the impact of information technology on organizational performance
TRANSCRIPT
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`
The impact of information technology on
organizational performance
(An applied study on Oil & Gas companies in Egypt)
Doctor of Business Administration Thesis
Submitted to the “Business Administration Department”
Faculty of Commerce – Ain Shams University
by
Mohamed Mahmoud Abouelmagd
Under Supervision
Dr. Bassam El-Ahmady Dr. Rasha Ihab
Cairo – Egypt
(2016)
ة عين شمسـجامع –ارة ـكلية التجFaculty of Commerce – Ain Shams University
ات العلياـقطاع الدراس
2
Abstract
Currently, Egypt is the largest oil producer in Africa outside of OPEC and
the second largest natural gas producer.
Egypt is looking to be energy hub and take a major role in international
energy markets
Information technology plays a vital role in the Oil & Gas business and
improves the efficiency and effectiveness of companies’ business process.
Researches from the last ten years have proved that, those companies that
invests in technology increase their market share, financial figures and overall
competitiveness
Hence, the research deals with the impact of information technology on the
performance of oil & gas companies in the oil & gas sector in Egypt.
This study aims to identify the impact of Information Technology (IT) on
organizational performance in oil & gas companies in Egypt.
The researcher adopted the descriptive analytical method in addition to a
questionnaire as a tool for collecting data. The researcher distributed (384)
questionnaires to 6 companies in the oil & gas companies in Egypt representing
three levels of performance (high, medium and low), relying on the classification
of the Accountability State Authority during the period. This means that (128)
questionnaires were directed to each group of workers in the companies
representing the research sample. A total of (253) questionnaire was returned, (49)
were excluded due to their invalidity for the analysis, and the rest (204) were valid
for analysis. The statistical analysis was conducted through the (SPSS) program.
3
The researcher used many statistical methods in the research including the
frequencies and percentages to describe the sample characteristics, the arithmetic
mean and standard deviation to analyze the sample replies, the alpha Cronbach
coefficient to measure the consistency of the questionnaire, the Pearson correlation
coefficient to measure the validity of the internal consistency of the questionnaire
and the Pearson correlation coefficient to measure the relationship between the
study variables as well as testing the simple regression analysis to test the
hypotheses.
The study concluded the following results:
There is a significant impact of IT network infrastructure on the performance
of Oil & Gas companies in Egypt.
There is a significant impact of IT applications on the performance of Oil &
Gas companies in Egypt.
There is a significant impact of IT personnel on the performance of Oil &
Gas companies in Egypt.
Key words: IT Network Infrastructure, IT Applications, IT Personal,
Organizational performance, Return on investment (ROI)
4
Acknowledgement
First and most importantly, I would like to thank my dissertation Supervisor,
Dr. Bassam El- Ahmady who is not only served as my main supervisor but also
encouraged and challenged me throughout my dissertation process.
My greatest thanks go to My Wife Asmaa, who has been my friend and supporter
and sacrificed tremendously for me throughout my DBA program. I thank her for
all of her love, help, and understanding.
At the end, this dissertation could not have been written without My Parents’
Doaa
Mohamed Abouelmagd
[email protected] December 2016
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Table of Contents
List of Tables ......................................................................................................................................... 7
List of Figures ..................................................................................................................................... 10
Chapter (1): Study Framework ................................................................................................. 11
Introduction ............................................................................................................................................ 12
Research Problem ................................................................................................................................... 14
Previous studies ...................................................................................................................................... 15
Research objectives ................................................................................................................................ 21
Research Hypotheses .............................................................................................................................. 22
Research Variables .................................................................................................................................. 22
Research Methodology ........................................................................................................................... 23
Research Limitations ............................................................................................................................... 25
Chapter (2): Theoretical Framework ..................................................................................... 27
Introduction: ........................................................................................................................................... 28
Historical Overview of IT: ........................................................................................................................ 29
Importance of ITs Definition Information Technologies (ITs): ................................................................ 31
Role of Information Technology: ............................................................................................................ 33
IT Factors: ................................................................................................................................................ 36
IT Infrastructure: ..................................................................................................................................... 38
Components of Information Technology: ............................................................................................... 39
Applications of IT: ................................................................................................................................... 44
IT Personnel: ........................................................................................................................................... 51
IT impacts organizational characteristics and outcomes: ....................................................................... 54
IT Characteristics: .................................................................................................................................... 55
Advantages of Information Technology: ................................................................................................. 56
Disadvantages of Information Technology: ............................................................................................ 58
Definition of Performance: ..................................................................................................................... 61
Performance as a Multi-Dimensional Concept: ...................................................................................... 62
Performance Measurement: ................................................................................................................... 62
Organizational Performance: .................................................................................................................. 66
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ROI as a measurement of Organizational Performance: ........................................................................ 66
IT and organizational performance: ........................................................................................................ 70
The impact of using IT on the managerial and work concepts: .............................................................. 72
Oil & Gas sector in Egypt: ........................................................................................................................ 74
Egypt: ...................................................................................................................................................... 78
Oil sector in Egypt: .................................................................................................................................. 82
Chapter (3): Applied Framework ............................................................................................ 87
Preface .................................................................................................................................................... 88
First: Research Methodology .................................................................................................................. 88
Second: The Study Population and Sample: ........................................................................................... 89
Third: Research Tool: .............................................................................................................................. 91
Data Collection Instrument and Source: ................................................................................................. 95
Statistical Methodology used in the research: ....................................................................................... 96
Statistical Processes used: ...................................................................................................................... 97
Verifying the tool Validity: ...................................................................................................................... 98
The Results of the internal consistency: ................................................................................................. 98
Structural validity of the test Parts: ...................................................................................................... 103
Reliability of the study tool: .................................................................................................................. 104
Analysis of the demographic characteristics of the study sample as follows:...................................... 106
Distributive Statistics ............................................................................................................................ 115
Hypotheses Test .................................................................................................................................... 156
Chapter (4): Conclusions & Recommendations ............................................................. 165
Introduction .......................................................................................................................................... 166
Theoretical Results: ............................................................................................................................... 166
Practical Results: ................................................................................................................................... 167
Conclusions: .......................................................................................................................................... 169
Recommendations: ............................................................................................................................... 170
Appendices ................................................................................................................................................ 172
APPENDIX (1) ......................................................................................................................................... 173
APPENDIX (2) ......................................................................................................................................... 175
APPENDIX (3) ......................................................................................................................................... 177
7
List of Tables
Table 1 : Important studies about IT and organizational .............................................................. 15
Table 2 : Definitions of Information Technology from the perspective of Management
Information Science ...................................................................................................................... 31
Table 3 : ERP Solution Satisfaction/ Benefits Realization () ........................................................ 46
Table 4 : Questionnaires Distribution ........................................................................................... 90
Table 5 : IT Network Infrastructure questionnaire questions ....................................................... 91
Table 6 : IT Applications questionnaire questions ....................................................................... 92
Table 7 : IT Personnel questionnaire questions ............................................................................ 93
Table 8 : Performance questionnaire questions ............................................................................ 94
Table 9 : Shows Likert Scale ........................................................................................................ 95
Table 10 : Distribution of Means according to the hierarchy used in the Research Tool ............. 96
Table 11 : Correlation coefficients between each statement of the first Part (IT Infrastructure)
and the total score of Part.............................................................................................................. 99
Table 12 : Correlation coefficients between each statement of the second Part (IT Applications)
and the total score of Part............................................................................................................ 100
Table 13 : Correlation coefficients between each statement of the third Part (IT Personnel) and
the total score of Part .................................................................................................................. 101
Table 14 : Correlation coefficients between each statement of the Forth Part (Performance) and
the total score of Part .................................................................................................................. 102
Table 15 : Calculating the correlation coefficient and significance level shows each of Parts with
the total score of the questionnaire statements ........................................................................... 103
Table 16 : Reliability coefficients for Parts of study Cronbach's alpha coefficient Method ...... 104
Table 17 : Split-half Coefficient method .................................................................................... 105
Table 18 : The Gender Distribution of the sample ..................................................................... 106
Table 19 : The Age Distribution of the sample........................................................................... 108
Table 20 : The Qualification Distribution of the sample ............................................................ 111
Table 21 : The Managerial Level Distribution of the sample ..................................................... 113
Table 22 : Analyzing the statements of the IT Network Infrastructure ...................................... 115
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Table 23 : Analyzing IT Network Infrastructure in Low Performance sample .......................... 116
Table 24 : Analyzing IT Network Infrastructure in Medium Performance Sample .................. 117
Table 25 : Analyzing IT Network Infrastructure in High Performance Sample ........................ 119
Table 26 : Analyzing IT Network Infrastructure in the Entire Sample ...................................... 121
Table 27 : IT Network infrastructure comparison in all performance categories ....................... 123
Table 28 : Analyzing the statements of the IT Applications ...................................................... 124
Table 29 : Analyzing IT Applications in Low Performance Sample .......................................... 125
Table 30 : Analyzing IT Applications in Medium Performance Sample ................................... 126
Table 31 : Analyzing IT Applications in High Performance Sample ......................................... 128
Table 32 : Analyzing IT Applications in Entire Sample ............................................................. 130
Table 33 : IT Applications comparison in all performance categories ....................................... 132
Table 34 : Analyzing the statements of the IT Personnel ........................................................... 133
Table 35 : Analyzing IT Personnel in Low Performance Sample .............................................. 134
Table 36 : Analyzing IT Personnel in Medium Performance Sample ........................................ 136
Table 37 : Analyzing IT Personnel in High Performance Sample .............................................. 137
Table 38 : Analyzing IT Personnel in the Entire Sample ........................................................... 139
Table 39 : IT Personnel comparison in all performance categories............................................ 141
Table 40 : Analyzing the statements of the Organization Performance ..................................... 142
Table 41 : Analyzing the Performance in Low Performance Sample ........................................ 142
Table 42 : Analyzing the Performance in Medium Performance Companies ............................ 143
Table 43 : Analyzing the Performance in High Performance Companies .................................. 144
Table 44 : Analyzing The Performance in Entire Sample .......................................................... 146
Table 45 : Performance comparison in all companies’ performance categories ........................ 147
Table 46 : Comparison between all parts’ Mean in all companies categories ............................ 148
Table 47 : Correlation between IT Components & performance in high organizational
performance ................................................................................................................................ 149
Table 48 : Correlation between IT Components & performance in Medium organizational
performance ................................................................................................................................ 151
Table 49 : Correlation between IT Components & Performance in Low organizational
performance ................................................................................................................................ 153
Table 50 : Correlation between IT Components & organizational performance........................ 155
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Table 51 : Correlation between IT Network infrastracture and orgnizational performance ...... 156
Table 52 : ANOVA test for IT Network Infrastructure .............................................................. 157
Table 53 : Coefficients table for IT Network Infrastructure ....................................................... 158
Table 54 : Correlation between IT Applications and orgnizational performance ...................... 159
Table 55 : ANOVA test for IT Applications .............................................................................. 160
Table 56 : Coefficients table for IT Applications ....................................................................... 161
Table 57 : Correlation between IT Personnel and organizational performance ......................... 162
Table 58 : ANOVA Test for IT Personnel .................................................................................. 163
Table 59 : Coefficients table for IT Personnel ............................................................................ 164
10
List of Figures
Figure 1 : Research Variables ....................................................................................................... 22
Figure 2 : Oil & Gas Holding Companies in Egypt ...................................................................... 25
Figure 3 : Interdisciplinary nature of IT research () ...................................................................... 33
Figure 4 : A conceptual model of the relationship between information technology and
organizational characteristics applied from Yap (1986 pp.67). .................................................... 37
Figure 5 : Connection between the organization, IT infrastructure, and business capabilities () .. 38
Figure 6 : The Framework of Information Technology Human Resources Plan() ........................ 48
Figure 7 : ROI ( Cost & Benefits) ................................................................................................. 68
Figure 8 : IT ROI Categories ........................................................................................................ 69
Figure 9 : Egyptian Petroleum Sector ........................................................................................... 81
Figure 10 : The Gender Distribution of the sample .................................................................... 106
Figure 11 : The Age Distribution of the sample ......................................................................... 108
Figure 12 : The Qualification Distribution of the sample ........................................................... 111
Figure 13 : The Managerial Level Distribution of the sample.................................................... 113
Figure 14 : IT Network infrastructure comparison in all performance categories ..................... 123
Figure 15 : IT Applications comparison in all performance categories ...................................... 132
Figure 16 : IT Personnel comparison in all performance categories .......................................... 141
Figure 17 : Performance comparison in all companies’ performance categories ....................... 147
Figure 18 : Comparison between all parts’ Mean in all companies categories .......................... 148
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Chapter (1): Study Framework
12
Introduction
Information technology has become an essential part of any business and
competitive advantage that can change the business structure. This observation was
one of the motives for this study.
The information has become as lifeblood for business and its decisions, and the
organizations do their best to enhance the role of Information technology to
increase its performance and to keep life among its competitors in the market.
The objective of information technology in an organization is to provide the
management, managers and stakeholders with information for more precise
planning, foresting, monitoring and controlling of business. More so, the use of
powerful computer software and network information systems have helped
organizations to become more flexible, removing layers of redundant management
functions, separate work from location and also restraining work flows.
