Journal of Service Science and Management, 2011, 4, 141-157
doi:10.4236/jssm.2011.42018 Published Online June 2011 (
Copyright © 2011 SciRes. JSSM
Information Technology Adoption and
Assimilation : Towards a Research Framework for
Service Sector SMEs
Sylvestre Uwizeyemungu, Louis Raymond
Institut de recherche sur les PME, Université du Québec à Trois-Rivières, Trois-Rivières, Canada.
Received February 3rd, 2011; revised March 12th, 2011; accepted April 2nd, 2011.
Information technologies (IT) have become one of the most important infrastructural elements for SMEs in service in-
dustries. Now, these firms show specific characteristics and behaviours with regard to adopting and assimilating IT.
These specificities have not been taken into account however in formulating a research framework or programme on
the adoption and assimilation of IT in service SMEs. The present study thus seeks to fill this void. After reviewing the
literature on IT in the services sector, the antecedents of IT adoption and assimilation in the context of service SMEs
are identified and integrated within a research framework. This framework is then applied to generate a set of
twenty-two salient propo sitions for future research on IT adoption and assimilation in service sector SMEs.
Keywords: IT Adoption, IT Assimilation, Service Sector, SME, Owner-Manager
1. Introduction
The manufacturing sector has long been considered to be
the main engine of regional, national or continental
economies, and thus has received the most attention from
economists, management researchers, and governments.
There has been an evolution of the role of various actors
in the world economy however, such that a great part of
the manufacturing employment is shifting toward
emerging countries such as China, India and others,
whereas the developed countries in North America and
Europe that used to be most industrialized are seeing this
employment being replaced by employment in the ser-
vices sector [1]. Hence it is generally accepted that there
now exists a “post manufacturing world” [2] in which
service enterprises in general, and service SMEs (small-
and medium-sized enterprises) in particular, are called
upon to play an increasingly important role. In fact, ser-
vice SMEs could become the economic engine for many
countries that are undergoing industrial reorganizations
and are redeploying toward knowledge-based industries.
Yet we lack knowledge on the specific characteristics
and operating ways of service SMEs, given that the ser-
vice sector has been insufficiently studied to-date when
compared to the manufacturing sector [3,4].
Now, while this transition to a service economy poses
major challenges, notably to manufacturing enterprises
that must adapt in order to survive, it creates numerous
opportunities for service SMEs. In order to seize these
opportunities, one crucial condition for these firms is the
“need to establish capabilities to manage their portfolio of
resources, including information technologies (IT), as
services for business processes” [5]. The role of IT is es-
pecially critical as these technologies have quickly be-
come one of the most important infrastructural elements
of services firms [6-8]. Some authors go so far as to state
that many service providers will need to implement
“e-processes” in some form or other in order to survive
In such a context, there is obviously a strong interest in
ascertaining the level of IT adoption and IT use in ser-
vice SMEs, and in identifying the antecedents of this
adoption and this use. While there exists an abundant
empirical literature on the adoption and assimilation of
IT in both large and small manufacturing firms, such
empirical studies on service firms in general and service
SMEs in particular are also starting to increase in number
[10-12]. The main result of these last studies is that ser-
vice SMEs show specific characteristics and behaviors
with regard to adopting and assimilating IT. These speci-
ficities have not been taken into account however in
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
formulating a research framework or program on the
adoption and assimilation of IT in service SMEs. The
present study thus seeks to fill this void.
We begin the paper by reviewing the literature on IT
in the services sector. We follow by identifying the ante-
cedents of IT adoption and assimilation in the context of
service SMEs. We then integrate these antecedents
within a research framework that enables us to formulate
a set of twenty-two propositions for future research, and
conclude with the study’s theoretical and managerial
2. IT in the Services Sector
Do IT adoption levels in the services sector differ from
those observed in the manufacturing sector? Beyond
adoption levels, does the nature of the technologies
adopted also differ? And do motivations to adopt IT and
implementation approaches differ? These are the ques-
tions we attempt to answer in the following sections of
the paper.
2.1. IT Adoption in the Services Sector
Statistics from OECD countries show that services sec-
tors are typically the most intensive users of IT [13]. At
the end of the 1990s already, enormous investments were
made by the services sector to absorb new IT software,
these absorption costs being conservatively estimated to
be at least five times the cost of IT hardware [14]. In the
United States, more than 30% of the total stock of
equipment and software in services consists of IT hard-
ware and software, whereas the average is just over 11%
for all private industries, the much less IT-intensive sec-
tors being the goods-producing sectors (agriculture,
mining, manufacturing and construction) for which, in
many cases, this rate fall under 5% [13].
The measure of IT intensity, that is, the share of IT
investment in total investment also shows the services
sector as leading in this regard: [15]’s study shows that
for service firms, the average share of IT investment in
total investment amounts to approximately 35 percent,
whereas it is between 19 and 22 percent for manufactur-
ing firms. One can also measure a firm’s IT intensity by
IT investment per employee. With this measure, it has
been confirmed that service firms use IT more inten-
sively than manufacturing firms [15]. Service sector or-
ganizations invest in IT twice as much per employee as
manufacturing sector organizations [16]. As service firms
in the United States invest annually over US$ 100 billion
in IT, the sector’s rate of aggregate ownership of the in-
stalled information and communication-based technology
is estimated to be 85% [17].
This predominance has been attributed to the fact that
many services are more information-intensive in nature,
requiring more processing and distributing of informa-
tion than manufacturing [15]. As denoted by [18], “in-
formation intensive work activities in terms of service
practices require well developed IT systems so as to en-
able improved service performance”. Another study
shows that even in an economic downturn, IT expenses
in the services sector continue to grow [19].
The statistics indicating massive adoption of IT by
service enterprises must be further analyzed nevertheless,
as notable differences may remain hidden. Firstly, adop-
tion rates are variable depending upon the nature of the
technology adopted. Secondly, there exist disparities
among service sub-sectors. Thirdly, there exist disparities
depending upon the size of service firms. And fourthly,
one should not confound IT adoption rates with IT as-
similation or usage levels in a given sector or sub-sector.
2.1.1. Adoption Rates Depending upon the Nature of
Adoption rates vary depending upon the nature of IT. For
instance, in a study of ERP adoption by European mid-
size companies, [20] indicated, already in 1998, an adop-
tion rate of about 20% in the project industry and the
wholesale industry, vs. nearly 40% in discrete and auto-
motive, explaining these differences by the fact that
“ERP has its roots in manufacturing”. In effect, most
ERP vendors initially developed products only for
manufacturing companies and thus did not target the ser-
vices market [10]. However, the expectations were high
in the years 1998-2000 regarding ERP in the services
sector, as [21]’s study found that 24% of the application
budget in this sector was allocated to ERP.
This being said, if one analyzes the adoption of ERP or
integrated enterprise systems further, one quickly identi-
fies fundamental differences between the services and
manufacturing sectors at the software module level. For
example, one can easily understand that service firms do
not implement production planning modules, as the no-
tion of material requirements planning does not really
apply in this context [10]. However, they use human re-
sources and workforce management modules more than
manufacturing firms [21]. With regard to ERP modules,
research suggests that the services sector largely benefit
from logistics modules such as project management and
after-sales services even though their integration is not as
complete as in the manufacturing sector [10].
While ERP and supply-chain management (SCM)
system adoption rates are lower in the services sector,
they are higher with regard to customer-relationship
management (CRM) systems [22]. And studies also in-
dicate that e-commerce technology has been adopted at a
faster pace by services enterprises than by manufacturers
[23]. For Web use in general, when compared to both
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
manufacturing and commercial firms, a higher percent-
age of service providers are “e-merchants”, that is, they
generally exhibit the highest scores in all types of Web
uses [24]. Reference [9] identified two major applica-
tions of Internet-based processes (e-processes) which are
being extensively used to enhance service firms’ per-
formance: e-transactions and e-CRM. E-transactions re-
fers to the use of Web-based processes between service
firms with their partners (suppliers and customers for
instance) to handle many routine transactions such as
order taking/sending, billing, payment and order tracking.
This definition corresponds to the “e-purchasing” defini-
tion proposed by [24] for whom “e-transaction” refers
merely to e-government and e-banking transactions. On
the other hand, e-CRM refers to the use of Internet capa-
bilities for keeping, improving and extending the firm’s
relationships with its customers: collecting the right in-
formation enables the firm to develop accurate customer
profiles, launch targeted marketing campaigns, and pro-
vide better after-sales support. According to one survey,
e-transactions absorbed 37% of the total investment in
new IT at a typical company, while e-CRM absorbed
13% [9].
2.1.2. Dispari t i es wi thi n the Services Sector
In matters of IT adoption in the services sector, there
sometimes exist notable disparities among sub-sectors.
