A Thesis Submitted in Partial Fulfilment of the Requirements for the Award of Master Business Administration (MBA) of Mzumbe University ( Dar es salaam campus college)
Information technology had a great impact in all aspects of life and the global economy is currently undergoing fundamental transformation. Modern businesses are not possible without help of information technology, which is having a significant impact on the operations of Small and Medium Sized Enterprises (SME) and it is claimed to be essential for the survival and growth of economies in general. It is generally recognized that SME play a key role in the revival and development of national economy in many countries and particular in the context of Tanzania. The study investigates the way in which the SMEs use ICT to become competitive in today’s economy. This empirical study had three objectives. The first objective was to identify the current state with regard to the use of ICT by SMEs in Tanzania. The second objective was to assess the problems preventing SMEs in using ICT as a competitive tool. The third objective was to identify the contributions of ICT to SMEs growth in Tanzania The results of the study show that only a small number of SMEs in Tanzania are aware of the benefits of ICT adoption. The main driving forces for ICT investment are to provide better and faster customer service and to stay ahead of the competition. A majority of surveyed SMEs have reported a positive performance and other benefits by utilizing ICT in their businesses. Majority of SMEs outsource most of their ICT activities. Lack of internal capabilities, high cost of ICT and lack of information about suitable ICT solutions and implementation were some of the major barriers identified in adoption of ICT by SMEs. The findings therefore have important implication for policy aimed at ICT adoption and use by SMEs. The findings of this research will provide a foundation for future research and will help policy makers in understanding the current state of affairs of the usage and impact of ICT on SMEs in Tanzania.