The impact of information technology goes beyond a small service department
in organization and becomes a part of the business chain.IT Management moves
from back office to the front office and participate in the strategic planning for the
organization.
Moreover, Information technology improves the relationship between vendors
and customers and enables the delivery of services more directly, more rapidly,
and electronically to customers.
Information technology also provide important communications and
collaboration tools, which support core organizational functions such as inventory
control, purchasing, workflow management, human resource management, data
management, and operations.
New Information technology continues to improve communications, access to
business information, and our ability to analyze and use of business information.
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Information technology is no longer a tool to support back office transactions but
has begun to affect how businesses organize, do business and compete.
The aim of this study is to declare the impact of information technology (IT)
on Oil & Gas companies in Egypt. According to this aim, the researcher reviewed
the related literature and after developing a research model and hypotheses, the
researcher made numerous analyses.
The data of this research obtained from a sample of six Oil & Gas Companies in
Egypt selected depending on the performance according to (Accountability State
Authority) concerning the ROIs for these companies from (2010 to 2015) as the
following:
Two high performance companies
Two medium performance companies
Two low performance companies.
14
Research Problem
There is a debate in the role of information technology departments, Some
companies deals with their information technology departments as a profit center
whereas other companies deals with IT as a cost center.
This debate in the perception of the role of information technology is shown
clearly in Oil & Gas companies in Egypt, and may affect the investment in
information technology.
Several studies have examined the impact of IT, and their findings have been
inconsistent. While Loveman (2001) found no evidence on performance increase
from IT investments; Weill (1990) found that transactional IT investments had a
positive impact on firm performance but strategic IT or informational IT did not.
Pourmirza (2006) found that IT labor produced substantial high returns in
organizational performance but IT capital did not.
This research seeks to investigate the true role of information technology
and its impact on the Oil & Gas companies’ performance in Egypt.
15
Previous studies
The most important recent studies on the impact of information technology
(IT) on organizational performance are discussed in the following table:
Table 1 : Important studies about IT and organizational
Studies Sector Countries
studied Sample Findings
Daniel
Kinuthia
Wanjiru
(2014)1
Oil
& G
as
Kenya
A sample size is a
set of entities drawn
from a population
with the aim of
estimating
characteristics of the
population (Kothari,
2004). The sample
size for this study
was 45 respondents
which was
equivalent to 15%
staff working at
Total Kenya limited.
According to
Mugenda &
Mugenda, (2003), a
representative
sample is one that is
at least 10%-20% of
the total population
An important research finding is that
the impact of ICT adoption on
procurement processes mainly refers
to time reductions and quality
improvements, rather than cost
reductions.
We found that company is likely to
realize improvements in cycle time
reductions and process quality. In
terms of ICT adaptability, this study
found that the company has not
adopted more complicated e-business
applications .From the study it is also
clear that the adoption of ICT
applications is not exclusively a matter
of resources. On the contrary,
operational compatibility and the level
of collaboration are two of the factors
that play a determinant role in
increased ICT adoption and impact
(
1 ) Daniel Kinuthia Wanjiru " Effects of Information Communication Technology Adoption on
Procurement Process in Kenya’s Oil Industry: A Survey of Total Kenya Limited Mombasa County "
Jomo Kenyatta University of Agriculture and Technology, Kenya
16
Studies Sector Countries
studied Sample Findings
Dr.
MINWER
M. AL-
ADWAN
(2012)1
Ind
ust
rial
com
pan
ies
Jordan
The research
population consists
of the managers of
the three levels in
the companies in
Jordan qualified
industry zones
(QIZ).
A sample of ( 128 )
had been chosen
randomly
The sample of the study shows the
importance of the use of information
technology in business organizations
and was effective more than efficiency
for multiple benefits.
The Infrastructure of applying
Information Technology is available
and it is sufficient for the use of
information technology, and explains
it to significantly increasing reliance
on the use of modern techniques in all
areas of work.
YUCONG
LIU
(2012)2
Indust
rial
com
pan
ies
USA Data collected for 26
companies across 19
industries
The results of this study clearly indicate
that IT can both directly and indirectly
contribute to firm performance. It is just
a matter of how and where to use IT
resources for business
(
1) Minwer M. Al-Adwan "Evaluation The Role Of Information Technology In Business Value
Performance (Bvp) " King Abdul-Aziz University-College Of Business At Rabigh Cob P. O. Box 344,
Rabigh,21911,Saudi-Arabia
(2) Yucong Liu " Business Value Of Information Technology In Network Environments" University Of
Kansas
17
Studies Sector Countries
studied Sample Findings
Dr.
Nathaniel
C. Ozigbo
(2012)1
Oil
& G
as
Nigeria
The sample size for
the study was
rounded to three
hundred and eighty
six respondents.
Also, the researcher
adopted simple
random technique
where each member
of the respondents
had the same chance
of selection.
This study provided an empirical
evidence that the adoption of ICTs in
the management of Nigerian Oil and
Gas Industry were very beneficial
found that the staff of the industry
needed additional training in
information technology
The study found that technology
acquisition mechanisms could best
assist the Nigerian oil and gas industry
to achieve sustained development
Robert
(2011)2
Ser
vic
es U
tili
ty
Kenya
60 staff (Human
Resources
Directorate NCWSC
2011)
It was clear that majority agreed that
IT has enhanced the company revenue.
The observations showed that
investments in IT substantially
increased the average organizational
performance of companies, since 2007
when NCWSC embarked
on an IT development strategy various
milestones have been achieved and the
company
Overall revenue improving.
(
1 ) Nathaniel C. Ozigbo "The Adoption of Information and Communication Technologies in the
Management of Nigerian Oil and Gas Industry” department of Business Administration University of
Abuja Abuja, Nigeria. [email protected]
(2) Robert Kibui Gakuo, "Impact of Information and Communication Technology Investment on
Organizational Performance: A case study of Nairobi Water Company", Master thesis, Faculty of
Information Technology, Strathmore University, Nairobi, Kenya, 2011.
18
Studies Sector Countries
studied Sample Findings
Yuan Niu
(2010)1
Indust
rial
com
pan
ies
USA
Data were collected
using an online
survey over a five-
month period. The
survey
was distributed to
supply chain
professionals with
the assistance of two
supply chain
professional
associations – the
Association for
Operations
Management
(APICS) and the
Institute for Supply
Management (ISM)
IT impacts firm and supply chain
Performance by enabling them to
marshal other organizational
resources. Taking a
knowledge perspective, this
dissertation shows that relational
capability and knowledge
management capability are critical for
IT to bring performance gains to the
supply chain
Muhamma
d Shaukat, et al.,
(2009) 2 B
ankin
g
Pakistan
surveys of 48
companies (24
manufacturing and
24 banking)
IT has positive impact on
organizational performance of all the
organizations but the banking sector
performance outstrips the performance
of manufacturing sector.
(
1 ) Yuan Niu " The Impact Of Information Technology On Supply Chain Performance: A Knowledge
Management Perspective"University Of North Carolina At Charlotte In Partial Fulfillment Of The
Requirements For The Degree Of Doctor Of Philosophy In Information Technology
(2)Muhammad Shaukat, Muhammad Zafarullah and Rana Abdul Wajid" Impact of Information
Technology on Organizational Performance: A Comparative Quantitative Analysis of Pakistan’s Banking
and Manufacturing Sectors", European Journal of Economics, Finance and Administrative Sciences ISSN
1450-2887 Issue 16 , 2009.
19
Studies Sector Countries
studied Sample Findings
Parham
Jafari
Moghadam
Fard
(2008)1
Dis
trib
uti
on C
om
pan
ies
Iran
Data gathering was
performed in 135
distribution
companies and their
branches in Iran.
Total number of
distributed
questionnaire was
equal to 286
Outcomes of this research confirm the
moderating impact of organizational
infrastructures as information
technology complementary in the
association between
IT and company performance
Companies can benefit from better
performance of IT solution by setting
additional emphasis on their
organizational infrastructure like
training, authorizing,
decentralization and applying novel
technologies
IT applications can be further effective
if companies offer superior
infrastructures for IT prior to
implementation and prior to adoption of
information technologies.
(
1) Parham Jafari Moghadam Fard" A Process-Oriented Perspective On Evaluation Of The Impact Of
Information Technology On Distribution Company Performance In View Of Organizational
Infrastructures" Luleå University Of Technology Department Of Business, Administration, Technology
And Social Sciences
20
Based on this review and align with aforementioned views, term information
technology will cover wide range of information processing and computer
application in organizations. It will cover systems of information, Internet,
information and communication related technologies, and their infrastructure
including computer softwares, networks and hardwares, which processes or
transmit information to enhance the effectiveness of individuals and organizations.
However, term information technology also includes any computer application and
required packages of hardwares, Computer Aided Manufacturing, Computer Aided
Design, Electronic Data Interchange and Enterprise Resource planning that
positively affects the productivity of cooperation.
According to previous studies the most important components of information
technology are the following:
IT Network Infrastructure
(Network, Communication and Data Center)
IT Applications
(HR System, Financial System, Petro-Technical Applications, SAP, Oracle
Financial and any ERP)
IT Personnel
(IT Managers, Helpdesk, Systems administrators, programmer and
computers engineers)
21
Research objectives
1. The important objective is to answers the following research questions:
"What's the impact of IT Network infrastructure on organizational
performance in Oil & Gas companies in Egypt?"
"What's the impact of IT Applications on organizational performance in Oil
& Gas companies in Egypt?"
"What's the impact of IT Personnel on organizational performance in Oil &
Gas companies in Egypt?"
2. The general objective of this study is to analyze the role of Information
Technology in enhancing the performance of Oil & Gas companies in Egypt.
3. Also the research aims to solve the conflict of the Information Technology
perception in Oil & Gas companies in Egypt.
22
Research Hypotheses
H01: There is no significant impact of IT Network infrastructure on the
performance of Oil & Gas companies in Egypt
H11: There is significant impact of IT Network infrastructure on the performance
of Oil & Gas companies in Egypt
H02: There is no significant impact of IT Applications on the performance of Oil
& Gas companies in Egypt
H12: There is significant impact of IT Applications on the performance of Oil &
Gas companies in Egypt
H03: There is no significant impact of IT Personnel on the performance of Oil &
Gas companies in Egypt
H13: There is significant impact of IT Personnel on the performance of Oil & Gas
companies in Egypt
Research Variables
Dependent Variable: Organizational performance
Independent variable: IT Network Infrastructure, IT Applications and IT Personnel
IT Network
Infrastructure
IT Applications
IT Personnel
Organization Performance
Figure 1 : Research Variables
23
Research Methodology
Instruments
Validated and reliable questionnaire used to measure the practical
impact of IT Network infrastructure, IT Applications and IT Personnel on
various oil & gas companies’ performance.
The questionnaire contains 29 questions; every question must have a
meaning related to this study.
The questions are divided into 4 parts as the following:
7 questions to measure the IT Network Infrastructure
9 questions to measure the IT Applications
9 questions to measure the IT Personnel
4 questions to measure the impact of information technology on
companies’ performance
The questionnaire is using with a 5-point Likert scale as following:
(1)Strongly Disagree
(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
24
Population and Sampling
A stratified random sample had been considered for collecting the
data. The study applied on Oil & Gas companies in Egypt.
Three strata had been considered according to the level of the
companies ’performance in Oil & Gas sector which are listed as high,
medium and low performance according to (Accountability State Authority)
concerning the ROIs for these companies from 2010 to 2015
Data Collection
Primary data had been collected through answering a questionnaire that will
be spread among (6) Oil & Gas companies with different performance
according to Accountability State Authority report concerning the ROIs for
these companies from 2010 to 2015
(2) companies with high performance
(2) companies with medium performance
(2) companies with low performance
The questionnaire had been answered by middle, senior and top managers in
each of these companies in order to evaluate their organization's information
technology level
The information technology staff was prohibited to participate in answering
this questionnaire
25
Research Limitations
1. The research applied for the companies which are owned by the following Oil
& Gas Holding companies:
The Egyptian General Petroleum Corporation “EGPC”
The Egyptian Natural Gas Holding Company “EGAS”
The Egyptian Petrochemicals Holding Company “ECHAM”
Ganoub El-Wadi Holding Company “GANOPE”
The Egyptian Mineral Resources Authority. “EMRA”
Figure 2 : Oil & Gas Holding Companies in Egypt
Petroleum Minister
EGPC
ECHAM
GANOPE EGAS
EMRA
26
The selected companies are depending on the performance as following:
Two high performance companies
Two medium performance companies
Two low performance companies.
The research is not including the Oil & Gas Production companies.
2. Due to the data confidentiality in this sector the researcher faced a problem in
data collection as the following:
Lack of accessibility to data because most of the data are confidential
Lack of cooperation from the company’s management and staff.
However those limitations was overcame by creating an official letter from
University to the ministry of petroleum to facilitate the data collection
Also the researcher has 20 years’ experience in oil & gas companies, this
experience facilitated the data collection process
3. Moreover, to avoid biased attention; the information technology staff in the
selected companies was prohibited to participate in answering the research
questionnaire.
4. The research applied for the most important Information technology
components as the following
IT Network Infrastructure
IT Applications
IT Personnel
The research is not including the other components of information
technology.