For example, [1]’s study made in France indicates that IT
usage is relatively weak for SMEs in the logistics
sub-sector, whereas it is strong for those in the engineer-
ing and technical consulting sub-sectors. While certain
sub-sectors such as professional services still invest in
“back-office” solutions, others such as banks have almost
no need to invest anymore, given the saturation level
attained for IT adoption in such sectors [10]. The con-
sensus is that “business and financial services generally
lead in adopting IT, whereas areas such as health and
retail generally lag” [25]. As noted previously however,
this leadership of one sub-sector compared to another can
vary if one considers a particular type of IT. For instance,
[24]’s study of Web usage shows that the large retail
chains undertake e-purchasing (i.e. electronic search for
new suppliers, online orders, electronic monitoring of
orders’ status) more frequently than other firms; thus, a
larger percentage of e-purchasers are found in commerce
as compared to manufacturing and other services.
2.1.3. Disparities with Regard to Enterprise Size
IT investments levels also vary with the size of service
enterprises. In analyzing three measures of such invest-
ment, namely “% of intensive IT users”, “% of IT in total
investment” and “IT investment per employee”, [15]
established that even if the majority of service firms use
IT intensively regardless of their size, the very small
firms (fewer than 10 employees) lead in regard to all
three indicators. These authors also found that small en-
terprises have a significantly greater IT investment per
employee and IT investment in total investment than
medium-sized and large enterprises. In this regard,
OECD data show that large firms more frequently use the
Web to sell their products and services than small and
medium-sized firms [25]. For their part, [24] show that
the firm’s size is a significant predictor of its specific use
of the Web, as a greater proportion of large firms fall into
the “e-merchant” and “e-purchaser” categories, whereas
the largest percentages of “information-seekers” (i.e.
firms that use the Web mainly for information search and
gathering as part of their business intelligence activities”)
are found among medium-sized companies.
2.1.4. IT Adoption Does Not Mean IT Assimilation
The preceding observations with regard to enterprise size
must be interpreted with prudence, given that IT adoption
does not necessarily mean that these technologies are
highly assimilated or used by the service firm that have
adopted them. This is illustrated by investigations of the
various levels of IT sophistication in the services sector.
For instance, [1] denote four levels of Internet usage in
service SMEs that operate internationally, as presented in
Figure 1, by increasing order of sophistication: Internet
for communication, Web site, prospecting for new mar-
kets, online service offer.
These uses are similar to what [26] call e-business ca-
pabilities, that is, by order of increasing prevalence in
manufacturing firms: e-communication, e-intelligence,
e-commerce and e-collaboration. These authors add that
while it may seem logical to develop these capabilities in
that order, it may be preferable to first develop those ac-
tivities that are more aligned or in “fit” with the firm’s
strategic orientation.
Given that IT adoption rates include service firms that
Figure 1. Levels of sophistication in the use of the Internet
by service SMEs.
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
may be at very different IT sophistication levels and that
a firm may increase its IT management and IT usage
sophistication over time, these levels are more important
than adoption in explaining the benefits or value obtained
from IT by a company, be it large, medium-sized or
small. This is confirmed by a multi-country study (Can-
ada, Spain, Norway, Australia, Belgium, Sweden, Den-
mark and Finland) done by the OECD [27] whose main
finding was that despite an increased use of IT, “the up-
take and integration of more sophisticated electronic
business applications remains relatively limited”. In other
words, there is a high level of business connectivity (use
of the Internet) in all of these countries, but the level of
e-commerce adoption (to purchase products online, re-
ceive orders online, sell products and services online)
remains low. One should thus distinguish among service
enterprises not by their adoption of IT in a generic man-
ner but rather in regard to the sophistication of the IT
2.2. Motivations for IT Adoption
As to what motivates firms to adopt IT, studies have
shown no particular differences between the service and
manufacturing sectors [9,10], i.e. these motivations are
basically technological, operational, strategic and per-
formance-related [Ndubisi, 2007]. These are substantive
or rational motivations, but one also denotes less rational
motivations in service firms. For example, [9] found that
some of these firms adopt e-commerce technologies due
to a “bandwagon” effect or “gold-rush” mindset, regard-
less of their actual value or potential benefit, which is
also the case for manufacturing firms [29]. With regard
to integrated enterprise systems in the services sector, [10]
assert that motivation for adoption and implementation
problems later encountered are the same as those found
in the ERP literature in general.
This being said, [30]’s analysis of the determinants of
Internet usage shows that relative weight of each deter-
minant varies by sector. For instance, expected near-term
and long-term consequences of Internet adoption are
found to have no predictive effect on usage in the manu-
facturing sector whereas in the service sector, near-term
consequences have a positive effect while long-term con-
sequences have a negative effect. Motivations may also
vary with the nature of the IT adopted. Reference [9]
shows for example that with regard to e-processes, rea-
sons for adoption depend upon the type of e-processes.
Thus, service firms wishing to access new markets im-
plement e-transactions only, whereas those expecting
performance benefits implement both e-CRM and
2.3. IT Implementation Approaches
Most information technologies adopted by service enter-
prises were first developed for manufacturing enterprises.
For instance, given that the former were not initially tar-
geted by ERP system vendors, many face a serious “mis-
fit” problem, that is, a gap between the functionalities
offered by the system and that required by adopting firm
[10]. This could explain, at least in part, why adapting IT
to the specific processes of service enterprises has gener-
ally taken longer [15]. Longer IT implementation delays
can also be explained by greater difficulties in reengi-
neering processes within the services sector. In fact,
process modeling methods and tools must take into ac-
count that the essential components of service production
and delivery processes are the firm’s employees, that is,
human beings rather than goods or machines [10].
Contractual approaches to IT implementation have not
been widely used in IS research, notwithstanding their
explanatory potential with regard to the phenomena of IT
outsourcing and software package adoption. Building on
the IT productivity paradox notion, [16] propose a model
of divergent enterprise systems contracting approaches in
the service and manufacturing sectors. The results of
their study show that service enterprises generally dis-
play a preference toward the revisionist-adversarial ap-
proach, whereas manufacturers generally display a pref-
erence toward a preservationist-cooperative approach.
The former approach, marked by a short-term orientation
and technology-driven, translates into an IT contract that
allows for revision, change and disengagement at the
opportune moment. The preservationist-cooperative ap-
proach is long-term oriented and business decision-
driven; it translates into a contract that aims to insure the
extension of software licenses, portability to other tech-
nological platforms and evolving compatibility.
3. IT Adoption and Assimilation Factors
Implementing a new IT successfully depends for a large
part on the organization’s capacity to conduct the im-
plementation project and integrate the changes brought
about by the new system, that is, on the “organizational
readiness” of service firms for IT adoption and assimila-
tion [31,32]. It thus becomes important to identify the
factors that determine this capacity. While many success
factors have been identified, all can be put into one of the
three categories of the technology-organization-environ-
ment (TOE) framework [33]; hence the process by which
a firm adopts and implements technological innovations
is influenced by the technological, organizational, and
environmental contexts. Now, many such contextual
factors of IT adoption and assimilation have been studied
in various contexts (SME vs. large enterprise, services vs.
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
manufacturing sector, for a specific type of IT such as
ERP). In the present study, we seek to identify those fac-
tors that are applicable to service SMEs and to highlight
the specificity of these factors in such a context.
3.1. Technology-Related Factors
While the notion of IT covers a reality that is diversified
and complex, the tendency to refer to it as if it was a
monolithic reality whose characteristics are well defined
can seriously limit, even falsify our comprehension of IT
adoption by business enterprises. Now, what similarity is
there between adopting email technology and adopting
an ERP system? It thus becomes crucial to discriminate
different types of IT in order to adequately measure IT
adoption practice characteristics [34].
In distinguishing standardized IT (company-wide ap-
plications of service-supporting technology) from cus-
tomized IT (applications managed locally by contact em-
ployees or service teams that allow them to better meet
customer needs), [34] found the antecedents of IT adop-
tion to be notably different among the two types of tech-
nology. These authors concluded on the need for manag-
ers “to discriminate between types of technology and
fine-tune their IT adoption strategy to the specific type of
IT concerned”. The distinction made by these authors can
be linked to the three-category typology proposed by
[35], based on the typical function of IT, namely gen-
eral-use IT (e-mail and Internet access), produc-
tion-integrating IT and market-oriented IT. Taking the
specificity of service enterprises into account, these cate-
gories could be redefined as general-use IT, proc-
ess-integrating IT and customer-oriented IT.
3.2. Organization-Related Factors
In reviewing the academic literature, [9] identified a wide
range of firm-level factors that have the potential to en-
able technology adoption: those factors relate to a firm’s
technology opportunism, technological orientation, or-
ganizational innovativeness, technology portfolio and
absorptive capacity. Reference [36] considered three
factors that contribute to organizational readiness for IT
adoption: top management support, organization culture,
and characteristics of IT professionals. Top management
support is essential for defining the role of IT, for IT
planning, and for making resources for IT projects avail-
able. With regard to the organization’s culture, elements
deemed to increase readiness to adopt IT include end
users’ prior exposure to IT, strong support for the ex-
pression and discussion of new and innovative ideas,
support for risk taking and experimentation, existence of
technology champions, and a proactive business strategy.
As for the characteristics of IS professionals, their under-
standing of business needs and their capacity to proac-
tively follow developments in IT field can increase or-
ganizational awareness and push for the adoption of new
IT applications.
These organizational factors do not have the same
connotation however in a SME as in a large enterprise.
