Ashok's TCS Project Report New

Information Technology Road Map for SMEs

A STUDY ONINFORMATION TECHNOLOGY ROAD MAP FOR SMEs AT IDA BALANAGAR, HYDERABAD

Project report submitted toTata Consultancy Services Hyderabad

Submitted ByG Ashok Kumar

Under the Supervision of

Mr. Aslam BashaRegional ManagerTata Consultancy Services

DECLARATION

I hereby declare that this project report entitled An Empirical Study on Information Technology Road Map for SMEs in IDA Cherlapalli, Hyderabad. Has been prepared by me during the period of 45 days to be submitted SANSKRITHI SCHOOL OF BUSINESS, Puttaparthi in practical fulfillment for the award of degree POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT prescribed by ALL INDIA MANAGEMENT ASSOCIATION ,NEW DELHI. Under the guidance of Dr. Venkat Barla Director, SANSKRITHI SCHOOL OF BUSINESS, Puttaparthi. I also declare that this project report is the result of my own effort and it has not been copied from any of the earlier reports submitted by anybody to ALL INDIA MANAGEMENT ASSOCIATION ,NEW DELHI or any other university for the award of any degree in diploma. I also assert that the information collected by me for Information Technology Road Map for SMEs In IDA Cherlapalli, Hyderabad will be confidential.

(G Ashok Kumar)

ACKNOWLEDGEMENT

My profound thanks and deep sense of gratitude to Mr. Aslam Basha, Regional Manager, TCS and to authorities of TCS, Hyderabad who gave me the opportunity for doing this project work at Hyderabad. Its my primary duty to express my humble thanks and deep sense of gratitude to our director sir Dr. Venkat Barla sir who acted as a source of inspiration in completing my work by constantly enlightening me with his valuable guidance and suggestions during the period of this project.I also thank the staff for providing my all help and facilities in carrying out my project and making me feel at home I also express my gratitude towards the help rendered by Dr. Venkat Barla Director &my project guide, Sanskrithi School of Business for guiding me in completion of this project work.Finally, I thank all my friends for spending their valuable time providing their valuable suggestions in successful completing of this project.

(G Ashok Kumar)

Table of Contents

Executive Summary7Introduction9Enterprise Resource Planning9Origin of "ERP"9Expansion10Characteristics10Functional areas11Components11Indian SMEs [Small and Medium Enterprises]13Definition of SMEs14Indian SMEs in Technology Adoption16Future Technologies for SMEs17Key challenges faced by Indian MSME sector18Objectives21Methodology23Collection of Data23Sampling25Formulation of Questionnaire26Scope of the Study29Limitation of the Study31Data Analysis Tools33Contribution35Industry Profile37Company Profile40History401968 to 2000402000 to present41Products and services41Service lines41Literature Review43Information Technology Adoption Concept44Information Technology Adoption within SMEs45Influencing Factors45Internal Factors45External Factors63Conclusion, Suggestions & Future Research66Primary Data Analysis70Findings96Suggestion98Conclusion100Summary103ERPBLIOGRAPHY105Website Referred105Book Referred106Article Referred106ANNEXURE108List of Company109

EXECUTIVE SUMMARY

Executive SummarySmall and Medium Enterprise (SMEs) constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the SMEs play a pivotal role in the overall industrial economy of the country. SMEs are thus important for the national objectives of growth with equity and inclusion. The process of liberalization and market reforms since 1991 has brought about intense competition for SMEs both in domestic and overseas markets. This has made it imperative for the Indian SMEs to overcome the challenges that they face and maintain, improve and sustain competitiveness through lower cost, improved quality, making available wider choice by initiating various measures including innovation and up-gradation of technology.Having realized the need to preserve, protect and promote SMEs, the Indian government is also committed to the growth and development of the SMEs and to enhance their competitiveness. The government seeks to fulfill its mission by formulating policies and designing/implementing support measures in the field of credit, technological up gradation, marketing, entrepreneurship development etc. and undertaking effective advocacy for these purposes.The SMEs that are successfully competing today are the enterprises that have developed a culture of success through appropriate ERP &ERP interventions that has enabled them to stay ahead of others. The SMEs with heavy infusion of technology are much better adapted to meet the business needs and compete in the domestic as well as global markets.Finance is one of the critical inputs for the promotion and development of the micro and small enterprises. Recognizing the importance of easy and adequate availaERPlity of credit in sustainable growth of the SME sector, the Government has been announcing various policy measures. Faced with increased competition on account of globalization, SMEs are beginning to move from a reliance on bank credit to a variety of other specialized financial services and options.The role of government policies, technology interventions and financial measures for creating competitive SMEs has been discussed in detail in this background note.

INTRODUCTION

IntroductionEnterprise Resource PlanningEnterprise resource planning (ERP) is a business management softwareusually a suite of integrated applicationsthat a company can use to collect, store, manage and interpret data from many business activities, including: Product planning, cost Manufacturing or service delivery Marketing and sales Inventory management Shipping and paymentERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resourcescash, raw materials, production capacityand the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders. Enterprise system software is a multi-ERPllion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems. The ERP system is considered a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. However, ERP system development is different from traditional systems development. ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.Origin of "ERP"In 1990, Gartner Group first used the acronym ERP as an extension of material requirements planning (MRP), later manufacturing resource planning and computer-integrated manufacturing. Without replacing these terms, ERP came to represent a larger whole that reflects the evolution of application integration beyond manufacturing. ExpansionERP systems experienced rapid growth in the 1990s, because the year 2000 problem and introduction of the euro disrupted legacy systems. Many companies took the opportunity to replace their old systems with ERP. ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions, such as customer relationship management (CRM), dealt directly with customers, or ebusiness systems such as ecommerce, egovernment, etelecom, and efinanceor supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.[citation needed]"ERP II" was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead Long Live ERP II. It describes webbased software that provides realtime access to ERP systems to employees and partners (such as suppliers and customers). The ERP II role expands traditional ERP resource optimization and transaction processing. Rather than just manage buying, selling, etc.ERP II leverages information in the resources under its management to help the enterprise collaborate with other enterprises. ERP II is more flexible than the first generation ERP. Rather than confine ERP system capaERPlities within the organization, it goes beyond the corporate walls to interact with other systems. Enterprise application suite is an alternate name for such systems.Developers now make more effort to integrate moERPle devices with the ERP system. ERP vendors are extending ERP to these devices, along with other business applications. Technical stakes of modern ERP concern integrationhardware, applications, networking, supply chains. ERP now covers more functions and rolesincluding decision making, stakeholders' relationships, standardization, transparency, globalization, etc. CharacteristicsERP (Enterprise Resource Planning) systems typically include the following characteristics: An integrated system that operates in (or near) real time without relying on periodic updates[citation needed] A common database that supports all applications A consistent look and feel across modules Installation of the system with elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps

Functional areasAn ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules: Financial accounting: General ledger, fixed asset, payables including vouchering, matching and payment, receivables cash application and collections, cash management, financial consolidation Management accounting: Budgeting, costing, cost management, activity based costing Human resources: Recruiting, training, rostering, payroll, benefits, 401K, diversity management, retirement, separation Manufacturing: Engineering, ERPll of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management Order Processing: Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning. Supply chain management: Supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing). Project management: Project planning, resource planning, project costing, work breakdown structure, ERPlling, time and expense, performance units, activity management Customer relationship management: Sales and marketing, commissions, service, customer contact, call center support - CRM systems are not always considered part of ERP systems but rather Business Support systems (BSS). Data services: Various "selfservice" interfaces for customers, suppliers and/or employeesComponents Transactional database Management portal/dashboard ERP system Customizable reporting Resource planning and scheduling Analyzing the product External access via technology such as web services Search Document management Messaging/chat/wiki Workflow management

