Factors Influencing SME Compliance with Government Regulation on Use of IT: The Case of South Africa

This study investigated the factors influencing SME compliance with regulation on use of IT in South Africa. The researcher argues that these consist of a combination of business, industry, economic, technological, sociological, and psychological factors. The results show that cost of compliance was the main influencing factor and that both rural and urban SMEs make limited effort to develop policies and demonstrate compliance. Furthermore, a discriminant function analysis revealed that rural SMEs can be distinguished from their urban counterparts in terms of their disposition towards IT regulation by five factors. Perception of high compliance costs was the key distinguishing factor followed by lack of awareness, lack of training on compliance and security, perception of unfair regulation and possession of inadequate security controls. The author hopes that this research-based evidence will provide better understanding of SME compliance behaviors and guide the development of appropriate solutions to compliance challenges in these organizations.