27
Chapter (2): Theoretical Framework
28
Introduction:
Information Technology deals with large collections of hardware and
software solutions that enable organizations to gather, organize, and analyze data
that helps them achieve their goals. It deals with how technology is used in the
workflow processes in organizations to deliver services that generate revenues. As
the IT industry evolves to meet the technology demands of today’s workplace,
different challenges are arising and IT professionals try to meet these challenges.
Information technology is a nascent field that emerged by the end of the last
century when our society experienced rapid changes from an industrial society to
an “information society.” Since its inception, computing has become the defining
technology of the age, changing how people live and work. Computers became
part and parcel of modern culture and the primary force behind much of the world's
economic and social change.
Information technology has been evolving at an increasingly rapid rate as
there are many rapid changes that took place in the businesses environment that led
to the transition from the era of industrial revolution to the information age. This
caused the businesses environment to face many laws of competition and the need
to respond rapidly to the changes taking place in the market. While businesses
continue to increase investment in information technologies (IT), it is becoming
increasingly important to study the effect of technology on the labor market.
Information technologies aims at reducing the number of middle class jobs
and increasing those for highly skilled workers and this is why there is an
increased need for highly skilled workers. So, every day work, communication,
29
information gathering, and decision making all rely on information technology (IT)
(1).
The common rule of thumb that expresses this rate of growth is known as
Moore’s Law. Moore’s law states that the number of transistors in a dense
integrated circuit doubles approximately every two years(2)
. Recently, this is used
to indicate that the processing power of computers is doubling almost every two
years. Therefore, businesses have begun to realize the tremendous impact
information technologies can have on their operations.
Historical Overview of IT:
As businesses increase investment in Information Technology, it is
becoming increasingly important to analyze the impact of IT investment on the
labor market. Traditional areas of IT like television, radio, computers, and mobile
devices have been a constant factor in the development of theories on
technological unemployment in the 21st century. However, emerging fields of IT
like machine learning, artificial intelligence and the need to enjoy a great deal of
knowledge about IT make people more concerned with the potential effect of
technology in the near future, especially in relation to their works(3)
.
(1) Wil van der Aalst and Christian Stahi,"Modeling Business Processes: A Petri Net-Oriented
Approach", The MIT Press, Cambridge, Massachusetts, London, England, 2011. P. 1.
(2) Raul Rojas, "Gordon Moore and His Law: Numerical Methods to the Rescue ", Documenta
Mathematica. Extra Volume ISMP (2012) 401–415, p. 401.
(3) Davis Craig, "The Impact of Information and Communication Technologies on Employment, Wages,
& Profits", Master Thesis, the College of New Jersey, 2015, p. 1.
30
Moore’s Law (1):
By the late 1980’s desktop workstations and personal computers were used
on a large scale in many organizations to carry out the computing operations (2)
.
However, as the personal computer became more powerful and more connected, it
became more complex to administer, and the demand for people who could “make
things work” in a networked microcomputer environment escalated. This led to a
revolution with the appearance of Web browsers and the resulting explosion of the
World Wide Web. Computers became the usable communication device that
connected the entire world, so, Web browsers necessitated for everyone in society
to use it.
As Web sites became more active and interactive, the demand for
application developers and especially database developers expanded as well. The
field continues to evolve at an astonishing pace. The rapid evolution of the
discipline has a profound effect on Information Technology in all its forms.
Today, networking and the Web have become the underpinnings for much of
our economy. They have become critical foundations of Information Technology.
Modern networking technology enhances everyone's ability to communicate and
gives people throughout the world unprecedented access to information.
Much of the change that affects information technology comes from
advances in technology. In the last decade there have been unprecedented
innovations in technologies for communication, computation, interactivity, and
(1) Brynjolfsson, E., & McAfee, A. "Race Against the Machine. Lexington, Massachusetts: Digital
Frontier Press", 2012.
(2) Paul Grefen "Advanced Information Technology in Office Environments A Contemporary
Introduction to Office Automation", University of Twente, Enschede, Netherlands, 2001 Edition, p.
13.
31
delivery of information. Over the last ten years the world has changed dramatically
both in how people work and live.
Importance of ITs Definition Information Technologies (ITs):
Table 2 : Definitions of Information Technology from the perspective of Management
Information Science
Author Definition
Davis
(1991) (1)
“The systems [Information Technology] is an integrated,
user/machine system providing information and
information processing to support the strategy, operations,
management, analysis, and decision making functions in an
organization.”
Orlikowski
(1992a) (2)
"The structurational model of technology comprises the
following components:
(i) human agents−technology designers, user, and
decision-makers,
(ii) technology−materials artifacts mediating task
execution in the workplace, and
(iii) (iii) institutional properties of organizations,
including organizational dimensions such as
structural arrangements, business strategies,
ideology, culture, control mechanisms, standards
operating procedures, division of labor, expertise,
communication patterns, as well as environmental
pressures such as government regulation,
competitive forces, vendor strategies, professional
norms, state of knowledge about technology, and
socio/economic conditions.
Rodriguez & “The meaning of information technology is almost
universally understood. It comprises all the technological
(
1) Donaldson, L., & Davis, J. H. 1991. Stewardship theory or agency theory: CEO governance and
shareholder returns. Australian Journal of Management, 16(1): 49-64. P. 7.
(2) ORLIKOWSKI, W. J. The duality of technology: rethinking the concept of technology in
organizations. Organization Science, v. 3, n. 3, p. 398-427, 1992, p. 409.
32
Ferrante
(1996) (1)
factors for storage, manipulation, and retrieval of data,
which are thus transformed into information which is
useful to society.”
Morath &
Schmidt
(1999) (2)
IT includes hard components (for example, computers, fax
machines, cellular phones), hard/soft components (for
example, Internet, intranet, network and video-
conferencing systems, virtual reality) and soft components
(for example, group ware, EDI programs, learning
management systems, groupware.
Hellrigel, Dan
& et. al.
(2001) (3)
It may be also defined as "the tools, procedures, methods,
techniques, machinery, machines used to convert the
organization inputs (materials, information, and ideas) into
outputs (goods and services)
Since information technology (IT) influences many areas, many scientific
disciplines study issues related to IT, and therefore many researches were carried
out on such a discipline and each of these areas defined it from its own perspective,
focusing upon certain features relevant to them. Figure (1) illustrates some
disciplines that conduct IT research.
(1) Rodriguez, M.V.R., & Ferrante, A.J. (1996). Information technology for the 21st century: managing
the change. Southampton, UK: Computational Mechanics. P. 3.
(2) Morath, F., & Schmidt; A., (1999). Management of Knowledge as Interface Management - From exo-
words to endo-worlds. In Jacksson P. (Ed.). Virtual Working Social and Organizational dynamics,
Vol. 12. pp 193–205.
(3) Hellrigel, Dan & Slocum, J.W.& Woodman, R., "Organization Behavior",9th ed., South Western
College Publishing, 2001, p. 393 .
33
Figure 3 : Interdisciplinary nature of IT research (1)
Thus, it can be said that IT research combine theories or methods from other
disciplines.
Role of Information Technology:
Information technology (IT) has become a vital and integral part of every
business plan from multi-national corporations that have mainframe systems and
databases to small businesses that have a single computer. IT has dramatically
changed the lives of the individuals and organizations. Currently online shopping,
digital marketing, social networking, digital communication and cloud computing
etc. are the best examples of change which came through the wave of information
(1) Raquel Flodström, "A Framework for the Strategic Management of Information Technology",
Swedish Research School of Management and Information Technology (MIT), 2006, p. 63.
Computer
Science IT research
34
technology. Now accurate business planning, effective marketing, global sales,
systematic management, real time monitoring, instant customer support and long
term business growth cannot be achieved at the optimum level without IT(1).
Information technology plays a vital role in different phases of business
including the decision making, marketing, customer support and satisfaction,
resource management and globalization.
1- Decision Making:
Every successful organization has to do a comprehensive market research
process which enables its management to make the right decision. This market
research can be done by gathering and analyzing information utilizing the tools of IT
such as online surveys, forums, blogs, group discussions using the internet and the
traditional means as in-person interviews as well. Currently Big data, Google
Analytics and Microsoft CRM Dynamics are also great tools to extract useful
information which can impact on decision making. These online tools not only
provide real time responses from the potential audience but also ensure the accuracy
of data by minimizing the risk of human errors(2).
2- Marketing and Business Growth:
Any business success lies in its marketing as the management has to identify
its target audience first and then observe their trends and needs to be able to handle
the transaction well. The overall marketing covers public relation, advertising,
promotion and sales which subsequently impact on business growth. Many types
of marketing can help you reach your potential customers especially the digital
Marketing that promotes products or services all over the world. Currently web
(1) https://www.linkedin.com/pulse/role-information-technology-business-success-abid-afzal-butt.
(2) Hsinchun Chen & Roger H. L. Chiang & Veda C. Storey, "Business Intelligence and Analytics: from
Big Data to Big Impact", MIS Quarterly Vol. 36 No. 4, pp. 1165-1188/December 2012. P. 1167.
35
market is booming at a very fast pace because most of the entrepreneurs have
understood that the long term success in business is not possible without digital
presence on the internet. Millions of new marketing websites are being added on
the internet yearly (1).
3- Customer Support and Satisfaction:
Higher level of customer satisfaction is the key to success, so business
success depends on knowing its customers' needs, trends, behaviors and
satisfaction level. Effective communication is the best tool to understand the
customer demands, problems and their solutions. This is achieved by the Internet
Technology that has enabled communicating with millions of potential or existing
customer in the real time. Innovative organizations use customer relationship
management systems (CRM) to hold valuable data for understanding customer
behaviors and future needs.
4- Resource Management and Globalization:
Resource management plays a crucial role in business success. Information
technology has played a vital role in automating the organizational resources
complex problems by introducing user friendly solutions. A decade ago, most of the
resource management solutions were desktop based, but the internet and cloud
technology enabled software engineers to introduce cloud based ERP (Enterprise
Resource Planning) solutions. Now, the managers can manage or monitor their
organizational resources virtually anywhere in the world by using their personal
computer, laptops, tablets or Smartphone. This concept has introduced the idea of
globalization. Most of multinational companies (Microsoft, Google, Amazon,
(1) Ibid. P. 1169.
36
McDonalds etc) in the world use these cloud based solutions to manage their virtual or
physical offices and staff worldwide(1).
IT Factors:
There are many factors affecting the use of IT in organizations. These
factors can be found in the internal and external environment of organizations.
Factors from the internal environment are divided into 2 groups: characteristics of
managers and their attitudes towards adoption of IT, IT knowledge and innovation
as well as the organizational characteristics such as business size, organizational
structure and organizational culture. General factors from the external environment
are political, economic, social, and infrastructure. Each of these will be dealt with
in the following.
Yap (1986) (2) explains that it is difficult to establish the true relationship
between information technology and organizations. The following Figure (2)
illustrated that the organizational factors may determine the use of information
technology or the use of information technology may influence the organization, or
some combination of both. Knowledge of the underlying organizational factors
affecting the use of information and the impact of information technology on
organizations identifies the way in which organizations benefit from information
technology(3).
(1) http://smallbusiness.chron.com/information-technology-its-role-modern-organization-1800.html.
(2) Yap, C.S. (1986). Information Technology in Organizations in the service sector. PhD thesis,
University of Cambridge.
(3) Chieochan O., Lindley D. and Dunn T., " Factors Affecting the Use of Information Technology in
Thai Agricultural Cooperatives : A Work in Progress", The Electronic Journal on Information Systems
in Developing Countries, EJISDC (2000) 2, 1, 1-15, p. 3.
37
Figure 4 : A conceptual model of the relationship between information technology and
organizational characteristics applied from Yap (1986 pp.67).
There are many theories and models used to explain the inter-relationship
between the information technology and organizations. Some of these included the
models set by Robey & Zmud (1992) (1) and these can be seen as follows:
1) The political conflict model, which introduces the concept of multiple
objectives, held by different interest groups or stakeholders.
2) The organizational ecology model, which views organizational form as a
result of external controls rather than proceeding from the decisions
or preferences of organizational members.
3) The managerial innovation model, which argue that the adoption of new
technology depends on awareness of problems and organizational culture that
encourage risk-taking.
4) The diffusion of innovations model, which argues that the spread of new
technology depends on their application to the with work context.
(1) Robey, D & Zmud, R. (1992). Research on the Organization of End-User Computing:
Theoretical Perspectives from Organization Science, Information Technology & People, 6, 1, 11-27.
Information
Technology Organizations
Affect the use of
Impacts upon
38
IT Infrastructure:
IT infrastructure refers to the composite hardware, software, network
resources and services required for the existence, operation and management of an
enterprise IT environment. It allows an organization to deliver IT solutions and
services to its employees, partners and/or customers and is usually internal to an
organization and deployed within owned facilities. Therefore, IT infrastructure
consists of all components that somehow play a role in overall IT and IT-enabled
operations. It can be used for internal business operations or developing customer
IT or business solutions(1).
Figure 5 : Connection between the organization, IT infrastructure, and business capabilities (2)
(1) Efrain Turban, "Information Technology Infrastructure, part II, 2015, P.134.
(2) Ibid, P.134.
Customer
Services
Supplier
Services
IT Services
and
Infrastructur
e
Information
Technology
IT Strategy
Business
Strategy
39
Components of Information Technology:
The information technology is defined as the broad umbrella that includes
information technology, data processing, communication systems and other.