Cloud computingCloud computing is a recently evolved computing terminology or metaphor based on utility and consumption of computing resources. Cloud computing involves deploying groups of remote servers and software networked that allow centralized data storage and online access to computer services or resources. Clouds can be classified as public, private or hybrid. The criticisms about it are mainly focused on its social implications. This happens when the owner of the remote servers is a person or organization other than the user, as their interests may point in different directions, for example, the user may wish that his or her information is kept private, but the owner of the remote servers may want to take advantage of it for their own business.Cloud computing relies on sharing of resources to achieve coherence and economies of scale, similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing is the broader concept of converged infrastructure and shared services.Cloud computing, or in simpler shorthand just "the cloud", also focuses on maximizing the effectiveness of the shared resources. Cloud resources are usually not only shared by multiple users but are also dynamically reallocated per demand. This can work for allocating resources to users. For example, a cloud computer facility that serves European users during European business hours with a specific application (e.g., email) may reallocate the same resources to serve North American users during North America's business hours with a different application (e.g., a web server). This approach should maximize the use of computing power thus reducing environmental damage as well since less power, air conditioning, rack space, etc. are required for a variety of functions. With cloud computing, multiple users can access a single server to retrieve and update their data without purchasing licenses for different applications.The term "moving to cloud" also refers to an organization moving away from a traditional CAPEX model (buy the dedicated hardware and depreciate it over a period of time) to the OPEX model (use a shared cloud infrastructure and pay as one uses it).Proponents claim that cloud computing allows companies to avoid upfront infrastructure costs, and focus on projects that differentiate their businesses instead of on infrastructure. Proponents also claim that cloud computing allows enterprises to get their applications up and running faster, with improved manageaERPlity and less maintenance, and enables IT to more rapidly adjust resources to meet fluctuating and unpredictable business demand. Cloud providers typically use a "pay as you go" model. This can lead to unexpectedly high charges if administrators do not adapt to the cloud pricing model. The present availaERPlity of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware virtualization, service-oriented architecture, and autonomic and utility computing have led to a growth in cloud computing. Cloud vendors are experiencing growth rates of 50% per annum. Indian SMEs [Small and Medium Enterprises]SME sector of India is considered as the backbone of economy contributing to 45% of the industrial output, 40% of Indias exports, employing 60 million people, create 1.3 million jobs every year and produce more than 8000 quality products for the Indian and international markets. With approximately 30 million SMEs in India, 12 million people expected to join the workforce in next 3 years and the sector growing at a rate of 8% per year, Government of India is taking different measures so as to increase their competitiveness in the international market.There are several factors that have contributed towards the growth of Indian SMEs. Few of these include; funding of SMEs by local and foreign investors, the new technology that is used in the market is assisting SMEs add considerable value to their business, various trade directories and trade portals help facilitate trade between buyer and supplier and thus reducing the barrier to tradeWith this huge potential, backed up by strong government support; Indian SMEs continue to post their growth stories. Despite of this strong growth, there is huge potential amongst Indian SMEs that still remains untapped. Once this untapped potential becomes the source for growth of these units, there would be no stopping to India posting a GDP higher than that of US and China and becoming the worlds economic powerhouse.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 affected by the technological and environmental contexts only indirectly, through the mediating effect of the organizational context, and especially through the SME owner-managers strategic orientation.Among all organizational factors, there is reason to underline the particular role played by the owner-managers strategic orientation. Indeed, according to the upper echelon theory, organizational strategic outcomes and processes are a function of the managerial characteristics 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 behavioral factors than calculations for economic optimization, and will reflect decision-makers idiosyncrasies. Strategy being the mediating force between the firm and its environment, it is through the small business owner-managers strategic orientation that one can understand the latters 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-managers competencies as well as his or her choices in regard to acquiring human resources and developing employees competencies. Definition of SMEs(a) Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:(i) A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;(ii) A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and(iii) A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722 (E) dated October 5, 2006.(b) Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.(i) A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;(ii) A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore; and(iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes: (a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment. The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under:Manufacturing Sector

EnterprisesInvestment in plant & machinery

Micro EnterprisesDoes not exceed twenty five lakh rupees

Small EnterprisesMore than twenty five lakh rupees but does not exceed five crore rupees

Medium EnterprisesMore than five crore rupees but does not exceed ten crore rupees

Service Sector

EnterprisesInvestment in equipment

Micro EnterprisesDoes not exceed ten lakh rupees

Small EnterprisesMore than ten lakh rupees but does not exceed two crore rupees

Medium EnterprisesMore than two crore rupees but does not exceed five core rupees

Indian SMEs in Technology AdoptionTechnology is the backbone of modern business. But Indian Small and Medium Enterprises (SMEs) lag behind in the adoption of technology and this proves to be roadblock in the path of catching up with their global counterparts.

India, according to a report by Pluggd.in, has the second largest population of SMEs among BRIC and the US. This has not gone unnoticed by IT vendors, who seek to tap the potential that Indias SMEs hold.

The provision of Software-as-a-Service (SaaS), for example, has allowed firms such as TravelCarma, (a travel firm based in Gujarat) to extend its services in Frankfurt. A report from the Business Standard noted that while SaaS as a platform for delivering applications has been around for quite a while now, SMEs have only started to realize its true potential after the recession, because of the services cost-effectiveness.

However, while a number of software product SMEs are benefitting from the interest of multi-national corporations and IT firms from all over the world, many new players hesitate to take up new technology is due to the lack of awareness, and majority of those who are aware step back because of their nervousness to embrace the new technologies.

Although SMEs provide employment to about 75percent of Indias workforce, these enterprises spend only 30 percent of the countrys IT spending. These statistics from Pluggd.in are only made more shocking with the fact that only 12 percent of Indian SMEs use computers and 90percent of them use it just for document processing. A major change in this attitude will help the SMEs to a huge extent in competing globally.Some of the main reasons behind Indian SMEs avoiding the adoption of technology include budget and infrastructure limitations. The shortage of skilled labor that has the basic know-how to work computers is another looming problem for SMEs from upcoming cities.

The government seems more than eager to help SMEs change their perception of technology though. In a Seminar on Information, Communication & Technology for Enhancing Competitiveness of Indian SMEs, organized by PHD (Punjab Haryana Delhi) Chamber in New Delhi, Dr Ajay Kumar, the Joint Secretary of the Department of IT in the Ministry of Information and Technology, Government of India, said Information Technology is a tool which enables you to innovate and make a difference. IT enables better information use and better information management.

However, the government is yet to encourage SMEs in the adoption of new technologies by promoting low-cost technology solutions that are designed specifically for SMEs. A few other steps that would encourage SMEs in this regard would be the provision of opportunities, as well as the implementation of a culture of innovation, especially in the fields of marketing.Adopting the latest IT tools and techniques can help India's small and medium businesses boost revenues by $ 56 ERPllion, while also creating over a million jobs, according to a report by software giant Microsoft. The research, conducted by global management consulting firm BCG for the Microsoft report, also revealed that about 90 per cent of small and medium enterprises (SMEs) in India have no access to the Internet. "The report - Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders - found that if more SMEs in India adopt latest IT tools there is potential for SME revenue to grow by $ 56 ERPllion and create 1.1 million new jobs," Microsoft India Managing Director Karan Bajwa said. BCG surveyed Brazil, India, China, Germany and the US and found SME revenue could grow by a comERPned $ 770 ERPllion in these five primary countries if more SMEs could achieve the growth rates of those SMEs that use modern IT tools. "These same SMEs could add some 6.2 million new jobs in those countries alone. BCG believes that this association between IT adoption and growth would be consistent in countries across the world," BCG Senior Partner and co-author of the report Neeraj Aggarwal said. BCG surveyed 4,000 SMEs in these five countries, which included 750 surveyed in India, during July 2013. The research revealed nearly 90 per cent of SMEs in India have no access to the Internet, compared with only 22 per cent of SMEs in China and 5 per cent of SMEs in the US. Future Technologies for SMEsIf we stretch our vision long term we can think of some new technologies which can prove important to MSMEs.1. Cloud computingCloud computing can prove to be buzzword for SMES in future. It is nothing but literally placing computing in internet space. All the applications, IT resources and software rest on internet space and can be made available on demand, free of cost or some subscription fee or may be on pay per use basis. It is beneficial for SMEs as they do not have to pay upfront and invest huge amounts. Its applications are modular where SMEs can pick the features they need leaving out the rest. Other than the common applications, high end applications such as ERP & CRM are available through cloud computing.2. Remote infrastructure Management3. Virtualization4. SaaS

Key challenges faced by Indian MSME sectorDespite its strategic importance in any industrialization strategy, the opportunities that the Indian landscape presents and its immense potential for employment generation the MSME sector confronts several challenges. They face problems at every stage of their operation, whether it is buying of raw materials, manufacture of products, marketing of goods or raising of finance. Some of the challenges Indian MSMEs face have been briefly discussed below: 1. High Cost of CreditAccess to adequate and timely credit at a reasonable cost is the most critical problem faced by this sector. The major reason for this has been the high risk perception among the banks about this sector and the high transaction costs for loan appraisal. While the quantum of advances from the public sector banks (PSBs) to the MSEs has increased over the years in absolute terms, from Rs.46, 045 Crores in March 2000 to Rs.1, 85,208 Crores in March 2009, the share of the credit to the MSME sector in the Net Bank Credit (NBC) has declined from 12.5 percent to 10.9 percent during the same period.2. Collateral RequirementsPlayers in MSME sector are not in a position to provide collateral in order to avail loans from banks and hence denied access to credit.

