Analysis of Information System Development in the Context of the Latest Technological Era: Challenges and Potential for Success

ABSTRACT


Micro,
Small, and Medium Enterprises (MSMEs) play a crucial role in economies worldwide, contributing to job creation, economic growth, innovation, and community empowerment [1].Rapid advances in technology have presented both opportunities and challenges for MSMEs in the contemporary business landscape.Information systems have emerged as an essential tool for improving business performance, competitiveness, and sustainability.The integration of information systems in MSMEs can help streamline business processes, reduce errors, and simplify sales and inventory transactions [2].For instance, web-based cashier and inventory information systems have been developed for MSMEs, such as Putra Anugrah Sejahtera, which sells premium spray paint for wheels [2].The implementation of such systems has shown positive results in user acceptance tests, indicating that they meet user needs and address the challenges faced by MSMEs [2].Digital marketing and technology adoption have also become increasingly important for MSMEs.In the face of economic crises, such as the Covid-19 pandemic, MSMEs have had to adapt by utilizing digital technology to increase sales and recover from the crisis [3].A study on MSMEs in Barito Kuala Regency found that digital marketing had a direct or indirect effect on increasing sales, with technological capital serving as an intervening variable that mediated the influence of digital marketing on sales [3].Moreover, the digital era has provided MSMEs with new opportunities and challenges, enabling them to develop new business models, experiences, and operational codes that influence consumerism in both products and services [4].For example, the Rahma gift center in Kendalrejo Village adapted to the digital economy by implementing technology and digitalization in its business practices [4].
In conclusion, the development and integration of information systems have become vital for MSMEs to improve their business performance, competitiveness, and sustainability.By adopting digital marketing strategies, technology, and innovative solutions, MSMEs can better navigate the contemporary business landscape and contribute significantly to economic growth and job creation.
In West Java province, Indonesia, MSMEs (Micro, Small, and Medium Enterprises) play an important role in the socio-economic fabric, driving local development and providing livelihoods for a large proportion of the population [5].To adapt to the complexities of the current technological era, MSMEs need to capitalize on the potential benefits offered by information systems.These systems encompass a wide range of technologies, including software applications, databases, communication networks and digital platforms that facilitate data storage, analysis and exchange.To thrive in the digital era, MSMEs need to adopt and integrate their businesses online, which includes online business transactions and online business management [6].This means MSMEs must strengthen various aspects within their own companies, such as improving management capabilities, leadership, capital management, marketing and bookkeeping skills, product development, and innovation in the use of technology [6].Some of the factors that influence the adoption of information technology (IT) in MSMEs include compatibility, ICT experience, and customer pressure [7].MSMEs can also benefit from government support and owner-manager innovation, which can positively influence their attitude towards fintech [8].In addition, the use of fintech can help MSMEs overcome capital constraints, facilitate online trade transactions, and improve bookkeeping and inter-regional product marketing [9].
In summary, to capitalize on the potential benefits offered by information systems, MSMEs in West Java, Indonesia, need to adopt and integrate their businesses online, improve various aspects of their enterprises, and leverage government support and owner-manager innovation.By doing so, they can better adapt to the complexities of the current technological era and continue to drive local development and provide livelihoods for a large proportion of the population.
Information system integration offers MSMEs the promise of streamlined operations, data-driven decision-making, improved customer engagement, and expanded market reach.However, the journey to successful information system development is fraught with challenges that need to be addressed strategically.These challenges include financial limitations, lack of technical expertise, resistance to change, integration issues, and cybersecurity concerns.
This research seeks to explore the intricacies of information systems development in the context of the MSME sector in West Java.By examining the challenges faced by MSMEs in adopting and implementing information systems, this study aims to shed light on the underlying barriers that hinder progress.In addition, the study also seeks to explore the potential transformative impact of successful information systems integration on MSME business performance.Through a comprehensive analysis of existing literature, real-world case studies and empirical data, this research intends to contribute to a deeper understanding of the dynamics between MSMEs, information systems and the broader economic landscape.By unraveling the nuances of these relationships, stakeholders ranging from business owners to

