Influence of Information Technology Adoption on the Effectiveness of Strategic Decision-Making in Small and Medium Enterprises in Nairobi County, Kenya

Mitchell Gakii () and Prof. Allan Kihara ()

Journal of Entrepreneurship and Project Management, 2025, vol. 10, issue 4, 39 - 59

Abstract: Purpose: The purpose of this study was to investigate the influence of information technology (IT) adoption on the effectiveness of strategic decision-making among Small and Medium Enterprises (SMEs) in Nairobi County. The specific objectives were, to assess the effect of data analytics on decision-making effectiveness, to evaluate the impact of ERP systems, to analyze the contribution of cloud computing and to examine the role of IT investment in supporting decision effectiveness. Methodology: A descriptive correlational research design was employed, and data was collected from 89 SME managers through structured questionnaires scored on a five-point Likert scale. Analysis was conducted using SPSS, generating descriptive, correlation, regression, and ANOVA results, presented through tables and figures. Findings: The findings revealed weak and statistically insignificant relationships between all four IT variables and decision-making effectiveness. Data analytics showed a positive but weak correlation (r = .0.058, p = .918). ERP adoption demonstrated similarly weak influence (r = .031, p = .705), and cloud computing exhibited a weak positive correlation (r = .207, p = .194). IT investment showed virtually no relationship with decision effectiveness (r = .003, p = .702). The regression models explained only minimal variance, with R² values ranging from .001 to .043, confirming that IT adoption, in isolation, does not drive effective strategic decision-making in the sampled SMEs. The study concludes that while IT resources are available within many SMEs, they remain underutilized and insufficiently aligned with strategic objectives. Investments are often directed at infrastructure without ensuring integration, user competence, or strategic governance. As a result, IT adoption has yet to translate into measurable improvements in decision quality. Unique Contribution to Theory, Practice and Policy: The study recommends that SMEs emphasize alignment of IT with business priorities, strengthen user training, and adopt structured evaluation frameworks to link IT spending to decision outcomes. Future research should explore mediating factors such as organizational culture, managerial competence, and industry dynamics, which may condition the relationship between IT and decision-making effectiveness.

Keywords: Data Analytics; ERP Systems; Cloud Computing; IT Investment and Decision-Making Effectiveness (search for similar items in EconPapers)
Date: 2025
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