EFFECT OF INFORMATION AND COMMUNICATION TECHNOLOGY

ON NON-FINANCIAL PERFORMANCE OF SMALL AND MEDIUM

ENTERPRISES IN ABEOKUTA

SUBMITTED TO THE

DEPARTMENT OF BUSINESSS ADMINISTRATION AND MANAGEMENT,

SCHOOL OF BUSINESS AND MANAGEMENT STUDIES,

MOSHOOD ABIOLA POLYTECHNIC,

ABEOKUTA, OGUN STATE.

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF

HIGHER NATIONAL DIPLOMA IN

BUSINESSS ADMINISTRATION

2023

i
 CERTIFICATION

This is to certify that this work was carried out by with Matriculation Number 13570650 in the

Department of Business Administration and Management, School of Business and Management

Studies, Moshood Abiola Polytechnic, Abeokuta, Ogun State under my supervision.

______________________ _______________________
MR. FELIX TAIWO DATE
SUPERVISOR

___________________________________ _________________________
DR. OBA ABIMBOLA AINA-DAVID DATE
HEAD OF DEPARTMENT

ii
 DEDICATION

This project is dedicated to Almighty God, the beginning and the end, the source of all

knowledge, the Alpha and Omega of every creature, who in his infinite mercy protected and saw

me through this program. May His name alone be praised (Amen).

iii
 ACKNOWLEDGEMENT

My greatest acknowledgement and sincere appreciation goes to Almighty God, the most merciful
who has seen us through this program.

Our sincere gratitude goes to my supervisor Mr. Felix Taiwo, for his fatherly care and for
painstakingly supervising my project.

My sincere acknowledgement goes to all the lecturers and non – teaching staffs in the
Department of Business Administration and Management for impacting knowledge in me. HOD
Business Administration and Management, Dr. Oba Abimbola Aina-David, Dr. T. A. Kasali
(Director of MAPCED), Mr. D. O Anikan (Director of cademic Planning Unit), Mrs Oyebolu
(Director of School Business Administration and Management Studies), Mr. T. O. Ogunbayo.,
Mr. Ayo Aderounmu, Mr. Ademola Adeniran, Mr. Taiwo Otegbade and Mr. Fadeyi Akeem,
Mrs. Olubumi Abiola and Mrs. Shonola. May God protect and guide you all.

I will be greatly indebted to my very caring parents Mr. & Mrs. Adeniji, my loving dear wife-
Mrs. Adejoke Monsurat Adeniji, my siblings and to my friends who are too numerous to
mention. Thanks for your love from day one and being a support system, may God continue to
bless you and may you sit back and confidently eat the fruit of your labour (Amen).

All our wonderful friends and colleagues, may the Lord see us all through the journey of life.
Our gratitude knows no bound and we pray that we all reach the pinnacle of our career, amen.

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 ABSTRACT
The purpose of this study is to describe the general characteristics of (SME) Small and Medium
Scale Enterprises and explore the effects of (ICT) Information Communication Technology on
(SME) Small and medium scale enterprise productivity in Ogun State. A survey research
approach of the data collection was adopted to 180 respondents. Based on the sample results
obtained is indicated that SMEs in Nigeria improves its processes and products with the use of
Information Communication Technology and also most Small and Medium Scale Enterprises in
Ogun State were operated by men and women within the age range of 25-40 year old and as well
mostly had the least educational qualification of B.Sc. Furthermore, Information Communication
Technology enhances the production process in organizations as a monitoring technology which
decreases cost, increase organizational capabilities and also assists to shape inter-
organizational coordination. Hence, based on the research overviewed it is noted that
Stakeholders in the Small and Medium Scale Enterprise industry agree that the introduction of
Information Communication Technology in its operations changes its processes and productivity
which in turn boost profitability. In the same vein, the use of Information Communication
Technology by Small and Medium Scale Enterprise opens up new opportunities, reduces
inventories with the use of Information Communication Technology as well as makes their
services more tradable.
Keyword: Information Communication Technology, Small and Medium Scale Enterprises

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 TABLE OF CONTENTS

Title page i
Certification ii
Dedication iii
Acknowledgment iv
Table of Contents v
Abstract vii
CHAPTER ONE: INTRODUCTION
1.1. Background to the Study 1
1.2 Statements of problem. 6
1.3 Research Objectives 6
1.4 Research Questions 7
1.5 Research Hypotheses 7
1.6 Scope and Limitation of the study 8
1.7 Significance of the study 8
1.8 Definition of Terms 8
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual Review 12
2.1.1 Information Communication Technology(ICT) 12
2.1.1.1 Components of ICT Systems 18
2.1.1.2 Factors Affecting ICT use among Nigerian SMEs 21
2.1.1.3 The Limitations and Challenges of ICT in SMEs 21
2.1.1.4 Some of the notable contribution of ICT On SMEs 24
2.1.1.5 ICT Adoption in Financial Reporting 25
2.1.2 Technological Advancement and Employees Performance 27
2.1.2.1 Training and Employee Efficiency 28
2.1.2.2 Technology Innovation and Organizational Performance 30
2.1.2.3 Technological Change and Employee Relations 30
2.1.3 Concept of Quality Service Delivery 31
2.1.4 Small – medium enterprises
34

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2.1.4.1 Types of small – medium enterprises 34
2.1.4.2 List of small – medium enterprises 34
2.1.4.3 Role of Small-scale enterprises in economic growth and development inNigeria. 35
2.1.4.4 Problems of small – medium enterprises 37
2.1.1.4 Some of the notable contribution of ICT On SMEs 38
2.2 Theoretical Review 38
2.2.1 Technology Acceptance Model 38
2.2.2 Theory of reasoned action (TRA) 40
2.2.3 Pecking Order Theory 41
2.2.4 Social presence theory 42
2.2.5 Media richness theory 42
2.3 Empirical Review 43
CHAPTER THREE: METHODOLOGY
3.1 Research Design 45
3.2 Population of the Study 45
3.3 Sample Size Determination and Sampling Method 45
3.4 Sources of Data Collection 46
3.5 Research Instrument Specification 46
3.5.1 Demographic Data Index: 46
3.6 Validity of Instrument 47
3.7 Reliability of Instrument 47
3.8 Method of Data Analysis 48
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.1 Analysis of Demographic Characteristics of Respondents 49
4.2 Analysis of Research Questions 50
4.3 Overall Measure of SMEs Non-Financial Performance 52
4.4 Analysis and Result 53
4.5 Test of Hypothesis 55
CHAPTERFIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 59
5.2 Conclusion 61

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5.3 Recommendations 62
5.4 Suggestion for Further Studies 63
5.5 Contribution to Knowledge 63
Bibliography
Appendices

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 CHAPTER ONE
INTRODUCTION
1.2. Background to the Study
Information and communication technologies (ICT) have had a significant impact on today's
business environment, and they are widely used in it. ICT is rapidly altering global production,
work, business, trade, and consumption patterns both within and between businesses and
consumers. In order to function as a tool that might improve the business process, any
commercial must integrate ICT into their business process and gain from the profits they offer.
Before making any financial investments, it is important to understand how information and
communication technologies work (Ballantine, 1998).

The adoption rate of ICT is quite low in a significant number of small-scale industries as a result
of ambiguity, misunderstanding, and incapacity. Numerous studies show that a significant
number of ICT initiatives in small-scale enterprises fail. According to Carson and Gilmore
(2000), SMEs, particularly new ones, frequently have to deal with the issue of ambiguity and
uncertainty when it came to ICT adoption. ICT adoption is crucial for the continued existence of
small-scale organizations. Small businesses are better able to compete with major businesses
because of ICT. ICT also makes it possible for small businesses to conduct international
business.

Information and communication technology (ICT) is now essential for all small and medium-
sized businesses, including those in Nigeria. ICT skills are necessary for involvement and
engagement in contemporary life. The advancement of telecommunications has had a significant
impact on its uses and applications of it. ICT can be used to simulate scenarios, search, create,
evaluate, and present information, as well as to resolve issues. Okwuonu (2013). (2013). The role
of Small and Medium Enterprises (SMEs) in any economy cannot be overlooked as they
constitute a significant employer of labor and their active role as a key element of development
in developing countries has been acknowledged. ICT enables rapid access to ideas and
experiences from a wide range of people, business organizations, communities, and cultures, and
it is a powerful force for change in any society. It encompasses the hardware and software
components of computers as well as interactions between various electronic devices. Examples:

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Hardware includes a touch screen display, keyboard, scanner, digital camera, printer, and digital
TV decoder. Word processors, databases, web browsers, and video players are examples of
software. Internet, digital radio, networks, cell phone, and instant messaging are all forms of
communication. Global positioning system (GPS).

In most countries, according to Apulu and Lathman (2011), information and communication
technology serves as a catalyst and enabler for economic growth. According to Hyvönen and
Gradon (2013), one of the crucial areas that contemporary businesses improve in order to obtain
strategic gains is the use of ICT. Similar to this, Ashrafi and Murtaza (2014) note that businesses
today use ICT not only to reduce costs and increase productivity but also to deliver better
customer service. According to Spanos and MacGregor (2012), the usage of ICT allows buyers
and sellers to exchange information and transfer items across international borders, hence
facilitating greater access to global supply chains. According to Buhalis (2013), the use of ICT
has improved corporate interactions. According to Kuteyi (2013), small and medium-sized
businesses promote economic growth through creating jobs and increasing GDP (GDP).
According to Premkumar (2013), the use and commercialization of ICT are becoming more
common throughout the world.

The adoption of novel ICT can result in new business opportunities and provide a number of
benefits. At the moment, both large organizations and small and medium-sized enterprises
(SMEs) are looking for ways to improve their competitiveness and productivity in order to
reduce costs and maximize profits. Small-scale industry firms are staffed by small-scale
businesses, small-scale industries, and small-scale entrepreneurs. The idea of small and medium-
sized firms (SMEs) was brought into the development landscape with the primary goal of
enhancing commerce and industrialization in the current developed nations, according to the
Organization for Economic Co-operation and Development (OECD) (2004). According to
Okwuonu (2012), small businesses are those with total assets, excluding land and buildings, of
more than 5 million Naira but less than 50 million Naira and a total workforce of more than 10
but fewer than 49 employees. While medium-sized businesses are those with a total asset value,
excluding land and buildings, of more than 50 million Naira but less than 500 million Naira with
a staff of between 50 and 199 people.

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According to Sanusi and Udechukwu (2013), the Central Bank of Nigeria supports the Small and
Medium Industries and Equity Investment Scheme (SMIEIS), which defines small and medium-
sized enterprises (SMEs) as an enterprise with a maximum asset base less than N200 million
(roughly $1.43 million), excluding land and working capital, and with the number of staff
employed not less than 10 and not more than 300 (otherwise, it will be a cottage or micro-
enterprise; see SMIEIS Small and Medium Enterprises (SMEs) are crucial to the growth of any
economy, according to the Central Bank of Nigeria, since they have significant potentials for
creating jobs, advancing local technology, diversifying output, fostering indigenous
entrepreneurship, and integrating with big businesses.

There doesn't appear to be a standard definition of a small business in Nigeria or elsewhere in the
world. The differences in capital expenditure, number of employees, sales turnover, fixed capital
investment, available equipment and machinery, market share, and level of development are
discussed differently by various writers, academics, and academic institutions. These
characteristics differ equally from one country to the next.

A manufacturing facility that employs less than ten employees or whose investment in
machinery and equipment does not surpass six hundred thousand naira is considered a small-
scale enterprise, according to Akabueze (2002). A small business in Nigeria is any
manufacturing process or service industry with a capital not exceeding N150, 000 in
manufacturing and equipment alone, according to the Federal Government Small Scale Industry
Development Plan of 1980. According to the Small-Scale Industries Association of Nigeria, a
small business is one that employs up to fifty people and has an investment (i.e., money, land, a
building, and equipment) of up to N60,000 before the SAP. According to the Federal Ministry of
Industries, it refers to businesses that were established for no more than N500,0010 (pre-SAP
Value). Small scale industry was defined by the Centre for Management Development (CMD) as
"a manufacturing, processing, or servicing industry involved in a factory of production kind of
operation, employing up to 50 full-time people" in the policy proposal it gave to the federal
government in 1982.