The Importance of Information Systems in MSMEs
Micro, Small, and Medium Enterprises (MSMEs) have historically been recognized as important contributors to economic growth and development around the world.In recent years, the rapid evolution of technology has emphasized the importance of integrating information systems in MSME operations.Information systems encompass a variety of technologies and tools that enable efficient data management, communication, and decision-making [10]- [12].
Information systems empower MSMEs by streamlining processes, reducing operational inefficiencies, and increasing overall productivity.They provide a structured framework for managing business operations, from inventory management and sales tracking to customer relationship management.By utilizing information systems, MSMEs can access data in real-time, enabling data-driven decision-making and offering insights into market trends, customer preferences, and the competitive landscape [13]- [15].

Challenges in Information System Development for MSMEs
While the potential benefits of information system integration for MSMEs are clear, the journey to successful implementation is fraught with challenges that require careful consideration [16]- [20]

METHODS
This research utilizes a mixed methods approach, which combines qualitative and quantitative research techniques.This approach allows for a comprehensive exploration of the challenges faced by MSMEs in developing information systems and their potential impact on their business performance.
Qualitative research enables an indepth understanding of the complex factors that influence MSMEs' information systems development.The qualitative aspect of the research involved conducting case studies and interviews with stakeholders to gather rich and contextualized insights into their experiences, challenges and strategies.The quantitative research aims to measure the prevalence of challenges, adoption rates of information systems, and perceived impact on business performance among a larger sample of MSMEs.This will be achieved through a structured survey that provides quantifiable data for analysis.

Literature Review
This research began with an extensive literature review to build a theoretical foundation and identify key themes related to the development of information systems in MSMEs, the challenges faced, and their potential benefits.Academic journals, industry reports, and relevant publications will be systematically reviewed to inform the research.

Case Studies
Several case studies were conducted involving selected MSMEs in West Java.These case studies aim to provide real-world insights into the challenges and strategies associated with information system development.Case study participants will include business owners, managers and IT personnel.Semi-structured interviews will be conducted to collect qualitative data regarding experiences, decision-making processes, and outcomes related to information systems development.

Survey
A structured survey was designed and administered to a larger sample of MSMEs in West Java.The survey was distributed online and in person, targeting a diverse range of industries and business sizes.The survey questionnaire included questions relating to current information system adoption, challenges faced, and perceived impact on various aspects of business performance and a total of 300 samples were involved in the study.

Data Analysis
The qualitative data collected from the case studies and interviews were thematically analyzed.This process involved identifying recurring themes, patterns and insights within the data.By analyzing the qualitative data, common challenges, success factors, and strategies related to information system development in MSMEs will be identified.
Quantitative survey data is analyzed using statistical software.Descriptive statistics will be used to summarize the prevalence of challenges, the adoption rate of information systems, and the perceived impact on business performance.Inferential statistics, such as correlation and regression analysis, may be used to identify the relationship between information system adoption and business performance indicators.

Challenges in Information System Development
An investigation into the challenges faced by Micro, Small and Medium Enterprises (MSMEs) in West Java regarding the development of information systems found several significant obstacles that hinder the successful integration of these systems into their operations.

Financial Constraints
A common challenge that emerged from the analysis was financial constraints.Many MSMEs struggle to allocate resources for information system development due to limited budgets.The costs associated with purchasing hardware, software, training and infrastructure upgrades are often seen as prohibitive.These limitations restrict the scope and capabilities of the information systems that MSMEs can adopt, leading to missed opportunities for efficiency gains and competitive advantage.

Lack of Expertise
Another important challenge is the lack of technical expertise within MSMEs.Small-scale enterprises often do not have dedicated IT personnel or the financial means to hire external experts.As a result, making the right decisions regarding the selection, implementation and maintenance of information systems becomes difficult.This lack of technical knowledge can lead to nonoptimal system configuration, limited utilization of available features, and inadequate troubleshooting in the event of technical problems.

