Knowledge Management System in Small and Medium Enterprises: Comparison
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Please note this is a comparison between Version 2 by Sirius Huang and Version 1 by Werner Richardt van zyl.

Knowledge is a key competitive advantage for small and medium enterprises (SMEs) as a way of competing with other organisations. There is a need to investigate SME adoption of knowledge management systems (KMSs). Knowledge management systems can only assist in this task if they are sufficiently adopted.

  • small and medium enterprises
  • technology adoption
  • knowledge management systems

1. Introduction

The management of knowledge is not just privy to large organisations with more resources [1]. According to [2], SMEs rely on their relational capital, but can only do so if they leverage these resources. The management of KM tasks and processes are a vital part of SMEs. SMEs find a greater necessity to manage organisational knowledge in a competitive environment, as they possess fewer resources with which to compete with larger organisations [1]. IT/information system (IS) can leverage SME KM practices and advance them further into the knowledge economy [3]. Innovation and IT is crucial for effective KM [4]. Worldwide, in the United States and Europe for instance, SMEs comprise the vast majority of gross domestic product. This observation is even more true in developing countries. Likewise, South African SMEs are a crucial driver of economic growth. SMEs make up 98% of the formal sector, providing employment to between 50 and 60% of the labour force across all sectors [5]. According to [6], the small and medium enterprises (SMEs) sector generates 70% of total employment for more than 95 countries [7]. Thus, SMEs are crucial to the economy, and yet very vulnerable to the wrong strategic decisions.
For many SMEs (and large organisations), the main competitive advantage is no longer physical but intangible in the form of information and knowledge [8]. Technology has become more accessible as it becomes more affordable and more disseminated, clearing a path for knowledge management systems (KMSs) to be adopted. However, their contribution to the digital revolution is impeded with low technology adoption and the inability to manage skills and innovation resources [9].

2. Knowledge Management

The purpose of knowledge management is to increase resources of organisational knowledge, improve performance and create a competitive advantage, [10,11][10][11]. The creation of knowledge is imperative as part of today’s globally competitive environment. Without proper knowledge, an organisation cannot be fully competitive, much less maintain a competitive advantage. The benefits of KMSs are wide-ranging and include an increase in profitability and more efficient and effective business processes, among others.
KM practices in SMEs can provide specific benefits such as improved customer service, more efficient processes and procedures and better communication [12]. Still, there have been large highly publicised cases of information system failures. For instance, an IS implementation by Hewlett-Packard failed at a cost of $160 million [13].
The benefits of information systems are multidimensional, such as improved effectiveness and efficiency, translating into higher organisational profitability. Despite these benefits, decades of research have identified many factors for information system failures and successes and are far-reaching [14]. For KM efforts, the reasons for failure range from a lack of executive leadership, inadequate processes and technology, a lack of understanding and a lack of participation at all organisational levels.
Despite the benefits of KM implementation efforts, they do not guarantee the full adoption of IS systems such as knowledge management systems (KMSs). Large organisations (>200 employees) possess significantly more resources than SMEs and are therefore more resilient in the face of KM adoption failures. For SMEs, it is becoming increasingly important that their organisational intellect is managed in a systematic way. In addition, limited research exists on the factors that contribute to KMS adoption in the SME context.
Large organisations have more financial resources to implement information systems (IS) and have a greater probability of recovering from IS failure. Large organisations also possess more IT infrastructure, systems and processes in place to transform the influx of information into knowledge. SMEs are crucial to the economy, yet very vulnerable since they are much smaller than large organisations, which have free resources for resilience. SMEs are also more vulnerable to the exploitation of intellectual property by larger corporations. In comparison, SMEs have been slow to adopt cloud computing, which includes knowledge management systems [16,17][15][16].
The work-from-home revolution catalysed by the COVID era has compelled organisations to even more closely manage their knowledge driven by the high rate of resignations in large and small organisations [18][17].
The current state of economies worldwide has caused companies to become more competitive, since organisational competition is no longer geographically bound (nationally and internationally). Competition for knowledge is now global for even the smallest SMEs.
Insufficient knowledge management can lead to a decline in organisational performance, innovation and service delivery to clients, and ultimately a decline in revenue [18][17]. Globalisation is accelerated by ICTs [19][18], creating the opportunity for organisations to manage their knowledge more efficiently and effectively. The benefits of ISs are multidimensional, including improved effectiveness and efficiency, translating into higher organisational profitability. Despite these benefits, decades of research have identified many factors for information system failures and successes [20,21][19][20]. Innovation in information and communication technologies (ICTs) has greatly affected the introduction of new KMSs as they become cheaper and more user-friendly [3]. Cloud computing has also emerged as a knowledge management system (KMS) adoption alternative that has increased in recent years [22,23,24][21][22][23] in SMEs. This is bound to be a more compelling technology in future, especially considering the work-from-home culture that has emerged since the COVID-19 pandemic.
Current studies combine Rogers’ [28][24] Diffusion of Innovation (DOI) theory with the Technology–Organisation–Environment (TOE) framework. The former is well established in the literature. According to a review of the IS adoption literature by [29][25], the DOI is able to identify “perceived critical characteristics of technological innovations (such as relative advantage, compatibility, complexity, observability and trialability) that may influence the attitude of potential adaptors or rejecters of IS” (p.6). Previous research has argued that the TOE framework is consistent with Rogers’ DOI theory [30][26]. Constructs in the DOI theory have been found to be significant in many studies which have been used in the TOE frameworks, such as compatibility and relative advantage.
Critical success factors have been used successfully in the past to study KMS adoption [31,32,33,34][27][28][29][30].

3. Knowledge Management Systems and SMEs

The day-to-day operations of an SME often do not include the management of information. Yet, in a knowledge-driven economy, this should be one of the principal tasks within an SME. Knowledge management systems are aimed at managing organisational knowledge. In this sense, knowledge management can be defined as “the capability to acquire, create, codify, applying and protecting knowledge within the organisation”. That is, they are IT-based, socio-technical systems designed and developed to maintain and enhance the organisation’s KM processes. Successes within KMSs have been documented in case studies and provide evidence to the value that KMSs can add to an organisation, if they are properly adopted [35][31].
SMEs are not simply smaller versions of large organisations. A non-linear relationship exists between small and large organisations. The latter’s size allows it an increasingly greater ability to deal with adverse events, such as a KMS failure. Their limited financial and human resources in SMEs, among others, makes them less able to compete with larger organisations, afford expensive KM systems or deal with KM failure. SMEs have many benefits to gain from adopting KMS tools and techniques [3] and need to make the most of KM guidance to benefit from KM resources. Furthermore, SMEs are reliant on relational capital to increase their innovation capacity [2]. To this end, researchers have investigated the factors influencing KMS adoption. Studies investigating the critical success factors (CSF) for information systems and, in particular, KMSs have identified a plethora of success factors [34][30].
In order to investigate the factors that influence KMS adoption systematically, the Technology–Organisation–Environment (TOE) framework is utilised while integrating the DOI theory as well as salient CSFs for KMS adoption. The framework also captures a holistic perspective from a systems theory paradigm.
Individual-level adoption frameworks gained prominence with the technology acceptance model (TAM) of [36][32]. The TAM has since been revised over the years through the work of, among others [37,38,39][33][34][35]. A limitation of these models is that they emphasise factors related to the individual context, thereby ignoring contexts related to the technological, organisational and environmental contexts.

References

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