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Last but not least, a small business in the US is one that is independently owned and operated
that complies with either the employment or sales standards established by the agency. The
following are the standards for the majority of industries. Manufacturing: - The number of
employees varies by industry and can reach 1500. Retailing: Small, defined as annual sales or
receipts of $2,000,000 to $7,000,000. Wholesale:- Small, if annual sales do not exceed $9.5 to
$22 million, Services: Annual sales of no more than $2 million to $8 million. Sharma and
Bhagwat (2012). Explain how ICT tools can significantly help SMEs by providing the necessary
infrastructure and other opportunities, which are necessary for providing the right types of
information that will enhance organization efficiency at the right time, and also provide SMEs
with competitiveness through integration between supply chain partners and inter-organizational
f Small and medium-sized firms (SMEs) are a significant source of employment, technological
breakthroughs, service delivery, and competitive advantages for both developed and developing
countries, according to Ghobakhloo, Sabouri, Hong, and Zulkifli (2011). SMEs are gradually
implementing information technology (IT) to benefit from its significant advantages as a result
of the increased competitive pressure and need to reach the global market. Information and
communication technology has also altered how SME enterprises are run because they are
crucial to the storing, retrieving, processing, and dissemination of information (Jacob and
Umukoro2013).

Through the utilization of contemporary gadgets, information and communication technology

has evolved into the fuel that propels corporate success. Information technology is used to
achieve a competitive edge in the modern cooperative world by processing and disseminating
data utilizing computer hardware, software, communications, and digital electronics. ICT plays a
crucial role in information sharing and dissemination, which also helps to increase the supply of
information within enterprises. It covers communications that take place between more than only
hardware, as well as computer hardware, software, and programs. Examples: Hardware consists
of a touch screen display, keyboard, scanner, digital camera, printer, and digital television
decoder. Word processors, databases, web browsers, and video players are examples of software.
Internet, digital radio, networks, mobile phones, and instant messaging are all forms of
communication. Global positioning system (GPS).

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Small and medium-sized businesses (SMEs) may now compete successfully in both domestic
and foreign markets because of the development of the internet. ICT may therefore play a crucial
role by assisting SMEs in developing new business prospects and fending off competitive
pressure. SMEs can save costs by improving internal processes, improving their product through
quicker customer communication, and better promoting and distributing their products through
online presence with the use of appropriate ICT. In every stage of the business process, ICT
actually has the ability to enhance SMEs' core businesses (Bhagwat and Sharma, 2012).

1.2 Statements of the Problem

Numerous scholars, including Karikari (2012), Ladokun and Osunwole (2014), Abosede (2016),
Jacob and Umukoro (2013), and Alawe (2014), have examined the relationship between ICT and
the performance of SME. All agreed that the use of ICT will be the cornerstone for Small and
Medium-Sized Enterprises (SMEs) to compete successfully and effectively in both domestic and
foreign markets. Although these academics have made significant progress, there is still a lack of
research on how ICT might help Small and Medium Sized Enterprises (SMEs) grow in terms of
service delivery, staff effectiveness, and production. Instead of being a key factor in assuring
Small and Medium Scale Enterprises (SMEs) growth, using contemporary technology has
typically been viewed by Small and Medium Scale Enterprises (SMEs) as a terrible exercise that
will result in layoffs or distracted workers. The goal of the current study is to address this
problem and offer relevant recommendations for improving the beneficial effects of information
and communication technology (ICT) on the performance of small and medium-sized businesses
(SMEs).
1.3 Research Objective
The general objective of the research is to investigate the effect of ICT on non-financial
performance of SMEs in Abeokuta metropolis. The specific objectives include:
i. Evaluating the effect of ICT on financial reporting of Small and Medium Enterprises
(SMEs) in Abeokuta.
ii. ascertaining the effect of ICT on employee‘s efficiency of Small and Medium Scale
Enterprises (SMEs) in Abeokuta

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 iii. Examining the effect of ICT on Service delivery of Small and Medium Scale Enterprise
(SMEs) in Abeokuta.
1.4 Research Questions
This research has on the following research questions in order to achieve the set objectives:
i. To what extent does ICT significantly affect financial reporting of Small and Medium
Enterprises (SMEs) in Abeokuta metropolis?
ii. In what ways has ICT significantly effect on employees‘ efficiency of Small and
Medium Scale Enterprises (SMEs) in Abeokuta metropolis?
iii. How can ICT significantly affect service delivery of Small and Medium Scale
Enterprises (SMEs) in Abeokuta metropolis?

1.5 Research Hypotheses

i. H01: ICT has no significantly effect on financial reporting of Small and Medium Scale
Enterprises (SMEs) in Abeokuta metropolis.
ii. H02: ICT has no significant effect on employees‘ efficiency of Small and Medium Scale
Enterprises (SMEs) in Abeokuta metropolis.
iii. H03: ICT has no significant effect on Service delivery of Small and Medium Scale
Enterprises (SMEs) in Abeokuta metropolis.

1.6 Scope and Limitation of the study.

This research work seeks to examine the effect of ICT on Small and Medium Scale Enterprises
(SMEs) performance in Nigeria. Since it is not practically possible to conduct a research on the
entire of Small and Medium Scale Enterprises (SMEs) in Ogun State due to their geographical
spreads, the study will be limited to purposively selected of Small and Medium Scale
Enterprises (SMEs) to proxy for of Small and Medium Scale Enterprises (SMEs) in Abeokuta
metropolis. The main limitation of the study is that flaws are certainly possible in the course of
work on the part of literatures consulted, distribution and respondent to questionnaires. But it is
important to note that any constraints encounter cannot sufficient to nullify the findings of this
research but to ensure that the results of the study are reliable and consistent with actual
expectation in my recommendation.

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1.7 Significance of the study.
One of the major significant of this research work is that, it will serve as references sources for
incoming researchers, academicians and students that will intends to acquire information on the
effect of ICT on Small and Medium Scale Enterprises (SMEs) performance and broaden their
knowledge on the extent to which the impact of ICT can be felt as regards Small and Medium
Scale Enterprises (SMEs) performance.
1.8 Definition of Key Terms
SMEs - Small enterprises as those enterprises whose total asset excluding land and building
are above 5 Million Naira but not exceeding 50 Million Naira with total workforce of above 10
but not exceeding 49 employees.
ICT - Information and communication technology (ICT) is an integration of
telecommunications (telephone lines and wireless signals), computers as well as necessary
enterprise software, middleware, storage, and audio-visual systems, which enable users to
access, store, transmit, and manipulate information
Performance - the manner in which a mechanism performs or the act of doing a job, an
activity, etc.s
Service delivery -is a component of business that defines the interaction between
providers and clients where the provider offers a service, whether that information or a
task, and the client either finds value or loses value as a result. Good service delivery
provides clients with an increase in value
Productivity - A productivity measure is expressed as the ratio of output to inputs used in a
production process, i.e. output per unit of input.
Employees - An individual who works part-time or full-time under a contract of employment,
whether oral or written, express or implied, and has recognized rights and duties.
Data- are pieces of information that have been converted into a format that can be moved or
processed quickly. Data is information that has been transformed into binary digital form for
use with modern computers and communication mediums. The topic of data may be used in
either the singular or the plural. Data in its most basic digital form is referred to as "raw data."
Information - is regarded as data that have been produced in such a way as to be useful to
recipient.
Application package- this is a set of programs together with the appropriate system

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documentation. The package is designed to meet the needs of a number of users and is
modular in construction so that a limited amount of modification can be carried out to carter
for the needs of individual business.
ICT Manager - An Information Technology Manager is responsible for implementing and
maintaining an organization's technology infrastructure. Businesses rely on a central
information processing system to support efficient data management and communications. The
IT manager monitors the organization's operational requirements, researches strategies and
technology solutions, and builds the most cost-effective and efficient system to achieve those
goals.
MIS Management information system, or MIS, broadly refers to a computer-based system
that provides managers with the tools to organize evaluate and efficiently manage departments
within an organization. In order to provide past, present and prediction information, a
management information system can include software that helps in decision making, data
resources such as databases, the hardware resources of a system, decision support systems,
people management and project management applications, and any computerized processes
that enable the department to run efficiently..
Database: A database is an organized collection of data. It is the collection of schemas, tables,
queries, reports, views, and other objects. The data are typically organized to model aspects of
reality in a way that supports processes requiring information, such as modeling the
availability of rooms in hotels in a way that supports finding a hotel with vacancies.
Internet: The Internet is the global system of interconnected computer networks that use the
Internet protocol suite (TCP/IP) to link devices worldwide. It is a network of networks that
consists of private, public, academic, business, and government networks of local to global
scope, linked by a broad array of electronic, wireless, and optical networking technologies.
The Internet carries an extensive range of information resources and services, such as the
inter-linked hypertext documents and applications of the World Wide Web (WWW),
electronic mail, telephony, and peer-to-peer networks for file sharing.
Ethernet - is a popular network protocol and cabling scheme that uses a bus topology and
carrier sense multiple access/collision detection (CSMA/CD) to prevent network failure or
collisions, when two devices try to access the network at the same time.

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Wireless network - wireless network are wide area network (WAN), that allows user to
access information instantly via handheld wireless device.
Intranet: this is a private network belonging to an organization (which was in .it is accessible
only by member of the organization require authorization to access such network E Business.

xvii
 CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual review
2.1.1 Information Communication Technology (ICT)
Scholars have characterized information and communication technology (ICT), a word that
sprang to prominence in the early 20th century, from a variety of angles. ICT was characterized
as electronic-based technology by Ayodele (2002), as quoted by Afolabi and Abidoye (2011),
and is typically used to retrieve, store, process, and package information as well as to give access
to knowledge. ICT is also referred to as enabling technologies (both hardware and software) in
Afolabi and Abidoye's (2011) citation of Aluko (2004). These technologies are required for the
delivery of voice/audio, data (high speed and low speed), video, fax, and internet services from
point A to point B (or possibly to multiple points B, C, etc.) using wired and wireless media
protocol (IP) and non IP networks. Information and communication technologies (ICTs) are the
use of computers and other technologies for the acquisition, organization, storage, retrieval, and
transmission of information, according to Nwachukwu (2004), who was referenced in Afolabi
and Abidoye (2011). Information and communication technology, however, in this context refers
to the use of electronic equipment like computers, telephones, the Internet, satellite systems, and
others to store, retrieve, and distribute information in the form of data, text, images, and other
formats.
It is also possible to define information and communication technologies (ICTs) as a broad range
of rapidly evolving tools and resources used to create, disseminate, store, and manage
information. These include telecommunications technologies like telephony, cable, satellite, TV
and radio, computer-mediated conferencing, and videoconferencing, as well as digital
technologies like computers, informatics, and the Internet. ICT, as described by Ebijuwa (2005),
refers to equipment used to gather, process, store, transmit, and disseminate information. ICT,
according to Anyakoha (2005), is the electronic method of gathering, handling, storing, and
transmitting information.
ICT, according to Antherjanam and Sheeja (2008), is a general phrase that refers to a variety of
technologies. The fusion of computer, communication, and microelectronic-based technologies is
what it is. The ICT includes a significant portion of the technologies and apparatuses like radio,
telephone, telegraph, fax, TV, mobile phone, Internet, WWW, email, LAN, ISDN,

xviii
videoconference, and satellite communication techniques. Information can be shared throughout
communities thanks to LAN and WAN.
ICT, according to Oyegbami (2009), is a tool for social and economic rebirth and, when
employed well, has a great chance of containing both domestic and global disaster. If used
appropriately, it will support the expansion and development of academic institutions in Africa.
The widespread use of ICT devices has contributed to the social and economic changes the globe
is currently experiencing. ICT can be used in a variety of human-related disciplines.
Sensing technologies are tools that take data and convert it into a format that a computer can
understand, according to Iwu (2003), as mentioned in Afolabi and Abidoye (2011). These
include communication technologies, which are tools that allow information to be communicated
from the source to the user, such as sensors, scanners, keyboards, mice, electronic pens, touch or
digital boards, barcode sensors or readers, voice recognition systems, etc. Additionally, they
strive to get past obstacles to information transfer posed by nature like speed and distance. Fax
machines, telephones, communications systems, electronic mail, teleconferences, electronic
bulletin boards, etc. are a few of them; display technologies are output devices that provide as the
human user's interface to sensor, communication, and analysis technologies. They include, for
example, televisions, printers, and computer screens.
Others include analysis technologies, which are tools used in research procedures for data study,
analysis, and in-depth search for solutions to simple to complicated phenomena. A
comprehensive computer system could consist of a micro, mini, mainframe, or super scamper.
Storage technologies are also important because they make it possible to store data effectively
and efficiently in a way that makes it accessible afterwards. They consist of cassettes, magnetic
tapes, disks, and optical disks, among others. The Internet is one of the most beneficial and
positively impactful ICT products.
A broad spectrum of computerized technologies are referred to as ICT. ICT refers to any
technology that facilitates electronic information capture, processing, and transfer as well as
communication (Williams,2005). Technologies include items and services such as desktop
computers, laptops, mobile devices, wired or wireless intranets, enterprise software, data storage
and security, network security, and other business productivity tools. ICT is defined as
technology that serve needs through email and chat services by Brynjolfsson and Hitt, L.M.
Organizational networking, both internal and external, has improved how corporations operate.

