The relationship among organisations' factors, information technology, innovation and performance: an Indonesian SMEs study

Information technology has enormous benefits for small and medium enterprises (SMEs) especially to develop innovations in order to enhance their competitiveness. However, currently only few SMEs in Indonesia have used information technology. This study was conducted to examine the factors that influenced SMEs in utilising information technology as well as the impact of information technology utilisation for innovation and performance of SMEs. Based on survey data collected from 115 Indonesian SMEs, it is concluded that the perceived benefits, organisational readiness, and external encouragement have significant positive influence on the utilisation of information technology, with the most dominant factor being organisational readiness. The results also showed that the utilisation of information technology has a significant positive impact on innovation and performance.