The former is generally an extension of the beliefs, atti-
tudes, and behaviors of the entrepreneur or owner-
manager. This means that SMEs are strongly influenced
by the owner’s personal idiosyncrasies [23]. As the small
firms’ strategy, structure, and culture are embodied by
their owner-managers, many organizational determinants
of IT adoption can be considered as entrepreneurial de-
terminants [37]. We further analyze the three factors that
appear critical for SMEs, namely the owner-manager’s
strategic orientation and competencies that determine IT
adoption, and the employees’ competencies that deter-
mine IT assimilation.
3.2.1. SME Owner-Manager’s Strategic Orientation
Entrepreneurs or SME owner-managers may differ in
their strategic orientation, causing them to view their
environments in different ways. A strategic orientation is
“an indicator of the process developed to analyze and
integrate new information, to coordinate decisions, to
examine the evolution of environmental factors and to
assess new projects” [38]. Miles and Snow’s (1978) ty-
pology seems to be most appropriate to conceptualize
and operate strategic orientation in the context of SMEs
and indeed has been one of the most widely used con-
structs for ascertaining a firm’s strategy in this context
Briefly, according to the Miles and Snow’s typology
[39], the firm’s strategic orientations can be classified
into four categories: prospector, defender, analyzer, and
reactor. This typology is based on how the firm responds
to three major problems facing it: the entrepreneurial
problem (the organization’s product-market domain), the
engineering problem (the choice of technologies and
processes for production and distribution), and the ad-
ministrative problems (formalization, rationalization and
innovation in an organization’s structure and policy
processes). As indicated previously, the SME’s strategic
orientation will most likely be that of its owner-manager.
Roughly speaking, the prospector is deemed to be entre-
preneurial, innovative and new opportunity-oriented,
while the defender is more internal-oriented, aims to
maintain the firm’s position in a relatively stable market.
Being a hybrid of prospector and defender, the analyzer
is selective in pursuing new opportunities while he/she
seeks to maintain the firm’s position in core markets. The
reactor has no well-defined strategy and his/her reaction
to changes occurring in the firm’s environment cannot be
predicted a priori; this is why the reactors are generally
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
excluded from formal analysis [26,40,41].
3.2.2. SME Owner-Manager’s Competen cies
Studying the determinants of the successful adoption and
use of IT in manufacturing SMEs, [42] showed that
top-management perspectives and attitudes towards IT
adoption and use, along with IT competencies (IT people
and knowledge available), are the key factors. Develop-
ing a framework for benchmarking IT practice within
small firms, [43] established a link between the preced-
ing factors and three sets of associated skills and compe-
tencies, namely technical IT skills, managerial IT skills,
and business and general management skills.
Studying the determinants of business-to-business
(B2B) e-services adoption and assimilation in SMEs,
Scupola [12] brought the competencies identified by [42]
down to four main competencies at the top-management
level: technical, vision, value and control competencies.
The technical competency implies that without really
being an expert in IT, the manager is comfortable with
new technology and its operation [12]. In [12]’s study,
while technical ability at the managerial level was not
found to be important for primary adoption, technical
skills at the employee level were found very important
for IT assimilation. Reference [42] showed however that
in a SME context, there may be a strong link between IT
knowledge at the managerial level and IT technical skills
at the employee level. Without such knowledge, a small
business manager in effect cannot ascertain the limita-
tions of employees and have them develop the skills
necessary to assimilate IT.
Reference [12] found that for managers, IT vision, IT
value and IT control competencies were determinant for
the primary adoption of IT. The IT vision competency
refers to the managerial ability to foresee the strategic
impacts of IT on the business. The IT value competency
refers to the ability to recognize the opportunities to con-
tribute to the business value embedded in the IT applica-
tions adopted. And the IT control competency refers to
the managerial ability to enforce rules and policies and to
provide required resources to ensure that IT is adopted at
the individual level.
3.2.3. SME Employees’ Competencies
Once the decision to adopt IT has been made at manage-
rial level, a set of competencies at the employees’ level
are deemed necessary for the actual implementation and
effective use of IT. It is at the individual level that one
will see if the IT adopted has been well assimilated, i.e.
has become an integral part of the firm’s culture and rou-
tines. Reference [12] identifies three sets of competen-
cies needed at this level: technical skills, interpersonal
skills, and conceptual skills. The two last categories fall
in the “interpersonal and management competence” sub-
category of [44]’s taxonomy of business competencies
for IT professionals.
Technical skills refer both to tacit and explicit IT
knowledge. Reference [45] proposed a comprehensive
model of IT competencies with the same two dimensions.
In their model, the components of explicit IT knowledge
include technology, applications, systems development,
management of IT, and access to IT knowledge. The
components of tacit IT knowledge are grouped into two
sub-categories, namely experience (personal use of IT, IT
projects, management of IT) and cognition (process view,
vision for the role of IT). Contrary to technical skills,
business competencies focus on domains of knowledge
that are not specifically IT-related. They are defined as
“the set of business and interpersonal knowledge and
skills possessed by IT professionals that enable them to
understand the business domain, speak the language of
business, and interact with their business partners” [44].
These authors identify seven areas of knowledge,
grouped into two broad sub-categories, which constitute
the business competence. The first sub-category, the or-
ganization-specific knowledge refers to the understand-
ing of the specific organizational context and of the con-
nections between IT and business, and covers four areas
of knowledge: organizational overview, organizational
units, organizational responsibility and IT-business inte-
gration. The second sub-category, the interpersonal and
management knowledge, refers to the ability of IT pro-
fessionals to interact with and to manage others. It covers
three areas of knowledge: knowledge networking, inter-
personal communication skills, and leadership skills.
While IT professionals need to develop their business
competence, it has been underlined also that business
professionals need to develop their IT competence to
some extent. Both categories need to develop a “shared
knowledge” in order to implement and use IT effectively
in support of business activities. Referring to [46], one
may characterize shared knowledge as the knowledge
that IT professionals possess about business processes on
one hand, and the knowledge that business professionals
possess about the potential of IT on the other hand. One
may also define it as the common understanding between
IT people and business people regarding how IT can be
used to improve the performance of business processes.
Hence, technical skills refer to the IT-knowledge of both
IT professionals and business professionals, and business
competence refers to the organization-specific knowl-
edge and the interpersonal and management knowledge
of both IT professionals and business managers.
3.3. Environment-Related Factors
A number of theories such as neo-institutional theory
deny that technology adoption is the result of rational
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
decisions or cognitive choices by the firm [9]. IT adop-
tion is thus rather seen as being a result of external or
environmental pressures, and this would be particularly
true of SMEs that are more susceptible to such pressures
than large enterprises. The environmental context factors
found in the literature are regrouped under four main
categories: technology S-curves, sub-sector characteris-
tics, networking intensity and commercial dependence.
3.3.1. Technology S-Curves
The relationship between a service provider firm and its
customers is by nature often closer than a similar one in a
manufacturing context. Service operations generally in-
volve customer contact, joint production, and often re-
quire customer-specific inputs [47]. This means that the
technology adopted and used in the service delivery
process will be in contact with the customer to the very
least, and can go as far as being considered as part of the
service. Indeed, in the specific case of IT, the service
practices-service performance relationship is moderated
by IT sophistication [18]. One would thus understand
[34]’s statement that “the customization of service tech-
nology is inherently implied in the definition of service
In the services sector, the client organization’s in-
volvement in the service delivery process is such that its
readiness to adopt the technology proposed to it must be
taken into account. Hence the importance of technology
S-curves (emerging technology, developing technology,
and mature technology) as an environmental context
factor for [48] who showed that the acceptance of an
innovation by customers follows a multi-segment model.
The first customer segment is made up of a small number
of firms that see a high utility or competitive value in the
new service offered and are ready to support a high cost.
Subsequent segments arriving later in the technology
development and maturity phases are made up of a larger
number of firms that see less value in the service pro-
posed and will thus only adopt it at a lower cost, but the
market potential for these segments is greater. Reference
[48] underlines that a company may make an expensive
mistake if it tries to immediately capture the large-volume
segments, overlooking “both the learning process and the
fact that emerging markets nearly always start in small,
specialist, high value segments”.
3.3.2. Service Sub-Sector Characteristics
The structure of the industry and the market in which a
firm operates determines for the most part the pressures
and constraints that will apply to its technology adoption
decisions. Building on the notion of “industry clock-
speed”, [49] analyzed the links between the dynamics of
a firm's business environment and the speed of its inter-
nal operations, demonstrating that an organizational
change such as the adoption of IT is modulated by indus-
try forces. This leads one to more closely analyze the
nature of the services sub-sectors in order to understand
the role played by their specific attributes in the adoption
and assimilation of IT, using to this end the multi-criteria
classifications proposed in the literature [50,51].
Following a literature review on service typologies,
[52] noted the diversity of existing classifications, based
upon the great variety of criteria used. In addition to the
ownership criterion (for-profit, private not-for-profit,
public), all classifications of service enterprises are fun-
damentally composed of two aspects, one being the
product package predominantly affected by market-
ing-oriented service dimensions (tangibility, differentia-
tion, object of service, type of customer, commitment),
the other being the product delivery process predomi-
nantly affected by operations-oriented service dimen-
sions (customer contact, capital intensity, customer in-
volvement, production process, employee discretion).