xix
Both employees and customers can contact the managers for comments, updates, and extensions.
Nowadays, business demands a lot of preparation because of sophisticated computerized
organization systems. Business plans can be created using an ICT-based system in an organized
manner using grant charts, timetable formats, and other tools. Huge databases may now be
managed and maintained on networks and backup systems, allowing for communication,
cooperation, and the creation and exchange of knowledge between "human beings and their
organizations." Additionally, according to Yu, ICT encompasses a variety of technologies that
enable the gathering, exchange, retrieval, processing, analysis, and transfer of needs via email
and chat services. Organizational networking, both internal and external, has improved how
corporations operate. Both employees and customers can contact the managers for comments,
updates, and extensions. Nowadays, business demands a lot of preparation because of
sophisticated computerized organization systems. Business plans can be created using an ICT-
based system in an organized manner using grant charts, timetable formats, and other tools. Now,
massive databases may be managed and kept on network and backup disks. The transition to
modern information and communication technologies (ICT) has changed how individuals and
organizations run their businesses. One of the outstanding achievements of engineering and
scientific research in the 20th century that has led to significant advancements in every aspect of
human life is the development of ICT (Hassan &Ogundipe, 2017). When ICT originally came
into being in the middle of the 1980s, it was defined as all communication equipment used for
radio, networking, and computer-based communications, including desktops, mobile devices,
websites, card transactions, computer programs, and so on. Electronic and technological
advancements make up ICT. Information technology enables the movement and transmission of
digital information, while computer technology serves as a medium for storing and processing
digital forms of information (Fasiku, 2014; Julta, Bodorick, & Dhaliwal, 2002).

Theoretical and academic dialogue on the complexity of technology and its relationship to SMEs
has always been vigorous, encouraging significant developments. ICT uses a variety of technical
applications in the sharing and processing of data. Information is a phrase that suggests intellect,
whereas technology denotes the utilization of tools and communications. ICT can be defined as
the fusion and application of information processing, networking, and computer technology. ICT
stands for information and communication technology, which means combining technological

xx
applications and communication technology to collect, organize, save, and share information. It
is frequently associated with technologies that are used to record, archive, modify, and transmit
information in a variety of formats. It makes digital communication resources available to a wide
range of people by utilizing computer-based technologies, the internet, cellular networks,
smartphones, devices, applications, web services, video chats, social media, and other network
sites. Computer algorithms, databases, network infrastructure, software tools, operating systems,
machine learning, knowledge bases, etc. are some of the approaches utilized in ICT (Hassan
&Ogundipe, 2017). ICT is a crucial tool for handling information and product distribution in
small and medium-sized organizations since it is utilized for strategy creation, connection and
coordination, consumer access, management and decision-making, and data knowledge
management (Sajuyigbe, & Alabi, 2012). ICT is crucial in helping small and medium-sized firms
enter international markets and gain an advantage over rivals.

The use of ICT by numerous businesses has reduced processing costs, eliminated distance
restrictions, crossed regional borders, and improved operations within geographic boundaries. In
every stage of business operation, ICT can help small and medium-sized firms grow their core
markets. The usage of ICT also has a tendency to reduce the cost of collaboration and enhance
organizational procurement. The development of ICT also results in significant cost savings,
opportunities, and commercial enterprise convenience. It can range from fully automated market
processes that increase efficiency to big data transformations where businesses turn a wide range
of ICT-generated data into information that enables innovative products and services to internet
interactions like online shopping, telehealth, and networking that give customers more flexibility
in how they interact, communicate, and connect to the rest of the world (Onileowo&Anifowose,
2020).

A survey of pertinent literature helped to direct this work. ICT is now commonly used as an
expanded synonym for information technology and is synonymous with gadgets like mobile
phones, PDAs, handheld computers, etc. ICT actually refers to the convergence of
telecommunications devices and equipment through a connection system with the primary
purpose of resource sharing. ICT is seen as a type of technology that provides a realistic gain
while also enhancing organizational business value. Change is unavoidable in the fast-paced,

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highly dynamic corporate climate of today. ICT is increasingly acting as a catalyst for these
organizational changes. It has changed from a luxury to a necessity, and as a result, even
commercial establishments in rural parts of Nigeria are starting to use ICT in order to survive
and prosper in the constantly shifting business landscape. On a larger scale, the study found that
the impact of ICT on business growth has spread to the point where it is become harder for
businesses to compete successfully in the global market without sufficient ICT infrastructure.
Even while SMEs must adopt ICT to varying degrees of complexity, a balanced awareness of the
right forms of ICT required by SMEs is equally important. For instance, rudimentary
communication systems and a PC with minimal software are frequently used as the primary ICT
tools by SMEs. With the Internet, SMEs may take advantage of cutting-edge communication
tools like email and online shopping. For some, especially those in service-based businesses like
tourism, this might be sufficient. More significantly, like any business, SME carefully considers
the actual benefits attainable, staff ICT capacity, and the available finances before deciding
which type of ICT product to adopt. ICT is essential in today's technologically advanced world
while making one or more decisive decisions. Although there is evidence that SMEs use ICT for
tactical purposes, the study's conclusion is that SMEs have the potential to benefit somewhat
from ICT advancements through novelty, marketing, and enhanced customer response.
2.1.1.1 Components of ICT Systems
Akomea-Bonsu, and Sampong (2012) stated that there are six components to any ICT system;
we have introduced some of them above
People - are the source of the data, even systems that run automatically need the software
programmers to set the data up.
Data - which is entered by people for processing; such as 25,000 gas meter readings, or 10,000
students‘ module results.
Hardware - the physical devices that are needed to enter the data, to process the data, and to
display the information in the most appropriate format. The hardware will include a keyboard or
scanning device to enter the data, a microprocessor to calculate the readings into the amounts
due, and a printer to print off bills to send to customers.
Software - the program that stores data such as names and addresses, and different rates and
charges, that when readings are entered instruct the processor to produce the results of the
calculations.

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Procedures - are the ways in which tasks should be done as directed by the management of an
organization. This will include how data is to be used, how systems are developed to suit the
required outcome. All administration runs using pre-determined procedures.Information - the
output of all the processing from the ICT system, bills are presented for the gas company's
customers.
People - are at the end of the process, as the information is assessed, and used to determine
whether the process continues if satisfactory or is amended if it needs improving. Knowledge is
information and a set of rules. Using the information presented decisions can be made;
knowledge workers are engineers, doctors, managers etc. Computers may be programmed to
make decisions based on the outcome of raw data entered.

ICT benefits for SMEs in Nigeria ICT has advantages in many spheres of human endeavor,
including various economic areas of a country. ICT has a significant impact on how business
products are created, distributed, and promoted. Small and medium-sized enterprises (SMEs)
play a significant role in Nigeria's transition to economic reliance, making effective ICT use
crucial for decision-making. Improved productivity, better internal business operations,
worldwide connectivity, and improved inventory management systems are just a few of the
important advantages for SMEs. Akunyili, (2010) (2010)

Around the world, corporate organizations are finding more and more use for information and
communication technology (ICT). Companies are discovering that production levels are
significantly higher, employee satisfaction is at an all-time high, and overall business efficiency
is benefiting from the speed at which communications can occur as technology develops and
more effective communications solutions are made available to the workforce. ICT is driving the
rate of growth in firms big and small by increasing everything from customer happiness to better
communications between employees and management. (Tella and Adekunle) (2008). Among the
benefits of ICT are;
Improved Communications to Increase Customer Satisfaction: There are certainly a ton of
gadgets that are essential to both internal and external communications throughout every firm.
ICT includes mobile phones, PCs, laptops, and any other device that enables communication to
and from the home office. Customers can get replies through emails and live chat in real time

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when a customer care department is equipped with computers and the internet. Fewer things are
returned for refund when issues can be resolved with a little TLC from the customer service
team, and business runs much more smoothly and efficiently as a result (Alam and Noor 2009).

Scheduling and tracking both manpower and jobs are now much more efficient thanks to the
quick development of HR software solutions. HR Cloud-based solutions have been developed by
businesses like www.xcdhr.com to expedite many of the operations that took much too long to
accomplish manually. HR software frees up staff to deal with employees on a more personal,
face-to-face level as the situation demands thanks to built-in or customized capabilities that
enable HR staff to organize work hours, leaves, vacation breaks, and even paid training hours
(Taylor and Murphy 2004).

Provide Ongoing Training: In the past, businesses would spend a lot of money sending staff to
conferences and workshops to advance their training for certain jobs. In fact, the more
complicated the training, the more money was spent to transport staff members to a distant
seminar or hire specialists to lead on-site training. Employers can now provide training through
internet-based devices so that employees can do it at their convenience and at a significantly
lower cost to the business thanks to the growth of telecoms and video conferencing Akunyili
(2010).

Open Lines of Communication Between Staff and Management: Poor communication between
management and staff was another issue that frequently led to a breakdown in operations.
Thanks to improvements in digital communications, employees now have immediate access to
management at all times for any questions or to share their opinions and suggestions on anything
from better ways to produce goods to better ways to transport them. Again, workers can set up
video conversations so they can really "display" what they are talking about without leaving their
station, expanding their options for communication beyond email and phone calls. (Walker,
Burn, and Rowe, 2005).
2.1.1.2 Factors Affecting ICT use among Nigerian SMEs
According to Akunyili (2010), despite the increased rate at which modern technologies are being
infused into developing economies like Nigeria, the diffusion ratio in that country is still low. As

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a result, internal and external barriers were included in Roy et al's classification of these
difficulties. The proprietor/manager characteristics, cost and return on investment, insufficient
ICT literacy, lack of funding, and many other internal barriers are in contrast to the external
barriers, which are primarily socio-cultural, political, and regulatory challenges. Additionally, a
number of research carried out in emerging nations have pointed out one or more contributing
elements in developing economies like Nigeria. The lack of energy in Nigeria is cited as another
significant factor that hinders the use of ICT by Nigerian organizations. Numerous studies
support the idea that a significant factor in the slow adoption of ICT among businesses is the
status of the infrastructure. These essential infrastructures are lacking for a variety of reasons,
ranging from inadequate government provision to subpar service delivery. Low levels of ICT
adoption among SMEs are seen to be caused by a lack of a sufficient communication backbone
and high-speed wide area networks for interconnectivity. ICT implementation costs have also
been mentioned as a potential barrier preventing many Nigerian SMEs from utilizing ICT
Apulu&Ige (2011).

