Using importance performance analysis to understand and guide e‐business decision making in SMEs

Purpose – E‐business adoption among small and medium‐sized enterprises (SMEs) has been limited because of resource constraints and a failure to understand the strategic value of e‐business. To facilitate decision making concerning e‐business applications and their implementation, simple, low cost tools are needed to assist in analyzing and developing effective e‐business strategies. This paper aims to evaluate the use of e‐business applications among SMEs, to test the robustness of importance‐performance (IP) analysis models and to present IP mapping as a resource/tool for decision making. Design/methodology/approach – A total of 19 e‐business motivations were identified from the literature and incorporated into a self‐administered survey questionnaire. Data were collected from 439 SMEs located throughout the US. Findings – Most IP studies have assumed that importance and performance are independent; however, three recent studies have argued otherwise, identifying positive, negative and v‐shaped relationships. The study finds a fourth, N‐shaped relationship between importance and performance. This is an extension of the v‐shaped relationship and appears when the full range of performance scale values is displayed. Research limitations/implications – The relationship between the “importance” and “performance” variables suggests a path of travel that can help show the e‐business adoption states and the possible undulations in e‐business strategies along the path. Firms can identify their location on an IP map relative to the N‐shaped path and then identify the path to the optimum location on the map. Originality/value – This paper should be useful for academic researchers and business practitioners seeking guidance in terms of which e‐business applications to adopt and implement.