Integration of information technology capabilities in generating small and medium enterprise performance

Abstract

The role of information technology (IT) during the Covid 19 pandemic has made everything in business easy. The role of technology in business during a pandemic also makes it easier for entrepreneurs to navigate buying and selling activities and services. Technology makes it easy to shorten time saving business costs, as in business financial records that make one financial report must record everything manually with technology done automatically with the help of accounting software. Research purposes to test resources-based view theory in relation to the implementation of IT to produce operational performance and financial performance of small and medium enterprises (SMEs). The research was conducted on SMEs in Bali. The research method used to answer the research objectives uses a quantitative test approach Partial Least Square. Based on data analysis, it was found that the development of SME IT Adoption had an effect positive on IT Assimilation, but directly IT Adoption is not able to improve operational performance and financial performance. IT assimilation can improve the operational performance and financial performance of SMEs. Operational performance is not able to mediate the effect of IT adoption on the financial performance of SMEs. IT assimilation is a fully mediating variable in the relationship between IT and the operational performance and financial performance of SMEs in Bali. The results of the study show that IT resource management through a technology-based business competency model can succeed in realizing Organizational Capability that can be used to build business competitiveness if the organization or business unit that adopts it pre-determines IT integration in accordance with the vision, mission, and goals of the organization. This is very important to implement in an effort to adapt to uncertain business world conditions, such as when Covid 19 occurred.