The following is an explanation of the components of the information and
communication technology:
1- Hardware:
Hardware is defined as the physical part of the information technology of
computers and devices attached to it to perform the required tasks.
a. PC’s
A personal computer (PC) is a general-purpose computer whose size,
capabilities, and original sale price make it useful for individuals, and is intended
to be operated directly by an end-user. Within a few years, the personal computer
became an integral part of every office. Networked with the organization's
mainframes and departmental computers, it became part of the technology
infrastructure of every company. Eventually, the personal computer became a part
and parcel appliance in nearly every home in the developed world.
b. Servers
A server is a computer program or a device that provides functionality for
other programs or devices, called "clients". Servers can provide various
functionalities, often called "services", such as sharing data or resources among
multiple clients, or performing computation for a client. A single server can serve
multiple clients, and a single client can use multiple servers. A client process may
run on the same device or may connect over a network to a server on a different
40
device (1). Typical servers are database servers, file servers, mail servers, print
servers, web servers, game servers, and application servers(2).
2- Network:
A computer network is a group of computer systems and other computing
hardware devices connected together through communication channels to facilitate
communication and resource-sharing among a wide range of users. Networks are
commonly categorized based on their characteristics (3)
.
LAN (Local Area Network) - a small network that physically connects
nearby computers (computers within the firm, organization, or a household).
Devices interconnected within an area of 1000m2, which is the generally accepted
maximum size for a LAN, are considered to be in a local area network (LAN) (4)
.
Low latency and high bandwidth are typically properties which describe a local
area Network(5)
. Local area network technologies include for example Ethernet and
the newly emerging Gigabit Ethernet. In addition, there is also the Wireless local
area network (WLAN) technologies in addition to some new technologies that will
(1) Windows Server Administration Fundamentals. Microsoft Official Academic Course. 111 River
Street, Hoboken, NJ 07030: John Wiley & Sons. 2011. pp. 2–3. ISBN 978-0-470-90182-3.
(2) Comer, Douglas E.; Stevens, David L. (1993). Vol III: Client-Server Programming and Applications.
Internetworking with TCP/IP. Department of Computer Sciences, Purdue University, West Lafayette,
IN 479: Prentice Hall. pp. 11d. ISBN 0-13-474222-2.
(3) Stig Jarle Fjeldbo, "Administration of Remote Computer Networks", Master thesis, OSLO University
College, Department of Computer Science, May 23, 2005.
(4)Kevin Hamilton Kennedy Clark. Cisco LAN Switching (CCIE Professional Development). Cisco
Press, 1999.
(5) Annabel Z. Dodd. The Essential Guide to Telecommunications, Second Edition. Prentice Hall PTR,
1999.
41
provide a wider range, higher bandwidth, increased security and quality of
service(1)
.
WAN (Wide Area Network) - a larger network that covers a city or a
region. It is a computer network covering a wide geographical area, and are used to
connect local area networks together. They can be built to connect several private
local area networks in an organization, or built by Internet service providers to
provide an organization access to the Internet(2)
.
Wide area networks are typically built of leased lines, where a router
connects the local area network to the private wide area network(3)
. An alternative
is to use the Internet, which provides a shared infrastructure and a high speed wide
area network. Virtual private networks (VPNs) can use encryption and other
techniques to make the connection secure and private(4)
.
3- Internet:
The Federal Networking Council (FNC) defined the "Internet" as the global
information system that is logically linked together by a globally unique address
space based on the Internet Protocol or its subsequent extensions. It is able to
support communications using the Transmission Control Protocol/Internet Protocol
(TCP/IP) suite or its subsequent extensions. In addition, it provides uses or high-
(1) Sergio Verdú. Wireless bandwidth in the making. IEEE, 2000..
(2) Andrew S. Tanenbaum. Computer Networks, Fourth Edition. Prentice Hall, 2003.
- Annabel Z. Dodd., Op. cit., 1999.
(3) Gene Spafford Simson Gar_nkel, Alan Schwartz. Practical Unix & Internet Security, 3rd Edition.
O'Reilly, 2003.
(4) Ibid.
42
level services layered on the communications and related infrastructure, either
publicly or privately(1)
.
It consists of a world network of connected computers, connected through
WAN and LAN.
4- Voice Telecommunication
Telecommunications is the science of communicating over a long distance
using telephone or radio technology. This involves using microelectronics,
computer, and PC technologies to transmit, receive, and switch voice, data, and
video communications over different transmission media(2)
.
5- Data centers
They consist of tens of thousands of servers that perform and process many
Internet business applications. They use virtualization to simplify management and
use server resources in a better way.
Internet and business applications are increasingly being moved to large data
centers that hold massive server and storage clusters. Current data centers can
contain tens or hundreds of thousands of servers, and plans are already being made
for data centers holding over a million servers(3)
. Some data centers are built to run
(1) Oliver M. Heckmann, "The Competitive Internet Service Provider: Network Architecture,
Interconnection, Traffic Engineering and Network Design", John Wiley &
Sons, Let,ISBN:0470012935, 2006, p. 47.
(2) http://docplayer.net/1810741-Telecommunications-evolution-and-future.html
(3) Timothy Wood, "Improving Data Center Resource Management, Deployment, and Availability With
Virtualization" Doctor of Philosophy Dissertation, Graduate School of the University of Massachusetts
Amherst, 2011, p.1.
43
applications for a single company, such as the search engine clusters run by
Google. Other data centers are operated by service providers that are able to rent
storage and computation resources to other customers at very low cost due to their
large scale. Cloud computing, which refers to hosting platforms that rent data
center resources to customers, is becoming increasingly popular for running
Internet websites or business applications. virtualization allows for new and better
solutions to existing data center problems by allowing for rapid, flexible resource
provisioning(1)
.
6- Security
Security is the greatest concern for many companies and they rely on their
IT staff to prevent or stop these system breaches. It can be defined as the “freedom
from risk or danger; safety”. (The American Heritage Dictionary) (2)
.
However, when dealing with the computer and networking security, this
definition implies a degree of protection that is difficult to provide in the modern
connectivity-oriented computing environment. Therefore, a more relevant
definition specific to computer science is that security: is “The level to which a
program or device is safe from unauthorized use”. The more accessible the data is,
the less secure it is.
So, any security plan aims at balancing between the two and this is why
security professionals have a language of their own and understanding their
concepts requires learning their jargon.
(1) Ibid.
(2) Debra Littlejohn Shinder and Michael Cross " Scene of the Cybercrime", Syngress Publishing Inc.
2008, p. 507.
44
Therefore, computer security aims at achieving many objectives as
follows(1)
:
Controlling the physical accessibility to computer(s) and/or networks.
Preventing accidental erasure, modification or compromise of data.
Detecting and preventing intentional internal security breaches.
Detecting and preventing unauthorized hacking.
Network security solutions are loosely divided into three categories:
hardware, software and human. Computer security involves many aspects, from
protection of the physical equipment to protection of the electronic bits and bytes
that make up the information that resides on the network. However, despite such a
focus on security, many organizations still implement security measures
haphazardly, with no well-thought-out plan for making all the parts fit together.
Applications of IT:
Information Technology is being applied to facilitate developing various
aspects of society as it is a major force in facilitating the public and private sector
activities, improving the citizens' quality of life, sharing knowledge and improving
access to information.
1- Database:
A database is an organized collection of data(2).It is the collection of
schemas, tables, queries, reports, views and other objects. The data are typically
organized to model aspects of reality in a way that supports processes requiring
information.
(1) Tom Shinder's, "ISA Server 2006 Migration Guide", Syngress Publishing Inc. 2011, p.2.
(2) "Database - Definition of database by Merriam-Webster".merriam-webster.com.
45
The purpose of a database is to help people keep track of things. It does this
by storing data in tables, where each table has rows and columns like those in a
spreadsheet. A database usually has multiple tables. and each table contains data
about a different type of thing. Databases store not only rows of data, but also
relationships among the rows of data. Data are recorded €acts or figures.
Information is knowledge derived from data. Or, using another common definition,
information is data presented in a meaningful context.
Databases store data in tables, and they represent the relationships among
the rows of those tables. They do so in a way that facilitates the production of
information.
There are larger database applications such as those in the CRM. Customer
Resource Management (CRM) is an information system that manages customer
contacts from initial solicitation through acceptance, purchase, continuing
purchase, support, and so forth. CRM systems are used by salespeople, sales
managers, customer service and support staff. and other personnel, A CRM
database in a larger company might have 500 users and 10 million or moreover, in
perhaps 50 or more tables. According to Microsoft. In 2004 Verizon had a SQL
Server customer database that contained more than 15 terabytes of data. If that data
were published in books, a bookshelf 450 miles long would be required to hold
them(1)
.
2- ERP:
Enterprise Resource Planning (ERP) is an information system that can be in
every organization. It includes sales, inventory, production planning, purchasing,
and other business functions(2)
.
(1) http://www2.hawaii.edu/~donnab/lis670/Kroenke_ch1_2006_databases.pdf.
(2) Rouse, Margaret. "ERP (enterprise resource planning)". Tech Target. Retrieved July 14, 2015.
46
ERP system is an integrated information system to support the business
within different organizational parts of an enterprise. The leading global providers
are SAP, Oracle and Microsoft. ERP packages are designed to be customizable to
concrete needs of an organization and to its legacy systems.
Table 3 : ERP Solution Satisfaction/ Benefits Realization (1)
Tier I and tier II ERP Solutions
SAP Oracle Tier II
Industry
Average
Benefits Factor 72.2% 58.0% 68.6% 65.3%
Executive Satisfaction 76.4% 75.9% 67.7% 70.7%
Employee Satisfaction 73.6% 60.3% 76.5% 67.4%
Business Risk factor 50.0% 56.9% 61.8% 54.0%
There is a reason why these company’s declare themselves rivals. SAP has
been developing ERP systems since its creation while Oracle has been expanding
into the ERP market. SAP is show to have more experience with ERP along with a
bigger clientele in the ERP market since it stands in the market the longest out of
the two. Oracle on the other hand has multiple partners thanks to its many ventures
such as middleware. The biggest difference between the two is the need of the
specified company hiring. SAP creates a standard with its many modules and can
be bought in pieces based on need but at the cost of submitting to the standards.
(1) Panorama's 2010 ERP Report.
- Available at http://panorama-consulting.com/2008ERP Report.html
47
While Oracle is customizable and largely less expensive to integrate and deploy
but lacks in scalability for smaller to midsize companies which is a very large
market. It shows that even long standing systems have their drawbacks along with
their strengths.
3- HR Systems:
Organizations nowadays realize the power of information technology (IT)
tools for reaching their business targets, fulfill defined organizational goals and
optimize the work processes as well. The IT tools contributed to the Human
Resources (HR) area by accomplishing their assigned tasks by using the source of
IT capabilities in measuring and tracking the human capital as well as using the
HR information system generally.
Human Resources play an important role in all strategic decisions of the
organization. Human Resources Managers aspire to occupy more strategic position
within the organization to get to the essence of the problem how to manage, to
motivate and to increase the performance of organization. Human Resources
Management (HRM) must aim at achieving the competitiveness of the
organization in the field of HR by means of providing constant educational and
training programs for personal development of employees. It has been scientology
proven that one of the supporting pillars which can contribute to the fulfillment of
the personal policy is the usage of IT technologies in HR(1)
.
Human resource processes should be focused on the strategic objectives.
These strategies are led to prepare an IT strategic plan that in turn translates into an
(1) Seyni Mamoudou & G.P Joshi, "Impact of Information Technology in Human Resources
Management", Global Journal of Business Management and Information Technology. ISSN 2278-
3679 Volume 4, Number 1 (2014), pp. 33-41. P. 34.
48
appropriate human resource strategic plan in the field of IT as the Figure 1
depicts(1)
.
Figure 6 : The Framework of Information Technology Human Resources Plan(2)
(1) Sameni, M.K., Khoshalhan, F. Analysis of Human Resource Development for Information
Technology and E-Commerce in Iran. IT Department, Faculty of Industrial Engineering, K.N.Toosi
University of Technology, Tehran, Iran. 2006.
(2) Ibid, p.1190.
Corporate
strategy
IT strategy
HR Strategy
(Emphasis on
IT)
Short and Middle term
strategies
Long term
strategies
49
4- Financial Systems:
Information technologies are being used to enhance money market mutual
funds, operated by investment companies and securities broker/dealers, permit
shareholders to redeem shares by writing the equivalent of a check(1)
.
Observers pointed out that technology as a key factor responsible for the
rapidity and magnitude of change in the financial service industry.
Banks, depending heavily on information processing and communication
technologies, are beginning to offer securities through discount brokerage
subsidiaries. Banks, credit unions, and savings and loan associations join networks
of automated teller machines that enable account holders to obtain cash 24 hours a
day from machines that are available nationwide. Both securities dealers and banks
have developed systems that allow account holders with personal computers to
transfer funds between accounts, pay bills, and order the purchase and sale of
securities(2)
.
5- Petroleum Applications:
Despite increasing attention to alternative energy sources, the world can’t
forget about oil and gas as it struggles to meet ever-rising demand for clean and
affordable energy. Technology is the most important force to increase the supply of
more challenging oil and gas, and mitigate the environmental impact of energy
production and consumption(3)
. Companies need to develop, deploy and integrate
(1) John H. Gibbons, "Effects of information technology on financial services systems, DIANE
Publishing, 1984, p. 3.