Reference [52] also denoted the need to integrate these
two aspects to arrive at a unified representation that cap-
tures all the important dimensions and their interactions.
This multidimensional classification has been applied to
a certain point by researchers attempting to derive a clas-
sification of services from empirical data [50,51]. Based
on seven service attributes (importance of employees,
customization, customer's ability to switch firms, em-
ployee/customer contact, services directed at people or
things, continuous benefits, differentiation between
firms), [50]’s study classified services into three catego-
ries: 1) high-contact, customized, personal services, 2)
moderate contact, semi-customized, non-personal ser-
vices, 3) and moderate contact, standardized services. In
similar fashion, [51] proposed 1) professional services, 2)
service shop and 3) mass services, while other research-
ers have refined these classifications by empirically de-
riving sub-categories [53]. For the purposes of this study,
[51]’s classification will be used because of it is the most
commonly referred to in the literature.
3.3.3. Networking Intensity
The literature indicates that external pressures as well as
assistance to adopt and assimilate IT originate in the
networks to which SMEs belong. On one hand, business
partners who have developed close logistical links with
SMEs will push for a technological alignment of these
firms with their own technology [54]. On the other hand,
it is through cooperative networks that SMEs can over-
come their resource limitations [55]. For these firms,
R&D efforts are associated to networking activities that
act as a substitute for the economies of scale unavailable
to them [56]. Thus for service SMEs, the number and
quality of connections to other organizations constitutes
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
social capital that affects to a certain extent its IT adop-
tion and assimilation capabilities [57]. For example,
some studies show that the SME’s decision to adopt and
use e-commerce is made easier in a networked environ-
ment [23].
3.3.4. Commercial Dependency
One finds a number of SMEs that are dependent upon a
small number of important customers, if not a single
prime contractor in the case of subcontracting firms.
Thus, the commercial dependency of a SME is generally
measured by the proportion of its total sales that is ac-
counted by its three most important customers [58]. A
commercially dependent SME is subject to strong pres-
sures from these customers not only to reduce its costs
and improve the quality of its products and services, but
also to align its processes with their own. While most IT
studies indicate these pressures as a push to adopt IT [59],
the opposite can sometimes be true as a SME may wish
to adopt a technological innovation that does not satisfy
the foreseeable needs of its current powerful customers
4. Research Framework and Propositions
Given the preceding considerations, the research frame-
work proposed in this study is presented in Figure 2.
The research framework posits that IT adoption and IT
assimilation are directly affected only by the elements of
the organizational context. These two constructs are af-
fected by the technological and environmental contexts
only indirectly, through the mediating effect of the or-
ganizational context, and especially through the SME
owner-manager’s strategic orientation.
Figure 2. IT adoption and assimilation research framework
for SMEs in the service sector.
4.1. Owner-manager’s Strategic Orientation
Among all organizational factors, there is reason to un-
derline the particular role played by the owner-manager’s
strategic orientation. Indeed, according to the upper
echelon theory [61], organizational strategic outcomes
and processes are a function of the managerial character-
istics of top managers, and this is particularly true in the
case of SMEs, as previously mentioned. Following this
theory, strategic choices are more of the outcome of be-
havioral factors than calculations for economic optimiza-
tion, and will reflect decision-makers’ idiosyncrasies [62].
Strategy being the mediating force between the firm and
its environment [26], it is through the small business
owner-manager’s strategic orientation that one can un-
derstand the latter’s sense-making of the technological
and environmental contexts, that is, how he or she detects
threats and opportunities. This sense-making will affect
the development of the owner-manager’s competencies
as well as his or her choices in regard to acquiring human
resources and developing employees’ competencies.
4.1.1. Strategic Orientation and Technological
Considering that SMEs of the prospector strategic type
are constantly in search of new opportunities, one ex-
pects these firms to be the first and the most numerous in
adopting new IT, and to experiment with a greater num-
ber of technologies [26]. Being preoccupied by reinforc-
ing their position in existing markets, defenders will be
less apt than prospectors to innovate technologically. In
matters of IT, the former will stick with technologies that
have been proven within their markets. For analyzer
firms, as they sometimes behave as prospectors or as
defenders depending upon the situation, an in-between
position is assumed, thus the following proposition:
P1: Prospectors will adopt a wider range of informa-
tion technologies than analyzers, and even more so than
Now one may also consider information technologies
with regard to one of the three role categories to which
they belong, namely general-use IT, process-integrated
IT and customer-oriented IT. Prospectors would tend to
adopt general-use IT more than defenders, as the latter
would focus on proven technologies specifically adopted
for their market, thus the following proposition:
P2: Prospectors will adopt general-use IT at a higher
rate than analyzers, and even more so than defenders.
Operating in stable markets and emphasizing resource
efficiency and cost-cutting process improvements to
maintain their base business [41,63], defenders will be
more attracted by process-integrating IT than prospectors.
Constantly searching for new markets and new products,
the latter cannot invest in processes that are called upon
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
to change incessantly. They will rather invest in develop-
ing business intelligence capabilities that will allow them
to pre-empt their competitors by acquiring and processing
strategic information on emerging markets/products.
Prospectors will thus need to invest in e-intelligence for
environmental scanning, and in e-communication to deal
with internal complex coordination and communication
mechanisms in their participative and decentralized deci-
sion-making processes [26]. As e-intelligence and
e-communication technologies are considered to be gen-
eral-use IT (cf. proposition 2), a third proposition fol-
P3: Defenders will adopt process-integrating IT at a
higher rate than analyzers, and even more so than pros-
As the survival of defenders is based on their ability to
protect their familiar products and markets, they have to
develop excellent market sensing and linking capabilities
[64]. While the same could be said of prospectors, the
latter’s perspective is different in that their survival is
insured by developing new products rather than focusing
on existing ones, and by detecting opportunities in the
general business environment rather than in a specific
market. Whereas in attempting to satisfy above all their
existing customer base, defenders must know their cus-
tomers better and develop tighter relationships with them,
thus requiring customer-oriented IT. This leads to the
following proposition:
P4: Defenders will adopt customer-oriented IT at a
high rate than analyzers, and even more so than prospec-
4.1.2. Strate gic Orientation and Envi ronmental
Context Strategic Orientation and Technology S-Curves
Most studies of IT adoption take the adopting firm’s
point of view rather than its customers’ point of view.
Since technology in support of service activities will be
likely in contact with customers, service providers need
to make sure that the technology adopted is acceptable
and satisfactory to customers and service organizations
[65]. As the adoption of a service technology by existing
customers requires a shift in their behavioral patterns
[66], introducing a new technology may induce customer
“hostility” [65]. Given that “market innovation is essen-
tially a social phenomenon rather than a response to
known customer needs” [48], the firm should not overes-
timate its capacity to push the adoption of a new service
technology by its customers. A service SME would thus
have to decide at which stage of the technology S-curve
(emerging, developing, or mature technologies) such
technology will be proposed to its customers, reflecting
its technology position by this decision.
Defining technology position as a pattern of invest-
ment in the technologies diffusing through an industry,
[40] identify three such positions that a firm can adopt to
integrate its technology and business strategies: first
mover, early adopter, or late adopter. These authors es-
tablish a parallel on one hand between technology posi-
tion and three broad classes of technology (base, key, or
pacing technologies), classified by their competitive im-
pact [67], and on the other hand between technology po-
sition and [39]’s strategic typology. Forming the techni-
cal core of the business and being necessary for it to re-
main competitive, base technologies are well known and
available to competitors. Key technologies are those that
provide a strategic advantage to the firms when they are
adapted so as to provide new functionalities and better
outputs that competitors will have difficulty in reproduc-
ing. Pacing technologies are those innovations that have
the potential to significantly alter the basis for competi-
tion. Hence first movers, early adopters, and late adopters
tend to adopt pacing, key, and base technologies respec-
tively [40].
Reference [40] also contends that the first mover, early
adopter, and last adopter technology positions reflect the
prospector, analyzer, and defender strategies respectively.
From the customers’ point of view, there also exist first
movers and late adopters. Diffusion of innovation theory
refines the technology position concept by proposing five
categories [48], namely innovators, early adopters, early
majority, late majority, and laggards. Innovators and
early adopters tend to adopt technologies that are in an
emerging phase, firms in the early majority adopt devel-
oping technologies, whereas firms in the late majority
and laggards would rather adopt mature technologies.
Thus follow propositions regarding the moment of IT
adoption by service SMEs:
P5: Prospectors will tend to adopt emerging IT when
there are innovators and early adopters among its cus-
tomers that are willing to use such technology.
P6: Analyzers will tend to adopt developing technolo-
gies when there is an early majority among its customers
that are willing to use such technology.
P7: Defenders will tend to adopt mature technologies
when there are a late majority and laggards among its
customers that are willing to use such technology.
While first movers (prospectors), early adopters (ana-
lyzers), and late adopters (defenders) tend to adopt pac-
ing, key, and base technologies respectively [40], the
services sector requires that the customers’ readiness
with regard to IT be taken into account. For instance, this
would mean that prospectors would have either to:
- be content with a small potential market constituted
of innovators and early adopters [48];
- adopt multiple pacing technologies, each aimed at a
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
distinct market, to increase sales potential by reaching
innovators and early adopters segments in each market;
- adopt pacing, key, and base technologies concur-
rently in order to serve all customer segments whatever
their location on the innovation diffusion curve.