2.1.1.3 The Limitations and Challenges of ICT in SMEs

Numerous obstacles have been recognized as inhibiting growth, especially in emerging nations,
given the significant benefits that small and medium-sized firms have on the development of any
country (Al-Qirim, 2007). Due to size and cost restrictions, these restrictions have become a
significant problem in a lot of businesses, and they are more likely to cause them harm
(Rahayu& Day, 2017). These include a lack of suitable credit, a significant lack of technology
advancement, a lack of infrastructure and skill sets, a low level of entrepreneurship education,
and staff turnover that has an impact on productivity, growth, and efficiency. Nigeria's SME
development lacks the ICT-related human and technology resources. Even though they are aware
of the potential advantages of employing ICT, most SME operations concentrate on daily tasks
and lack the skills necessary to use new technology to advance their enterprises. It still needs
technical know-how or skilled staff. ICT implementation in SMEs is also constrained by internal
and external organizational constraints. Owner-manager attitudes toward ICT, firm
characteristics, cost, and return on investment are examples of internal barriers. Infrastructure,
social, cultural, political, legal, and regulatory constraints are examples of external barriers. Due
to their limited resources and lack of the necessary ICT training, SMEs are more vulnerable to

xxv
hazards than large enterprises when investing in and implementing ICT (Emmanuel & Alfred,
2008). The following restrictions apply to the development of SMEs using ICT in Nigeria:

Government Policy: In Nigeria, small-scale business establishment is significantly influenced by

the government. By refocusing government efforts and establishing adaptable laws and
regulations, they can foster the growth of SMEs in Nigeria. They may do this by utilizing ICT
effectively. Apulu&Ige (2011). (2011).
Unstable economic policy: Nigeria consistently experiences political unrest, which has a
detrimental impact on the efficiency and productivity of SMEs. When a new administration
assumes power, the previous administration's policy is often abandoned, which can cause policy
instability and hinder the effectiveness and overall performance of SMEs (Al-Qirim, 2007).
Poor Policies and Procedures: The previous administration created a number of policies to
support and encourage SMEs, but they were poorly implemented, which prevented them from
reaching their goal.
Lack of Continuity: In Nigeria, the majority of small and medium-sized enterprises are run by
lone proprietors, and they usually fold as soon as the founder becomes ill or dies. Due to the
enterprise's stringent time constraints, this raises the possibility of ICT funding
(Onileowo&Anifowose, 2020).
Poor managerial abilities: In this industry, it has never been easy to acquire the necessary
management abilities. The majority of smaller businesses lack the fundamental managerial skills
required to function as soon as they grow. The fact that ICT education has not received the
highest priority in the institutions exacerbates this problem (Dierckx, &Stroeken, 999)
Lack of infrastructure required to reap the benefits of ICT: In Nigeria, NITEL (Nigerian
Telecommunications Limited), NIPOST (Nigerian Postal Agency), and PHCN (Power Holding
Corporation of Nigeria) services are required for the majority of ICT infrastructures, including
the internet, telefax, and e-mail. These services are delivered in an epileptic manner and come
with exorbitant prices. Additionally, ICT infrastructures are a finite resource not just in
businesses but also in schools, industries, and society. It is frequently challenging for SMEs to
boost ICT use in business expansion due to the restricted ICT resources. 2001 (Hengst & Henk).
Low capital outlay: The amount of capital invested determines whether a business will succeed
or fail. As a result, inadequate capital expenditure has always had a negative effect on small

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businesses. Financial institutions are sometimes hesitant to invest their money in this industry
since it is thought to be high risk (Onileowo&Anifowose, 2020).

2.1.1.4 Some of the notable contribution of ICT On SMEs

ICT has come a very long way within the past few years and is growing exponentially. As more
and more businesses become acquainted with the various aspects of Information and
Communications Technology, the rapidity at which advances are made will increase and
businesses will find that operational efficiency will increase as well. Technology in the 21st
Century has just entered a new threshold. It will be interesting to see where 3D communications
and remote printing take us in the future. (Dierckx, &Stroeken, 999)

The last decades, ICT has undergone a very quick development and has been introduced into all
segments of people‘s lives. This has hence brought new opportunities for businesses and
individuals (e.g. social networks, searching and sharing the information), and better quality of
life (Bučar, 2001). Modern ICT tools can decrease the costs as well as increase productivity and
effectiveness on the level of individuals and organizations (Hengst& Henk 2001). ICT has also
triggered deep changes in the field of communication and accessibility and availability of
information (OECD, 2001a, b; Pinterič&Grivec 2007, 33-34).
Due to development of ICT many things can be performed more efficiently and with greater
success. For example, ICT makes it possible to even test different decision making scenarios.
This is the reason why many people believe that ICT might be used as a tool for creating and
developing entrepreneurial skills. (Davis, 1989). Besides, ICT might offer learning opportunities,
business planning solutions, database tools as well as business training opportunities with the
help of business plan simulators. ICT can help to develop and enhance communication and social
networks as well.
From the vegetable trader downtown at the open air market putting calls through to her suppliers,
notifying them of her depleting stock; to the Jua kali artisan calling customers to inform them of
their ready-to-pick-up shoes; to the dressmaker who uses messaging apps and social media
platforms to display and sell her products; and the working professional who orders lunch from
online food delivery companies, technology with the added benefit of the internet and various
information & communication technology tools is gradually becoming an integral part of the
business environment and our lives (Dibrell, Davis, Craig, 2008).

xxvii
2.1.1.5 ICT Adoption in Financial Reporting
ICT adoption is the acceptance/internalization and usage of information and communication
technology by individuals and business firms with a belief that it is among the main alternatives
for cost reduction in an organization. ICT adoption in any business firm has proved to be
beneficial to both firms and customers, as it plays a significant role in reduction of operational
inefficiency in an organization as well as improvement in its decision making (Krishnaveni and
Meenakumari, 2010). ICT is an essential tool for efficient administration of an organization, and
for better delivery of services to clients as its adoption improves the supply of timely and
accurate financial information, reduce the cost of production due to better access to market
information and facilitates organizational flexibility, which results into ‗improved product
quality‘ (Majumdar Apulu& Lathan, 2010).

ICT adoption and its usage in financial reporting has also proved beneficial to the accountants
and management of organizations as it increases the supply of information for decision making,
facilitates easy dissemination of financial information within and without the organization which
in turn reduces the time constraints in accessing the required information and monitoring
activities (Spanos and MacGregor 2002). ICT adoption also results into increased organizational
capability and improved performance as a result of low operating costs, improved coordination,
decreased inefficiency and uncertainty as well as increases in revenues (Hengst& Sol, 2001;
Jimenez-Zarco (2006). ICT adoption is also beneficial as it improves information accessibility on
customers and provides effective means of customer service delivery. ―With improved ICT uses
in organization, customers can easily acquire goods and services online and easily access
services and product information online, communicate with organizations easily which in turn
brings customer satisfaction on services offered by the organization‖ (Melville, Latu S and Koh
2004).
The information stimulates the creation of new knowledge by giving firms and innovators fast
access to knowledge. Lefebvre, (1996) concluded that ICT adoption in financial reporting brings
a host of other benefits including saving time and space in the sending as well as retrieving of

xxviii
information both within and across diverse organizations using cloud accounting; providing
faster response to market needs and allowing more flexibility in system and product design;
production and equipment delivery; and, facilitation of training of existing staff on new and
sophisticated equipment‘s. Further he concluded that ICT adoption has also leads to acquisition
of additional capabilities by the employees in these organizations, gives employees sociological
and psychological impetus at the workplace, improves work-group effectiveness, organizational
climate, job satisfaction, personal growth and accomplishment.

Granlund, (2007) however acknowledges that even although ICT plays an important role in the
field of financial reporting, the relationship between ICT and accounting has not been studied
thoroughly well. He also states that, accountants are reluctant to adopt ICT in financial reporting
due its dynamic nature, even though it makes work easier, faster and cleaner‖. Banda, (2012),
looked at the adoption of ICT and its impact on performance financial reporting in organizations
and concluded that there exists positive relationship and a fair use of ICT in business process
automation resulting into increased staff productivity, reduced transaction costs and growth.

Shanker (2008) in his study concluded that ICT adoption by business institutions improves
efficiency as it assists in reduction of transaction costs, overcome the constraints of distance by
cutting across geographic boundaries thereby assisting to improve performance and coordination
of activities within organizational boundaries. He notes that financial reports, like cash flow
statements, income statements, statement of affairs, market share reports and departmental profit
and loss, have also been improved in quality and are now more accessible with computerized
system. Importantly, computerized Financial reporting systems allow accountants to process
large amounts of data and produce financial information quicker, cheaper and more efficient. He
however noted that, since ICT was introduced in accounting profession, accountants have only
automated existing processes rather than envisioning how ICT could be used to conduct business
in new and innovative ways, adding that ICT has also led to more transparency in organizations
since it enables networking and information sharing that leads to demands for greater openness
and transparency (Shanker, 2008).

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2.1.2 Technological Advancement and Employees Performance

Technologies can only lead to increased productivity or improve performance when combined
with other resources effectively by human resources or when done effectively, and use
technology productively and ethically (Dauda &Akingbade, 2011). Advancement makes
employees more effective and firmer more efficient (Muhammad, 2014). Motivation of the
employee has direct influence on technological advancement Employee‘s performance is closely
linked with technological advancement. Technological advancement can be managed effectively
through employees. Resource- based theory suggests that a firm‘s resources are extremely
important for the firm‘s development, and that human capital is a key resource of a firm. The
function of this resource depends on the employees‘ ability and enthusiasm, and on efficient
human resource management (Muhammad, 2014).

Technological advancement has enormous influence on employee performance Technological

advancement is important factor for influencing the improvement of performance. Most of
studies have repeatedly shown a positive relationship between a firm‘s technological
advancement and performance, and concluded that technological advancement is important for
employee performance (Dauda &Akingbade, 2011).

2.1.2.1 Training and Employee Efficiency

Gaps between personnel and upper level management can be filled through training. It enables
staff members to actively contribute to and participate in decision-making. Following training, an
employee's ability to coordinate with peers, subordinates, and senior officers grows. These
actions improve one's reputation in the eyes of think tanks dedicated to maximizing an
organization's value. Most significantly, after training, employee performance improves. The
welfare of its staff is of more concern to global organizations. These businesses introduce
various training initiatives aimed at enhancing the value of their workforce. International
businesses teach their staff members in several aspects of the workplace. Training not only
improves workers' cerebral abilities but also their physical benefits, such as active decision-
making, which can relieve mental stress (Farooq & Khan, 2011).

xxx
Employee commitment to the organization and performance are related. High levels of
dedication result in high performance, while low levels of commitment result in low
performance. So, to put it simply, we can tell if an employee is performing well when they are so
dedicated to the company. Training increases an employee's loyalty to the company. Employee
skill improvement compels a firm to raise wages and perks for workers. Researchers and
academics agree that training increases employees' loyalty to their employers, but it only has the
desired effects when the trainees themselves are on board with the training plan. This indicates
that training is only successful when both parties cooperate. When these expectations are not
met, it is due to the employees' low commitment and excessive turnover. Employees start
training programs with high expectations. Due to minimal commitment, individuals will rather
leave an organization if given the chance (Brum and Matlay, 2007).

Employee performance is more affected by training when they learn the skills and knowledge
necessary to do a certain job. However, motivation and rewards may also be elements that affect
how well workers perform in addition to training. Because they are aware of what is expected of
them by their coworkers, trained personnel perform better in groups. Employees who participate
in frequent training sessions are amenable to organizational changes. When an organization
introduces a novel program, employees who don't regularly attend training sessions object.
Employee training costs are decreased for the firm thanks to trained personnel. Because once an
individual has received all necessary training, he can instruct other untrained employees within
the company. Employees that have received training are better equipped to complete a variety of
organizational tasks. Training is a methodical strategy to changing behavior that enables staff
members to modify their actions in accordance with the organization's rules and values
(Jagero&Komba, 2012).

2.1.2.2 Technology Innovation and Organizational Performance

The starting point of technological development, changes and innovations is always people. It is
the people who create, initiate, use and manage ideas that are the bases and directions of
technology. Identity theory provides a way of assessing individual relations to organizational
objectives and national goals and enables us to understand human resource inspiration and
readiness for technology innovation. The motivation individual that receives determines the

xxxi
extent of its identity and his readiness to innovate for organizational and national development.
This theory to Dauda (2011) provides strategies intended to change beliefs, attitudes, values and
structure of an organization so that they can better adapt to new technologies, market challenges
and changes. It can also be used to plan intervention in organization process to increase
organization effectiveness and health. Both (Bechard, 2010) and Dauda (2011) demonstrated the
relationship between organizational development and managerial effectiveness.

