This study investigated the extent to which the Small-to-Medium sized firms (SMEs) utilized their IT resources strategically, and also identified factors inhibiting such utilization. An attribute approach was adopted to identify attributes characterizing strategic IT utilization in SMEs. Seventy SMEs participated in the study and factor analysis was conducted to identify the underlying factors that explained the inhibitors of strategic IT utilization. While the results show that some SMEs utilize IT resources to reduce costs and improve customer services, many SME managers are still ignorant about their business environment. They do not use IT resources to create links with suppliers, neither do they use them to differentiate products/services nor to enable innovations. Lack of skills and knowledge to employ IT competitively emerged as the prime inhibitor of strategic IT utilization. Other factors were: poor planning; lack of resources; poor IT vision and leadership; and environmental uncertainty.
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