Optimizing SME Performance through ICT Diversification and Competence Development Strategies

Objective: This study examines the moderating role of employee competence in the relationship between ICT diversification and employee performance in SMEs within the e-commerce shoe sector in East Java, Indonesia. Research Design & Methods: An explanatory approach was used, employing Moderated Regression Analysis (MRA) to test the hypothesis. Data were collected from 90 employees using standardized questionnaires and analyzed with IBM SPSS Statistics version 25. Findings: The results show that both ICT diversification and employee competency positively and significantly influence employee performance. The interaction between ICT diversification and employee competency further enhances the relationship between these factors and employee performance. Initially, the model demonstrated a strong relationship between ICT diversification and employee performance, which became even stronger when employee competency was included as a moderating variable. This indicates that employee competency plays a significant role in amplifying the positive effects of ICT diversification on performance. Implications and Recommendations: The findings offer practical insights for SMEs to improve performance through targeted ICT training and competency development. However, the study is limited to the e-commerce shoe sector in East Java, which may limit the generalizability of the results. Future research should expand to diverse industries and wider geographical locations to validate these findings. Contribution & Value Added: This research addresses the gap in understanding the moderating effect of employee competence on the relationship between ICT and performance in SMEs, offering new insights into strategic human resource management.