2.1.2.3 Technological Change and Employee Relations

Many organizations and nations in the developed and developing countries have established
research and development units, departments and organizations to enable them to cope with
technological change. The degrees of aggregation of technological innovation by organization
and nation determine its performance and development. This is related to management and
control of internal and systems and its response to external system. Significant improvement in
output, productivity and growth are achieved when they use new technology. Increased
productivity and general economic growth in most developed nations have been attributed to
increasing technology and technological innovation. In these countries a significant proportion of
R & D expenditure are devoted to the introduction of new product. Productions of large quantity
and quality of goods and services have been traced to improved technology through R & D.
Organizations have also tended to lie emphasize on capital in terms of machinery and equipment
and less on labour to increase their profitability. But these have not positively increased labour
productivity. The substitutions of capital for labour have not really improved labour productivity
or performance. The substitution of one by the other depends on the organization assessment of
its environment and needs rest. Companies where large number of labour are displaced or
removed to be replaced by capital without proper assessment may not record significant price
and profit. Improved performances of many organizations were often traced to the improved
performance of all the factors of production and the number of customer not only on technology
(Dauda, 2000).

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2.1.3 Quality Service Delivery

Investigating the idea of quality service delivery is vital if we are to comprehend how IT may
improve that delivery of services. The concept of quality as it is used in the literature on services
is centered on perceived quality. Consumer perception of an entity's general excellence or
superiority is known as perceived service quality (Parasuraman, 1988). Customer expectations
and perceived satisfaction over time are compared to determine perceived quality, which
produces perceptions of high service quality. Service quality is determined by comparing what
customers believe an organization should provide (their expectations) with how well they believe
the business performed in providing the services. The perception of good service quality
develops over time as a result of repeated experiences of satisfaction, which are regarded as
being tied to a particular transaction. Service quality is determined by comparing what
consumers believe an organization should provide (their expectations) with how they believe the
business performed in providing the service (Mpofu, Milne, and Watkins-Mathys 2009).

It is crucial to note that the argument over the various definitions of service quality has not yet
been resolved. In particular, Cronin and Taylor (1992; 1994) suggest a scale based solely on
assessments of perceptions. The fact that information offered to the client may affect both
expectations and perceptions is perhaps the most important component of this issue in the current
situation. The waiting example indicates that customers wait more patiently if they are aware that
they will have to wait, which is a very obvious illustration of the impact of knowledge on the
delivery of services (Dawes and Rowley, 1996).

Understanding the characteristics that influence consumer expectations and perceptions of

service quality is essential to measuring service quality. These characteristics are chosen by the
consumer and have a big impact on how well the service is rated. Understanding the dimensions
of these characteristics and perhaps having the ability to measure them might provide insight into
more efficient approaches to raise the caliber of a service. Focus groups for particular business
sectors and service encounter kinds can be used to find these dimensions. With their work on
SERVQUAL, certain authors, most notably Parasuraman (1988), have attempted to identify
some generic aspects of service quality, such as dependability, assurance, tangibles, empathy,
and responsiveness (RATER). The RATER components, however, have been proven to be

xxxiii
unstable across contexts, and there has been a significant and ongoing discussion concerning the
generic characteristics of service quality (Buttle, 1996). However, it is crucial to pinpoint the
elements that play the biggest roles in the provision of particular services as well as any
communication tactics that make it easier to identify these dimensions through client interaction.

An experience that revolves around the simultaneous delivery and receipt of the service is what
customers go through when they purchase a good or service. Due to their fundamental qualities,
which are generally acknowledged to be intangibility, inseparability (of production and
consumption), perishability, and heterogeneity, services are seen as being distinct from products
(Dibb, 1994). The employee or service provider and the client are drawn closer physically and
psychologically during this dyadic contact (Solomon, 1985). (Schneider, 1994). At this time,
client perceptions start to take shape and assessments of the experience's nature begin to
improve. Because customers can participate in the creation process and assume responsibility for
the service they receive, services have some degree of interactivity (Hoffman and Bateson,
1997). By encouraging greater client involvement in the service experience, the service provider
can benefit from cost savings.

Customers can participate actively at every stage of production thanks to IT, enabling them to
become active co-producers rather than passive consumers (Storbacka, 1997). However, these
kinds of changes necessitate alterations to the customer script (Hoffman and Bateson, 1997), and
management must explain to their clients the proper role behaviors. For instance, during the
check-in step as defined by (Bitran and Lojo, 1993), where customers input information, the
customer may take on the role of a partial employee. According to Aijo (1996), customers will
be integrated completely into the production process at some time, and their increased
involvement will give decision-makers invaluable information. The distinction between
employees and customers will probably become hazier in the future in many service firms.
Customers are more inclined to participate in or even carry out some components of the service
since time and control are crucial to them when obtaining services (Berkely and Gupta, 1995).

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2.1.4 Small – Medium Enterprises

Small enterprises are those enterprises whose total asset excluding land and building are above 5
Million Naira but not exceeding 50 Million Naira with total workforce of above 10 but not
exceeding 49 employees.

2.1.4.1 Types of small – medium enterprises

The small – medium enterprises have been further classified into micro, small and medium based
on investment in plant and machinery and in equipment‘s respectively.

The criterion for defining the size of a business differs from country to country, with many
countries having programs of business rate reduction and financial subsidy for SMEs. According
to the European Commission, the SME are the enterprises that follow this definition:

Company category Employees Turn over Balance sheet

Medium-sized < 250 ≤ €50 million ≤ €43 million

Small < 50 ≤ €10 million ≤ €10 million

Micro < 10 ≤ €2 million ≤ €2 million

2.1.4.2 List of small – medium enterprises

Here are about 10 small-scale businesses in Nigeria that are really profitable and interestingly,
require very little capital to start.
Micro-enterprises Small enterprises Medium-sized enterprises
Beads making Candle production Printing and publishing
services
Petty trading: Bar soap production Rubber-shoe-soles
production
Daycare centre‘s: Pounded yam floor Pharmaceutical product
production

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 Fashion design: Laundry bar soap Large farm for maize, citrus,
rice
Laundry services: Bread bakery Large estate development

Sales of phones and Garri production Engineering / technical

accessories: project.
Phone repairs Cassava processing Furniture production

Barbing/hair saloon Red palm oil production Production of hydraulic jack

Catering services: Ceramic production Auto/room air-conditioning

production
Food production: Poultry & livestock Children standard clothing
processing production

2.1.4.3 Role of Small-scale enterprises in economic growth and development inNigeria.

Employment Creation: Small businesses are now recognized as a significant employer. The
majority of all non-government employees in the nation are employed by them, and this trend
appears to be increasing. 622,000 people, or 45% of the projected 1.38 million wage workers in
1970, worked in small, non-agricultural businesses. Nigeria now has issues with rural-urban
migration and unemployment. This has been made worse by the alarming turnover of graduates
from polytechnic universities and post-primary schools each year. In this situation, small
businesses can offer employment possibilities to this population and slow the trend of rural-to-
urban migration. According to Enudu (1999: p222), thousands of recent graduates and former
civil workers have found work in Nigeria thanks to the country's small-scale businesses. It
should be noted that a study conducted in 1962 in Eastern Nigeria by the United States Agency
for Inter-National Development found that there were 10, 722 small-scale firms and 28, 721
people employed overall. According to Okafor (1996: p.114), there is evidence to support the
claim that small businesses employ around 30% of all working people. This demonstrates how
small-scale operations are crucial to lowering the unemployment rate in our nation.

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Promotion of competition - By offering clients better pricing and services, small businesses
operate as a brake on monopolies and promote competition. The demands of the market are
directly accessible to the small business owner. In a competitive environment, having practical
technical knowledge is crucial. Of course, a small business cannot consistently compete with a
huge one. But a large number of little enterprises, each competing in its own specific market and
manner, work together to provide the desired level of competition.

Waste utilization: Small businesses utilise the waste products of larger businesses to continue
their own production. Eze (2009) noted that the workers in the "Tinker shadow" industrial area in
Ogbete, for instance, frequently provide a large number of maintenance services and spare parts
for industrial machinery. Some toilet roll companies employ waste paper from printing machines
for the creation of toilet rolls, while others graft bodies of outmoded imported vehicles and buses
into a broad variety of buses and vehicles of diverse forms.

Introduction to huge business - Every firm has its origins. Small businesses nurture aspiring
entrepreneurs and, in some cases, develop into giant corporations. Many huge organizations in
the world today began as little businesses. Some people might be afraid of entrepreneurship in
large enterprises, but due to a lack of capital and other resources, they can only do this by
starting tiny businesses.

Small manufacturing businesses have an advantage in meeting highly specialized or personalised

demand, or in catering to a market with a low volume or one that requires periodic readjustments
due to changes in fashion or for other reasons. Here, the tiny business' adaptability serves it well.
Large corporations may be hampered by their cumbersome bureaucratic processes and
comparatively high overhead costs. Short "runs" of non-standard terms are not something they
enjoy producing, but a tiny factory can frequently do so for financial gain.

2.1.4.4 Problems of small – medium enterprises

Limited Financial and Capital Market Access - The majority of SMEs are only allowed to
borrow money from family and friends, which makes it difficult for them to react quickly to
unforeseen problems. The SMEs' inability to fully utilize available capital market financing is

xxxvii
more concerning. (2002) Kalanje Their resistance to disclosure and ownership dilution has been
blamed for this.
Lack of Continuity - Because most small businesses are sole proprietorships, they frequently stop
operating as soon as the owner loses interest in them or passes away.
Poor Management Experience - Management has always been an issue in this industry because
most entrepreneurs lack the experience necessary to succeed once their company starts to
develop. The issue is made worse by the fact that training is not typically prioritized in these
establishments (Madrid-Guijarro, Garcia, van Auken, 2009).
Insufficient Information Base: Small-scale enterprises are frequently characterized by inadequate
record-keeping, which deprives them of the data they need for planning and management. In this
industry, this typically has an impact on project completion.
Poor Accounting System - The majority of small-scale industries lack standards in their
accounting systems and do not allow for performance evaluations. This presents a chance for
poor management, which could ultimately result in business failure.
Government policy instability - Small-scale industries have not benefited from the government's
unstable policy decisions. This has caused instability and led to the early closure of numerous
small-scale industries.
Limited Market Access - The expansion of SMEs is also constrained by a lack of market demand
for their products. Although many SMEs provide certain inputs to major businesses, their
marketplaces are effectively constrained by the non-standardization of their products, the issue of
quality assurance, as well as generally poor purchasing power brought on by customers'
declining real earnings. This is made worse by the fact that SMEs are unaware of the existence of
these niche markets.
Lack of Raw Materials - Some SMEs must acquire their raw materials from outside sources,
forcing these businesses to source foreign exchange. Due to the fluctuation of currency exchange
rates, planning may be challenging and the system may become unstable as a result of some
stocks or other factors.
These issues can be adequately classified as micro and macro difficulties or as financial,
managerial/technical, commercial, and infrastructure issues. While the macro difficulties are
those that are inherent in the economy and make the business environment tough for SMEs to
function in, the micro problems are those that are inherent in the nature and operations of SMEs.

xxxviii
2.2 Theoretical Review
2.2.1 Technology Acceptance Model

TAM is one of the literature's most important applications of Ajzen and Fishbein's theory of
reasoned action (TRA). The most generally used model of how users accept and use technology
is Davis' (Davis, Bagozzi, & Warshaw, 1989) technology acceptance model (Venkatesh, 2000).
Fred Davis and Richard Bagozzi created it (Davis 1989, Bagozzi, Davis &Warshaw 1992). The
two technological acceptance measures—ease of use and usefulness—replace many of the
attitude measurements used in TRA. Both TRA and TAM, which have significant behavioral
components, use the assumption that when someone makes the decision to act, they will have
complete freedom to do so. An information systems theory called the technology acceptance
model (TAM) analyzes how people come to accept and employ a technology. According to the
concept, when consumers are exposed to new technology, a variety of factors, including the
following, affect their choice of how and when to utilize the technology: According to Fred
Davis, perceived usefulness (PU) is "the extent to which a person believes that utilizing a certain
method would increase his or her performance." According to Davis, perceived ease-of-use
(PEOU) is "the extent to which a person perceives that utilizing a given system would be free
from effort" (Davis 1989).