3. Limited Access to Equity CapitalThis is common challenge faced by this sector in spite of the fact that overall capital inflows have witnessed significant increase in the recent years. Absence of equity capital may pose a serious challenge to development of knowledge-based industries, particularly those that are sought to be promoted by the first-generation entrepreneurs with the requisite expertise and knowledge. 4. Problems in supply to government departments and agencies Majority of government tenders prescribe high eligiERPlity criteria such as annual turnover, past experience etc. which deters entity to MSME sector 5. Procurement of raw materials at a competitive costThis is a growing challenge faced by this sector as procurement for raw materials is carried out within local territory due to their financial constraints and procurements are much smaller in scale as compared to industry at large.6. Problems of storage, designing, packaging and product displayMSMEs face problems of storage, display and designs for their products. Non availaERPlity of selling outlets for their products is a serious constraint. In addition, MSEs also face problem of inadequate infrastructure for marketing of their products to interior/remote parts of the country. 7. Lack of access to global markets With the liberalization and globalization of the Indian economy, the small enterprises in India have unprecedented opportunities on the one hand, and face serious challenges, on the other. While access to global market has offered a host of business opportunities in the form of new target markets, possiERPlities to exploit technological advantage, etc., the challenges in this process have flowed mainly from their scale of operation, technological obsolescence, and inaERPlity to access institutional credit and intense competition in marketing. 8. Inadequate infrastructure facilities, including power, water, roads, etc.To ensure competitiveness of the MSMEs, it is essential that the availaERPlity of infrastructure, technology and skilled manpower are in tune with the global trends. MSMEs are either located in industrial estates set up many decades ago or are functioning within urban areas or have come up in an unorganized manner in rural areas. The state of infrastructure, including power, water, roads, etc. in such areas is poor and unreliable. 9. Low technology levels and lack of access to modern technologyThe MSME sector in India, with some exceptions, is characterized by low technology levels, which acts as a handicap in the emerging global market. As a result, the sustainaERPlity of a large number of MSMEs will be in jeopardy in the face of competition from imports. 10. Lack of skilled manpower for manufacturing, services, marketing, etc. Although India has the advantage of a large pool of human resources, the industry continues to face deficit in manpower with skills set required for manufacturing, marketing, servicing, etc. 11. Absence of a suitable mechanismWhich enables the quick revival of viable sick enterprises and allows unviable entities to close down speedily.

12. Branding and MarketingDue to very high cost of business acquisition, Low media budget, non-participation in International events, the MSME branding and visiERPlity is extremely poor.

OBJECTIVESObjectives

To analysis the growth of SMEs in term of IT infrastructure. To identify the challenges facing by SMEs in adoption of IT. To analysis the future trend of IT in SMEs. To study the future market of ERP in SMEs. To fill the knowledge gap in the IT literature for understanding the process of adoption and implementation of IT innovations in organizations.

METHODOLOGYMethodologyCollection of DataThe data has been collected from the company reports and websites which were obtained by the company.1. Primary DataData that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings, therefore its validity is greater than secondary data.

Sources of Primary DataSources for primary data are limited and at times it becomes difficult to obtain data from primary source because of either scarcity of population or lack of cooperation. Regardless of any difficulty one can face in collecting primary data; it is the most authentic and reliable data source. Following are some of the sources of primary data.a. Experiments: Experiments require an artificial or natural setting in which to perform logical study to collect data. Experiments are more suitable for medicine, psychological studies, nutrition and for other scientific studies. In experiments the experimenter has to keep control over the influence of any extraneous variable on the results.b. Survey: Survey is most commonly used method in social sciences, management, marketing and psychology to some extent. Surveys can be conducted in different methods.c. Questionnaire: This is the most commonly used method in survey. Questionnaires are a list of questions either open-ended or close -ended for which the respondent give answers. Questionnaire can be conducted via telephone, mail, live in a public area, or in an institute, through electronic mail or through fax and other methods.d. Interview: Interview is a face-to-face conversation with the respondent. In interview the main problem arises when the respondent deliberately hides information otherwise it is an in depth source of information. The interviewer can not only record the statements the interviewee speaks but he can observe the body language, expressions and other reactions to the questions too. This enables the interviewer to draw conclusions easily.e. Observations: Observation can be done while letting the observing person know that he is being observed or without letting him know. Observations can also be made in natural settings as well as in artificially created environment.

2. Secondary Data

Data collected from a source that has already been published in any form is called as secondary data. The review of literature in nay research is based on secondary data. Mostly from books, journals and periodicals.Sources of Secondary DataSecondary data is often readily available. After the expense of electronic media and internet the availaERPlity of secondary data has become much easier.a. Published Printed Sources: There are variety of published printed sources. Their crediERPlity depends on many factors. For example, on the writer, publishing company and time and date when published. New sources are preferred and old sources should be avoided as new technology and researches bring new facts into light.a.1. Books: Books are available today on any topic that you want to research. The use of books start before even you have selected the topic. After selection of topics books provide insight on how much work has already been done on the same topic and you can prepare your literature review. Books are secondary source but most authentic one in secondary sources.a.2. Journals/periodicals: Journals and periodicals are becoming more important as far as data collection is concerned. The reason is that journals provide up-to-date information which at times books cannot and secondly, journals can give information on the very specific topic on which you are researching rather talking about more general topics.a.3. Magazines/Newspapers: Magazines are also effective but not very reliable. Newspaper on the other hand are more reliable and in some cases the information can only be obtained from newspapers as in the case of some political studies.a.4. Published Electronic Sources: As internet is becoming more advance, fast and reachable to the masses; it has been seen that much information that is not available in printed form is available on internet. In the past the crediERPlity of internet was questionable but today it is not. The reason is that in the past journals and books were seldom published on internet but today almost every journal and book is available online. Some are free and for others you have to pay the price.a.5. E-journals: e-journals are more commonly available than printed journals. Latest journals are difficult to retrieve without subscription but if your university has an e-library you can view any journal, print it and those that are not available you can make an order for them.a.6. General Websites: Generally websites do not contain very reliable information so their content should be checked for the reliaERPlity before quoting from them.a.7. Weblogs: Weblogs are also becoming common. They are actually diaries written by different people. These diaries are as reliable to use as personal written diaries.b. Unpublished Personal RecordsSome unpublished data may also be useful in some cases.b1. Diaries: Diaries are personal records and are rarely available but if you are conducting a descriptive research then they might be very useful. The Anne Franks diary is the most famous example of this. That diary contained the most accurate records of Nazi wars. Letters: Letters like diaries are also a rich source but should be checked for their reliaERPlity before using them.b2. Government Records: Government records are very important for marketing, management, humanities and social science research.c. Association Datac.1. Association recordsc.2. Educational institutes recordsd. Public Sector Recordsd.1. NGO's survey datad.2. Other private companies records

SamplingIn statistics, quality assurance, & survey methodology, sampling is concerned with the selection of a subset of individuals from within a statistical population to estimate characteristics of the whole population. Acceptance sampling is used to determine if a production lot of material meets the governing specifications. Two advantages of sampling are that the cost is lower and data collection is faster than measuring the entire population.Each observation measures one or more properties (such as weight, location, color) of observable bodies distinguished as independent objects or individuals. In survey sampling, weights can be applied to the data to adjust for the sample design, particularly stratified sampling (blocking). Results from probaERPlity theory and statistical theory are employed to guide practice. In business and medical research, sampling is widely used for gathering information about a population.

