Published January 31, 2013
Small information technology (IT) businesses that follow formal processes are more productive and achieve higher quality and customer satisfaction, according to a School of Management study.
Published in Communications of the ACM, the study found that smaller IT companies saw more benefit from formal processes than their larger competitors.
“Small businesses are the lifeblood of the U.S. IT industry, accounting for approximately 80 percent of IT jobs in the country,” explains study co-author Rajiv Kishore, associate professor of management science and systems. “With greater competition and more demanding customers, small IT providers must now prove they can deliver high-quality products and services in a timely and predictable manner.”
The research looked at both large and smaller companies that use the Capability Maturity Model (CMM)—a tool that helps improve the business processes of IT service providers.
In the past, smaller organizations have been wary of such productivity models, feeling the processes can be too time-consuming or a barrier to productivity and office culture. But Kishore says there are ways to reap the benefits of formal process capability without sacrificing an entrepreneurial or less-formal culture.
“Small firms should tailor CMM to their own environment and stress a process focused on flexibility, efficiency and quality,” he says. “Evidence suggests that small firms that use it can see improvements with productivity, quality and customer satisfaction.”
Kishore, an associate editor at Information and Management, a leading information systems journal, collaborated on the study with Matthew Swinarski, associate professor of MIS, and Diane Parente, Breene Professor of Management, both from the Sam and Irene Black School of Business at Penn State Erie, The Behrend College.