(2) Ibid.
(3) Steve Edwards, Omar Ishaq and Øivind Johnsen, " Oil and Gas 2030", IBM Institute for Business
Value, IBM Global Business Services Executive Report, p.1.
50
strategic production and information technologies to enable key success factors
such as performance management, enterprise risk management, operational
excellence, people management and adaptive business models.
Improving Production and information technologies:
New technologies are vital to efficient exploration, improved recovery and
operating within acceptable health, safety and environmental requirements. The
future technology progress help the operations in petroleum sector in four ways –
the first three relate to production technologies and the fourth is about how to
apply information technologies:
1. Improve exploration of new oil and gas resources
2. Enhance recovery from existing fields in production and operation of more
challenging conventional and unconventional sources
3. Reduce the environmental footprint and risks of different types of oil and
gas production activities
Enhance recovery from existing fields and tap challenging sources
Technological progress and the expectation of persistent rising energy prices have
made unconventional oil and gas sources more attractive and viable. Much of the
supply increase in the recent decade has resulted from improving recovery from
existing large fields thanks to the technology of Improved Oil Recovery (IOR) that
enabled access to dispersed trapped oil and residual low mobile oil. Thus, it can be
said that the use of integrated information technology and advanced IOR
techniques will enable more efficient production and prolong the life of existing
fields(1)
.
(1) Mari Nichols-Haining and Christine Rueter, "Research Portfolio Report Small Producers:
Operations/Improved Recovery", 2015.
51
IT Personnel:
Information Technology (IT) is a broad term that includes all aspects of
managing and processing information and related technologies. Information
technology professionals are responsible for designing, developing, supporting and
managing computer hardware, computer software, and information networks,
including the Internet(1)
.
IT workers are highly specialized in their field. They like what they do and
understand it inside and out. There are two of the most essential skills needed from
IT professionals are teamwork and communication skills. Systems are complex and
people are needed to help translate that task. Therefore, IT professionals are the
ones responsible for helping others get their work done efficiently without the
complex jargon of the technology world.
If a company relies on phones and emails, chances are that there’s an IT
professional behind it all making sure the cogs in the machine function properly.
Here are some of the most popular positions for people interested in Information
Technology:
1- IT Management:
Information technology managers need a technical background as well as
excellent managerial skills. Because they direct the work of other employees, these
individuals require strong interpersonal and communication abilities. Analytical
thinking also is very important as this position often involves problem resolution
and process development. In addition, a strong customer-service orientation is a
(1) Dominic Magut, "Smart Study and Career Selection Handbook" Kenya, ISBN: 978-1-300-32882-7,
2012.
52
must. IT manager should hold a bachelor’s degree in an IT-related field plus
experience with the specific types of business systems, hardware and networking
services utilized by the firm. Demonstrated leadership also is required(1)
.
2- Systems Administrator(2):
An IT Network Systems Administrator works in small or large organizations
in the commercial and public sectors, offering a wide range of IT services which
are critical for the operation of daily business. IT Network Systems Administrator
is responsible for working professionally and interactively with users to meet their
needs and ensure continuance of the systems and service levels they require to
perform their roles effectively.
With the rapid change of IT systems, these IT Network Systems
administrators face rapidly expanding opportunities and challenges. For the
talented IT Network Systems Administrator there are many commercial, public
sector and international opportunities; however, these carry with them the need to
understand and work with diverse cultures, and to keep up to date with fast
changing industry developments. The diversity of skills associated with IT network
systems administration is therefore likely to expand.
3- Programmers(3):
Employees in this job function as information technology professionals,
participating in or overseeing a variety of analytical and programming assignments
(1) Glossary of Job Descriptions for Information Technology, Robert Half Technology 2016 Salary
Guide. P. 23.
(2) Ibid. P. 26.
(3) Glossary of Job Descriptions for Information Technology, Robert Half Technology 2016 Salary
Guide. P. 23.
53
that provide for the development, enhancement, and maintenance of automated
data, voice, or video application programs, application systems, and operating
systems software within mainframe, network, and client server environments.
4- Helpdesk(1):
All help desk personnel need excellent problem-solving, communication and
interpersonal skills, along with patience, a positive, customer-friendly attitude and
the ability to work in a team environment. In addition, they should have a strong
technical understanding of the various hardware, software and networking systems
being supported. Employer requirements depend on the help desk position level.
Tier 1, an entry-level position, normally requires less than two years of work
experience and may require an associate’s degree or completion of coursework at a
technical school. Tier 2 positions typically require two to four years of work
experience and may require a bachelor’s degree, or a two-year degree and
additional, equivalent work experience in a help desk setting. Tier 3 positions often
require four or more years of help desk experience, a bachelor’s degree in
computer science or a related field, and/or professional certification, such as the
Help Desk Institute’s Customer Support Specialist (CSS) or Help Desk Analyst
(HDA), A+ certification or the Microsoft Certified Systems Engineer (MCSE)
designation.
(1) Ibid. p. p. 33 -34.
54
IT impacts organizational characteristics and outcomes:
IT plays a significant role in moderating the relationship between
organizational characteristics including structure, size, learning and Culture
Information technologies encompass a broad array of communication
media and devices which link information systems and people(1)
.
IT promotes collaboration and information sharing both inside and across
organizational boundaries. Huber's ( 1990) (2)
suggested that IT is a variable
that can be used to enhance the quality and timeliness of organizational
intelligence and decision making, thus promoting organizational performance.
Huber's theory treats several organizational characteristics as dependent
variables with IT positioned as the independent variable. In order to offer a
more encompassing view of IT and organizational functioning. we examine
IT as a moderator of the relationship between organizational characteristics
and several organizational outcomes.
(1) Tarabour. R. M., "Building standards-based unified messaging systems Computer Technology
Review 19 (5), 27.56. 1999..
(2) Huber, G. P., "A theory of the effects of advanced information technologies, on organizational
design, intelligence and decision making. Academy of Management Review, 15 (1), 47-71 , 1990.
.
55
IT Characteristics:
IT has some distinct characteristic and the most important of these are as
follows:
(1) Saves Time: it make all places – contiguous electronically.
(2) Save Area: by using the storage means which accommodate huge amount of
saving information which can be accessed easily and smoothly.
(3) Intellectual tasks sharing with the machine: as a result of interaction and
dialogue between the researcher and the system of artificial intelligence,
which makes information technology contributes to the development of
knowledge and strengthen the composition of the users opportunities for
inclusiveness and control in the production process.
(4) The formation of networks as it unites the technological tools in order to
form communication networks, and this increases the flow of information
between users and industrialists, as well as machinery producers. This
allows the exchange of information with the rest of the other activities.
(5) Interactivity: the user of this technology should be a recipient and sender at
the same time. Participants in the communication process can exchange
roles, which allows the creation of a kind of interaction between the
activities.
(6) Timeliness: means the possibility of receiving the message at any time
convenient to the user as users are not required to use the system at the same
time.
(7) Decentralization: enables the independence of information and
communication technology. The Internet, for example can be used in all
conditions as it can't cease working at the level of the whole world at the
same time.
(8) Connectivity: means the possibility of linking the various communication
devices, i.e., regardless of the company or the country of origin.
56
(9) Mobility: as the user can benefit from its services during his/her travels
anywhere by many means of communication via the computer, mobile
phone etc...
(10) Convertibility: the possibility of transferring information from one
medium to another, such as transforming audio message to a printed or
readable message.
(11) Demassification: means the possibility of communicating the message to a
single individual or a particular group, rather than the huge audiences.
(12) Circulation and Dissemination : It is the ability of the network to expand to
include more unlimited space of the world to gain its strength from this
systematic flexible pattern of dissemination.
Advantages of Information Technology:
Information technology has helped in shaping both the business world and
our society in general. Many fields have been impacted by information technology
and these include; education , health , entertainment ,communication just to
mention but a few. The impacts of information technology are profound. As the
world develops, more technology will emerge and this technology will have both
positive and negative impacts. Some of the following points show how information
technology has impacted men's lives.
Globalization:
IT has not only brought the world closer together, but it has allowed the
world's economy to become a single interdependent system. This means that we
can not only share information quickly and efficiently, but we can also bring down
barriers of linguistic and geographic boundaries. The world has developed into a
global village due to the help of information technology allowing countries like
57
Chile and Japan who are not only separated by distance but also by language to
shares ideas and information with each other.
Communication:
With the help of information technology, communication has also become
cheaper, quicker, and more efficient. We can now communicate with anyone
around the globe by simply text messaging them or sending them an email for an
almost instantaneous response. The internet has also opened up face to face direct
communication from different parts of the world thanks to the helps of video
conferencing.
With the help of communication technology tools like phones, video
conferencing , electronic mail, databases just to mention but a few. Movement of
information within an organization or business has become easy and first.
Employees can easily move information across departments without having any
interruptions. Tools like electronic mail , e-fax, mobile phones and text messaging
enhance the movement of information among employees, customers and business
partners or suppliers.
1- Cost Effectiveness and productivity:
It increases production and saves time because of tasks automation. This in
turn increases productivity which ultimately gives rise to profits that means better
pay and less strenuous working conditions.
2- Bridging the cultural gap:
Information technology has helped to bridge the cultural gap by helping people
from different cultures to communicate with one another, and allow for the
exchange of views and ideas, thus increasing awareness and reducing prejudice.
3- More time:
58
IT has made it possible for businesses to be open 24 x7 all over the globe.
This means that a business can be open anytime anywhere, making purchases from
different countries easier and more convenient. It also means that you can have
your goods delivered right to your doorstep with having to move a single muscle.
4- Provide New Job Opportunities:
Probably the best advantage of information technology is the creation of new
and interesting jobs such as computer programmers, Systems analyzers, Hardware
and Software developers and Web designers that constitute some of the many new
employment opportunities created with the help of IT.
Disadvantages of Information Technology:
Although the benefits of information technology make it seem ideal, there
are also some disadvantages of information tech that are listed below.
1- Expense of Implementation and Maintenance:
Setup costs for implementing an information technology system within a home
or business can be very costly. Software can training can also take another big bite out
of the budget. Information technology systems, just like any other equipment, need to
be maintained and repaired from time to time. But there are also updating and
upgrading costs associated with IT systems.
Small businesses fail to afford this expensive technology so they end up
losing their clients to a business which has improved its technology and provides a
better service or product.
2- Unemployment
59
While information technology may have streamlined the business process it
has also created job redundancies, downsizing and outsourcing. This means that a
lot of lower and middle level jobs have been done away with causing more people
to become unemployed.
By implementing IT systems into a company, tasks take less time and
therefore, employees have more time throughout the day. Paperwork is processed
and filed immediately, reports are generated with the touch of a button and
financial statements are generated automatically. Companies are finding that they
can combine jobs and need a smaller staff to operate fully.
3- Privacy:
Though information technology may have made communication quicker,
easier and more convenient, it has also bought along privacy issues. From cell
phone signal interceptions to email hacking, people are now worried about their
once private information becoming public knowledge.
When information is stored electronically, there are more chances of having
security breaches. Hackers are evolving along with technology and they are never up
to any good. Security systems that were state-of-the-art last year are now out-of-date
and in desperate need of upgrading. To protect company data, a security specialist
should be kept on staff.
While information technology is quickly becoming something that we cannot
live without, there are many aspects that keep us on our toes. Trying to stay current on
the changes and be able to afford the upgrades can make a person feel helpless and
confused. But when we understand the different aspects of information technology,
then we can accomplish so much more than without it.
4- Lack of job security:
60
Industry experts believe that the internet has made job security a big issue
as since technology keeps on changing with each day. This means that one has to
be in a constant learning mode, if he or she wishes for their job to be secure.
5- Dominant culture:
While information technology may have made the world a global village, it
has also contributed to one culture dominating another weaker one. For example it
is now argued that US influences how most young teenagers all over the world
now act, dress and behave. Languages too have become overshadowed, with
English becoming the primary mode of communication for business and
everything else.
Thus, it can be said that the Information technology plays vital role in the
world. Many changes have been occurring in society with the IT. There are several
things discuses to consider when information technology starts; this present paper
makes an attempt to: deals with the advantages and disadvantages of information
technology and the essential roles that are being followed in present scenario in
information technology.
61
Definition of Performance:
The accomplishment of a given task measured against preset known
standards of accuracy, completeness, cost, and speed. In a contract, performance
is deemed to be the fulfillment of an obligation, in a manner that releases the
performer from all liabilities under the contract(1)
.
Performance comprises both a behavioral and an outcome aspect. It is a
multi-dimensional and dynamic concept.
When conceptualizing performance, one has to differentiate between an
action (i.e., behavioral) aspect and an outcome aspect of performance(2)
(Campbell,
1990; Campbell, McCloy, Oppler, & Sager, 1993; Kanfer, 1990; Roe, 1999). The
behavioral aspect refers to what an individual does in the work situation. Not every
behavior is subsumed under the performance concept, but only behavior which is
relevant for the organizational goals: “Performance is what the organization hires
one to do, and do well” (Campbell et al., 1993, p. 40). Thus, performance is not
defined by the action itself but by judgmental and evaluative processes (cf. Ilgen &
Schneider, 1991; Motowidlo, Borman, & Schmit, 1997). The outcome aspect refers
to the consequence or result of the individual’s behavior. Outcome aspects of
performance depend also on factors other than the individual’s behavior. In
practice, it might be difficult to describe the action aspect of performance without
any reference to the outcome aspect.
