Environmental Scanning – An Information System Framework for Strategic Decisions in SMEs

The aim of this chapter is to explore the role of environmental scanning in information systems for strategic decisions in the context of small and medium sized enterprises (SME) in Australia. A case study approach was adopted for this exploratory study. In-depth interviews were conducted with owners of two SMEs. Data were analysed using manual qualitative data analysis techniques. Owing to the unique characteristics of SMEs, findings suggest that SMEs share some commonalities and differences to their large firm counterparts. In general, SMEs have a clear idea what their information needs are. They have a narrow scope of scanning, which focuses mainly on economic, customers, and competitive information. External sources from media, salespeople, clients, and competitors are their major sources of information. Human memory and manual filing systems are the key methods of storing information. The information is distributed through personal communications. SMEs use common sense and intuitive approach rather than sophisticated analytical tools to analyse the information. The scanned information is used for both strategic and functional decisions. The findings provide insight to SMEs as to the usefulness of environmental scanning in making various business decisions.