Towards a Stage Model for E-Business Adoption Among SMEs: Preliminary Results for Manufacturing and Service Firms

The ubiquity of the Internet has allowed companies of any size to engage in e-business. However, e-business adoption among Small and Medium sized Enterprises (SMEs) is limited because of resource constraints and a failure to understand the strategic value of e-business. In an effort to better understand the value of e-business to SMEs, this paper examines the use of over 100 e-business applications by over 400 SMEs in five different industries. Cluster analysis suggests a three stage model for e-business evolution in which firms progress from making only nominal use of the Internet to convey company information, to supply chain and order management applications in a transitional stage, to more extensive and integrated use in subsequent stages. Evidence of differences in use is also presented for firms that are manufacturers versus service providers.