The sampling process comprises several stages: Defining the population of concern Specifying a sampling frame, a set of items or events possible to measure Specifying a sampling method for selecting items or events from the frame Determining the sample size Implementing the sampling plan Sampling and data collecting Data which can be selected

Sampling Technique:Simple random SamplingSample Size: 50Sample Element:CompaniesSampling Area: IDA Cherlapally, HyderabadResearch Instrument:QuestionnaireStatistical Method:Percentage Method Analysis:Bar Diagrams, Pie-Charts

Sampling design of the study constitutes of two steps1. Selection of the study area.1. Selection of the sample size.The sampling design is considered as non-probaERPlity sampling. Convenience sampling has been taken for conducting the survey.

Sampling ProcedureSimple random sampling was used to collect the information because of time factor.Sample Size100 Samples were collected for the studyPeriod of StudyThe period for the study went for 45 days.Formulation of QuestionnaireThe structured un-disguised questionnaire was prepared for collection of Primary data from the customers. As the questionnaire is the only mode of Communication between the researcher and the respondent, the questionnaire for the Study was drafted with at most care and caution so that relevant and essential Information for the inquiry may be collected without any difficulty, amERPguity or Vagueness. To attain the objectives different pattern of questions were made use of in the study, they are

1. Dichotomous questionsDichotomous questions allow for only two possible answers are yes or no.2. Multiple Choice questionsThese types of questions list a number of answers and permit the subjects to select the answers that best approximate their own views.3. Open-ended questionsIn this type of questionnaire, the questions are structured but the responses are Un-structured. The respondents are free to reply with whatever information and in words, which they consider to be relevant.4. Close-ended questions In this type of questionnaire, both the questions and answers are arranged in a structured pattern. Under this type of questions, there are various sub-types.

Statistical DesignTo draw the inferences and conclusions from collected observations both conventional and non-conventional statistical techniques were used. The conventional Statistical techniques adopted in the present study are percentage analysis

Population SizeI have divided the entire population industry wise and from each industry and from each department I have picked up 10 companies randomly and collected data.Sample size is: 250

SCOPE of the STUDY

Scope of the StudyInformation technologies (IT) have become one of the most important infrastructural elements for SMEs in service industries. Now, these firms show specific characteristics and behaviors with regard to adopting and assimilating IT. These specificities have not been taken into account however in 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. 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 propositions for future research on IT adoption and assimilation in service sector SMEs.Adoption rates vary depending upon the nature of IT. For instance, in a study of ERP adoption by European midsize companies, indicated, already in 1998, an adoption rate of about 20% in the project industry and the wholesale industry, vs. nearly 40% in discrete and automotive, 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 services market. However, the expectations were high in the years 1998-2000 regarding ERP in the services sector, as 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 identifies 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 notion of material requirements planning does not really apply in this context. However, they use human resources and workforce management modules more than manufacturing firms. 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. 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. And studies also indicate that e-commerce technology has been adopted at a faster pace by services enterprises than by manufacturers. The scope of this particular study has been restricted because of the various constraints. Therefore the boundary or scope for this study has been restricted to a selected sample of industry of IDA Cherlapally, Hyderabad. An effort has been made to ensure that the sample is represented the whole population. A sample of 50 companies out of the total all most all 50 companies we gathered information through personal interaction with the questionnaire for obtaining their responses.

LIMITATION of The STUDY

Limitation of the Study

This study covers data on Information Technology Road Map for SMEs located in IDA Cherlapally, Hyderabad only. It will not represent all India data. The sample consisted only of companies with turnover of 50cr to 100cr. Companies of the lesser turnover were not considered for the purpose of study. There is no concrete basis to prove the response given is a true measure of the opinion of all the companies as a whole.

Basic AssumptionsIt has been assumed that one of the limitations of ERPas as stated above does not exist in the responses obtained by the companies this is because if there is any kind of aERPas in the answers to the questionnaire, then the purpose of conducting the survey is defeated. Hence we go by the assumption that the responses of the surveyed are free of ERPas and prejudice and that they exhiERPt a true picture of the company.

DATA ANALYSIS TOOLS & TECHNIQUEData Analysis ToolsThis are the toolsof MS Excel what I have used to analyze the survey data 1. Sort: You can sort your Excel data on one column or multiple columns. You can sort in ascending or descending order.2. Filter: Filter your Excel data if you only want to display records that meet certain criteria.3.Conditional Formatting: Conditional formatting in Excel enables you to highlight cells with a certain color, depending on the cell's value.4. Charts: A simple Excel chart can say more than a sheet full of numbers. As you'll see, creating charts is very easy.5. Pivot Tables: Pivot tables are one of Excel's most powerful features. A pivot table allows you to extract the significance from a large, detailed data set.6. Tables: Tables allow you to analyze your data in Excel quickly and easily.7. What-If Analysis: What-If Analysis in Excel allows you to try out different values (scenarios) for formulas.8. Solver: Excel includes a tool called solver that uses techniques from the operations research to find optimal solutions for all kind of decision problems.9. Analysis ToolPak: The Analysis ToolPak is an Excel add-in program that provides data analysis tools for financial, statistical and engineering data analysis.Data Analysis Technique Narrative Descriptive Statistical/mathematical Audio-Optical Others

CONTRIBUTION

ContributionHistorically, firms in the SME sector have used IT mainly for managing accounts. Firms such as Tally etc. grew very strongly during the first half of 2000s mainly due to providing standalone IT solutions for accounting needs. Over the past few years however, the SME sector is realizing the benefits of the increased IT adoption in other areas as well. ERP giants such as SAP and Oracle have announced separate initiatives to launch products especially designed for the SME sector. These products take short implementation times and licensing mode is favorable to firms in the growth stage. Benefits from increased IT adoption are manifold. While internally, increasing ICT penetration can improve collaboration and efficiency, externally it can provide access to markets which would have been otherwise inaccessible. When used properly, ICT can enable small and medium sized businesses to: Spur innovation Increase efficiency Manage customer relationships properly Provide linkage to local, regional and international markets Enable access to new technologies

Major benefits for increased IT adoption among SMEs are enumerated in exhiERPt 2. As is evident from the research, the major drivers for increased IT adoption among the SME is to increase communication within the organization and to provide linkages between customers and suppliers. While these drivers are listed for organizations of all types, manufacturing firms tend to focus more on aspects such as operations management.It is also evident that accounting functionalities no longer figure in the top-7 drivers for IT adoption. This may be because accounting functionalities mostly come out of the box and most organizations have already implemented solutions that can fulfil their basic accounting needs.

INDUSTRY PROFILE

Industry ProfileCurrent Information Technology IndustryUser data is like a treasure trove and ERP (ERP) is the tool that helps enterprises leverage the data to increase customer engagement, satisfaction and resolve their business imperatives. Slowly yet gradually Indian CIOs are realizing the hidden potential of ERP. They are also undergoing added pressure from consumers, environmental policies, government and industry regulations to improve their operations and processes to become both agile and efficient in a volatile marketplace. These internal and external pressures are driving increased adoption of analytics solutions across the country.CIOReview as the navigator for enterprises to get the clear picture of the ERP industry presents to you the '25 Most Promising ERP Companies in India'. We bring to you detailed profiles of some of the best contenders in the ERP industry that help enterprises adopt data analytics to ultimately fuel their business growth. A distinguished panel comprising of accomplished Indian CEO's & CIO's of public companies, VC's, analysts, founders of other VC funded companies including CIOReview's editorial board decided on the top 25 companies. These companies have the technical skill sets and business acumen to become high value organizations. The list will help you make the right choice for your ERP needs.10 Most Promising ERP Companies in IndiaCompanyFounder/CEOFoundedDescription

Advantics Solutions Pvt.LtdMumbai, Maharashtraadvantics.co.in WinayakDurganandWagleDirector1991

A two decade old provider of end-to-end Data Warehousing and ERP solutions, mainly in the Banking, Finance, Pharmacy and other business verticals.