Resistance to Change
Resistance to change emerges as a psychological barrier that significantly affects the adoption of information systems.Employees and management in MSMEs may be resistant to the implementation of new technologies due to concerns of disruption to existing processes and roles.This resistance can slow down the adoption process, hinder effective system utilization, and limit the realization of potential benefits.

Integration Issues
Integrating new information systems with existing processes and technologies is a complex challenge faced by MSMEs.Compatibility issues between different systems, software and databases can lead to data inconsistencies and operational inefficiencies.These integration challenges are compounded by a lack of technical expertise, making it difficult for MSMEs to ensure smooth interaction between legacy systems and newly implemented information systems.

Cybersecurity Concerns
Cybersecurity is emerging as a significant issue, especially for MSMEs dealing with sensitive customer information.Limited cybersecurity measures can leave businesses vulnerable to data breaches, unauthorized access, and cyberattacks.The fear of compromised data and privacy breaches can deter MSMEs from fully utilizing information systems, especially when handling confidential customer data.

Potential for Success and Business Performance
Despite these challenges, the research findings underscore the potential transformative impact of successful information systems integration on MSME business performance.

Improved Efficiency and Decision Making
Several case studies and survey responses highlighted instances where MSMEs successfully overcame the challenge of integrating information systems.In these cases, businesses reported improved operational efficiency, reduced manual work, and more streamlined processes.Real-time access to data enables more informed decision-making, allowing businesses to respond quickly to market changes and allocate resources more effectively.

Improved Customer Experience and Market Reach
MSMEs that use information systems experience increased customer engagement and satisfaction.Information systems enable personalized interactions, efficient complaint resolution, and faster response times.In addition, digital platforms and e-commerce capabilities facilitate market expansion, allowing businesses to reach a wider audience beyond geographical boundaries.

Adaptation and Innovation
Successful MSMEs demonstrate the ability to adapt and innovate through insights gained from information systems.By analyzing market trends, customer preferences, and competitor behavior, businesses can identify emerging opportunities and adjust their products and services accordingly.This adaptability and responsiveness to changing market dynamics provides a competitive advantage.

Discussion
The challenges and potential for success in information system development for MSMEs in West Java are interconnected and nuanced.The challenges, such as financial constraints and lack of technical expertise, can hinder successful implementation.However, the potential benefits, including improved efficiency, enhanced customer experience, and innovation, demonstrate that overcoming these challenges can yield substantial rewards, This is in line with previous research [28]- [31].
To address these challenges, stakeholders should consider implementing targeted strategies.MSMEs can explore collaboration opportunities to share expertise and resources, while also investing in employee training to bridge the technical skills gap.Policymakers and industry associations can play a role in providing financial incentives, offering technical support, and promoting cybersecurity awareness.This is in line with previous research [32]- [37].

CONCLUSION
In the context of the current technological era, Micro, Small, and Medium Enterprises (MSMEs) in West Java face a dichotomy of challenges and opportunities concerning information system development.This research has shed light on the intricate barriers that hinder the adoption of these systems, including financial limitations, technical expertise gaps, resistance to change, integration complexities, and cybersecurity worries.However, the successes of several MSMEs showcased the transformative potential of information system integration.Strategic recommendations for MSMEs and stakeholders emerge from these findings.To overcome financial constraints, collaboration and resource sharing among MSMEs could be encouraged.Technical expertise gaps might be bridged through training programs and partnerships with IT professionals.Resistance to change could be addressed through effective change management strategies.Integration issues may find solutions in standardized interfaces and consultation with IT experts.Cybersecurity concerns call for awareness campaigns and resources to bolster defenses.By addressing these challenges and embracing information system integration, MSMEs stand to gain improved efficiency, enhanced customer experiences, expanded market reach, and the ability to adapt and innovate.
Ultimately, the successful development of information systems can fortify MSMEs' role as drivers of economic growth in West Java, contributing to a resilient and prosperous local economy.