(1) http://www.businessdictionary
(2) Ibid, p.3.
62
Performance as a Multi-Dimensional Concept:
Performance is a multi-dimensional concept. So, there are two types of
performance, the task and contextual performance(1)
(Borman and Motowidlo
(1993)). Task performance refers to an individual’s proficiency with which he or
she performs activities which contribute to the organization’s ‘technical core’. This
contribution can be both direct (e.g., in the case of production workers), or indirect
(e.g., in the case of managers or staff personnel). Contextual performance refers to
activities which do not contribute to the technical core but which support the
organizational, social, and psychological environment in which organizational
goals are pursued. Contextual performance includes not only behaviors such as
helping coworkers or being a reliable member of the organization, but also making
suggestions about how to improve work procedures.
There are three main differences between task and contextual performance(2)
(Motowidlo & Schmit, 1999):
(1) Activities relevant for task performance vary between jobs whereas
contextual performance activities are relatively similar across jobs
(2) Task performance is related to ability, whereas contextual performance is
related to personality and motivation;
(3) Task performance is more prescribed and constitutes in-role behavior,
whereas contextual performance is more discretionary and extra-role.
Performance Measurement:
Performance measurement is the ongoing monitoring and reporting of
program achievements, particularly the progress towards pre-determined goals. It
(1) Ibid, p.3.
(2) Ibid, p.3.
63
is conducted by a program or agency management to address the type or level of
program activities conducted (process), the direct products and services delivered
by a program (outputs), and/or the results of those products and services
(outcomes). A “program” may be any activity, project, function, or policy with a
certain purpose or set of objectives.
One of the newer approaches refer on measuring performances of
organizations via KPI. KPI are financial and non- financial measures that
organizations use to reveal how successful they were in accomplishing long lasting
goals. In order to constitute effective system of performance measurement it is
very important to have defined and standardized all processes within the
organization.
Significance of process approach could be seen through the fact that it is a
base of two nowadays management systems: strategic management, via BSC, and
technical standardization, via QMS.
Key Performance Indicators (KPIs) are the backbone of business. They are
the used to help the organizations understand whether their business is on the right
track for success, and, if it’s not, more easily identify where to make improvements
and focus more attention. They confirm the standards that organizations need to
meet to gain budgets because the aim of a KPI is to bring about improvement.
Therefore, the amount of data that businesses and organizations generate
necessitate choosing the right measures and indicators. With that in mind, KPIs
must be aligned with the overall organizational strategy and objectives.
KPIs give executives the chance to communicate the mission and focus of
the organization to investors, team members, and other stakeholders. As KPIs filter
through the organization, they must grab employees’ attention to make sure that
everyone is moving together in the right direction and delivering value to the
64
business. Furthermore, visualizing KPIs through business dashboards makes it
easier to quickly get a sense of how well the organization is meeting its KPI goals.
Departments, and even individuals within an organization, may have their
own KPIs. But it is important that they understand the context of what they are
being measured against and how it fits within the broader business strategy and
goals.
The KPIs that a company or organization measures will vary depending on
the type of business and industry, its customers, and its staff. However, they are
likely to include some of the following:
Net profit
Net Promoter Score
Customer engagement
Customer complaints
Market share
Share of voice
Carbon footprint
Supply chain miles
Waste recycling rate
Employee satisfaction
Staff churn
Return on investment (ROI)
Once defining the organizational goals and strategy, identifying and aligning
the KPIs for the organization will be much simpler. This requires sound
Performance Management.
As for Performance Management, it is a process for setting goals and
regularly checking progress toward achieving those goals. It includes activities that
ensure organizational goals are consistently met in an effective and efficient
manner. The overall goal of performance management is to ensure that an
65
organization and its subsystems (processes, departments, teams, etc.), are optimally
working together to achieve the results desired by the organization.
Therefore, an organization can achieve the overall goal of effective
performance management by continuously engaging in the following activities:
Identifying and prioritizing desired results
Establishing means to measure progress toward those results
Setting standards for assessing how well results are achieved
Tracking and measuring progress toward results
Exchanging ongoing feedback among those individuals working to achieve
results
Periodically reviewing progress
Reinforcing activities that achieve results
Intervening to improve progress where needed.
66
Organizational Performance:
Organizational performance is one of the most important constructs in
management research. It explains the success of an organization and how it
performed over a period of time. Finding measures of the organizational
performance explains, an organization can compare its performance across
different periods of times and consequently performance of different organizations
can also be compared to each other. Among the different measures of performance
is a general category of financial and non-financial. Financial measures rely on
economic aspect of efficiency. They explain how the extent of organizational
efficiency that is one of the organizational objectives. Organizations attempt to
achieve efficiency, which is closely related to cost reduction. They are concerned
with the efficiency as well as the effectiveness(1)
. While the emphasis of efficiency-
seeking enterprises is on cost, effective-seeking enterprises focus on increasing
customer value. In other words, they focus on producing more reliable products
and higher quality(2)
. Therefore non-financial measures would be more appropriate
in measuring organizational performance with regard to effectiveness.
ROI as a measurement of Organizational Performance:
Organizational performance consists of the actual output or results of
an organization as measured against its intended outputs (or goals and objectives).
According to Richard et al. (2009) (3)
organizational performance encompasses
three specific areas of firm outcomes: (a) financial performance (profits, return on
(1) Hunt, S. D. & Duhan, D. F. (2001). Competition in the third millennium: efficiency or effectiveness?"
Elsevier Science Inc.
(2) Ibid.
(3) Richard et al. (2009): Measuring Organizational Performance: Towards Methodological Best Practice.
Journal of Management.
67
assets, return on investment, etc.); (b) product market performance (sales, market
share, etc.); and (c) shareholder return (total shareholder return, economic value
added, etc.)(1)
. These elements should go hand in hand to achieve the
organizational effectiveness(2)
.
The ROI is originally an accounting term that is defined by Flamholtz
(1985) (3)
as a financial ratio that expresses profit in direct relation to investment.
So, the ROI is simply the net profits (or savings) expected from a given
investment. When organizations want to maximize their ROI, they generally would
set a minimum ROI for any new products, services, or cost-saving programs(4)
.
Some of these traditional accounting methods in determining ROI have
generated doubts about its accuracy and predictive power since other nonfinancial
performance indicators have been excluded in the profitability equation(5)
. As a
consequence, more organizations are adopting a value-based approach to measure
returns by combining both financial and nonfinancial data in the ROI calculation.
Some common examples would be the application of economic equations of
shareholder value analysis, economic value added, and market value added(6)
.
(1) Ibid.
(2) padhaya, B., Munir, R., & Blount, Y. (2014). Association between Performance Measurement
Systems and Organisational Effectiveness. International Journal of Operations & Production
Management, 34(7), 2-2..
(3) Flamholtz EG, Das TK, Tsui AS (1985) Toward an integrative framework of organizational control.
Account Org Soc 10:35–50.
(4) Weitz, B.A., Castleberry, S.B. and Tanner, J.F. Jr (2009), Selling: Building Partnerships, 7th ed.,
McGraw-Hill/Irwin, New York, NY, pp. 250-74.
(5) Laitinen, E.K. (2003), “Future-based management accounting: a new approach with survey evidence”,
Critical Perspectives on Accounting, Vol. 14 No. 3, pp. 293-323.
(6) Ehrbar, A. (1999), “Using EVA to measure performance and assess strategy”, Strategy & Leadership,
Vol. 27 No. 3, pp. 20-4.
68
These approaches calculate ROI from the perspective of overall value, where value
is defined in terms of both financial and nonfinancial indicators.
The ROI refers to the return for money the organization asked to spend
'invest' and its actual worth. Despite the difficulty faced in defining the term
accurately, a common accounting or finance definition is that it is "A measure of
the net income a firm is able to earn with the its total assets. Return on investment
is calculated by dividing net profits after taxes by total assets(1)
".
Figure 7 : ROI ( Cost & Benefits)
Sources: http://www.rms.net/lc_faq_other_roi.htm. Available at: 2/5/2016.
(1) http://www.rms.net/lc_faq_other_roi.htm. Available at: 2/5/2016.
ROI
(Worth)
What We Give
(Investment)
What We Get
(Return)
Benefits Costs
69
Business Benefits - The "Returns" Decision-Makers Need To Know:
Traditionally, when IT professionals and top-management discuss the ROI
of an IT investment, they were mostly thinking of “financial” benefits. Today,
business leaders and technologists also consider the “non-financial” benefits of IT
investments(1)
.
Figure 8 : IT ROI Categories
Sources: http://www.rms.net/lc_faq_other_roi.htm. Available at: 2/5/2016.
Financial Benefits include impacts on the organization's budget and
finances, e.g., cost reductions or revenue increases.
Non-Financial Benefits include impacts on operations or mission
performance and results, e.g., improved customer satisfaction, better information,
shorter cycle-time(2)
.
(1) Matthew Cho, "Mixing Technology and Business: The Roles and Responsibilities of the Chief
Information Security Officer", Research on Topics in Information Security, SANS Institute 2003, p. 9..
(2) Lekha Menon, Bhawna Rehani and Sudharshan Gund, Business Intelligence on the Cloud Overview,
Use Cases and RoI", National Conference on Communication Technologies & its impact on Next
Generation Computing CTNGC 2012, p. 26.
Beneficial Returns
Financial Non-Financial
IT ROI Categories
70
IT and organizational performance:
Information Technology has been defined in various ways by different
authors. Frenzel (1999) (1)
for example defines IT as “Information Technology is
the term that describes the organization’s computing and communications,
infrastructure, including computer systems, telecommunication networks, and
multimedia (combined audio, text, and video) hardware and software”. Information
Technology is now also being used in all government organizations.
This technology really has drastically changed the working of today’s
organizations and is being used both by developed and developing countries for
performance improvements. The goal of every information systems, based in any
organization is to improve performance on the job and this performance efficiency
is only achieved when IT is accepted and used warmly by the concern employees
in organizations(2)
. In their quest for development, many developing countries put
great hope in use of IT. Information Technology now is the most preferred choice
of all developing and developed countries to upgrade their economies and become
competitive in the global market place. Information Technology is now also being
used in all government organizations.
IT has become a catalyst for changes in the organizational and operational
structure and management. The results from its ability to improve productivity,
reduce costs, improve decision-making as well as strengthening the relationships
(1) Frenzel Carroll W.(1999), “Management Of Information Technology”, 3rd edition. pp 10, 23,132.
(2) Venkatesh, V., & Davis F.D. (2000), “A theoretical extension of the Technology Acceptance Model,”
Journal of Management Sciences Vol. 2, pp. 186-204..
71
with customers and developing new strategies to improve organizational
performance applications(1)
.
The need for information technology and computer use appears clearly in
better performance of work as it helps workers to achieve higher levels of
performance and enables managers to make more improvements in the
organizational operations by providing the information necessary to make effective
decisions in support of the achievements the organizational performance(2)
.
IT enhances achieving the goals of the organization and the individual(3)
as
well as their efficiency and effectiveness of performance. The organizations today
must possess information technology so that they can achieve higher performance
through their products and advanced services as well as improving production
processes, marketing, reducing costs and improving quality in an environment of
increasing global competition.
The role of technology information is to update and develop the performance
of organizations as leading to the creation of new types of jobs and work areas and
a variety of activities in the working environments. These can be seen in the
following:
1. Provide actual work force within the organization
2. Increase communication channels between the various administrative
departments
(
1) Turban , E., et al., Op. cit., 1999, p.3.
(2) Turban , E., et al., Op. cit., 1999, p.198.
(3) Kotler, P., " Marketing Management " , New Jersey : PrenticeHall , 2000, p. 74.
72
3. Achieve effective control of the operational processes and reduce the extent
of administrative regulations
4. Save time for the senior management and full-time for more important
business. It also improves productivity and motivate employees and
managers to make intense intellectual efforts to raise and efficiency in
performance as well as supporting and promoting the necessary activities
and knowledge management - for making administrative decisions.
5. Enhance the discovery and knowledge analysis through the use of search
engines and databases to find appropriate means to set goals and put the
technology in place(1)
.
It should be noted that the use of technology incorrectly may hamper the
work of the organization and lead them to failure and deterioration rather than
achieving the competitive advantage.
The impact of using IT on the managerial and work
concepts:
Change the working methods as the use of modern technology allows remote
working and guidance which is reflected on the elements of time and cost.
Speed of circulating information within the organization and thus help
making sound decisions.
Change the skills, the availability of huge amount of information - that is
difficult to deal with easily - requires special skills.
Change of plans.
Free the human element of the routine work restrictions thus leading to the
creative and intelligent work.
(
1) Turban , E., et al., Op. cit., 1999, p.340.
73
Increase the importance of information confidentiality and reliability.
Therefore, the organizational structures should be modified to cope
with the advanced working methods:
Organizations use many types of technology in transforming inputs into
outputs. It is found that there is a strong relationship between the size of the
production processes and the organizational structure. It is also found that the
efficiency and effectiveness depends greatly on the extent of proportionality
between the technology used in the organization and the organizational structure of
the organization. Thus, the most fundamental changes required in the
organizational structures can be summarized as follows:
Providing an organizational unit of information technology within each
institution or firm.
