Selection of packaged software in small businesses

Abstract

It has been argued that small businesses can improve their organizational performance and increase their competitiveness with computer-based information systems. Nevertheless, very little research has been conducted on the issue of how a software package is selected and what factors affect the decision. This study attempts to fill this gap. A descriptive research model is developed and tested using data collected from a questionnaire survey of 68 small manufacturing businesses. The main findings are: (1) software characteristics, vendor's capability and opinions/advice given by other concerned parties are important factors considered by the owners/managers of small businesses in the choice of packaged software; (2) owners/managers who have a relatively higher level of computer/IS literacy tend to emphasise more factors with a technical nature; (3) those who have more experience in using/purchasing packaged software tend to give more weight to the importance of the capability of the vendor, both technical and non-technical; and (4) owners tend to look at the technical factors more seriously while managers tend to emphasise more non-technical factors such as price and popularity of the software package when making the software selection decision.