SME Transformation : Modelling Progressions

Small firms (SMEs) are encouraged to embrace e-business. However, the mechanisms by which such business transformation occurs is not understood. IS transformation models suggest a single path, though, there is little evidence that SMEs follow it, and e-business transformation models are untested. Venkatraman’s business transformation model provides a means of determining IS development that has been validated in large firms. While there is little research into its applicability to SMEs, research here in multiple SME cases reveals three business transformation paths, termed proscribed, disconnected and disjointed. The research demonstrates why some SMEs ossify at certain stages of transformation, and how disconnected progression may preclude SMEs from gaining the benefits of process redefinition and scope redesign. The implications for e-business, for the model and for SMEs are discussed.