Re-considering the organizational structure to maintain it capable of
operating within a competitive environment.
Establishing new units focused on marketing, sales and strategic planning as
well as customer orientation.
Providing organizational structures in line with the technological progress to
contribute to the great advantage of the new applications, fit with modern
working methods as well as the expansion of participation in decision-
making.
74
Oil & Gas sector in Egypt:
Information Technology (IT) is widely acknowledged to be crucial for
efficient operation and management of all industrial systems. The demand for IT
services has increased substantially over the years. Oil and gas companies are
under pressure to achieve higher returns on their capital assets in a safe and
sustainable manner. They need to drive higher asset reliability, productivity and
performance while managing growing demands as well as competition for oil
reserve access(1)
.
The Information Technology Applications in Petroleum Sector deal with
three major sectors such as upstream, midstream and downstream(2)
:
"Upstream" and "downstream" are business terms applicable to the
production processes that exist within several industries. Industries that commonly
use this terminology include the metals industry, oil, gas, biopharmaceutical and
biotechnology industries. Upstream, downstream and midstream make up the
stages of the production process for these and other industries(3)
.
Definition of Upstream(4)
:
The upstream stage of the production process involves searching for and
extracting raw materials. The upstream part of the production process does not do
(
1) M. Chiranjeevi, "Information Technology (IT) Applications in Petroleum Sector", Recent Advances in
Information Technology (RAIT), 2012 1st International Conference on, IEEE, 651 – 657, 15-17
March 2012.
(2) Ibid.
(3) Håvard Devold, "Oil and gas production handbook An introduction to oil and gas production,
transport, refining and petrochemical industry", ISBN 978-82-997886-3-2, 2013, p. 40.
(4) Tom Moore, "Defining the Upstream Oil and Gas Sector: Exploration, Production, and Natural Gas
Gathering and Processing", Western Climate Initiative – Oil & Gas Collaborative Santa Fe, NM,
November 19, 2009.
75
anything with the material itself, such as processing the material. This part of the
process simply finds and extracts the raw material. Thus, any industry that relies on
the extraction of raw materials commonly has an upstream stage in its production
process. In a more general sense, "upstream" can also refer to any part of the
production process relating to the extraction stages.
Examples of Upstream Processes:
In the petroleum industry, locating underground or underwater oil reserves
characterizes the upstream process. Additionally, the upstream process in this
industry involves bringing oil and gas to the surface. Extraction wells represent an
example of a structure operating in this stage in the process. The upstream stage in
the production process may also manifest itself as a supplier providing raw
materials to manufacturers or other businesses that ultimately process the
materials.
Definition of Downstream (1)
:
The downstream stage in the production process involves processing the
materials collected during the upstream stage into a finished product. The
downstream stage further includes the actual sale of that product to other
businesses, governments or private individuals. The type of end user will vary
depending on the finished product. Regardless of the industry involved, the
downstream process has direct contact with customers through the finished
product. (1) Brian Bass, The Definitions of “Upstream” and “Downstream” in the Production Process, HOUS.
CHRON. (last visited May, 4, 2016), archived at http://perma.cc/XU4K- 6G7L (“The upstream stage
in the production process may also manifest itself as a supplier providing raw materials to
manufacturers or other businesses that ultimately process the materials.”).
76
Examples of Downstream Processes:
In the oil and gas industry, the downstream process consists of converting
crude oil into other products and then selling those products to customers. Thus, oil
refineries represent structures that operate within the downstream process.
However, any kind of plant that processes raw materials may qualify as operating
within the downstream stage of production. A company that combines both
upstream and downstream processes is an integrated company.
Midstream operations link the upstream and downstream entities. Midstream
operations mostly include resource transportation and storage, such as pipelines
and gathering systems.
The petroleum industry includes the global processes of exploration,
extraction, refining, transporting, and marketing petroleum products.
The oil and gas industry has altered immensely over recent decades as
technology has opened up new possibilities along the energy chain. Upstream, oil
firms are exploring and exploiting deep-sea reservoirs that were once
technologically out of reach or simply unknown. Downstream, state-of-the-art IT
systems have pushed the boundaries of efficiency and productivity. As well as
bumping up sales and production, technology has helped in other ways. The use of
horizontal drilling techniques, for instance, has played a key role in reducing the
industry’s environmental footprint. Although oil companies have perhaps not
committed the same level of IT funding witnessed in some sectors, such as
financial services, there is a growing awareness of its role in the industry. The
concept of the intelligent oilfield – remotely capturing and using real-time data
from smart wells, and using complex IT systems to interpret and make timely and
meaningful decisions – is already here. “There is a demand for exploration
intelligence and oilfield connectivity to increase production, reduce finding and
77
lifting costs as well as help to better define reserves and their replacements,” says
Marisé Mikulis, worldwide oil and gas industry manager for Microsoft. “This is
critical because petroleum reserves and the ability to optimise their exploration and
replacement are the fundamental values of the upstream sector.”
One of the most striking developments in the IT industry which has helped
information dissemination in the oil and gas industry was developed by the World
Wide Web Consortium (W3C) about a decade ago. This technology known as
XML (Extensible Markup Language) uses tags and unstructured patterns in
developing requisite data (referred to as well-formed and valid data) for
information dissemination. The most wonderful thing with XML is that it is
structured in such a way that the information would be readable by both machines
and humans. Other technologies such as SGML and HTML for transferring data
were also developed by the W3C; however XML is the most beneficial of them all
in information dissemination.
Therefore, it can be said that in a global petroleum industry that is more
information-dependent than ever, success is in the hands of those that best
understand how to deploy effective, proved, available and future-proof information
technology solutions.
Too much IT can lead to an overly complex work environment that stifles
creativity and innovation. In addition, in order to maximise the benefits of IT, there
must be some attempt to set common standards to confront the vast swathe of
information facing exploration managers. This will require significant industry co-
operation, both within the oil and gas sector and in the IT world. Without
cooperation, the industry will struggle with complexity and find it difficult to
innovate to meet future challenges(1)
.
(1) http://www.world-petroleum.org/docs/docs/18th/18WPC%20News%20Day%201.pdf
78
Egypt:
Egypt is currently the largest oil producer in Africa outside of OPEC and the
second largest natural gas producer after Algeria. Egypt, having already taken on a
major role in international energy markets is now seeking to get its downstream
industry back on track.
Egypt has great potential when it comes to refining and petrochemicals. It is
an important transit route, offering great potential to become a hub for petroleum
products.
Egypt has a lot of attractive points for investors. In the oil and gas industry,
Egypt has a lot of potential resources, a lot of uncharted territory with the potential
for discoveries and a huge domestic market. It can absorb production and as far as
human resources, you can find very skilled people. That will reduce the costs of
any IOC that has to bring expats into the country.
The infrastructure in the oil and gas business is also great. Egypt has
changed a lot in the past few decades and is trying to improve the investment
environment every year to accommodate oil investors’ desires and requests. All
investors are free to exchange and repatriate their revenues to their countries. There
are no restrictions as there are in other countries. We have huge resources
potential, human resources, the investment environment and the infrastructure in
Egypt.
Another attraction point is that concession agreements are issued by law and
cannot be changed unless it goes back to parliament. That is a protection for the
investors. Egypt has a track record in helping companies with their concession
agreements. They have tried to solve their issues with the partners on win-win
bases.
Of course, there is the issue of deferred payments. I believe this is just a temporary
79
issue because of what has happened in the past few years. I’ve heard from some of
the companies that their receivables have been reduced to zero. There are problems
regarding payments, which are in partly Egyptian pounds and partly in dollars, but
at least they are trying to solve this issue as soon as they can. This issue, for sure,
has some impact on the business(1)
.
Additionally, Egypt is now a net importer of oil and gas. The demand is very
high, so whatever you discover will be sold immediately. You are not going to
have trouble finding a buyer. The fiscal terms, of course, are very attractive. The
PSA is very attractive because it’s based on competitive bids, but still the
companies are making money. There are companies that have been working here
for 40-50 years. There must be something good about it.
Egypt plays a vital role in international energy markets through the operation
of the Suez Canal and Suez-Mediterranean (SUMED) Pipeline. The SUMED
Pipeline is the only alternative route nearby to transport crude oil from the Red Sea
to the Mediterranean Sea if ships were unable to navigate through the Suez Canal.
Fees collected from the operation of these two transit points are significant sources
of revenue for the Egyptian government.
In Africa, Egypt has the third-largest population, after Nigeria and Ethiopia,
and the second-highest gross national income (GNI), after Nigeria, according to the
World Bank. Egypt’s economy suffered during and after the 2011 revolution as the
country experienced a sharp decline in tourism revenue and foreign direct
investment, according to the International Monetary Fund (IMF). Annual gross
domestic product (GDP) growth in Egypt dropped from 5.1% in 2010 to 1.8% in
2011 and still remains below the pre-revolution level, averaging 2.1% in 2015(2)
.
According to the IMF, financial support, particularly in the form of oil and LNG
(1) http://www.theoilandgasyear.com/interviews/upstream-opportunity-in-egypt/
(2) World Bank database, accessed May 2016.
80
shipments, from some Persian Gulf countries has helped Egypt to meet its
domestic energy demand(1)
.
Egypt’s economy has not fully recovered since the 2011 revolution. The
government continues to fund energy subsidies, which cost the government $26
billion in 2015, and this has contributed to the country’s high budget deficit and the
inability of the Egyptian General Petroleum Corporation (EGPC), the country’s
national oil company, to pay off its debt to foreign operators. EGPC owes foreign
oil and gas operators billions of dollars, which has led foreign operators to delay
their investments in existing and new oil and natural gas projects. EGPC
accumulated $6.3 billion in outstanding arrears to foreign oil and gas companies,
of which $1.5 billion was paid back in December 2013. The debt has since
increased back to $7.5 billion as of June 2014 and continues to grow(2)
.
(1) International Monetary Fund, "Arab Countries in Transition: An Update on Economic Outlook and
Key Challenges," (April 9, 2014), page 10.
(2) Middle East Economic Survey (MEES), "Egypt Outlines 2015-16 Budget Guidelines," (March 27,
2015), volume 58, issue 13.
81
The petroleum sector now consists of five strong entities cooperating and
integrating to make the best use of petroleum and mineral resources wealth(1)
.
They are:
The Egyptian General Petroleum Corporation “EGPC”
The Egyptian Natural Gas Holding Company “EGAS”
The Egyptian Petrochemicals Holding Company “ECHAM”
Ganoub El-Wadi Holding Company “GANOPE”
The Egyptian Mineral Resources Authority. “EMRA”
Figure 9 : Egyptian Petroleum Sector
(1) Ehab Mohamed Farouk Abd El Aziz, "An Assessment for Technical, Economic, and Environmental
Challenges Facing Renewable Energy Strategy in Egypt", Faculty of Engineering, Kassel University
Kassel, Germany, 2011, p.6.
82
Oil sector in Egypt:
Egypt’s oil sector witnessed a stark change beginning in the early 2000s.
The country drifted away from being an oil exporter to a net oil importer, as
domestic supplies have fallen short of demand.
This was mainly due to different factors including: the enormous rise in
population; growing economic development mainly in projects generated by fuel;
and a drop in new investments in the oil sector (most likely as a repercussion of the
energy subsidy system along with the political instability since 2011). This led to
an increase in oil consumption in parallel with stagnation in production. Egypt’s oil
consumption has clearly outpaced production since 2010.
One major challenge in Egypt’s oil sector is how to maintain a minimum
level of oil exports in order to maximize foreign exchange revenue. It has been
known that any barrel consumed domestically—especially when consumption
outpaced production—is a barrel not exported, depriving Egypt of foreign
exchange. Like many other developing nations, Egypt is seeking to strike a balance
between crude oil production, domestic consumption, and export revenue, while
seeking to maintain internal political harmony.
Despite declining production and becoming a net oil importer, Egypt’s crude
oil exports have remained virtually flat over the past few years, mainly to secure a
share in foreign currency. As a result, there is a lower volume of domestic crude oil
available for domestic refineries, and Egypt must then compensate the difference
by importing petroleum products and/or crude oil.
Controlling domestic oil consumption has become a ‘thorny’ issue for many
countries, sharpening the trade-off between consumer demands and export
earnings. This trade-off is hindered by a subsidy system of governmentally
controlled domestic energy price supports. In the light of the above mentioned
83
subsidy reforms, and faced with the high rates of growth in consumption, the
government has recently raised domestic prices in an attempt to curb this explosive
growth and reallocate resources more effectively.
In general, Egypt lacks giant oil fields; most of the country’s production
comes from relatively small fields. However, Egypt has the largest oil refinery
capacity in Africa, though it operates below capacity. Egypt’s oil refinery capacity
is around 700,000 bbl/d, while the country’s refined petroleum output is around
450,000 bbl/d. The refinery output declined from 2009-2013 by almost 28%, as
some reports attribute this decline to Egypt’s policy that permits foreign oil
companies to export crude oil as a repayment for the country’s financial debt.
