Effect of Information Systems Usage on the Perceived Business Profitability among SMES in Sekondi-Takoradi Metropolis in the Western Region of Ghana

Abstract

The study determined the effect of information systems usage on the perceived business profitability among SMEs in Sekondi-Takoradi Metropolis in the Western region of Ghana. It was a quantitative study which employed a cross-sectional survey design. Cluster sampling technique was employed to get 381 SMEs from Sekondi, Takoradi, Effia-Kwesimintsim and Essikado-Ketan to respond to the questionnaire. The data was analyzed quantitatively using descriptive analysis based on the General Linear Model. Ordinary Least Squares (OLS) regression was used to calculate the effect of the independent variables on the dependent variable. The results showed that 70.82 percent of the respondents use information systems; thus, the majority of SMEs use information systems for work. Information systems usage was shown to have a positive, but insignificant influence on perceived business profitability. This result implies that the generally, SME owners and/or managers believe that using information systems, positively affects business profitability. Takoradi Sub Metro and Effia - Kwesimintsim Sub Metro had positive B values (0.414 and 0.204 respectively); however, Takoradi Sub Metro had the most positive effect size regarding profits. Age of firm had a statistically significant positive influence on perceived profitability implying that the older the firm, the higher the likelihood of profitability. The number of employees was shown to have a negative influence on perceived profitability which implies that the bigger the firm, the lesser the likelihood of profitability. The effect was however statistically insignificant. The study recommended that SMEs be trained on the use of information systems in the execution of business processes and that business-oriented governmental and non-governmental institutions should organize training programs to equip SMEs with relevant IT skills.