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Modern organizations have to react fast and be flexible to innovative and interdisciplinary questions. Therefore organizing by projects is on a strong increase, because projects are accepted to be learning intensive organizational forms. But the boundaries between projects and the permanent organization are strong barriers for knowledge and experiences gained in projects. Knowledge management functions have to handle the knowledge and experiences from projects.

The paper seeks to overcome previous research limitations by examining both macro (industry, country) and micro (functions, enterprise) level phenomena within the information communication technologies (ICT) use of small and medium‐sized enterprises (SMEs). Australia and Germany were chosen because both recognise the importance of SMEs.

The study adopted an interpretivist philosophy and a qualitative case study method that enables gathering data which are rich in detail. Semi‐structured, on‐site interviews were carried out in eight firms of various classifications.

The study found that, for micro enterprises, ICT is only emerging in the form of systems that have the potential to facilitate the interactions with the outside. Small enterprises rely heavily on personal interactions, which they supplement with the use of ICT. In medium enterprises, ICT is more extensively used in interactions, both internally and with the environment. The differences between Australian and German firms do not significantly affect the extent to which ICT is infused into observed SMEs.

The study used the interpretivist research paradigm which is based on the assumption that reality is socially constructed. Findings indicated the need for increased organisational competencies and greater scope to use ICT to facilitate interaction with the external environment, especially customers and suppliers and forming alliances.

The case studies provided rich stories of ICT infusion in the important SME sector on an international scale and produced context‐aware institutionalised expectations that can help other SMEs understand ICT use. They can use the findings as benchmarks against which to measure their own endeavours.