The first option would not only confine the prospector
service firms to a small market without any growth po-
tential, but would also cause them to lose existing cus-
tomers unwilling to shift their behavioral patterns [66].
The second option would at first seem well suited to the
prospector’s nature as defined by [39], that is, innovative
in introducing new technologies and seeking new mar-
kets (which means many technologies and many mar-
kets). However, pacing technologies do not emerge so
often that a firm can rely solely on these. Service firms
should thus be prudent with regard to pacing technolo-
gies [67], given the uncertainty that surround them and
the high level of investment required at the expense of
other technologies. There remains the third option for the
prospector: in order to become or remain market leader,
the firm “has no option but to move with the develop-
ment of the market” [48], by following the customers’
rate of technology adoption. This reasoning can also be
applied to a certain extent to analyzers with regard to key
and base technologies. Hence the following propositions
with regard to the competitive impact of IT in service
P8: Prospectors will adopt a range of information
technologies that covers all three categories, that is, base,
key, and pacing technologies.
P9: Analyzers will adopt a range of information tech-
nologies that covers mostly two categories, that is, base
and key technology.
P10: Defenders will adopt a range of information
technologies mostly within a single category, that is, base
technologies. Strategic Orientation and Sub-Sector Attributes
The characteristics of an industry determine to a large
extent its more or less intense recourse to IT, explaining
the previously noted differences between the secondary
and tertiary sectors with regard to IT investments. The
greater IT-intensity of the services sector has thus been
attributed to the essential nature of business activities in
this sector, requiring a high level of information proc-
essing and diffusion [15,18]. This requirement can differ
somewhat among service sub-sectors however, depend-
ing upon the specific nature of the services offered.
Using the criteria that most often distinguish service
sub-sectors, namely customer contact, customization,
degree of employee discretion and number of services
processed by a typical service unit per day, [18] infer the
more or less important role of IT sophistication in the
delivery of service performance. These authors suggest
that for mass service organizations, this role will be more
important due to the low levels of contact time, customi-
zation and employee discretion, and to the high number
of services processed per day. The opposite would be
true of professional service organizations characterized
by high levels of contact time, customization and em-
ployee discretion, and to a small number of services
processed per day. IT adoption will thus be greater in
service sub-sectors where the expected impact of IT so-
phistication is greater. One could also presume that ser-
vice shop organizations would stand between mass ser-
vice and professional service organizations in this regard,
as they occupy a middle position on all of the chosen
For [10], the variation in the demand for IT infrastruc-
ture capabilities amongst industries will be determined
by the level of information intensity and marketplace
volatility along with business unit strategies and strategy
formation processes. Differences in IT adoption and as-
similation within service sub-sectors could then be ex-
plained by strategies developed and implemented by
SME owner-managers. Taking the latter’s strategic ori-
entation into account (cf. propositions 1 and 2), the fol-
lowing proposition can be made:
P11: Within the same service sub-sector (professional
services, service shop, mass services), prospectors will
have adopted the widest range of IT and will show the
highest IT adoption rates, whereas defenders will have
adopted the narrowest range of IT and will show the
lowest IT adoption rates.
As both the service SME’s strategic orientation and
the service sub-sector’s characteristics must be taken into
account, comparing for instance a professional service
prospector with mass service defender with regard to IT
would not make much sense. Such a comparison would
only make sense if it is made between SMEs whose stra-
tegic orientation differs within the same sub-sector, as in
proposition 11, or between SMEs with the same strategic
orientation but belonging to different sub-sectors, as in
the following propositions:
P12a: Prospectors in the mass services sub-sector will
show higher IT adoption rates than prospectors in the
service shop sub-sector, and even more so than those in
the professional services sub-sector.
P12b: Analyzers in the mass services sub-sector will
show higher IT adoption rates than analyzers in the ser-
vice shop sub-sector, and even more so than those in the
professional services sub-sector.
P12c: Defenders in the mass services sub-sector will
show higher IT adoption rates than defenders in the ser-
vice shop sub-sector, and even more so than those in the
professional services sub-sector.
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
151 Strategic Orientation and Network Intensity
A network can be broadly defined as “an integrated and
coordinated set of ongoing economic and non-economic
relations embedded within, among and outside business
firms” [23]. Even though there are a number of different
taxonomies of networks based on structure, process or
power [68], the one proposed by [69] is of interest here
in that it allows one to ascertain the intensity of relation-
ships among network members and to relate networking
choices to the strategic orientation of SME owner-
managers. Based on two dimensions, namely the type of
association (direct or indirect) and the form of interde-
pendence (commensalistic or symbiotic), this taxonomy
proposes four ideal types of collective alliances: confed-
erate (direct and commensalistic), conjugate (direct and
symbiotic), agglomerate (indirect and commensalistic)
and organic (indirect and symbiotic).
As explained by [70], direct association refers to
pair-wise relationships, indirect association refers to
longer linkages, commensalistic interdependence refers
to contracts based on economic ends, and symbiotic in-
terdependence refers to contracts based on mutual need.
Furthermore, according to [68], confederate relationships
refer to competitors with contractual agreements that
synergize functional activities such as shared shipping
costs, agglomerate relationships refer to competitors with
no contractual arrangements such as trade organizations,
organic relationships refer to traditional networking
across industries such as board memberships or other
voluntary organizations (indirect and non-contractual),
and conjugate relationships refer to alliances representing
vertical linkages through the value-added chain such as
buyer-supplier relationships. Characterized in the pre-
ceding manner, the nature of networks suggests stronger
links when the association is direct rather than indirect
and when interdependence is symbiotic rather than
commensalistic. Given that the direct/indirect dimension
seems more important, the four types of networks can be
ordered by decreasing order of networking intensity, that
is, conjugate, confederate, organic and agglomerate net-
It has been demonstrated that SMEs adopt particular
network alliance forms depending on their particular
strategic orientation [70]. Prospectors, analyzers, and
defenders are more likely to engage in confederate rela-
tionships, agglomerate/organic relationships, and conju-
gate relationships respectively, giving rise to the follow-
ing proposition:
P13: Defenders, tending to engage in conjugate net-
works, will be subjected to greater pressure and will re-
ceive greater support for IT adoption from their net-
working partners than prospectors who tend to engage in
confederate networks, and even more so than analyzers
who tend to engage in agglomerate and organic net-
works. Strategic Orientation and Commercial
While it is generally admitted that a business enterprise
must be customer-oriented if it is to succeed, [60]’s study
shows that firms who were leaders in their industry failed
because they listened very carefully to their major cus-
tomers who placed stringent limits on their innovation
programs. Now, if a firm originates innovation projects
depending upon a major customer’s requirements, the
success of such projects is determined by the customer’s
ability to correctly determine its requirements. While
such customers may be found in the case of sustaining
technological changes, that is, those changes in line with
previous changes in the same industry, it is more difficult,
if not impossible, to find such customers in the case of
disruptive technological changes, that is, those innovations
that modify the industry’s technological trajectory [60].
By nature, prospectors operate in emerging markets,
and thus have no existing customers to specify, with the
required precision and exactness, the needs which an
innovation is destined to fulfill. As their targeted markets
are more diversified and as new business opportunities
appear more frequently, there is less probability that
prospectors become dependent upon one or more major
customer when compared with defenders. In any case,
given that a high level of commercial dependency is in-
compatible with an entrepreneurial behavior [71], pros-
pectors in this situation would make great efforts to
change it. As opposed to prospectors, defenders operate
in more stable, less diversified markets. Careful to pro-
tect their market, the latter will tend to develop tight rela-
tionships with their customers, first by attentively “lis-
tening” to them. The following proposition thus ema-
nates from the previous considerations:
P14: Defenders will be more commercially dependent
and will be subject to more pressure for IT adoption from
major customers than analyzers, and even more so than
4.2. Role of Other Organizational Factors
Two other sets of organizational factors, namely the
owner-manager’s competencies and employees’ compe-
tencies play a role in the IT adoption/assimilation process.
Introducing a dynamic aspect into the study of IT adop-
tion, certain researchers distinguish between primary
adoption, secondary adoption, and assimilation [72]. It
has been shown in fact that the factors that determine
primary adoption differ from those that determine sec-
ondary adoption, and that these two groups of determi-
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
nants differ, a fortiori, from the determinants of IT as-
similation [12]. IT primary adoption is the first stage of
IT adoption, and it refers to the firm-level decision to
adopt the innovation; the second stage, IT secondary
adoption is the actual implementation or individual adop-
tion by users; IT assimilation is defined as “the extent to
which the use of a technology diffuses across organiza-
tional work processes and becomes routinized in the ac-
tivities associated with those processes”. In [12]’s study,
primary adoption was found to be determined by the vi-
sion and value competencies at the top management level.
While contingent to primary adoption obviously, secon-
dary adoption was seen to be fostered by control compe-
tencies that create the conditions for employees to adopt
the technology, therefore reducing the assimilation gap.
