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A recent United Nations Industrial Development Organisation executed pilot project in Sri Lanka aimed at providing restructuring assistance to ten manufacturing enterprises, looked at the application of computers for management functions and analysed the constraints limiting the use of the computer potential for improving enterprise competitiveness. This paper reports on the key observations and recommendations arising from this pilot project. It was found that though all the enterprises had access to computers, the utilisation was mainly for payroll, accounting and word‐processing tasks. Surprisingly the restructuring recommendations to improve enterprise competitiveness were based on a strategy of improving operations management and generating up‐to‐date management information and financial forecasts, areas that were not computerised. The paper analyses the findings from the ten pilot enterprises and recommends ways of enhancing the utilisation of the potential of microcomputers for improving the competitiveness of enterprises. The problems identified here in a developing country with a high literacy rate and high per capita utilisation of PCs, would be useful to other developing countries, facing the competitive threats arising from globalisation

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