This research investigates the crucial role of information technology (IT) in driving innovation within small and medium-sized enterprises (SMEs). It explores the key determinants and processes that fuel innovation through IT, examining the advantages and disadvantages of this approach. The study utilizes a deductive research approach and an explanatory research design, employing both primary and secondary data collection methods. The findings aim to provide valuable insights into the relationship between IT investment, innovation, and organizational performance in SMEs, highlighting the importance of strategic IT adoption for achieving competitive advantage and sustainable growth.