Applying Action Research and SSM to develop a quick methodology for the diagnosis of IT usage in small companies Alejandro Cataldo, Universidad de Atacama, Copiapó, Chile, alejandro.cataldo@uda.cl Karina Carvajal, Universidad de Atacama, Copiapó, Chile, karina.carvajal@uda.cl Abstract This article describes the development and field-testing of a methodology, called IT-QSM (Information Technology – Quick Scan Methodology), which can be used to help SMEs understand how to improve their usage of IT. The methodology seeks to answer two key questions: how can SMEs increase the effective usage of existing information systems; and what new IT systems could help to increase the company performance. We used action-research and Soft Systems Methodology as a framework to develop IT-QSM. We argued that is necessary to apply qualitative research techniques to create a flexible methodology which at the same time would be both time efficient and have practical useful results for small-companies managers. The methodology has been field tested in companies in New Zealand and Colombia. Results show the methodology can make a positive contribution as a diagnostic tool, and the satisfaction of the small companies managers with the outputs of the analysis also increased across the cases. This article will be of interest to academic researchers; SME consultants, owners, and managers; and government policy makers. Keywords: Small companies, information technology, Soft System Methodology. Introduction A problem that has received a lot of attention among researchers and practitioners has been how do organizations use and align information technology (IT) with their processes and strategies (Chan and Reich 2007). Although researchers have proposed several tools to investigate IT alignment in organizations to both strategy and processes, most of them were designed for larger companies and there is little evidence showing that these analysis techniques can be effectively applied to small and medium enterprises (SME) (Blili and Raymond 1993; Levy and Powell 2005), and some investigators have suggested that more research is required in this area (Burgess 2002). This research reports on a methodology that has been developed to help the owners and managers of SMEs to discover problems with the use of IT in their organizations, and be able to act on what has been discovered. The methodology is called IT-QSM (Information Technology – Quick Scan Methodology), and it has a specific focus on SMEs. A special characteristic of IT-QSM is that it was developed using qualitative methodologies, such as case studies and action-research. The first version of the methodology was developed by synthesizing what has been reported in the academic literature on IT alignment investigations, and then refined through iterative testing, reflection and improvement cycles on seven SME companies in New Zealand and Colombia. Table 1 summarizes the background of case firms (due to confidentiality agreements, company identities are not disclosed).