Evaluation of microcomputer utilization in small-and medium-sized businesses

This paper presents the result of an empirical study on the use of microcomputers by small and medium-sized businesses in South Africa. A number of countries were included in the survey. The purpose of this study was to establish, through the use of 51 variables in the project, what major problems small and medium-sized businesses experience in the use of microcomputers in a developing region such as southern Africa. Special emphasis was placed on the main reasons for purchasing microcomputers, types of software used, as well as training and experience in handling this equipment in the management of a small business. Major findings included a greater computer literacy amongst users, with a strong tendency towards computer application for more sophisticated purposes such as decision making means of support.

Evaluation of microcomputer utilization in small-and medium-sized businesses J.J.D. Havenga* and P.J.S. Bruwer Faculty of Economics and Management Sciences, Potchefstroom University for CHE, Potchefstroom, 2520 Republic of South Africa This paper presents the result of an empirical study on the use of microcomputers by small and medium-sized businesses in South Africa.A number of countries were included in the survey.The purpose of this study was to establish, through the use of 51 variables in the project, what major problems small and medium-sized businesses experience in the use of microcomputers in a developing region such as southern Africa.Special emphasis was placed on the main reasons for purchasing microcomputers, types of software used, as well as training and experience in handling this equipment in the management of a small business.Major findings • included a greater computer literacy amongst users, with a strong tendency towards computer application for more sophisticated purposes such as dccisivn making means of support.
Since the introduction of the microcomputer in the middle 1970s the technological advancement in its speed and storage capacity has been great.Greater awareness of the possibilities of new generation microcomputers as well as lower cost of hardware have caused an increasing demand among small-and medium-sized businesses to employ microcomputers in their firms.However, it does seem as if the greater demand for microcomputers has not always resulted in a more efficient utilization thereof.It is suggested (Massey, Jr., 1986) that the small business computer remains underutilized and that the benefits of computer technology to small businesses will not be fully realized until managers combine the already recognized cost savings with the tremendous revenue generation capacities that microcomputers offer.
Besides the under-utilization Cragg (1986) also noted that some studies have indicated that a high percentage of microcomputers have been purchased unwisely or have fallen into non-use.The latter can be the case if no technological development of microcomputers occurred, or due to lack of training of users.
It does, however, seem that microcomputers are being engaged to a larger extent in more areas than actually acknowledged (Lincoln & Warberg, 1987;Cragg, 1987).
The purpose of this study •is to ascertain the main reasons for purchasing a microcomputer in order to assess to what extent problems are experienced, and the contribution of microcoomputer utilization to more effective managerial functioning in small and mediumsized businesses in southern Africa.

Definition of small-and medium-sized businesses
From the survey of the literature it is evident that confusion still exists on a large scale as to what the correct definition of a small business should be.The official definition of a small business in the U.S.A. was already formulated in 1953 with the introduction of the 'Small Business Act'.Since then 24 other definitions were formulated, whilst a number of variations on the original definition were coined.This also implies the case with the definition of the Bolton Commission in the U.K.
For the purposes of this study small-and mediumsized businesses were defined in terms of annual turnover as well as current value of capital investment being less than RS million; number of employees less than 200; and number of branches five or less.The authors preferred to classify the businesses as medium and small, because in some countries medium-sized is considered to be small and in others vice versa.Throughout this article the term small business will be used to denote both medium and small.

Method and sample
The method of study covered a review of literature as well as an empirical survey.A questionnaire was developed taking into account information gathered from the literature and discussions with people in the small business field.
The questionnaire which includes 51 variables was screened carefully and pretested.
In a previous research project (Bruwer & Pretorius, 1986) a questionnaire of limited span, 14 variables, was developed.This served as a basis for this project.
• The seven-point scale that has already proven to be very successful in research (Lucas, 1975;Bailey & Pearson, 1983) was also used in this project.
In order to obtain a representative sample of small businesses in southern Africa using microcomputers, a direct mail list was obtained from the Small Business From a list of 4613 names the authors eliminated 791 firms which were either known, suspected, or could be.deduced to be large businesses.A random sample of 1000 names was drawn.A total of 391 questionnaires (39, l % response) were sent back of which 11 were discarded as unusable.From this response it was established that 216 businesses had their own microcomputers, representing 56,8%.However, it can not be generalized because the authors believe that quite a number of small businesses that do not own microcomputers, did not respond.The BMDP-programmes (Dixon & Brown, 1981) were mainly used for the processing and analyzing of the statistical data.

Variables used in the project
Appendix A contains the names and meanings of each of the variables set in the questionnaire.For the average response and standard deviation regarding certain variables as stated in Table 5 one has to refer l-iack to appendix A.

