A model to evaluate the effects of information and communication technology (ICT) on small and medium enterprises (SME’s) performance in African cities: case of Nairobi county

Abstract

The study set out to assess the role of Information and Communication Technology (E- commerce tools, Networking components/Internet, and communication technology) on the growth of Small and Medium Enterprises (SMEs), analyze how the use of Customer Relationship Management systems (CRM), Enterprise Resource Planning (ERP) systems, Decision Support Systems (DSS), Mobile communication, VOIP, Mobile Money Transfer (MMT) and use social media technologies affects the growth of SMEs. Descriptive survey design was used; a sample of 69 SMEs from a total of 464 registered SME’s was selected using Simple random sampling in Nairobi County. Primary data was collected using semi- structured questionnaires. Analysis was done using Statistical Package for Social Science (SPSS). Study findings indicated that e-commerce tools were highly adopted by SMEs with mobile payment systems being the highest adopted, online shopping and online catalogues for products and services. Adoption of e-commerce tools related to growth of SMEs. CRM systems were highly adopted by SMEs and had a moderate positive correlation their growth. Findings indicated that high growth SMEs was mostly associated with usage of social media and communication technology. The study recommended that SMEs should consider wide flexible solutions of open source software solutions, scalable platforms to allow progressive upgrade to meet increasing use and cloud solutions. Research should be conducted to identify additional challenges that will enable SMEs operations to be efficient, cost-effective to ensure their growth and sustainability.