Bodhtree Consulting Limited Hyderabad, Andhra Pradeshbodhtree.com Pal NatarajanCEO1999A provider of ERP tools and solutions specializing in business strategy, business process, ERP& advanced analytics Information management to name a few.

Board Software (India) Pvt. Ltd. Mumbai, Maharashtraboard.com Partha SenManaging Director Asia Pacific2008A provider of programming-free toolkits for rapid and cost-effective development of Corporate Performance Management and ERP software applications.

BeetleRim Technologies Pvt. Ltd. Hyderabad, Andhra PradeshBeetleRim.com BhargaviPagadalaFounder and Managing Director2007A provider of ERP tools and solutions specializing in business strategy, business process, ERP& advanced analyticsInformation management to name a few.

ERPrst India Private Limited Ahmedabad, GujratERPrst.com Manish JaniManaging Director2004A provider of an automated end-to-end, enterprise-caliber ERP platform that solves the problem from data to visualization.

DatawiseHyderabad, Andhra Pradeshmydatawise.com Vinay KumarCEO2003A provider of ERP/Analytics, Consulting, Outsourcing and data mining, incorporating strategic thoughts in cross functional analytical intelligence.

Deflytics Software Pvt Ltd Mumbai, MaharashtraDeflytics.com Sanjeev AgrawalDirector2012A provider of ERP and Analytic solutions with professional Services to design, develop, configure, deploy and maintain analytic solutions including ERPg Data and vertical specific solutions, both on-premises and on-demand.

DreamorERPtSoftech Pvt. Ltd. Bangalore, KarnatakadreamorERPt.com Sanchit JainCEO2010A provider of services across the entire Supply Chain and Logistics and offers ERP consulting services on the industry leading Microsoft SQL Server and LITE ERP platforms.

Elegant JERPElegantJERPAhmedabad, GujaratelegantjERP.com KartikPatelCEO2001The company uses its innovative Managed Memory Computing technology that has expanded the scope of application for ERP tools.

GrayMatter Software Services Pvt LtdBangalore, Vikas GuptaCEO & CTO2006A provider of ERP, Analytics and Data Science services delivering enterprise wide reporting/decision enabling solutions.

COMPANY PROFILE

Company ProfileTata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) service, consulting and business solutions company headquartered in Mumbai, Maharashtra. TCS operates in 46 countries. It is a subsidiary of the Tata Group and is listed on the Bombay Stock Exchange and the National Stock Exchange of India. TCS is the largest Indian company by market capitalization and is the largest India-based IT services company by 2013 revenues. TCS is now placed among the Big 4 most valuable IT services brands worldwide. In 2013, TCS is ranked 40th overall in the Forbes World's Most Innovative Companies ranking, making it both the highest-ranked IT services company and the top Indian company. It is the world's 10th largest IT services provider, measured by the revenues.History1968 to 2000Tata Consultancy Services Ltd was founded in 1968 by a division of Tata Sons Limited. Its early contracts included providing punched card services to sister company TISCO (now Tata Steel), fortune ranking 1 working on an Inter-Branch Reconciliation System for the Central Bank of India, and providing bureau services to Unit Trust of India.In 1975, TCS conducted its first campus interviews, held at IISc, Bangalore. The recruits comprised 12 Indian Institutes of Technology graduates and three IISc graduates, who became the first TCS employees to enter a formal graduate trainee programme. In 1979, TCS delivered an electronic depository and trading system called SECOM for the Swiss company SIS SegaInterSettle. TCS followed this up with System X for the Canadian Depository System and automating the Johannesburg Stock Exchange. TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired. In 1981, TCS established India's first dedicated software research and development centre, the Tata Research Development and Design Centre (TRDDC) in Pune. In 1985 TCS established India's first client-dedicated offshore development centre, set up for clients Tandem.In early the Indian IT outsourcing industry grew rapidly due to the Y2K bug and the launch of a unified European currency, Euro. TataConsultancyServices created the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party developer and client implementation.

2000 to presentOn 25 August 2004, TCS became a publicly listed company. In 2005, TCS became the first India-based IT services company to enter the bioinformatics market. In 2006, TCS designed an ERP system for the Indian Railway Catering and Tourism Corporation. In 2008, TCS's e-business activities were generating over US$500 million in annual revenues. TCS entered the small and medium enterprises market for the first time in 2011, with cloud-based offerings. In the 2011/12 fiscal year, TCS achieved annual revenues of over US$10 billion for the first time. In May 2013, TCS was awarded a six-year contract worth over 1100 crores to provide services to the Indian Department of Posts. In 2013 TCS moved from the 13th position to 10th position in the League of top 10 global IT services companies.In July 2014, TCS became the first Indian company to cross the Rs 5 lakh crore mark in market capitalization. Products and servicesTCS and its 59 subsidiaries provide a wide range of information technology-related products and services including application development, business process outsourcing, capacity planning, consulting, enterprise software, hardware sizing, payment processing, software management and technology education services. Its established software products are TCS BaNCS and TCS MasterCraft. Service linesTCS' services are currently organised into the following service lines (percentage of total TCS revenues in the 2012-13 fiscal year generated by each respective service line is shown in parentheses): Application development and maintenance (43.80%); Asset leverage solutions (2.70%); Assurance services (7.70%); Business process outsourcing (12.50%); Consulting (2.00%); Engineering and Industrial services (4.60%); Enterprise solutions (15.20%); and IT infrastructure services (11.50%).