The TAM has been regularly researched and updated, with the TAM 2 (Venkatesh & Davis
2000&Venkatesh 2000) and the Unified Theory of Acceptance and Use of Technology serving
as the two most significant updates (or UTAUT, Venkatesh 2003). In the context of e-commerce,
a TAM 3 has also been proposed, with the inclusion of the impacts of perceived risk and trust on
system use (Venkatesh &Bala 2008). There will be several limitations in the real world, such as
limited freedom to act (Bagozzi, Davis &Warshaw 1992). According to Bagozzi, Davis, and
Warshaw, people form attitudes and intentions toward trying to learn how to use the new
technology before initiating efforts directed at using it because new technologies, like personal
computers, are complex and there is a degree of uncertainty in decision makers' minds with
regard to the successful adoption of them. It's possible for attitudes and intents to be ill-formed or
lacking in conviction, or they could develop only after initial attempts to learn how to use the
technology. Therefore, such attitudes and intentions may not have a direct or immediate impact
on actual usage. (1992; Bagozzi, Davis, & Warshaw) ― Perceived ease of use appeared to play a

xxxix
big part in the diffusion of innovations, according to earlier study. In their analysis of adoption in
a wide range of innovation types, Tornatzky and Klein (Tornatzky& Klein 1982) discovered that
compatibility, relative advantage, and complexity had the strongest associations with adoption.
Eason examined perceived utility in terms of a fit between systems, tasks, and job profiles,
referring to the metric as "task fit" (quoted in Stewart 1986) Venkatesh and Davis expanded the
original TAM model to explain perceived usefulness and usage intentions in terms of social
influence (subjective norms, voluntariness, and image) and cognitive instrumental processes.
According to Legris, Ingham, and Collerette's 2003 research, TAM must be extended to include
variables that account for change processes (job relevance, output quality, result demonstrability,
perceived ease of use). The TAM2 extended model was evaluated in both voluntary and required
scenarios. The outcomes were quite favorable for TAM2 (Venkatesh & Davis 2000).

Venkatesh developed the unified theory of acceptance and usage of technology in an effort to
combine the primary opposing user acceptability models (UTAUT). The results showed that this
model outperformed each of the other models (adjusted R square of 69%). (Venkatesh, 2003).
Several recent research in the field of medicine have embraced UTAUT.

2.2.2 Theory of reasoned action (TRA)

The theory of reasoned action (TRA) is one of the three classic models of persuasion, and is also
used in communication discourse as a theory of understanding. The theory of reasoned action
was developed by Martin Fishbein and IcekAjzen in 1967 and was derived from previous
research that began as the theory of attitude. The theory aims to explain the relationship between
attitudes and behaviors within human action. TRA is used to predict how individuals will behave
based on their pre-existing attitudes and behavioral intentions. An individual's decision to engage
in a particular behavior is based on the outcomes the individual expects will come as a result of
performing the behavior.Technology Acceptance Model (Theory).The theory of reasoned action
has been used in many studies as a framework for examining specific kinds of behavior such as
communication behavior, customer behavior and sexual behavior. Many researchers use the
theory to study behaviors that are associated with high risks and danger, as well as deviant
behavior. In contrast, some research has applied the theory to more normative and rational types
of action. Researchers Davies, Foxall, and Pallister suggest that the theory of reasoned can be

xl
tested if "behavior is measured objectively without drawing a connection to prior intention Most
studies, however, look at intention because of its central role in the theory.

2.2.3 Pecking Order Theory

Pecking order theory was first suggested by Donaldson in 1961 and it was modified by Stewart
C. Myers and Nicolas Majluf in 1984. It states that companies prioritize their sources of
financing (from internal financing to equity) according to the cost of financing, preferring to
raise equity as a financing means of last resort. Hence, internal funds are used first, and when
that is depleted, debt is issued, and when it is not sensible to issue any more debt, equity is
issued. Pecking order theory starts with asymmetric information as managers know more about
their companies‘ prospects, risks and value than outside investors. Asymmetric information
affects the choice between internal and external financing and between the issue of debt or
equity. Therefore, there exists a pecking order for the financing of new projects. Asymmetric
information favours the issue of debt over equity as the issue of debt signals the board‘s
confidence that an investment is profitable and that the current stock price is undervalued (were
stock price over-valued, the issue of equity would be favoured). The issue of equity would signal
a lack of confidence in the board and that they feel the share price is over-valued. An issue of
equity would therefore lead to a drop in share price. This does not however apply to high-tech
industries where the issue of equity is preferable due to the high cost of debt issue as assets are
intangible.

2.2.4 Social Presence Theory

Social presence theory (Short, et al., 1976) is a seminal theory of the social effects of
communication technology. Its main concern is with telephony and telephone conferencing (the
research was sponsored by the British Post Office, now British Telecom). It argues that the social
impact of a communication medium depends on the social presence it allows communicators to
have. Social presence is defined as a property of the medium itself: the degree of acoustic, visual,
and physical contact that it allows. The theory assumes that more contact will increase the key
components of "presence": greater intimacy, immediacy, warmth and inter-personal rapport. As a
consequence of social presence, social influence is expected to increase. In the case of

xli
communication technology, the assumption is that more text-based forms of interaction (e-mail,
instant messaging) are less social, and therefore less conducive to social influence.

2.2.5 Media Richness Theory

Media richness theory (Daft & Lengel, 1986) shares some characteristics with social presence
theory. It posits that the amount of information communicated differs with respect to a medium's
richness. The theory assumes that resolving ambiguity and reducing uncertainty are the main
goals of communication. Because communication media differ in the rate of understanding they
can achieve in a specific time (with "rich" media carrying more information), they are not all
capable of resolving uncertainty and ambiguity well. The more restricted the medium's capacity,
the less uncertainty and equivocality it is able to manage. It follows that the richness of the media
should be matched to the task so as to prevent over simplification or complication.

2.3 Empirical Review

Murat, Akyuz (Ph. D) and Opusunju, Michael, Issac (2017) examined the study examines the
impact of information and communication technology on the performance of small and
medium scale enterprises (SMEs) SMEs in Abuja. Over the years, there have been existent of
information technology in Abuja and so many large firms adopted it in their business operation
but unfortunately, the small and medium scale enterprises in Abuja do fully adopt information
technology. The study used descriptive survey designed and employed the use of a
questionnaire administered to the respondents who are the owners of SMEs. The population of
the study was is 26000 (SEMDAN, 2013) and this was reduced to 393 (as required sample
size) using Taro Yamane formula. The study adopted simple random sampling technique to
administer the questionnaire. E-view software statistical software package and multiple
regressions were used to analyse the data. The finding revealed that there was a significant
relationship between information technology and performance of SMEs in Abuja. This implies
that there was a positive significant relationship between information technology services and
performance of SMEs and also there was a significant relationship between information
technology user skills and performance of SMEs in Abuja. It was concluded that from the
findings there is a significant relationship between information technology infrastructure and
performance of SMEs in Abuja. The study recommended that SMEs firm should continually

xlii
use information and communication technology in terms of the services, infrastructure and
user skills since it contributes significantly to the performance of SMEs in terms of increase in
sales, increases in patronage, market share and output. The SMEs firms that are not applying
the concept of information and communication technology should do so to improve their
performance now that every activity of the business are communicated or transacted toward
online.

OladejoMoruf, Akande Olusola O, YinusOluwaseun, (2014) investigated Impact of ICT

Adoption on the Performance of Small and Medium Scale Food and Beverages Firms in
NigeriaSMEs are designed as individual self-help and empowerment vehicles for employment
Opportunities .Testing the impact of ICT on Business operational activities and ICT in Nigeria
is expected to serve as a basis for attainment of SMEs growth. This paper attempts to
investigate the strength ICT adoption on performance of food and beverages SMEs operation.
The study was carried out in Lagos State, using multi-stage sampling technique, with a sample
of Two hundred and twenty-five (225) Questionnaires administered and distributed to both
Owner & staff of the selected Food and Beverages SMEs, Fifteen (15) respondent each was
picked from the fifteen (15) selected Food and Beverages SMEs. Two hundred (200)
Questionnaires were found useful for the purpose of the study representing 80% of the total
questionnaire distributed. Data collected were coded and analyzed using frequency table and
Simple percentage while non-parametric statistical test, ANOVA was used to test the
formulated hypothesis using SPSS analysis package. The study concludes that ICT has a
positive effect on the performance of selected Small and Medium Scale food, fruit drink and
Beverages Firms operation in Nigeria, buttressing the significance relationship between ICT
and performance in the selected food and beverages business enterprises. To this end, it is
recommended that government make the business environment ICT friendly through provision
of ICT Infrastructures which will facilitate expansion. Further, entrepreneurs should be
educated and informed about the important of ICT and how it could be used to increase
operational efficiency.

xliii
 CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
The study adopts survey research design. The choice of survey research design is because
questionnaires will help obtain data from a particular group of people (participants) about their
thoughts, feelings and opinions on the effect of Information and Communication Technology on
Non-financial performance of Small and Medium Scale Business Enterprises in Abeokuta
metropolis.
3.2 Population of the Study
The population for this research was the operators and occupants of registered SMEs in
Abeokuta Metropolis.
This study targeted a population of 326 registered and active business units which are
categorized as Small Medium Enterprises Abeok-uta metropolis as obtained from the 2016
record of National Association of Chamber of Commerce, Industry, Mines and Agriculture
(NACCIMA), Ogun State branch. This population comprises of SMEs owners from across
different sector of the economy in the selected area of study.
3.3 Sample Size Determination and Sampling Method
Cresswell (2003) asserts that the entire population may not be easy to study. In this study, the
Yamane‘s model was used to obtain the sample size. It is considered to be appropriate since the
sample size is known.
According to the model,
n= N
1 + N(e)2

Where ‗n‘ is the sample size

‗N‘ is the population
‗e‘ is the required error
n= 326
1 + 326(0.05)2

= 180

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From the model, a sample size of 180 participants was drawn from the population using stratified
random sampling and involving SMEs from different strata in the chosen area of study. Mugenda
and Mugenda (2003) recommend stratified sampling when studying a heterogeneous population
since it ensures that each segment of the population is represented and that population attributes
and characteristics within a stratum are adequately and representatively captured in the sample.
In this case, 60 SMEs each were selected from each of the 3 selected sub-areas; Lalubu, Panseke
and Ibara
3.4 Sources of Data Collection
In this research, primary data was collected as opinion of operators of SME‘s in the selected
areas was examined and processed to obtain relevant findings that will help in achieving
objectives of the research
3.5 Research Instrument Specification
A well-structured questionnaire which was divided into three sections was used for data
collection. They are:
3.5.1 Demographic Data Index: This collect demographic information of SMEs operators‘
gender, age, marital status, and educational qualification.
3.5.2 SMEs Non-financial Performance Scale: Three survey questions about productivity,
financial reporting effectiveness, and employee efficiency over the most recent years are used to
assess the non-financial Performance of SMEs. Although subjective performance measures are
frequently used in organizational research and have been supported in other contexts (e.g. Hou,
2012; Narasimhan & Kim, 2002), their use does call for justification. For the following reasons,
subjective measures are used in this study: Since all respondents are CEOs of SMEs, it can be
assumed that they were reasonably knowledgeable about the financial positions of their
companies; (2) since many of the firms were privately held, (3) since many of the firms were
smaller, (4) it is not clear that financial measures are more low, or more comparable across firms,
than subjective evaluations.
3.6 Validity of Instrument
The validity of a measuring instrument is defined as ―the extent to which difference in scores on
it reflect true differences among individuals on the characteristic we seek to measure, rather than
constant or random errors‖ (Sellitz, 1976). Specifically, the study examines convergent and
discriminant validity. Convergent validity is the extent of agreement among scales measuring the

xlv
same concept. Conversely, discriminant validity looks at the disagreement among scales used to
measure concepts that are not expected to be related.

