A knowledge management framework for supporting knowledge sharing on performance of SMES to guide it investment decisions case study of Kampala Central Division

Abstract

ABSTRACT This qualitative case study explores the challenges and information gaps hindering IT investment decisions and digital transformation among Small and Medium-sized Enterprises (SMEs) in Kampala Central Division, Uganda. The study aims to develop a context-specific Knowledge Management Framework (KMF) that empowers SMEs to make informed IT investment choices by addressing critical barriers such as financial constraints, staff resistance, infrastructure instability, and vendor distrust. Using a qualitative research design, the study conducted in-depth case studies of 30 SMEs across retail, healthcare, agriculture, and service sectors. Data was collected through semi-structured interviews, document reviews, and observations, with thematic analysis revealing six key challenges: financial risk aversion (92% of SMEs), digital skills gaps (87%), infrastructure inequity (83%), vendor distrust (78%), security vulnerabilities (65%), and unstructured decision-making (72%). Building on Alavi and Leidner’s (2001) Knowledge Management stages and extending the Technology-Organization-Environment (TOE) framework, the study introduces "Perceived Risk & Trust" and "Human Capital & Digital Literacy" as critical determinants of IT adoption in resource-constrained settings. The resulting KMF integrates localized knowledge creation, mobile money-compatible ROI tools, offline-first architecture, and sector-specific decision trees. A pilot evaluation with 5 SMEs demonstrated its potential, showing a 40% increase in IT investment confidence, a 35% reduction in perceived implementation failures, and a 50% improvement in staff adoption rates with localized training. The framework also provides policymakers with evidence-based recommendations, such as vendor accreditation systems and solar-powered digital hubs, while contributing to academia through a validated architectural blueprint for KM solutions in developing economies. The study concludes that a structured, context-sensitive KMF can significantly accelerate SME digital transformation by bridging knowledge gaps and mitigating risks. Key recommendations include SME adoption of the framework for systematic IT decision-making, policy interventions to improve infrastructure and vendor trust, and further research to validate the extended TOE model. By addressing both theoretical and practical gaps, this research offers a scalable solution to enhance SME competitiveness and drive Uganda’s digital economy. Keywords: Knowledge management, SME digitalization, IT investment, Kampala, contextual framework.