Strategic information planning and performance of SMEs: A structural equation modelling approach

Abstract

BACKGROUND: The business environment is getting unstable due to which execution of decision support systems has become significant to maintain competitive advantage. Small and medium enterprises in particular confront issues, such as insufficiency of devising strategic planning, strategic decision-making, and information exchange, as well as difficulty increasing performance. Because functional strategic management and decision-making are required, strategic information systems planning is employed to accumulate information and assist decision-makers in developing and implementing the best strategy for gaining superior performance. Executives in information systems focus on technical difficulties while ignoring decisions to support strategic plans. OBJECTIVE: The purpose of this article is to investigate how strategic information systems planning contributes to increased performance in SMEs. METHODS: Data was gathered through questionnaires distributed to information system executives in SMEs, primarily in Jordan. The data was collected with the help of questionnaires adopted from prior studies. For Analysis after applying the diagnostic tests, structural equation modelling has been applied to test the framework developed based on the literature. RESULTS: A structural equation modeling (SEM) was conducted, the individual loadings of the SEM items are investigated, reliability and discriminant validity is tested, and path coefficients of hypothesized relationships of the developed model are tested. CONCLUSIONS: The findings suggested that managers should prioritize implementing strategic information systems planning so that they can gain superior performance with better agility in the future. This research not only enhances the current understanding of the significance of strategic information systems planning but also assists supervisors to improve the procedure.