LITERATURE REVIEWLiterature ReviewThe modern economic environment which is dominated by globalization, hyper-competition, and knowledge and information revolution has revolutionized the way business is conducted (Pavic et al., 2007). This new technological epoch is apparent through the intensified investment in computer-processing and data preparation appliance in the manufacturing and service industry and telecommunications infrastructure, and its widespread usage in government agencies, educational organizations, and, more recently, in the households. Owing to these technological progressions, the implementation and application of IT is a significant driving force behind many socioeconomic changes (Dierckx and Stroeken, 1999). As the utilization and commercialization of IT becomes more widespread throughout the world, the adoption of novel IT can generate new business opportunities and various benefits. Nowadays, both large organizations and SMEs are seeking out ways to reinforce their competitive position and improve their productivity (Premkumar, 2003). Accordingly, there is an increasing consciousness of the necessity to derive profit through investing in IT within SMEs. IT tools significantly assist SMEs through supplying required infrastructure necessary for providing appropriate types of information at the right time. IT can also provide SMEs with competitiveness through integration between supply chain partners and inter-organizational functions, as well as by providing critical information (Bhagwat and Sharma, 2007). Prior IT literature however has shown that only a small number of studies focused on the adoption and use of IT in SMEs (Grandon and Pearson, 2004). Moreover, it has been found that in spite of exponential growth of IT within SMEs, the rate of IT adoption by these businesses has remained relatively low (MacGregor and Vrazalic, 2005) and large organizations have noticeably profited more than SMEs in both their IT-enabled improved sale and costs saving (Riquelme, 2002). In looking for reasons for such differences in IT adoption in SMEs, unique characteristics of these businesses can be highlighted. SMEs generally have limited access to the market information and suffer from globalization constraint (Madrid-Guijarro et al., 2009). Moreover, management techniques such as financial analysis, forecasting, and project management are rarely used by SMEs (Blili and Raymond, 1993). Tendency to employ generalists rather than specialists, reliance on short term planning, informal and dynamic strategies and decision making process, and lack of standardization of operating procedures are other distinctive characteristics of SMEs (Dibrell et al., 2008; Thong et al., 1996). However, restricted resources controlled by SMEs, which is commonly referred to as resource poverty (Thong et al., 1997; Welsh and White, 1981), is the major differentiator between SMEs and large organizations. Therefore, and with regard to the weakness of SMEs at different organizational and managerial, technological, individual, and environmental levels, the IT adoption and use in SMEs is in a disadvantage position in this respect (Al-Qirim, 2007; MacGregor and Vrazalic, 2006).The aim of this research is to achieve a better understanding of IT adoption in SMEs through explicitly and understandably exploring and identifying factors influencing IT adoption process within SMEs in both developed and developing countries existing in the literature with high concentration on certain SME-related issues. Proposed conceptual framework demonstrates the determinants of IT adoption process in SMEs through review of prior literature including concepts, methodologies, theories, empirical research and case studies relative to IT adoption among SMEs, and by comERPning exiting perspectives. The research investigates and reveals a number of internal and external issues pressuring and persuading SMEs to adopt IT solutions. Likewise, barriers to IT adoption in SMEs will be addressed by reviewing and classifying IT adoption factors. Using the proposed conceptual framework, the authors categorize and elucidate the key factors that directly or indirectly, as well as positively or negatively impact the process of IT adoption in SMEs.Information Technology Adoption ConceptIn order to describe the process of IT adoption, it is essential to define IT, as well as to scrutinize the adoption concept. For this paper, an inclusive term of information technology is defined to cover the multiplicity of these technologies. Within the diffusion and adoption of information technology literature, there is no generally accepted IT definition as various definitions of IT have widely been employed by different researchers. IT might be regarded as technological aspect of Information System (IS) (Hollander et al., 1999), which is aimed for creation of computer-based IS by using computer systems in organizations (Sarosa and Zowghi, 2003). IT can be defined as those technologies engaged in the operation, collection, transport, retrieving, storage, access presentation, and transformation of information in all its forms ... (Boar, 1997). Moreover, IT adoption is defined by Tan et al. (2009) as application of Information and Communication Technologies (ICT) tools including computer hardware, software, and networks required for connecting to the internet. According to (Attaran, 2003) , Information technology is defined as capaERPlities offered to organizations by computers, software applications, and telecommunications to deliver data, information, and knowledge to individuals and processes, however, and with regard to the concept of supplier relationships, Carr and Smeltzer (2002) defined IT as the use of automated purchasing systems, supplier links through electronic data interchange (EDI), computer-to-computer links with key suppliers and finally information systems. In the light of aforementioned views, term IT will cover wide range of information processing and computer application in organizations in this study. IT will cover IS, ICT, internet and their infrastructure including computer hardware and software, those technologies that processes or transmit information to enhance the effectiveness of individuals and organizations. Furthermore, term IT also includes any computer application and required hardware packages, Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), EDI, and Enterprise Resource planning (ERP) which increase the productivity of businesses, as well as any technologies used for electronic commerce (EC) such as electronic funds transfer (EFT), intranet, extranet, collaborative planning, forecasting, and replenishment (CPFR) applications, supply chain communications systems, and electronic supply chain management systems.On the other hand, different definition of IT adoption in organizations has been provided by prior literature such as decision to accept and use the innovation (Premkumar and Roberts, 1999; Tan et al., 2009; Thong, 1999; Zaltman et al., 1973), the full use of innovation as intended by the designer (Bving and Bdker, 2004), implementation success (Thong, 2001), extent of usage (Davis, 1989; Grandon and Pearson, 2004)) and effectiveness and success of adopted IT based on acceptance of or satisfaction with IT (Al-Gahtani et al., 2007; Al-Gahtani and King, 1999; Foong, 1999; Palvia, 1996; Palvia and Palvia, 1999). Thong and Yap (1995) defined IT adoption is SMEs as applying computer hardware and software solutions that provide support of operations, management, and decision-making in organizations. They explain that the aim of IT adoption (including computer applications such as CAD/CAM, EDI, MRP) is increasing business productively.Information TechnologyAdoption withinSMEsThe rich diversity of different perspectives toward factors that affect IT adoption process is available on a huge body of literature. The review of previous research has identified a number of influencing factors. Most of these perspectives and studies have concentrated on influencing factors such as top management, organizational behavior and characteristics, firms resources, government, customers, supplier and external IT consultant and vendors.Based on a review of the existing literature on IT adoption in SMEs, an integrated framework has been developed and used to classify various issues and factors relative to process of IS/IT adoption within SMEs (Figure1). This model merely comprises different aspects of internal and external IT adoption factors (Drivers, Influencing factors and barriers) and does not categorize adoption factors based on being drivers or barriers of IT adoption in SMEs. The authors believe that the presented categorization of IT adoption issues and factors through developed conceptual framework can help governments, organizations, managers and IT consultants to achieve clearer understanding of IT adoption process. It also add further knowledge to the literature while more comprehensive study of IT adoption within SMEs investigating SME-related influencing factors simultaneous with other aspects (drivers, enablers and inhiERPtors) of IT adoption has been warranted by prior literature. In the first part, internal and external factors influencing IT adoption are discussed. This section puts forward a proposed conceptual framework according to the literature and also includes inclusive categorization, as well as review of factors influencing adoption process. Finally, a brief explanation on the IT adoption issues in SMEs would be followed.Influencing FactorsWithin this study and as suggested by Figure 1, influencing factors are categorized into two major clusters of factors and their subcategories: internal and external factors. In addition, a brief review and categorizations of factors influencing IT adoption in SMEs has been offered in Table 1, those factors that are merely SME-related.Internal Factors1. Top ManagementIn SMEs, IT adoption process is directly affected by top management where all decisions from daily functions to future investments are made by them (Bruque and Moyano, 2007; Nguyen, 2009). SMEs mainly have simple and highly centralized structures with the chief executive officers (CEOs) in which, in most cases, owner and chief manager are one and the same person (Ghobakhloo et al., 2011a). Some surveys have revealed that when the SME owner/manager as the key decision maker makes a decision or appoints a high significance and value upon internal or external duties, the organization will also be inclined to respond in an analogous fashion (Chau, 1995; Lybaert, 1998). A number of studies have revealed that in SMEs, the role of CEOs (top management or owner/manager) is central to enterprise since their decision influences all firms activities, both in current and in future (Fuller-Love, 2006; Smith, 2007). This also refers to IT adoption decision from planning stage to the implementation, maintaining, and system upgrade stages (Bruque and Moyano, 2007; Fuller and Lewis, 2002; Nguyen, 2009). These decisions are mainly based on their experiential knowledge derived from comERPnation of existing competencies of knowledge, personal experience, judgment, and their communication skills (Carson and Gilmore, 2000). However, Keh et al. (2002) discuss that CEOs knowledge