Developing a frugal information system to support very small enterprise business transactions

Abstract

The research reported in this dissertation focuses on the development of a web-based frugal information system (frugal IS) which supports financial management of very small enterprises (VSEs), with a special focus on their business transactions. In most developing countries, VSEs have some significant contributions at various socioeconomic objectives, such as fostering entrepreneurship and improving growth of employment. They represent an income opportunity to retrenched and retired entrepreneurs which is recognised to be crucial to the livelihood of many poor local households and local citizens. In addition, these enterprises have a remarkable role to play in the areas of employment and poverty alleviation. Despite this, the majority of VSEs in developing countries, especially those in rural regions are faced with miscellaneous issues and challenges, which could be ascribed to their resource scarcity. In particular, most VSEs are resource-constrained in terms of knowledge and information resources, financial resources and human resources. What also exacerbates their situation is the fact that the majority of VSEs are still ingrained in their traditional ways of running the business and they are unready to adopt new and innovative working methods. In particular, VSEs are still accustomed to manual paper-based systems which are monotonous, error-prone, highly fragmented and severely inefficient. Unfortunately, all this gravely challenges the growth and development of VSEs. In this dissertation, a concept of frugal innovation, precisely frugal IS, is applied to distinctively address specific and unique business needs of VEs in developing countries. A methodology that is employed in this research is called design science research methodology (DSRM). The DSRM helped to address the problem of VSEs through design, construction, utilization and evaluation of a web-based frugal IS prototype system. A novel system life cycle model that favours the notion of frugality was employed for the design and development of a web-based frugal IS. The evaluation of the prototype system and its design revealed quite interesting results. The design of a web-based frugal IS prototype system was characterized with low complexity which promoted reusability, maintainability and reliability. The evaluation of usability indicated that the system was fairly simple to use, reliable and effective in terms of managing financial information of VSEs. Based on the general findings of this research, the design and development of a web-based frugal IS for VSEs in developing countries promises to assist VSE owners to assess their profitability, improve their financial management, promote sound economic decisions and help them to avoid business failure.