IT assimilation was however mainly associated to three
types of individual skills, that is, technical skills (tacit
and explicit knowledge), interpersonal skills (communi-
cation and empathy) and conceptual skills (creativity and
4.2.1. Owner-Manager Competencies and IT
In the context of SMEs, owner-managers will play a
key-role in the decision to adopt IT. Their attitudes to-
wards IT adoption will be shaped by their own compe-
tencies, namely IT vision, IT value, IT technical knowl-
edge and IT control. A small business manager who dis-
plays the IT vision competence will understand the stra-
tegic importance of information technology in business
activities [12]. This understanding will ultimately lead to
the adoption of IT that is aligned with the business strat-
egy. This is critical as it is now known that IT-strategy
alignment is a key determinant of the business value ob-
tained by the SME from such technology [26]. But the IT
vision competency, while necessary, is not sufficient.
This general awareness of the technology’s usefulness
has to be translated into a specific appreciation of the
value the firm could get from the IT. Evolving from the
IT vision competency to the IT value competency is not
easy for some entrepreneurs [73]. It has been found that
the level of executives’ perceived payoffs from IT is di-
rectly related to corporate goals for IT [74]. The
owner-managers whose IT vision and IT value compe-
tencies are strong are likely to decide to adopt IT, hence
the following two propositions:
P15: IT adoption rates will be higher in SMEs whose
owner-managers have developed stronger IT vision and
IT value competencies.
P16: SME owner-managers who have developed
stronger IT vision and IT value competencies will lead
their firm to adopt IT that is more aligned with their
business strategy.
Once the decision to adopt IT has been made, top
managers need to develop an IT control competency in
order to encourage and direct the assimilation of the
technology by users [12]. In SMEs, “the CEO has the
authority to influence other members of the business, and
he or she is likely to overcome any resistance to change”.
This is due to this individual’s particular and central po-
sition, and to the nature of interpersonal relationships
within the firm [42]. It is through the IT control compe-
tency that the owner-manager will create “facilitating
conditions” necessary to implement IT, i.e. to facilitate
the adoption and use of the technology by employees.
These conditions include resource availability, technical
support, user training, and removal of organizational bar-
riers to the use of IT [75,76]. As already mentioned, the
IT control competency could however be undermined,
especially in the context of SMEs, if owner-managers do
not possess sufficient technical knowledge in IT to allow
them not only to correctly ascertain the technical compe-
tencies required of employees, but also to enforce appro-
priate rules and policies related to technical matters and
to dedicate appropriate resources. Indeed, it has been
advanced that the IT-related explicit and tacit knowledge
of managers enables them to exhibit IT leadership and to
leverage the knowledge of their employees [45]. The
following propositions can thus be stated:
P17: SME owner-managers who demonstrate a
stronger IT technical knowledge and IT control compe-
tency will create more facilitating conditions for IT im-
plementation (IT secondary adoption).
P18: SME owner-managers who demonstrate a
stronger IT technical knowledge and IT control compe-
tency will foster stronger competencies among their em-
4.2.2. Employee Competencies and IT Assimilation
In their study on large enterprises, [77] found that the IT
knowledge of senior business executives had no influ-
ence on IT assimilation. According to [12] this seems to
be also true in SMEs as in the latter’s study, the employ-
ees’ competencies (rather than the executives’ IT com-
petencies) were found to be of utmost importance for
achieving IT assimilation. As already discussed, these
competencies can be roughly grouped into two broad
categories: IT technical skills and business competencies.
Even if the IT technical skills of employees are seen as
essential in the use and application of IT, they are not
generally considered to be the source of sustained com-
petitive advantage given that they usually are not hetero-
geneously distributed across firms and when they are,
skilled employees are highly mobile [78]. Firms without
these skills can indeed hire IT consultants and service
providers, but what happens when they cannot afford the
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
cost of such external resources? Given that SMEs have
greater difficulty in hiring qualified IT experts because of
their scarce financial resources, IT skills are likely to be
rare in such firms and thus become a source of competi-
tive advantage among competing SMEs [42]. This was
confirmed by [42] who found that an emphasis on de-
veloping IT resources and competencies internally was
associated with successful IT adoption and use in SMEs.
It has been found that strong partnerships between the
chief-information-officer (CIO) and other top-manage-
ment executives contribute to IT assimilation in large
enterprises [77]. As SMEs are likely not to show a dis-
tinct CIO position in their organizational structure, this
role may be fulfilled by the owner-manager or by another
manager or key employee. Small size in a business or-
ganization favours the development of organization-
specific knowledge among key employees, and whoever
fulfills the CIO’s duties in such a firm will likely have
developed a strong knowledge of other organizational
business areas. The small firm may be disadvantaged in
terms of IT skills and of interpersonal and management
knowledge when compared to the large firm, but it may
be advantaged in terms of organization-specific knowl-
edge. The last two research propositions can then be
stated as follows:
P19: SMEs whose employees demonstrate stronger
technical skills and business competencies will achieve
higher levels of IT assimilation.
P20: The smaller the size of SMEs, the stronger the
organization-specific knowledge of their employees with
regard to IT adoption and assimilation.
5. Conclusions
Information technologies are called upon to play a cru-
cial role in enterprises that are now engaged in a knowl-
edge-based economy. That is why there have been nu-
merous studies on the determinants of IT adoption and
assimilation, these determinants being most often re-
grouped under the three categories of the technol-
ogy-organization-environment (TOE) framework [33],
namely technology-related factors, organization-related
factors and environment-related factors. In comparison to
previous research, the first contribution of the present
study lies in the light it brings to the antecedents of IT
adoption and assimilation in the particular context of
service SMEs, firms that have suffered an “attention
deficit” on the part of researchers when compared to
manufacturing SMEs. Given research results obtained in
the latter’s context cannot be necessarily extended to
service SMEs, the former’s inherent particularities must
be taken into account, and the present study sought to
highlight the effects of such particularities upon the
adoption and assimilation of IT. For instance, a manu-
facturing SME can analyze an IT adoption opportunity
without consulting its customers because they will not
come into contact with the said technology but only with
the product resulting from the process in which IT is
used. A service SME cannot always do so as its custom-
ers are often part of the service process and are conse-
quently exposed to the technology adopted (e.g. ATMs in
the banking industry). The research framework proposed
here thus takes the contextual peculiarities of service
SMEs into account.
The second theoretical contribution of this study lies in
its highlighting the predominance of organization-related
factors over technology-related and environment-related
factors. We have proposed that technology-related and
environment-related factors, rather than directly affecting
the adoption and assimilation of IT as most often hy-
pothesized previously, have only an indirect effect, that
is, through the effect they may have upon the organiza-
tion-related factors. These last factors are thus presumed
to be alone in directly affecting adoption and assimilation.
And among organization-related determinants, emphasis
was placed on the critical role of the SME’s owner-
manager in capturing, interpreting and reacting to signals
emanating from the technological and environmental
In specifically targeting the services sector and SMEs,
this study suggests that IT adoption and assimilation in
these firms should be the product of an alignment be-
tween the strategic orientation and competencies that
characterize their organizational context on one hand,
and specific elements in their technological and envi-
ronmental contexts on the other hand. While the present
research is theoretical in nature, it offers managers a
frame of reference to analyze their firm’s situation before
initiating an IT project by highlighting key adoption and
assimilation factors in the specific context of service
SMEs. The proposed research framework could also be
used as conceptual foundation and methodological core
to develop an instrument measuring the strategic align-
ment and organizational readiness of service SMEs for
IT adoption and assimilation. Such an instrument should
provide reliable and actionable insights to managers and
IT practitioners in the services sector.
The twenty-two propositions resulting from this study
are based on the literature and could thus serve as hy-
potheses in empirical research. In this regard, three ave-
nues of research would seem to merit particular attention
as they have yet to be explored: 1) the effect of the stra-
tegic orientation of the service SME’s owner-manager
upon the nature of IT adopted and the moment of adop-
tion (in reference to the technology S-curve), 2) the
moderating effect of this strategic orientation on the rela-
tionship between the service sub-sector, networking in-
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
tensity and commercial dependency on one hand, and IT
adoption and assimilation on the other hand, and 3) the
interdependency between the owner-manager’s compe-
tencies, notably IT technical knowledge and the IT con-
trol competency, and the employees’ IT and business
[1] P. -Y. Léo and J. Philippe, “TIC, Nouvelle Donne Pour
Le Développement International des PME de Services,”
Actes du 8ème Congrès International Francophone en
Entrepreneuriat et PME, Fribourg, 2006.
[2] H. Chesbrough and J. Spohrer, “A Research Manifesto
for Services Science,” Communications of the ACM, Vol.
49, No. 7, 2006, pp. 35-40. doi:10.1145/1139922.1139945
[3] H. Merchant and A. Gaur, “Opening the ‘Non-Manufacturing’
Envelope: The Next Big Enterprise for International
Business Research,” Management International Review,
Vol. 48, No. 4, 2008, pp. 379-396.
[4] B. Oliveira and A. Fortunato, “The Dynamics of the
Growth of Firms: Evidence from the Services Sector,”
Empirica, Vol. 35, No. 3, 2008, pp. 293-312.