Ownership of microcomputers
In Table 1 an indication is given of the various kinds of businesses represented in the study as well as the percentage respondents that have their own microcomputer systems.The respondents who do not own microcomputers are for comparative reasons also included in this table.
The average turnover of the total population of businesses in the study lies between R500 001 and Rl million.The average present value of capital invested can be placed in the same category.
Businesses that have microcomputer systems on average employ between 11 and 50 persons whilst 61 % of the non-users employ between one and 10 persons.
In so far as number of branches is concerned, 62,3% of the businesses have no branches and 33% bewteen one and five.In the case of non-users the percentages are 67,7% and 29,9% respectively.A comparison between 1984 figures (Bruwer & Pretorius, 1986) and the present study regarding type of microcomputers in use, reveal definite changes in market-share of the various types.It can be seen in the period 1984-1987 (Table 2) that the Apple system has nearly disappeared from the southern African marketscene, whilst there has nearly been a 100% increase in IBM-PC's.Olivetti had a precentage growth from 5,3% to 12% and Commodore a decline from 25% to 9,9%.In 1987 IBM-compatible computers, manufactured mainly in Taiwan, Hong Kong, and locally, accounted for 24,6% of the market.
The largest percentage of businesses (27 ,2%) purchased their microcomputers in a price-range R10001-Rl5000.More sophisticated systems costing R30 000 and upward were acquired by 14,1 % of the businesses.
Main reasons for purchasing microcomputers Table 3 supplies the main reasons for purchasing microcomputers.From this table it is evident that reducing the administrative workload in 1984 was the main reason.In 1987 the respondents gave better planning, control, and decision making as main reasons.It does seem that the small businessman is accepting the value of management information systems and the extent to which microcomputers can be used.

Time-lapse and problem experiencing
The authors also tried to establish what the time-lapse is before small businesses experience their first problems  Response on seven-point scale questions Table 5 contains the abbreviations of aspects that had to be evaluated on a seven-point scale.These results will be discussed together with those of Tables 6 and 7.These tables contain information regarding the software programmes being used, as well as training and experience.

Discussion of results
Scrutinizing the results presented above reveal that principal users of microcomputers are small businesses in the manufacturing, electrical, automobile, and medical fields.
Significant changes have also occurred in the type of computers used with major shifts toward products of countries from the East.The decline in the Apple and possible decline in other USA-computers in the near future may be the result of the withdrawal of these companies from the market of the Republic of South Africa.
From the study it also became evident that underaverage problems are experienced (refer Table 5).Furthermore, the microcomputer system also contributes to a larger extent to ease management, planning, and decision-making problems.Administrative work is also simplified by the microcomputers and it contributes to an increase in overall productivity.A study conducted by Cragg showed that benefits gained from computerization were: time-saving/ease; better information, and cost saving (Cragg, 1986).Where small businesses employed less than 20 persons, Gunther Riihl (1982) saw the main benefits in the fields of production and sales.In businesses with more than 20 employees the benefits also extended to administrative tasks.
The problems experienced also changed significantly.This can be attributed mainly to the technological advancement in hardware and expansion of software over the past few years.Although training in the use of microcomputers is still not adequate, it can be deduced that there has been a dramatic improvement which also contributes to less problems being experienced.
The application of the microcomputer by small businessmen shows that it is mainly used for debtor systems (81,7%).General sales leJger systems (60,7%) are also used quite extensively.The 24, 1 % respondents who use it for planning purposes indicate that small businesses realize the value of management information and its generation through microcomputers.The data regarding formal training, presented in Table 7, may directly relate to this.
In the past few years since the microcomputer was introduced to the small business sector a reasonable percentage (55,5%) of employers and employees gained experience of two years and longer.This fact, together with the fact that 38,3% users had formal training beyond school level, mainly contributed to the extent of success achieved with microcomputers in the small business sector.From Table 5 it can be seen that an average response of 5,4 on the seven-point scale was recorded in so far as the 'total success' of microcomputers is concerned.

Conclusions
The level of microcomputer usage in southern Africa is increasing rapidly and microcomputers are being used more and more as a decision making means of support.Due to larger enrolment in computer courses users are also becoming more computer literate.
Small businessmen experience less problems with their microcomputer systems than a few years ago and microcomputers are being used for more sophisticated purposes than previously.
Taking into account the greater complexity of the market and the increasing and tougher competition, the quest for more sophisticated management with the support of microcomputers is becoming greater.This situation in turn necessitates further research on aspects such as structure of information services, end usercomputing, information systems planning, and decision support systems for small businesses (Cooley, Walz & Walz, 1987).
To what extent productivity is increased by the computer system To what extent the service rendered by the agent or supplier was satisfactory To what extent the computer lived up to agent's representations To what extent the computer system reduced administrative work To what extent cost reduction was achieved by the computer system To what extent personnel reduction was achieved by the computer system To what extent better control resulted from the computer system To what extent better decision-making and planning resulted from use of the computer system To what extent better administrative control is possible with the computer system How long the present computer system has been in use Formal computer training received by employee using the computer system Experience of the person using the computer Amount of training received to operate present computer To what extent the training was sufficient Familiarity with the computer system Evaluation of the total success of the present computer system Type of business Annual turnover Capital investment in business Number of employees Total cost of computer and software

Table 1
Ownership of microcomplJters

Table 4
Time-lapse and problem experience

Table 5
Average response regarding certain variables

Table 6
Types of software programs used

Table 7
Training and experience of users