and experience required for identifying opportunities is mostly attained by social relationship network rather than individualistic psychological traits.According to the literature, several factors including managements perception of and attitude toward IT, support and commitment, IT knowledge and experiences, innovativeness, perceived behavioral control over IT, desire for growth, and familiarity with administration directly impact the process of IT adoption is SMEs (Drew, 2003; Lybaert, 1998; Premkumar, 2003; Qureshi and York, 2008; Thong et al., 1993; Thong and Yap, 1995).Accordingly, the characteristics of the CEOs should be taken into consideration in the investigation of strategic activities, such as the adoption of innovations including IT as a new technology, and other novel technologies as well (Lefebvre and Lefebvre, 1992). Studies by Thong and Yap (1995) and Thong (1999) found that small businesses those have adopted IT are more likely to have CEOs possessing more positive attitude towards IT adoption. This view is reinforced by Caldeira and Ward's (2003) study confirming that positive attitude of top management has brought about the relative success of IS/IT adoption in SMEs, especially in manufacturing ones. In addition, it is argued that greater intention to adopt IT solutions is directly attributable to the more positive attitude of small minority business owners toward IT adoption (Qureshi and York, 2008). Consequently, if the CEO perceives that benefits of IT adoption outweigh its risks, then the business is more likely to adopt IT (Thong and Yap, 1995). Prior literature suggests that when the management has been highly willing to implement IT application, SMEs do not perceive management priority on IT as a major barrier in adopting IS applications (Bhagwat and Sharma, 2007). In addition, positive attitude of top management toward using IT (as the users of IT in SMEs) will result in IT acceptance and subsequently success in SMEs (Al-Gahtani and King, 1999; Davis, 1993; Ghobakhloo et al., 2010).On the other hand, IT adoption literature has provided evidence that top management support and commitment towards IS/IT adoption is one of the key cornerstone of higher levels of success and satisfaction with IS/IT adoption and use in SMEs (Fink, 1998; Ghobakhloo et al., 2010; Premkumar, 2003; Thong, 2001). Cragg and Zinatelli (1995) identified insufficient attention by management to IS as one of three main problem areas for computing in small firms. They argued that management can directly impact IS evolution and sophistication, since top management support and commitment is a key factor contributing to the IS success within small firms. For success of IT in Malaysian SMEs however it was found that anticipated benefits of computerization in SMEs can only be achieved by existence of five conditions including strong top management support as the key condition (Foong, 1999). In a similar context, and interpreting the successful adoption and use of IS/IT from the resource based theory, Caldeira and Ward (2003) and Ghobakhloo et al. (2011b) demonstrated that management support towards IS/IT adoption significantly participates in the IS/IT adoption success within SMEs. Opposite of what has been stated, Thong et al. (1993) and Thong et al. (1997) argued that there is no relation between the level of IS effectiveness and level of CEO support. Thong et al. (1997) defined top management support based on 5 elements (Table 2). They discussed that there is no difference in the level of IS effectiveness between small businesses with high levels of top management support and small businesses with low levels of top management support. The authors however believe that the role of top management support in IT adoption within SMEs in consequential and the Thong et al. (1993) and Thong et al. (1997) inconsistency in providing the support for this factor can be attributed to their definition of top management support and its measurement construct in their research.CEOs IT knowledge and experience of IT is another trait affecting IT adoption in SMEs (Drew, 2003; Fink, 1998; Ghobakhloo et al., 2011a; Lybaert, 1998). A study by Thong et al. (1995) demonstrated that small businesses with CEOs who are more knowledgeable about IT are more probable to adopt IT. They discussed that greater knowledge of CEOs will reduce the degree of uncertainty entangled with IT which will result in lower risk of IT adoption (Thong, 1999). Moreover, Palvia and Palvia (1999) found that in SMEs, CEOs with higher levels of computing skills are more satisfied with the implemented IS rather than those having inferior skills while based on the literature, satisfaction with IS/IT is one of the most applied measures of IT success in organizations (Adamson and Shine, 2003; Jayasuriya, 1998; Palvia, 1996). These views are consistent with the findings of other studies which found that sufficient knowledge of IT and its consequent influences over organization could be provocative and supportive for IT adoption in SMEs (Fink, 1998; Lybaert, 1998; Sarosa and Zowghi, 2003).Another influencing factor attributable to the top management characteristics is CEO innovativeness, both in general and IT-specific terms (Ghobakhloo et al., 2011a, 2011b). Personal Innovativeness in IT (PIIT) has been revealed to be a reliable predictor of users attitude about the simplicity of use and effectiveness of new technologies (Nov and Ye, 2008). Agarwal and Prasad (1998) have defined PIIT as the willingness of an individual to try out any new information technology. They discuss that PIIT is a major determinant of IT acceptance by moderating in perceived usefulness (PU), compatiERPlity, and perceived ease of use (PEOU). Here, it should be considered that in most of IT acceptance model such as Technology Acceptance Model (TAM) (Davis, 1989), Decomposed Theory of Planned Behaviour (DTPB) firstly introduced by Taylor and Todd (1995) and the Unified Theory of Acceptance and Use of Technology (UTAUT) by Venkatesh et al. (2003), as well as in majority of models of users satisfaction including End User Satisfaction (EUS) model (Adamson and Shine, 2003), Model of Small Business User IT Satisfaction (Palvia and Palvia, 1999) and Wixom and Todd (2005) integrated model of user satisfaction and technology acceptance with IT, PU and PEOU are two key constructs of user behavioral intention and subsequently IT usage behavior. An empirical research by Thatcher andPerrewe (2002) demonstrated that highly innovative individuals, having higher levels of PIIT, are more likely to look for stimulating experiences, as well as having more confidence in their competence to use IT. On the other hand, individuals possessing lower levels of PIIT are more probable to present general computer anxiety; also they might have less tolerance for risk. Findings of their empirical study illustrated the significant direct effects of PIIT on computer self-efficiency while computer anxiety partially mediated PIIT's effect on CSE.In general terms however and in SME context, studies by Ghobakhloo et al. (2011a), Thong and Yap (1995), and Thong (1999) revealed that movement toward IT adoption in small enterprises with innovator CEO are more probable. Innovative CEOs would prefer to apply distinctive and risky solutions such as IT that change the structure in which the problems are generated. Thus CEOs desire of being more innovative will expedite the process of IT adoption (Thong and Yap, 1995). Accordingly, the authors suggest that above mentioned studies and researches stress the significance of innovativeness in both general term and in term of PIIT on user perception and system acceptance where according to Scott and Walczak (2009), individuals with higher levels of PIIT will possess greater cognitive absorption and show higher computer self-efficiency. In SMEs, where users of a new information system are both employees and owner/managers, innovative owner/managers will have a better attitude toward IT adoption.Desire for growth is another characteristic of CEOs that deserves our attention as an important influencing factor over adoption of IT. Lybaert (1998) discusses that firms size is positively related to the decision to accumulate additional information, and growth of a firm is coupled with the gathering of additional information. They found that SMEs owner/manager, who makes most of the critical decisions and allows the firm to grow, uses more information when possesses greater desire for growth. Moreover, they argued that familiarity with administration is other important CEO-related determinant which influences the use of information and IS within SMEs. Lybaert (1998) study showed that comparing to CEOs not possessing knowledge of administration, CEOs with high familiarity with administration will use more information and subsequently IT.2. ResourcesSMEs have generally been distinguished by and are suffering from their restricted access to particular recourses compared to ERPg organizations (Igbaria et al., 1997; Nieto and Fernndez, 2005). according to the literature of IT adoption and due to SMEs unique characteristics, financial resources, technical and managerial resources, information resources accessiERPlity, internal and external expertise, market accessiERPlity, and in-house IT knowledge and experience are resources with aERPlity to hinder or simplify the adoption of IT in SMEs, and to positively or negatively influence this process as well (Caldeira and Ward, 2003; Cragg and Zinatelli, 1995; Dutta and Evrard, 1999; Fink, 1998; Lybaert, 1998; Nguyen, 2009; Southern and Tilley, 2000; Thong, 2001). A study by Dutta and Evrard (1999) investigating the strategic management of IT and organization within small enterprises in six different European countries suggests that the differences between small firms which are capable to make the use of IT and those enterprise which are not is partially attributable to quality of the internal resources, predominantly manpower, and initially the control of technological information. They also stated that innovation is often impeded through an insufficiency of financial resources required for RandD.Financial resources are one of the most considerable critical resources which are known as the key SMEs performance requirements and subsequently critical success factors based on resource-based theory (Rangone, 1999). In general, most SMEs are suffering from not having sufficient financial resources and most owner/managers invest their own personal assets (Fuller-Love, 2006). Limited financial resources compel SMEs to be cautious about their investment and capital spending (Ghobakhloo et al., 2011b). An imprecise IT investment decision can impose drastic financial consequences for SMEs and in extreme circumstances; it may lead to an insolvency and economical failure (Sarosa and Zowghi, 2003). As implementation of new IT system and its components requires long term investment (Nguyen, 2009) and concerning the high cost of IT infrastructure (Walczuch et al., 2000), only SMEs having adequate financial resources would regard adoption of IT as a feasible project to undertake (Thong and Yap, 1995), so that SMEs owner/managers who have access to necessary financial resources are more capable to establish