable factors which hinder SME's business success.