Objectives of knowledge management

 Limited SME adoption of digital 
business 
 ‘Adoption of digital business by 
established SMEs is generally less 
than that in larger businesses. This 
is principally a consequence of the 
negative attitude of managing directors 
and CEOs to the business benefits 
of information and communication 
technology (ICT).’ 
Debate 1.2 
Risks and barriers to digital business adoption 
The Internet is a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that 
fundamentally alters our business? (Grove, 1996)
This statement still seems to encapsulate how managers must respond to different digital 
technologies; the impact will vary through time from minor for some companies to signifi-
cant for others, and an appropriate response is required. 
There are also many practical risks to manage which, if ignored, can lead to bad customer 
experiences and bad news stories which damage the reputation of the company. In the sec-
tion on digital business opportunities, we reviewed the concept of soft lock-in; however, if 
the customer experience of a service is very bad, they will stop using it, and switch to other 
online options. Examples of poor online customer experience include: 
● 
Websites that fail because of a spike in visitor traffi c aft er a peak- hour TV advertising 
campaign.
● 
Hackers penetrating the security of the system and stealing credit card details.
● 
A company emails customers without receiving their permission, so annoying customers 
and potentially breaking privacy and data protection laws.
●
Problems with fulfi lment of goods ordered online, meaning customer 
orders go missing or are delayed.
● 
Email customer service enquiries from the website don’t reach the 
right person and are ignored.
The perception of these risks may result in limited adoption of digital 
business in many organisations, which is suggested by the data in 
Figure 1.11 . This is particularly the case for SMEs. (We study adoption 
levels and drivers in this type of business further in Chapter 4 .) 
Another approach to reviewing the strategy issues involved with 
implementing digital business is the classic McKinsey 7S strategy instru-
ment (Waterman
et al 
., 1980) which is summarised in Table 10.1 .