3.7 Reliability of Instrument

Reliability is the ―extent to which a measurement is free of variable errors‖ (Tull& Hawkins,
1987). In particular, the study is looking for consistency among the scales used to evaluate the
effect of Information and Communication Technology on non-financial performance of Small
and Medium Enterprises. Peter (1979) states that the most popular measure of reliability is
Cronbach‘s coefficient alpha which ―should be routinely calculated to assess the quality of
measure‖ (Churchill, 1991). In this study, Cronbach‘s alpha is used to assess the reliability of
measurement scales with multi-point items relating to the components of a service process.
Based on this, the Cronbach alpha test with the value of 0.7 ≤ ≤ 0.8 percent is considered
acceptable to ensure reliability.
The scale consisted of 13 items with Cronbach‘s alpha values for reliability which fell between
0.77 and 0.79.
SMEs non-financial performance Number of Items Cronbach's Alpha
Service delivery 4 .0.818
Financial reporting 5 0.724
Employees efficiency 4 0.723
Source: author‘s computation

3.8 Method of Data Analysis

The data collected was analyzed with the aid of Software Packages for Social Sciences (SPSS)
using simple frequency tables and percentages, descriptive statistics for analyzing the research
items and Regression coefficient as the analytical tool to investigate the effect of ICT on the non-
financial performance of SMEs in Abeokuta metropolis.

xlvi
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

Preamble
This chapter of a research presents research findings, discussion and analysis of data collected
based on response from questionnaires.

4.1 Demographic Analysis

One Hundred and Eighty (180) copies of the questionnaires were administered to the
owners/operators of SMEs and all the questionnaires were duly completed and returned to the
researcher thus giving 100 per cent rate of return.
Table 4.1: Demographic Characteristics of Respondents
Demographic variables Frequency Percentage
Age of Respondents
18-24 years 0 0
25-44 years 60 40
45 years and above 120 60
Total 180 100
Gender
Male 140 75
Female 40 25
Total 180 100
Marital Status
Single 20 4
Married 160 96
Total 180 100
Highest Educational Qualification
Secondary School Certificate 8 1
O. N. D 80 32
H. N. D/B.Sc. 40 45
M.Sc./Ph.D. 52 22
Total 180 100
xlvii
Number of Years Business is Established
1-5 years 27 8
6-10 years 45 26
11-15 years 59 31
16-20 years 13 19
21-25 years 23 9
25 years and above 13 7
Total 180 100
Source: Survey (2022).
Table 4.1 revealed that 40% of the respondents were between ages 25 to 44 years while 60%
were 45 years and above. Most 75% were male while 25% were female. Most 96% were married
while 4%were single. Regarding education level, most 45% reported holding H.N.D/B.Sc., 32%
earned O.N.D while 22% earned M.Sc./Ph.D. Regarding the number of years‘ business was
established, most 31% reported to have established their business between 11 to 15 years, 26%
reported between 6 to 10 years, 19% reported 16 to 20 years, 9% reported between 21 to 25
years, 8% reported between 1 to 5 years while 7% reported 25 years and above.

4.2. Analysis of Research Questions

Table 4.2 Measure of Level of adoption and awareness of ICT components
Description of Item N Mean SD Not at all Low/ Neutral Low/
Slightly Low Very Low
Desktop 180 3.52 1.14 (18%) (7%) (75%)
Laptop 180 3.55 1.14 (7%) (18%) (75%)
Internet stick 180 3.33 1.14 (40%) (10%) (50%)
Land line 180 3.86 1.14 (25%) (5%) (75%)
Mobile phone 180 3.43 1.14 (19%) (21%) (60%)
CD ROM 180 3.22 1.14 (14%) (26%) (60%)
Café 180 3.23 1.14 (18%) (7%) (75%)
E-mail 180 3.34 1.14 (18%) (7%) (75%)
Cash tiling 180 3.65 1.14 (20%) (10%) (70%)
Printer 180 3.86 1.14 (17%) (13%) (70%)

xlviii
Scanner 180 3.36 1.14 (25%) (5%) (75%)
Photocopier 180 3.86 1.14 (7%) (18%) (75%)
Source: Survey (2022).

Table 4.3 Service Delivery

Description of Item N Mean SD Very High/ Neutral Low/
High Very Low
Significant
Change in our customer
Base 180 3.52 1.16 (26%) (11%) (63%)

Level of Product/
Service innovation
Over time 180 3.42 1.02 (53%) (27%) (20%)

Level of market
Penetration 180 3.42 1.02 (53%) (27%) (20%)

Level of product
Diversification 180 3.38 1.24 (27%) (19%) (54%)
Source: Survey (2022).

Table 4.4 Financial Reporting

Description of Item N Mean SD Very High/ Neutral Low/
High Very Low
Clarity of financial
Records 180 3.51 1.48 (86%) (0%) (14%)

Easy access to
Financial Records 180 3.51 1.48 (86%) (0%) (14%)
Currency of

xlix
Financial records 180 3.51 1.48 (86%) (0%) (14%)
Ease of
Financial planning 180 3.51 1.48 (86%) (0%) (14%)
Ease of
Financial control 180 3.86 1.14 (71%) (0%) (29%)

Table 4.5 Employees efficiency

Description of Item N Mean SD Very High/ Neutral Low/
High Very Low
Knowledge of the
Job 180 3.61 1.37 (37%) (19%) (44%)

Learning ability 180 3.11 1.33 (88%) (12%) (0%)

Improve employees
Skills 180 3.11 1.33 (88%) (12%) (0%)

Improved dexterity 180 3.77 1.58 (9%) (0%) (91%)

Source: Survey (2022).

Service delivery:As Table 4.2 reflects, 72 respondents which represent 18% consider high the
statement on increased customer base as a result of ICT, 28 respondents which represent 7%
could not decide while 94 respondents which represent 75% consider the statement low. Also, 72
respondents which represent 18% consider high the statement on increased product/service
innovation as a result of ICT, 79 respondents which represent 20% could not decide while 43
respondents which represent 72% consider the statement low.

Employees’ efficiency: As Table 4.3 reflects, 102 respondents which represent 26% consider
high the statement that employees‘ knowledge as a result of ICT, 43 respondents which represent
11% could not decide while 249 respondents which represent 63% consider the statement low.
89 respondents which represent 53% consider high the statement on employees‘ learning ability

l
as a result of ICT, 106 respondents which represent 27% could not decide while 79 respondents
which represent 20% consider the statement low. 106 respondents which represent 27% consider
high the statement on improved employees‘ skills as a result of ICT, 75 respondents which
represent 19% could not decide while 213 respondents which represent 54% consider the
statement low. 339 respondents which represent 86% considers high the statement on improved
employees‘ dexterity none of the respondents could decide while 55 respondents which represent
14% consider the statement low.

Financial Reporting: As Table 4.4 reflects, 86 respondents which represent 37% consider high
the statement on clarity of financial records as a result of ICT, 75 respondents which represent
19% could not decide while 73 respondents which represent 44% consider the statement low. 47
respondents which represent 88% consider high the statement on easy access to financial records
as a result of ICT, 47 respondents which represent 12% could not decide while none of the
respondents consider the statement low. 35 respondents which represent 9% consider high the
statement on currency of financial records as a result of ICT, none of the respondents could
decide while 59 respondents which represent 91% consider the statement low.

4.3 Overall Measure of SMEs Non-financial Performance

Table 4.5 SMEs Development
Description of Item N Mean SD Very High/ Neutral Low/
High Very low
Productivity 180 3.18 1.23 (3%) (7%) (87%)
Financial reporting 180 3.57 1.49 (7%) (4%) (89%)
Employees efficiency 180 3.43 1.36 (2%) (4%) (94%)
Source: Survey (2022).

SMEs Non-financial Performance: Items considered as SMEs financial performance had mean
scores ranging from 3.57 to 3.18. These items measured the extent to which SMEs perform in
terms of: (1) service delivery; (2) Financial reporting; (3) Employees efficiency
As Table 4.5 reflects, 13 respondents which represent 3% disagreed that they experienced
productivity since they started the business, 10 respondents which represent 7% could not decide

li
while 43 respondents which represent 87% agreed with statement. 29 respondents which
represent 7% disagreed that they experienced ease of financial reporting, 14 respondents which
represent 4% could not decide while 351 respondents which represent 89% agreed with the
statement. 8 respondents which rep vresent 2% disagreed that there is an increase in overall
performance, 17 respondents which represent 4% could not decide while 69 which represent
94% agreed with the statement.
4.4 Analysis and Results
The hypothesized model was formulated as a structural equations model. The model was
estimated by the elliptical-weighted least squares method (ERLS) using the EQS software
(Bentler, 1992).The ERLS procedure has the advantage of producing estimates that are less
biased than the maximum likelihood estimates (MLE) when the data are non-normal. According
to Sharma et al. (1989), the performance of ERLS is equal to that of MLE for normal data, and
superior to other estimation techniques for non-normal data. They recommend that the researcher
should use the ERLS method whenever there is a doubt about the normality of data. The results
of the analysis are reported in Table 4.6. The overall chi-square statistic of the model is
significant (chi-square (40df) = 103.61, p < 0.001), which is expected given the size of our
sample (Bagozzi and Yi, 1988). However, the Bentler-Bonnet normed fit index (NFI = 0.94),
nonnormed fit index (NNFI = 0.94), the comparative fit index (CFI = 0.96), and the average off-
diagonal standardized residual (AOSR = 0.06) suggest that the model fits the data well (see
Table 4.7). Furthermore, all items in the measurement model load significantly on their specified
factors.

Measurement and Structural Model Estimates

Table 4.6: The Level of Awareness and Adoption Patterns of ICT Facilities among SMEs
Awareness Adoption Mean Std. Dev Std. t-value Df Sig. level
diff Error
Desktop Desktop 0.300 0.564 0.089 3.365 39 0.002
Laptop Laptop 0.225 0.480 0.076 2.966 39 0.005
Internet Internet stick 1.425 1.010 0.160 8.924 39 0.000
stick
Fax Fax 1.700 0.853 0.135 12.599 39 0.000

lii
Land Line Land Line 2.950 0.221 0.035 84.529 39 0.000
Mobile Mobile phone 0.050 0.221 0.035 1.433 39 0.000
phone
CD-ROM CD-Rom 1.400 0.955 0.151 9.268 39 0.000
Institutiona Institutional 1.050 1.037 0.164 6.407 39 0.000
l cybercafé cybercafé
Email Email address 0.275 0.452 0.071 3.846 39 0.000
address
Institutiona Institutional 2.400 0.744 0.118 20.396 39 0.000
l website website
Cash tilling Cash tilling 1.500 0.716 0.113 13.248 39 0.000
machine machine
Printer Printer 1.100 1.128 0.178 6.169 39 0.000
Scanner Scanner 1.050 1.061 0.168 6.259 39 0.000
photocopier photocopier 2.775 0.480 0.076 36.585 39 0.000
Source: Author‘s computation, 2022.