[5] A. Rai and V. Sambamurthy, “The Growth of Interest in
Services Management: Opportunities for Information
Systems Scholars,” Information Systems Research, Vol.
17, No. 4, 2006, pp. 327-331. doi:10.1287/isre.1060.0108
[6] E. Baark, “Engineering Consultancy: An Assessment of
IT-Enabled International Delivery of Services,” Technol-
ogy Analysis & Strategic Management, Vol. 11, No. 1,
1999, pp. 55-74. doi:10.1080/095373299107582
[7] K. Napoleon and C. Gaimon, “The Creation of Output
and Quality in Services: A Framework to Analyze Infor-
mation Technology-Worker Systems,” Production and
Operations Managem ent, Vol. 13, No. 3, 2004, pp. 245-259.
[8] A. Ozyilmaz and D. Berg, “The Role of Information
Technology in Service Innovation in the Two Different
Quadrants of the Service-Process Matrix,” International
Journal of Services Technology and Management, Vol.
11, No. 3, 2009, pp. 247-271.
[9] N. Tsikriktsis, G. Lanzolla and M. Frohlich, “Adoption of
E-Processes by Service Firms: An Empirical Study of
Antecedents,” Production and Operations Management,
Vol. 13, No. 3, 2004, pp. 216-229.
[10] V. Botta-Genoulaz and P. -A. Millet, “An Investigation
into the Use of ERP Systems in the Service Sector,” In-
ternational Journal of Production Economics, Vol. 99,
No. 1-2, 2006, pp. 202-221.
[11] E. Ramsey, P. Ibbotson and P. McCole, Factors that
Impact Technology Innovation Adoption among Irish
Professional Service Sector SMEs,” International Journal
of Innovation Management, Vol. 12, No. 14, 2008, pp.
[12] A. Scupola, “Conceptualizing Competences in E-services
Adoption and Assimilation in SMEs,” Journal of Elec-
tronic Commerce in Organizations, Vol. 6, No. 2, 2008,
pp. 78-91. doi:10.4018/jeco.2008040105
[13] D. Pilat and A. Devlin, “The Diffusion of ICT in OECD
Economies,” In: OECD, Ed., The Economic Impact of
ICT: Measurement, Evidence and Implications, OECD
Publishing, Paris, 2004, pp. 19-34.
[14] J. T. Scott, “The Service Sector’s Acquisition and Devel-
opment of Information Technology: Infrastructure and
Productivity,” Journal of Technology Transfer, Vol. 24,
No. 1, 1999, pp. 37-54.
[15] M. Stare, A. Jaklič and P. Kotnik, “Exploiting ICT Poten-
tial in Services Firms in Transition Economies,” The Ser-
vice Industries Journal, Vol. 26, No. 3, 2006, pp. 287-302.
[16] N. Kock and J. Verville, “Enterprise Systems Contracting:
Developing and Testing a Model of Divergent Appro-
aches in the Service and Manufacturing Sectors,” Inter-
national Journal of Management Practice, Vol. 2, No. 2,
2006, pp. 127-143.
[17] P. Mulligan, “Specification of a Capability-Based IT
Classification Framework,” Information & Management,
Vol. 39, No. 8, 2002, pp. 647-658.
[18] S. De Búrca, B. Fynes and T. Brannick, “The Moderating
Effects of Information Technology Sophistication on Ser-
vices Practice and Performance,” International Journal of
Operations & Production Management, Vol. 26, No. 11,
2006, pp. 1240-1254.
[19] IDC, La Dépense Informatique Dans Le Secteur Des
Services Aux Entreprises, 2009.
[20] Y. van Everdingen, J. van Hillegersberg and E. Waarts,
“ERP adoption by European Midsize Companies,” Com-
munications of the ACM, Vol. 43, No. 4, 2000, pp. 27-31.
[21] F. Scott and J. Shepherd, “The Steady Stream of ERP
Investments,” AMR Research, 2002.
[22] I. Shin, “Adoption of Enterprise Application Software
and Firm Performance,” Small Business Economics, Vol.
26, No. 3, 2006, pp. 241-256.
[23] R. C. MacGregor, “Factors associated with formal net-
working in regional small business: Some findings from a
study of Swedish SMEs,” Journal of Small Business and
Enterprise Development, Vol. 11, No. 1, 2004, pp. 60-74.
[24] P. Papastathopoulou and G. J. Avlonitis, “Classifying
Enterprises on the Basis of WWW Use: A Behavioral
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
Approach,” Internet Research, Vol. 19, No. 3, 2009, pp.
332-347. doi:10.1108/10662240910965388
[25] G. Vickery and S. Wunsch-Vincent, “ICT use in services
and the growth of digital content services,” In: OECD Ed.,
Enhancing the Performance of the Services Sector,
OECD Publishing, Paris, 2005, pp. 205-238.
[26] L. Raymond and F. Bergeron, “Enabling the Business
Strategy of SMEs through E-Business Capabilities: A
Strategic Alignment Perspective,” Industrial Management
& Data Systems, Vol. 108, No. 5, 2008, pp. 577-595.
[27] OECD, “Enhancing the Performance of the Services Sec-
tor,” OECD Publishing, Paris, 2005.
[28] N. O. Ndubisi, “E-Commerce Adoption by Non-Profit
Organisations: Key Dimensions of Facilitators,” Interna-
tional Journal of Services Technology and Management,
Vol. 8, No. 1, 2007, pp. 2-20.
[29] M. P. Caldas and J. T. Wood, “How Consultants can Help
Organizations Survive the ERP Frenzy,” Academy of
Managements Annual Meeting, 1999.
[30] C. H. Cheng, W. Cheung and M. K. Chang, “The Use of
the INTERNET in Hong Kong: Manufacturing vs. Ser-
vice,” International Journal of Production Economics,
Vol. 75, No. 1-2, 2002, pp. 33-45.
[31] S. Abdinnour-Helm, M. L. Lengnick-Hall and C. A.
Lengnick-Hall, “Pre-Implementation Attitudes and Or-
ganizational Readiness for Implementing an Enterprise
Resource Planning System,” European Journal of Opera-
tional Research, Vol. 146, No. 2, 2003, pp.258-273
[32] G. Stewart, T. Milford, T. Jewels, T. Hunter and B.
Hunter, “Organisational Readiness for ERP Implementa-
tion, Proceedings of the 6th Americas Conference on In-
formation Systems, Long Beach, August 10-13, 2000, pp.
[33] L. G. Tornatzky and M. Fleischer, “The Processes of
Technological Innovation,” Lexington Books, Lexington,
[34] A. de Jong, K. de Ruyter and J. Lemmink, “The Adoption
of Information Technology by Self-Managing Service
Teams,” Journal of Service Research, Vol. 6, No. 2, 2003,
pp. 162-179. doi:10.1177/1094670503257046
[35] R. Lucchetti and A. Sterlacchini, “The Adoption of ICT
among SMEs: Evidence from an Italian Survey,” Small
Business Economics, Vol. 23, No. 2, 2004, pp. 151-168.
[36] M. Tarafdar and S. D. Vaidya, “Information Technology
Adoption and the Role of Organizational Readiness: The
Case of an Indian Bank,” Journal of Cases on Informa-
tion Technology, Vol. 9, No. 3, 2007, pp. 27-49.
[37] V. Barbara-Sánchez, M. P. Martínez-Ruiz and A. I.
Jiménez-Zarco, “Drivers, Benefits and Challenges of ICT
Adoption by Small and Medium Sized Enterprises
(SMEs): A Literature Review,” Problems and Perspec-
tives in Management, Vol. 5, No. 1, 2007, pp. 103-114.
[38] A. Escribá-Esteve, L. Sánchez-Peinado and E. Sánchez
-Peinado, “The Influence of Top Management Teams in
the Strategic Orientation and Performance of Small and
Medium-Sized Enterprises,” British Journal of Manage-
ment, Vol. 20, No. 4, 2009, pp. 581-597.
[39] R. E. Miles and C. C. Snow, “Organizational Strategy,
Structure, and Process,” McGraw-Hill, New York, 1978.
[40] V. L. Mitchell and R. W. Zmud, “Endogenous Adaptation:
The Effects of Technology Position and Planning Mode
on IT-Enabled Change,” Decision Sciences, Vol. 37, No.
3, 2006, pp. 325-355.
[41] S. M. Shortell and E. J. Zajac, “Perceptual and Archival
Measures of Miles and Snow’s Strategic Types: A Com-
prehensive Assessment of Reliability and Validity,”
Academy of Management Journal, Vol. 33, No. 4, 1990,
pp. 817-832. doi:10.2307/256292
[42] M. M. Caldeira and J. M. Ward, “Using Resource-Based
Theory to Interpret the Successful Adoption and Use of
Information Systems and Technology in Manufacturing
Small and Medium Sized Enterprises,” European Journal
of Information Systems, Vol. 12, No. 2, 2003, pp. 127-141.
[43] D. Wainwright, G. Green, E. Mitchell and D. Yarrow,
“Towards a Framework for Benchmarking ICT Practice,
Competence and Performance in Small Firms,” Perform-
ance Measurement and Metrics: The International Jour-
nal for Library and Information Services, Vol. 6, No. 1,
2005, pp. 39-52.
