Summer is a period for relaxation; the time when one reads something which is not always related to one’s profession.  An article that has caught my attention was ‘Business-IT Alignment Equilibrium States in Small Firms: A Dynamic Perspective’ published in the MCAST Journal of Applied Research and Practice.  This paper formed part of a wider study that the author, Roland Aquilina, submitted as part of his doctoral studies.

I was interested in this work for two reasons. First, there is the methodology adopted by the author. Aquilina carried out interviews with owners of small businesses in Malta. Secondly, the analysis of these interviews gives an interesting picture of how these owners react when faced with IT hiccups. The behaviour of these businessmen does not differ from that of similar businessmen operating in other countries, in particular, those with an island mentality similar to ours. From an economic point of view, Aquilina seeks to give advice as to how businessmen, who are normally not versed in IT solutions, should react to the challenges that IT systems offer to small businesses.

Often, small businesses do not have the resources to invest in IT personnel. Therefore, they  have to rely on outsourcing. This is an element of weakness that is not without risks as there are sharks out there who take advantage of such situations. This goes to explain the reluctance of small businessmen. As normally happens, these businessmen first seek the advice of fellow businessmen who have had the same experience. Even if their situation may be different from that of the other businessmen, they still seek to take the same professional approach. But in the field of IT, like any other field, specialization is becoming the norm. Being an IT technician does not mean that the person can solve all IT related problems that a business may be facing. Yet for methodology to be scientifically relevant, it needs to be tested.

Aquilina’s research was of a qualitative nature. It was tested against what in the academic field is known as grounded theory. Grounded theory was applied for the interpretation of these interviews. This is an inductive methodology used for collecting data, which is reviewed according to how many times the same idea is repeated in the same interview. Then, each idea is tagged with a code. Codes are grouped into concepts, and concepts into categories. This leads to the creation of new theoretical frameworks and the formation of multiple realities and multiple viewpoints of reality.

In the case of small businesses in Malta, Aquilina concluded that the alignment of small businesses needs to undergo a four-tier process: adaptation, anticipation, synchronization and collaboration. This model is extremely interesting as this could be applied to any organization that is experiencing difficulties, including political parties.

Innovation is an integral part in the creation of new values in business. It is innovation that helps increase the gross domestic product. In 2011, 95% of small businesses employed less than 10 full time workers. I am sure that the figures have not changed much. But these small businesses constituted 43% of the workforce. Then, these businesses were responsible for 53% of the added value to our economy and 56% of the private sector employment. Clearly this sector is punching beyond its weight.

Yet, one hankering problem for these businesses is how can they fall in line with IT technology. Perhaps the new generation of businessmen is more IT savvy than the previous one but innovation in IT will continue to challenge any small business. Aquilina looked at these difficulties within a context. It is here where I found his research most interesting. What businessmen look for are concrete and adaptable solutions.

One needs to remember that small businesses do not usually develop a proper business plan.  They are too small for such complex studies. This does not mean that they do not think about their future. They do think but they rely on their inductive spirit to judge what is the best way forward. This is normally described as operating through instinct.

In the case of IT, this sort of approach gives a short term solution. But this is also the result of the very nature of small businesses. Small businesses are interested in addressing problems that arise on a day-to-day basis. This has an innate disadvantage. The information and knowledge that can be gathered from such experiences tends to be fragmentary. It was found that this was one of the reasons why small business owners normally doubt the benefits that may accrue from the adoption of new technological solutions for their businesses.

Yet, the history of IT shows that if it is applied correctly, IT will lead to better organizational performance. It increases productivity and profit. It also improves the service that can be given to customers.

Perhaps, the first word that would come to mind when speaking about business and IT is the creation of a website. Yet, a website is the least profitable for small businesses. In fact, I remember a time, when they were said to be the future for small businesses. This failed to materialize. Aquilina gives a clear explanation. Website development by small businessesis unstructured and in most cases, lacks the interfacing with a back-end database. Small businesses by their very nature are often too small to run a proper website – as large businesses do. Websites require full time dedicated personnel to bear fruit.

Then there is the system integration. This is a fundamental pre-requisite. The more integration there is, the higher is the quality of the end result. This leads to the elimination of one particular ailment that small businesses suffer from: the sporadic way in which some small businesses  act without linking action to strategy. The worst thing that can happen with IT is that it is not linked to strategic objectives. This results in financial loss. This is why synchronization and collaboration are the key elements in business that lead to innovation. This happens irrespective whether collaboration is internal or external. What synchronization and collaboration do in business is that they strengthen business planning and project management skills. This will also help in cases of outsourcing; it helps small businesses make a better professional choice.

Moreover, I would like to add one final remark. ‘Small islands’, Aquilina affirms, ‘are renowned for not being a homogenous group, yet they share many common features’. His study shows that more focus is needed on the outsourcers, in particular in the field of IT, as they have the key to the success or failure of small businesses operating on small islands.