4.5 Test of Hypotheses

Table 4.7 Regression Results
Coefficients Standard error t- statistics Level of sig.
(Constants) 1.476 0.077 19.132 0.000
SD 0.003 0.004 0.905 0.372
EE 2.850E-8 0.000 2.601 0.014
FR -3.567E-7 0.000 -5.395 0.000
RES -0.039 0.031 -1.239 0.224
ASV -7.932E-8 0.000 -2.372 0.024
R 0.947
R2 0.897
Adj. R2 0.882
F-statistic 59.372 0.000

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Table 4.7: Regression Results
Coefficients Standard error t- statistics Level of sig.
(Constants) -17539.409 441609.045 -0.040 0.969
EE 0.042 0.019 2.244 0.032
SD -874.655 6473.440 -0.135 0.893
ICTA 73952.486 198019.868 0.373 0.711
ASV 0.006 0.071 0.091 0.928
RES -111915.461 66894.398 -1.673 0.104
EDUQ -5961.103 41944.098 -0.142 0.888
MARISTAT 1.024E6 232750.631 4.399 0.000
BIZEXP 50434.606 13520.999 3.730 0.001
R 0.974
R2 0.948
Adj. R2 0.935
F-statistic 71.193

SMEs non-financial Performance

Financial reporting 0.85f
Employees‘ efficiency 0.73*** 4.12
Service delivery 0.88*** 5.20
Structural Model
Hypothesised relationships
H1 ICT SMEsnfPERF 0.54*** 2.61
f = Parameter fixed to a value of 1.00 (unstandardized) **p<0.05, ***p<0.01(one tailed tests)

4.5 Reliability of Scales

Even though most of the scales used in this study are well-established and have been used earlier
in the literature, their reliability and discriminant validity were still tested in order to verify the
quality of the measures. To test for reliability, a combination of item-to-total correlations and

liv
coefficient alpha was used. As may be seen in Table 4.8, all constructs have coefficient alphas
that range between 0.73 and 0.88, indicating acceptable levels of reliability (Nunnally, 1978)
4.6 Discriminant Validity
Discriminant validity was assessed using the Average Variance Extracted (AVE), the average
amount of variation that a latent construct was able to explain in the observed variables to which
it is theoretically related. The AVE should assume a value higher than 0.50 to verify the
discriminant validity (Hair, Hult, Ringle&Sarstedt, 2014). The AVEs were significantly greater
than the threshold value of 0.50, thus indicating support for the discriminant validity of the
constructs in the study.

Table 4.9 Discriminant validity for constructs

Construct Average Variance Extracted (AVE)
ICT 0.5252
Non financial performance 0.6871

4.7 Assessing common method bias

Due to the collection of all the measures from the same source, this study employed a Harman
one-factor test to examine the potential problem of common method variance. Podsakoff and
Organ (1986) state that a significant common method variance will result if one general factor
accounts for the majority of the covariance in the variables. Therefore, the study employed the
Harman principal factor analysis to test whether the study has a potential problem of common
method variance. The study followed Podsakoff and Organ‘s (1986) suggestion and conducted a
principal factor analysis of the questionnaire measurement items without rotation, in which the
first factor with eighten values greater than 1 accounted for 33.78 percent of the total variance.
Since a single factor does not emerge and one general factor does not account for most of the
variance, a common method bias is unlikely to be a serious problem in the data.

4.8 Discussion of Findings

The results showed that ICT was positively related to SMEs non-financial performance (β =
0.54; p ≤ 0.01), supporting hypothesis one (H1). The implication of this result showed that
improvements in ICT facilities are beneficial to the success of SMEs non-financial performance

lv
in Abeokuta metropolis. The relevance of strategic planning implementation is also emphasized
in this study. The findings of this research support result from several research works which
established a positive connection between ICT and SME non financial performance
(McIlquham-Schmidt 2010; Robbins, et al., 2008). Veskaisri, Chan and Pollard (2007) likewise
found that without a well-defined strategy, a firm will have justifiable reason for making and
keeping up a competitive edge in the industry where it operates. Although SMEs are often
acknowledged for being strategically myopic and mostly lacking a long-term vision (Wang, et
al., 2011); the implication of this research suggests that ICTis beneficial to SMEs non financial
performance.

lvi
 CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary of Findings
There is no significant difference between the levels of awareness and adoption patterns of ICT
facilities among SMEs in Abeokuta metropolis. The t-test values on the mean differences
between the levels of awareness and adoption patterns of ICT facilities among SMEs. The result
of the test shows that with the exception of mobile phone which was not significant, desktop and
laptop are significant 0.002 and 0.005 respectively, all the t-calculated values were significant at
0.000 significant level. This implies that there is a significant difference between the levels of
awareness and adoption patterns of ICT facilities among SMEs in Abeokuta. Hence, the need to
investigate and ascertain factors that influence ICT adoption for improved SMEs performance.
This is in-line with Apulu (2016) who opined that the automation of business processes in
companies provides a quicker means for achieving their desired output. Thus, SMEs have been
seen from this study to enjoy ease in carrying out their business transactions using ICT. This
shows that Nigerian SMEs can eliminate their labour intensive nature if they use ICT in their
business operations thereby increasing output, reducing cost of manpower and increasing
profitability. For Nigerian SMEs, the biggest challenge among several others is the problem of
ICT integration according to this study.If factors that influence its adoption are identified it will
help in formulating policies to improve its adoption level. Chau, 1995 who argues that ICT
enhances the production process in organizations as monitoring technologies could be used to
reduce the number of supervisors required in the process''. These is followed suit by the next
question which relives that SMEs uses ICT to make their services more easily tradable as
''Minton, 2003 affirms that buyers and sellers are able to share information and transfer goods
across national borders with the use of ICT, which helps to increase access to global supply
chain''.

In other to evaluate factors influencing ICT adoption affects SMEs productivity in Abeokuta.
The result of the first proposed regression model as specified in the methodology was called. In
general, the joint effect of the explanatory variable in the model account for 89.7% of the
variations in the factors that influence ICT adoption for productivity among SMEs in Abeokuta.
Lauder and Westall, (1997) that ''ICT improves suppliers‘ relations consequently a reduction in

lvii
inventories''. The last research question also relives that SMEs uses ICT to open up new
opportunities as affirmed by ''Onugu, 2005 that ICT enables organizations to decrease costs,
increase organizational capabilities and also assist to shape interorganizational coordination.
Therefore, the use of ICT helps to lower coordination cost and increase outsourcing in
organizations''
Three coefficients (innovation, diversification and penetration) are significant at 5%, 1% and
10% respectively. The implication here is that as SMEs adopt and transact over the internet, it
increases the SMEs productivity. Thus, the higher the level of adoption of ICT o SMEs, the
higher the performance of SMEs as a result of the multiplier effect.

In other to evaluate impact of ICT adoption on firm quality of financial reporting, it is assumed
that firms are competitive and combine labour and capital to produce a nearly homogenous
output or service over time. Further, to obtain the estimates of the impact of ICT adoption on
SME quality of financial reporting, a multiple regression was also used to show the precision of
the model. In general, the joint effect of the explanatory variable in the model account for 94.8%
of the variations in the factors that influence SMEs quality of financial report.
Three coefficients (access to financial report, clarity of financial records and ease of financial
planning and control) are significant at 5%, 1% and 1% respectively. The implication here is that
as ICT deepens, it increases the performance of Small and Medium Enterprises, Thus, the
positive relationship between ICT and the dependent variable.

These findings are clear indication of the influence of the characteristics (size or market share;
capital base; numbers of employees; turnover and asset value among others) of SMEs in ICT
adoption for improved performance. This is in line with the previous findings in the literature
that the characteristics of the Small and Medium Scale Enterprise affect are affected by the level
of adoption of ICT. Accordingly, Akomea-Bonsu and Sampong (2012), Taylor and Murphy
(2004), Martin and Matlay (2001) agree and acknowledge that there are many factors that make
SMEs different, such factor include turnover, industry, number of employees, format of business
and more importantly ICT.

lviii
5.2 Conclusion
This study highlighted a number of benefits derivable from Information and Communication
Technology which affirms that Information and Communication Technology is germane to the
growth and development of Small and Medium Enterprises in any economy. Although, in
Nigeria, there is no clear-cut definition, that distinguishes a purely small-scale enterprise from a
medium-scale enterprise. The National Economic Reconstruction Fund (NERUND) put the
ceiling for small-scale industries at 10 million naira. Section 37b(2) of the Companies and Allied
Matters Decree of 1990 defines a small company as one with: an annual turnover of not more
than 2 million naira; and net asset value of not more than 1 million naira (Ekpenyong and Nyong,
1992).
In the present study, with reference to hypothesis one, it was discovered that there is a significant
difference between the levels of awareness and adoption patterns of ICT facilities among SMEs.
Hence, the need to investigate and ascertain factors that influence ICT adoption for improved
SMEs performance. If factors that influence its adoption are identified it will help in formulating
policies to improve its adoption level. It was also discovered that ICT adoption is significantly
influenced by Capital Base, turn over, and asset value of the businesses investigated. With
respect to SMEs output performance, as SMEs capital input increases it also increases the output
performance. Thus there is a positive relationship between the capital base and the dependent
variable. Marital status and business experience of the owners of the SMEs also counts as they
have a positive and significant relationship with the dependent variable.
5.3 Recommendations
Based on the analysis and findings of this study, the researchers therefore recommend that:
i. Agencies that regulate SMEs should formulate policies that will facilitate the
adoption of ICT facilities by SMEs because of its potential in improving firms‘
growth performance.
ii. SMEs owners should endeavour to gain registration status as that will facilitate their
adoption of ICT as proxied by transaction over the internet. This will improve their
productivity and competitiveness.
iii. To raise productivity and global competiveness, SMEs owners should invest in ICT
and its components because they have been proven to significantly influence
organizational performance.

lix
 iv. For the government to succeed in reinventing the future of SMEs, it has to extend the
current reforms to her educational system to make it more functional , relevant ,need -
oriented and driven. Emphasis should be on modern technology, practical
technological and entrepreneurial studies aimed at producing entrepreneurs. There is
the urgent and dire need for the government to revamp the SME sector of the
economy on order to redress the growing unemployment rate in the country, reduce
poverty level, enhance standard of living and stimulate economic growth and
development.
v. Furthermore, emphasis should be made on encouraging the female gender to
participate more in activities of SMEs in Nigeria and as well include the study of both
ICT and SMEs development in her school's curriculum, establish more vocational
schools in both local and urban settlements of the country. The government should
help through enlightenment programmes for the youths right from grassroots.

5.4 Suggestion for Further Studies

Every research creates a gap for another research. It is however clear that the research is limited
to effect of ICT on non-financial performance of SMEs. Further studies can be conducted on
how ICT can be used to enhance market penetration and business expansion in less developed
nations.

5.5 Contribution to Knowledge

The global technological trend and intensity of competition in business environment have made
it necessary for Small and Medium and Enterprises to explore Information and Communication
Technology in order to survive and expand.

lx
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 QUESTIONNAIRE

DEPARTMENT OF BUSINESS ADMINISTRATION

MOSHOOD ABIOLA POLYTECHNIC, OJERE, ABEOKUTA, OGUN STATE

Dear Respondent,
REQUEST TO COMPLETE QUESTIONNAIRE
I am ADENIJI MUSBAU ADEYINKA of the above named institution. I am conducting a
research on ‗Effect of ICT on SMEs non-financial performance in Abeokuta.‘ This is being
carried out in partial fulfillment of the requirements for the award of HND in Business
Administration.
Information supplied will be treated confidentially and strictly be used for academic purpose.
Thank you for your anticipated cooperation.
Yours faithfully
13/57/0650

lxv
 QUESTIONNAIRE
Section A: Demographic Characteristics of Respondents
Age of Respondents
18-24 years ( )
25-44 years ( )
45 years and above ( )
Gender
Male ( )
Female ( )
Marital Status
Single ( )
Married ( )

Highest Educational Qualification

Secondary school certificate ( )
O. N. D ( )
H. N. D/B.Sc. ( )
M.Sc./Ph.D. ( )
Number of Years Business is Established
1-5 years ( )
6-10 years ( )
11-15 years ( )
16-20 years ( )
21-25 years ( )
25 years and above ( )

Key: VH-Very High; MH-Moderately High; H-High; L-Low Accurate; VL-Very Low
SN Questions: level of awareness and adoption of VH MH H L VL
ICT facilities
1 Desktop
2 Laptop

lxvi
3 Internet stick
4 Land line
5 Mobile phone
6 CD ROM
7 Café
8 e-mail
9 Cash tiling
10 Printer
11 Scanner
12 Photocopier

SN SMEs non-financial performance VH MH H L VL

Productivity
1 Increase in customer base
2 Level of product/service innovation
3 Level of market penetration
4 Level of product/service diversification
5 Financial reporting
6 Clarity of financial records
7 Easy access to financial records
8 Currency of financial records
9 Ease of financial planning
10 Ease of financial control
Employees efficiency VH MH H L VL
11 Knowledge of the job
12 Improved learning ability
13 Improved employees skills
14 Improved employees dexterity

lxvii