[44] G. Bassellier and I. Benbasat, “Business Competence of
Information Technology Professionals: Conceptual De-
velopment and Influence on IT-Business Partnerships,”
MIS Quarterly, Vol. 28, No. 4, 2004, pp. 673-694.
[45] G. Bassellier, B. H. Reich and I. Benbasat, “Information
Technology Competence of Business Managers: A Defi-
nition and Research Model,” Journal of Management In-
formation Systems, Vol. 17, No. 4, 2001, pp. 159-182.
[46] G. Ray, W. A. Muhanna and J. B. Barney, “Information
Technology and the Performance of the Customer Service
Process: A Resource-Based Analysis,” MIS Quarterly,
Vol. 29, No. 4, 2005, pp. 625-652.
[47] U. S. Karmakar and R. Pitbladdo, “Services Markets and
Competition,” Journal of Operations Management, Vol.
12, No. 3-4, 1995, pp. 397-411.
[48] R. Brown, “Managing the ‘S’ curves of innovation,” The
Journal of Business & Industrial Marketing, Vol. 7, No. 3,
1992, pp. 41-52. doi:10.1108/08858629210035418
[49] H. Mendelson and R. R. Pillai, “Industry Clockspeed:
Measurement and Operational Implications,” Manufac-
turing and Service Operations Management, Vol. 1, No.
1, 1999, pp. 1-20. doi:10.1287/msom.1.1.1
[50] J. Bowen, “Development of a Taxonomy of Services to
Gain Strategic Marketing Insights,” Academy of Market-
ing Science, Vol. 18, No. 1, 1990, pp. 43-49.
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
[51] R. Silvestro, L. Fitzgerald and R. Johnston, “Towards a
Classification of Service Processes,” International Jour-
nal of Service Industry Management, Vol. 3, No. 3, 1992,
pp. 62-75. doi:10.1108/09564239210015175
[52] D. P. Cook, C.-H. Goh and C. H. Chung, “Service Ty-
pologies: A State of the Art Survey,” Production and Op-
erations Managemen t, Vol. 8, No. 3, 1999, pp. 318-338.
[53] S. Ng, R. Russell-Bennett and T. Dagger, “A Typology of
Mass Services: The Role of Service Delivery and Con-
sumption Purpose in Classifying Service Experiences,”
Journal of Service Marketing, Vol. 21, No. 7, 2007, pp.
471-480. doi:10.1108/08876040710824834
[54] R. Dolmetsch, T. Huber, E. Fleisch and H. Österle, “R/3
Implementation in Small And Midsize Companies,” In R.
Dolmetsch, T. Huber, E. Fleisch and H. Österle, Eds.,
Accelerated SAP: 4 Case Studies, IWI-HSG, Institute for
Information Management, Universität St Gallen, St
Gallen, 1998, p. 51.
[55] K. Mohnnak, “Innovation Networks and Capability
Building in the Australian High-Technology SMEs,”
European Journal of Innovation Management, Vol. 10,
No. 2, 2007, pp. 236-251.
[56] M. Mazzanti and R. Zoboli, “Embedding Environmental
Innovation in Local Production Systems: SME Strategies,
Networking and Industrial Relations: Evidence on Inno-
vation Drivers in Industrial Districts,” International Re-
view of Applied Economics, Vol. 23, No. 2, 2009, pp.
169-195. doi:10.1080/02692170802700500
[57] M. Gebauer, “Information Systems on Human Capital in
Service Sector Organizations,” New Library World, Vol.
104, No. 1184/1185, 2003, pp. 33-41.
[58] M. S. Freel, “Strategy and Structure in Innovative Manu-
facturing SMEs: The Case of an English Region,” Small
Business Economics, Vol. 15, No. 1, 2000, pp. 27-45.
[59] L. Raymond and F. Bergeron, “EDI Success in Small and
Medium-Sized Enterprises: A Field Study,” Journal of
Organizational Computing and Electronic Commerce,
Vol. 6, No. 2, 1996, pp. 161-172.
[60] C. M. Christensen and J. L. Bower, “Customer Power,
Strategic Investment, and the Failure of Leading Firms,”
Strategic Management Journal, Vol. 17, No. 3, 1996, pp.
[61] D. C. Hambrick and P. A. Mason, “Upper Echelons: The
Organization as a Reflection of Its Top Managers,”
Academy of Management Review, Vol. 9, No. 2, 1984, pp.
[62] T. T. Chuang, K. Nakatani and D. Zhou, “An Exploratory
Study of the Extent of Information Technology Adoption
in SMEs: An Application of Upper Echelon Theory,”
Journal of Enterprise Information Management, Vol. 22,
No. 1-2, 2009, pp. 183-196.
[63] M. Song, C. A. Di Benedetto and R. W. Nason, “Capa-
bilities and Financial Performance: The Moderating Ef-
fect of Strategic Type,” Journal of The Academy of Mar-
keting Science, Vol. 35, No. 1, 2007, pp. 18-34.
[64] C. A. Di Benedetto and M. Song, “The Relationship be-
tween Strategic Type and Firm Capabilities in Chinese
Firms,” International Marketing Review, Vol. 20, No. 5,
2003, pp. 514-533. doi:10.1108/02651330310498762
[65] R. H. Walker, M. Craig-Lees, R. Hecker and H. Francis,
“Technology-Enabled Service Delivery: An Investigation
of Reasons Affecting Customer Adoption and Rejection,”
International Journal of Service Industry Management,
Vol. 13, No. 1, 2002, pp. 91-106.
[66] J. M. Curran and M. L. Meuter, “Encouraging Existing
Customers to Switch to Self-Service Technologies: Put a
Little Fun in Their Lives,” Journal of Marketing Theory
and Practice, Vol. 15, No. 4, 2007, pp. 283-298.
[67] T. J. Erickson, J. F. Magee, P. A. Roussel and K. N. Saad,
“Managing Technology as a Business Strategy,” Sloan
Management Review, Vol. 31, No. 3, 1990, pp. 73-83.
[68] D. G. Jarratt, “A strategic Classification of Business Al-
liances: A Qualitative Perspective Built from a Study of
Small and Medium-Sized Enterprises,” Qualitative Mar-
ket Research: An International Journal, Vol. 1, No. 1,
2998, pp. 39-49.
[69] W. G. Astley and C. J. Fombrun, “Collective Strategy:
Social Ecology of organizational Environments,” Acad-
emy of Management Review, Vol. 8, No. 4, 1983, pp.
[70] P. A. Golden and M. Dollinger, “Cooperative Alliances
and Competitive Strategies in Small Manufacturing
Firms,” Entrepreneurship Theory and Practice, Vol. 17,
No. 4, 1993, pp. 43-56.
[71] E. St-Jean, L. LeBel and J. Audet, “Entrepreneurial Ori-
entation in the Forestry Industry: A Population Ecology
Perspective,” Journal of Small Business and Enterprise
Development, Vol. 17, No. 2, 2010, pp. 204-217.
[72] D. W. Wainwright and T. S. Waring, “The Application
and Adaptation of a Diffusion of Innovation Framework
for Information Systems Research in Nhs General Medi-
cal Practice,” Journal of Information Technology, Vol. 22,
No. 1, 2007, pp. 44-58. doi:10.1057/palgrave.jit.2000093
[73] P. McGowan, M. G. Durkin, L. Allen, C. Dougan and S.
Nixon, “Developing Competencies in the Entrepreneurial
Small Firm for Use of the Internet in the Management of
Customer Relationships,” Journal of Industrial Training,
Vol. 25, No. 2-3-4, 2001, pp. 126-136.
[74] P. P. Tallon, K. L. Kraemer and V. Gurbaxani, “Execu-
tives’ Perceptions of the Business Value of Information
Technology: A Process-Oriented Approach,” Journal of
Information Technology Adoption and Assimilation: Towards a Research Framework for Service Sector SMEs
Copyright © 2011 SciRes. JSSM
Management Information Systems, Vol. 16, No. 4, 2000,
pp. 145-173.
[75] M. J. Gallivan, V. K. Spitler and M. Koufaris, “Does
Information Technology Training Really Matter? A So-
cial Information Processing Analysis of Coworkers’ In-
fluence on IT Usage in the Workplace,” Journal of Man-
agement Information Systems, Vol. 22, No. 1, 20005, pp.
[76] D. J. Neufeld, L. Dong and C. Higgins, “Charismatic
Leadership and User Acceptance of Information Tech-
nology,” European Journal of Information Systems, Vol.
16, No. 4, 2007, pp. 494-510.
[77] C. P. Armstrong and V. Sambamurthy, “Information
Technology Assimilation in Firms: The Influence of
Senior Leadership and IT Infrastructures,” Information
Systems Research, Vol. 10, No. 4, 1999, pp. 304-327.
[78] F. J. Mata, W. L. Fuerst and M. Barney, “Information
Technology and Sustained Competitive Advantage: A
Resource-Based Analysis,” MIS Quarterly, Vol. 19, No. 4,
1995, pp. 487-505.doi:10.2307/249630