On the applicability of a computer model for business performance analysis in SMEs: a case study from Chile

Article type: Research Article

Authors: Lind, Per | Sepúlveda, Edmundo | Nuñez, Jaime

Affiliations: Industrial Development, Linkoping University, Sweden | Mechanical Engineering, Universidad Tecnica Federico Santa Maria, Valparaiso, Chile

Abstract: Adopting computers for business analysis applications in the small and medium enterprise (SME) sector has been a slow process, in developed countries and even more in developing countries. There are various reasons for this. One is that many SME managers still confuse business performance with financial performance, thereby claiming that they are already users of computer‐based business analysis. Others, aware of this difference, find it difficult to get appropriate input data to measure non‐financial performance. This confusion seems to stem from the fact that enterprise performance has been measured by economic results mainly, and numerous models have therefore been developed to assist managers in monitoring the economy. With the advent of computerisation, these models were referred to as computerised management control systems and focused primarily on standard cost control. In today’s increasingly global business environment where competitiveness is a must to survive, as customers are in a position to choose suppliers world wide, external efficiency has become as important as internal cost control. Business strategies that focus on customer satisfaction and building relations have therefore been given precedence over standard cost control. There is, thus, a growing demand for new measures to assess business performance also from the external perspective, and new types of variables related to quality and customer satisfaction have been identified. The traditional inward‐looking models for managerial control need to be complemented by non‐financial and outward‐looking models with focus on monitoring of business performance. A computer software based on this approach was tested in an enterprise in Santiago, Chile. The findings are reported in this paper.

Journal: Information Technology for Development, vol. 9, no. 1, pp. 33-44, 2000