desired IS (Lybaert, 1998). However, and despite a number of studies have revealed that the financial restriction of SMEs regarding IT adoption is attributable to the high cost of IT tools and infrastructure (Chau, 1995; Premkumar, 2003; Walczuch et al., 2000), Dibrell et al. (2008) and Wu et al. (2006) suggest that; as the price of computer hardware and software has been considerably declined in recent years, IT implementation expenses are not major factor hindering IT adoption process in SMEs regarding their limited financial resources. Nevertheless, it should be considered that along with the initial cost of computer hardware and software, other IS/IT implementation expanses including the cost of users training and development and the post deployment costs should be undertaken by SMEs during different phase of IT adoption (Nguyen, 2009). With regard to this view, Ein-Dor and Segev (1978) supposed that throughinvesting sufficient financial resources, the probaERPlity of IS implementation success within organizations will be increased. This view is empirically reinforced by Thong (2001) who demonstrated that after external expertise, IS investment is the second most significant determinant of IS implementation success in Singaporean small business. Their study demonstrated that higher levels of allocation for IS investment will amplify the possiERPlity of IS implementation success in small businesses, while through this allocation for investment, small businesses will be able to hire more experienced external experts and/or implement better IS that meet their goals. Furthermore, due to abovementioned restrictions and regardless of decrease in the price of preliminary IT tools, SMEs are generally unable to meet the expense of other IT adoption costs such as taking expert professionals into service (Ghobakhloo et al., 2011b); therefore, SMEs are facing great difficulty hiring IT specialist to successfully implement IT with regard to financial constraints (Caldeira and Ward, 2003; Sarosa and Zowghi, 2003). This view is supported through a study by Pontikakis et al. (2006) of adoption of Internet-enabled Personal Computers (IEPCs) by Greek SMEs suggesting that when companies are traditionally facing with limited access to finance, a small number of SMEs are capable to rationalize costs of IT adoption, even as these costs encompass purchasing technology expenses (e.g. hardware and software) along with the costs of employee training, organizational restructuring and upgrading existing facilities.On the other hand, and comparing to large organization, it has been acknowledged that SMEs are suffering from lack of in-house IT expertise which might negatively influence the process of IT adoption (Chau, 1995; Cragg and Zinatelli, 1995; Fink, 1998). As a result, SME are facing significant risks and problems with their computerization regarding their inadequate knowledge of IS/IT implementation (Igbaria et al., 1997). Cragg and Zinatelli (1995) conducted a longitudinal study over an eight year period of IS sophistication and evolution in eighteen small firms and demonstrated that evolution and sophistication of IS within small firms will be drastically inhiERPted when small enterprises are suffering from lack of internal expertise. This view is supported through a study by Caldeira and Ward (2003) who revealed that internal expertise consisting of employees, supervisors, or those from top management are powerful determinants of IT adoption. In addition, Southern and Tilley (2000) categorized SMEs into three main groups based on level of ITC utilization; low users, medium users, and high users. They further found that the levels of IT (technological) expertise existing within the medium small firm users of ICTs are greater than low users of ICTs, while high small firm users of ICTs are more tendentious to have technological expertise than low and medium users.In addition, knowledge of IT is another vital resource influencing IT adoption in SMEs. Development of internal IS/IT knowledge and skills is one of the most important basis required for providing superior levels of IS/IT adoption and satisfaction in SMEs (Caldeira and Ward, 2003). In general, lack of IT knowledge in SMEs can be regarded as a barrier to IT adoption since CEOs of SMEs might be bewildered by swift development of IT tools and countless variety of choices (Sarosa and Zowghi, 2003; Venkatesh and Brown, 2001). Therefore, with regard to this fact that SMEs generally lack IT resources and skills (e.g. IT knowledge and computing skills) (Chan and Chung, 2002; Igbaria et al., 1997; Levy et al., 2001), theses business can provide themselves with potential resources from networking and also benefit from it when it comes to adopting IT (Fletcher, 2002; Nguyen, 2009). In SMEs, networking can be defined as a number of interaction between organizations, counterparts, suppliers, customers, and vendors so that, they could be either personal network or business network (Palvia and Palvia, 1999). Hence, the networks are a crucial ways for acquiring access to external knowledge required for successful implementation of IT (Nguyen, 2009).3. End usersIn most of organizations, employees are regarded as significant assets which along with the role of owner/manager, the firms survival and success seriously depend on them (Melville et al., 2004; Nguyen, 2009). These assets as the users of IT within SMEs are another precious resource of firms (Caldeira and Ward, 2003) which needs to be developed to contribute to the success of business (Egbu et al., 2005; Zhou et al., 2009).Prior literature suggests that characteristics of IT users including knowledge of IT, training, attitudes and intention toward IT, and participation and involvement in adoption process could impact IS/IT acceptance or its adoption process as well (Caldeira and Ward, 2003; Fink, 1998; Fisher and Howell, 2004; Lybaert, 1998; Robey and Zeller, 1978; Thong, 2001). Limited use of IT and a lack of success in reaping benefit from computer hardware and software in organizations, those issues that have negatively affected IS/IT in SMEs is attributable to the lack of training and skills in organizations where the successful adoption of IT needs sharing of knowledge, training, and higher levels of skills by the employees who are users of IT (Egbu et al., 2005; Ghobakhloo et al., 2010). To facilitate the successful implementation of IS in SMEs, and to avoid adoption failure, these businesses should also augment the level of IS knowledge among potential IS users through providing firms staffs with computer education and training courses (Thong, 2001). Sarosa and Zowghi (2003)and Ghobakhlooet al. (2010) argue that IT acceptance within users of IT as a part of firms employee will impose positive impacts on IT adoption. According to these authors, level of IT adoption and usage by users will be affected through provided IT course and training while higher knowledge of IT among users would help them in implementing the new technology.Premkumar and Roberts (1999) suggest that increasing users awareness of the benefits of information telecommunication technologies will also positively influence the process of these technologies adoption while this awareness could be amplified through improved education and training. Correspondingly, a study by Kleintop and Blau (1994) investigating impact of end users training on electronic mail system implementation demonstrate that end users practice with new IT system before its implementation will result in higher level of IT system acceptance. In addition, their research suggests that increase in amount of training among end users before IT implementation might lead to higher level of perceived ease of using IT, as well as perception of IS usefulness. Moreover, it is suggested that positive change or improvement of business functionality through new system may not be believed by some employees (Anderson and Huang, 2006). Regarding this pessimistic attitude, Bruque and Moyano (2007) suggested that employing new staffs instead of training current employees might be more effective way. This view is supported by more recent literature recommending that training should be provided to current staffs if cost of hiring new staff is higher than providing training to the existing employees and if there would be a substantial change in the IT through providing training (Ghobakhloo et al., 2011a; Nguyen, 2009).A number of prior studies have demonstrated that employee acceptance and usage of and satisfaction with IT might be immoderately problematic regarding adoption success (Davis, 1993; Igbaria et al., 1997; Zhou et al., 2009) where according to Bull (2003), more than half the computer systems implemented in western countries are underused or not utilized at all. The acceptance of IT by users including managers, professionals, and operating level personnel, which is an essential condition for its success, can be regarded as the success measures including user attitudes, usage, and satisfaction (Al-Gahtani and King, 1999). Lack of user acceptance has long been confirmed to be an impediment to the success of new IS, so user acceptance is regarded as the key factor determining success or failure of IS/IT projects (Davis, 1993). In SMEs, Employees attitude toward IT adoption might have significant impact on system acceptance and adoption success so that negative attitude of some users toward IT could negatively affect successful implementation of IT (Nguyen, 2009). They may not perceive that new IT can change or improve business function and when it comes to adopt IT, they might be worried about consequences such as threat of losing job (Irani et al., 2001). Nonetheless, employees attitudes toward use of the IS will be encouraged through evident top management support which will bring about a more tolerable conversion from the existing work practices and company operations (Thong et al., 1997). Moreover, Davis, (1993), Igbaria et al. (1997), Straub et al. (1995), and Szajna (1996) found that attitude toward using, along with PU and PEOU can fully affect the acceptance of IT by its users. PU refers to the degree to which a person believes that using a particular system would enhance his or her job performance (Davis, 1989) whileDavis (1989) defines PEOU as the degree to which a person believes that using a particular system would be free of effort. Above mentioned view was validated in small businesses through a study by Igbaria et al. (1997) who demonstrated that users IT acceptance in small businesses is directly affected by PU and PEOU. In addition, the contribution of PU in promoting personal computing acceptance in small businesses is mediated by PEOU.On the other hand, employees (as the users of IT) satisfaction with IT is another dimension of IT adoption success in SMEs (Adam Mahmood et al., 2000; Adamson and Shine, 2003; Al-Gahtani and King, 1999; Palvia, 1996; Palvia and Palvia, 1999; Yan et al., 2007). Contrary to technology acceptance literature focusing on individuals behavior and beliefs, system and information characteristics have been regarded as core concepts in the user satisfaction literature (Ghobakhloo et al., 2010). Adam Mahmood et al., (2000) argue that end-user information satisfaction is strongly a