Subsequently, the supply of crude oil available for domestic refineries has
declined, and Egypt started importing petroleum products
In recent years, there were plans to expand the country’s refining capacity
through building more refineries in partnership with foreign companies, though
they have not been realized yet. The petroleum industry is a key component of
Egypt’s economic performance, thus the decline of oil exports in the last few years
had a significant impact on the country’s economic development.
Some reports give indications that Egypt will see an ‘upswing’ in investment
in the oil sector in the coming years. With the political situation now looking more
stable than at any time in the past three years, oil investment has started picking up.
This foreseen improvement in oil investment in Egypt relies mainly on the
hydrocarbon potential of certain underexplored areas. In particular, the
Western Desert has shown very significant and promising hydrocarbon
potential, given that it has been underexplored and offers comparatively low-cost
onshore development opportunities.
84
In addition, some new oil discoveries have boosted Egypt’s reserve estimate
over the past few years.
Egypt has maintained a sustainable level of exploration, with a number of oil
discoveries made every year.
However, it is expected that Egypt will struggle to increase crude oil output
due to limited overall oil potential. The majority of Egypt's below-ground
hydrocarbon potential has proven to be gas, thus what new liquid product develops
is likely to come from gas condensates and not traditional oil.
Natural Gas in Egypt:
Since the early 2000s, Egypt has emerged as an important producer and
exporter of natural gas. Egypt started turning to gas to replace oil in the domestic
market, most importantly for fuelling heavy industries and electric power plants in
order to save more crude oil for exports. Until 2011 about 18% of gas production
was exported. Around 80% of Egypt’s natural gas reserves are in the
Mediterranean and the
Nile Delta, followed by smaller amounts in the Western Desert and the Gulf
of Suez.
Egypt’s domestic gas crisis is as much the consequence of historical ‘mal-
planning’ as it is the short term consequence of the country’s past three years of
political turmoil. Since 2011 Egypt’s natural gas production has declined sharply
and a stalled power sector started to become apparent. The decline was by an
annual average of 3% from 2009-2013; meanwhile, Egypt’s total gas exports have
declined substantially by an annual average of 30% from 2010-2013. This is
ascribed not only to the decline of production, but also to the enormous rise in
domestic demand, particularly in the power sector. Starting from the 1990s the
government encouraged households, businesses and the industrial sector to
85
consider natural gas as substitute for petroleum products. Therefore, the
consumption increased by an annual average of 7%, and as a result Egypt started
importing liquefied natural gas (LNG) to satisfy its consumption.
Many argue that Egypt’s gas production decline was by no means inevitable.
Egypt faces rapid depletion rates in many of its existing reservoirs, rendering
consistent investment in new reserves essential to maintaining and expanding gas
production. Many of these new reserves are in higher risk, higher-cost areas,
particularly the offshore Nile Delta, where access to more sophisticated technology
and foreign capital are key factors in determining the pace by which new resources
could enter the Egyptian gas market. The political turmoil following Egypt’s 2011
revolution has considerably hindered these offshore developments, directly through
temporary shut-downs in production, but more structurally by depriving the
Egyptian government of essential fiscal resources to meet various contract
commitments towards international companies. Egypt owed foreign operators
substantial debt of approximately $7.5bn by June 2014. Some of these operators
have reduced their exploratory activities and delayed project investment. In a
broader sense, however,
Egypt’s post-revolutionary turmoil merely accelerated the severity of
existing long-term deficiencies in Egypt’s energy sector that have existed for at
least a decade. Successive governments have inherited a gas sector hampered by
the conflicting requirements of Egypt’s rising domestic energy demand and already
existing export contracts with Egyptian gas customers.
Moreover, one additional factor that contributed in hindering natural gas
production was the low price the government used to pay foreign operators. It
presented a major obstacle for operators interested in investing in Egypt’s energy
sector, as these price conditions rendered such projects economically unviable for
many. Hence, substantial gas discoveries in the deep offshore Mediterranean and
86
other areas remained undeveloped. A history of exceptionally low domestic energy
prices—many multiples below international prices and increasingly below the
long-run marginal cost of production for more gas production projects—has
systematically distorted Egypt’s domestic energy market. This leads to extremely
low levels of industrial energy efficiency and subsequently wasteful energy
consumption, both by energy-intensive industries and high-end energy users.
Surging domestic energy consumption forced the government to divert a growing
share of its natural gas production to the domestic market, where low domestic
prices are paid instead of high international prices.35
Nevertheless, after the last presidential elections in 2014 Egypt started
witnessing remarkable progress on the level of political stability and economic
development. Fundamental steps have been carried out by the current government
to foster the energy sector and boost the economy including, as mentioned: paying
down arrears to international oil and gas companies; accelerating existing gas field
development; encouraging new exploration; securing LNG import contracts until
2020, particularly regarding five LNG shipments from Algeria that are expected to
cover consumption until
September 2015; signing a 5-year regasification unit contract; and mitigating
the impact of subsidy removals, within the overall subsidy reforms strategy,
through a range of measures including the acceleration of residential connections
to natural gas and allocating savings to boost social spending. For example, and in
a reflection of what could be considered a vote of confidence in
Egypt’s investment climate and economic potentials, in March 2015 BP
finalized agreements for a $12 billion project to produce offshore natural gas.
87
Chapter (3): Applied Framework
88
Preface
This chapter of the study deals with the research methodology, its parts, the
tool used and how it is constructed and developed. It also addressed the procedures
of verifying the validity and reliability of the tool in addition to the statistical
approaches used to analyze the data and draw conclusions. These procedures are as
follows:
First: Research Methodology
The researcher used in the present study the descriptive analytical approach
to reflect the phenomenon under investigation quantitatively and qualitatively. It
describes and analyses the phenomenon. In addition, it reveals the relationships
between its various dimensions to interpret and access general conclusions that
may contribute, improve and develop the reality.
The researcher used in studying
"The Impact of information technology on organizational performance : an
applied study on Oil & Gas companies in Egypt"
Two major sources of information that can be classified as follows:-
1) The secondary sources: The researcher used in dealing with the theoretical
framework the secondary sources of information as the books, relevant
references, periodicals, reports, articles, previous researches and studies that
dealt with the study subject. In addition, the researcher searched the various
internet sites.
2) Primary sources: In order to deal with the analytical aspects of the research, the
researcher used the primary sources as the questionnaire as the main tool of
research that is prepared specifically for this reason. The questionnaire forms
89
were distributed to highlight The Impact of information technology on
organizational performance in Oil & Gas companies in Egypt.
Second: The Study Population and Sample:
1. The Study Population:
The research dealt with The Impact of information technology on
organizational performance in Oil & Gas companies in Egypt.
Oil & Gas companies in Egypt (Excluding the Foreign companies & Joint
ventures) had been classified according to their performance presented by their
ROI's records from the years 2010 till 2014 according to the formal information the
researcher got from the Accountability state Authority into 3 categories:
a. High Performance companies (ROI greater than 10%)
b. Medium performance companies (ROI is between 5% & 10%)
c. Low performance companies (ROI is between negative records up to
5%).
2. Pilot Sample:
The researcher chose a random sample of 30 employees in oil & gas
companies in Egypt with different company's performance (ROI) and distributed
the questionnaire after taking the opinion and consent of the study supervisors. It
aimed at verifying the validity of the questionnaire to be applied to the study
sample by calculating its validity and reliability by the appropriate statistical
means.
90
3. The Study Sample:
It aimed at verifying the hypothesis of the study and answers its questions
that were selected randomly. It consisted of (384) employees of oil & gas sector
companies in Egypt, taking into account that the choice should represent the three
levels of performance (Low, medium, High) according to their ROI.
Two companies under every category were selected. The researcher
distributed (64) forms on each company, and thus (384) forms were distributed.
Some (253) forms were returned and thereby the return of forms ratio is 66%,
which proves the interest of respondents and their seriousness in the factor of
research. Some (49) forms were excluded as they were unfit for analysis. Thus, the
number of forms to be analyzed is (204) forms.
This can be seen in the following table:
Table 4 : Questionnaires Distribution
Performance Company Sample Returned
Return
Ratio
Invalid for
Statistical
Analysis
Valid for
Statistical
Analysis
Low 128 82 64% 20 62
Medium 128 75 59% 15 60
High 128 96 75% 14 82
Total 384 253 66% 49 204
91
Third: Research Tool:
The questionnaire was divided into four parts as follows:
Part 1: This Part discusses the IT Network Infrastructure; It consists of (7)
statements as follows:
Table 5 : IT Network Infrastructure questionnaire questions
IT Infrastructure:
Computer Network
Voice Communication
E-Mail Service
Security
N. Statement
1 IT provides the company employees with the latest technology in computers
2 The Company computer Networks are always available and reliable
3 The voice communication with all company’ sites are always available and reliable
4 The E-Mail Service is always available and reliable
5 The internet connection is always available and reliable with high performance
6 The level of information Security is high
7 The data storage capacity is sufficient
92
Part 2: This Part discusses the IT Applications; It consists of (9) statements as
follows:
Table 6 : IT Applications questionnaire questions
IT Applications:
Financial Application
HR Application
Purchasing Application
Operation Application
Project Application
N. Statement
8 The company uses modern IT Applications
9 The information provided by the IT Applications of the company is reliable
10 The information provided by the IT Applications of the company is accurate
11 IT Applications of the company provide users the complete information that is needed
12 Employees have sufficient understanding of IT Applications
13 IT Applications are well integrated
14 IT Applications of the company facilitate user friendly interface
15 IT Applications of the company are aligned with company processes and objectives
16 IT Applications of the company have increased the performance of employees
93
Part 3: This Part discusses the IT Personnel; it consists of (9) statements as
follows:
Table 7 : IT Personnel questionnaire questions
IT Personnel:
IT Managers
Helpdesk
Systems Engineers
Programmer
Database Administrators
N. Statement
17 IT Division have deployed sufficient Personnel to provide IT services
18 IT Personnel solve the problem in the first instance
19 IT Personnel keep users well informed about the progress of users complaint/s
20 IT Personnel handle users complaints/queries seriously
21 IT Personnel inform users exactly when maintenances will be performed
22 The behavior of IT Personnel gives confidence to users
23 IT Personnel are friendly and polite with users
24 IT Personnel are knowledgeable enough to perform their job
25 IT Personnel are continuously in touch with the users
94
Part 4: This Part discusses the Performance; it consists of (4) statements as
follows:
Table 8 : Performance questionnaire questions
N. Statement
26 IT has improved the productivity
27 IT contributed to increase the profit
28 IT has improved the internal controls in the company
29 IT has improved the overall performance of the company
95
Data Collection Instrument and Source:
First: Descriptive research is used to portray characteristics of a population.
Descriptive statistics offer frequency distributions and use measures of central
tendency and other measures to describe a sample or population.
Second: The used questionnaire consists of (29) statements, mainly close-
ended questions, scaled on a 5-point Likert scale, ranging from
(1)Strongly Disagree
(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree
Likert scale was used to evaluate the questionnaire as shown in the
following Table:
Table 9 : Shows Likert Scale
Reply Strong
Disagree Disagree Neutral Agree
Strong
Agree
Degree 1 2 3 4 5
These answers were classified into five equal-range levels by the following
equation:
Category Length = (the largest value – the lowest value) ÷ number of measure
alternatives = (5-1) ÷ 5 = 0.80
To get the following value of weighted Means of each description or
alternative:
96
Table 10 : Distribution of Means according to the hierarchy used in the Research Tool
Description weighted mean value
Strong Agree from 4.2 to 5
Agree from 3.4 to less than 4.2
Neutral from 2.6 to less than 3.4
Disagree from 1.8 to less than 2.6
Strong Disagree from 1 to less than 1.8
Statistical Methodology used in the research:
After the tabulation of respondents' replies, these replies were coded and
data entered using a computer. Then, the data were processed statistically using the
Statistical Package for Social Sciences (SPSS). In order to achieve the study
objectives and analysis of the data collected, various statistical methods were used
as follows:
97
Statistical Processes used:
Frequencies and percentages to describe the characteristics of respondents.
Mathematical "Mean" to find out how high or low the study population
responded to the study and their replies on the paragraphs of the
questionnaire factors.
Standard Deviation to know the extent of deviation of the study sample
responses on each paragraph of the questionnaire factors. It is noted that the
standard deviation shows the dispersion in the study sample responses on
each adequacy. Whenever its value becomes closer to zero, responses
become concentrated and their dispersion decrease in the scale.
"Pearson" coefficient to measure the Validity of the questionnaire in
addition to the direction & strength of the correlation between various
factors
"Cronbach Alpha" coefficient and the Spearman Brown Split-Half
methodology to determine the reliability of the questionnaire.
Simple liner regression test to test the hypothesis of the thesis
ANOVA test to test the significance of the full simple regression model.
98
Verifying the tool Validity:
The researcher conducted Validity steps on the survey sample in two ways as
follows:
First: The internal consistency:
The internal consistency meant the consistency of each Statement of the
questionnaire with the factor to which it belongs. The researcher calculated the
internal consistency of the questionnaire through calculating the correlation
coefficients between each Statement of the factor of the questionnaire and the total
score for the same factor.
Second: structural validity:
Structural validity is one of the standards of the tool validity which measures
the extent of achieving the objectives that the tool wants to access. It shows the
relevance of each factor of study to the total score of the Statements of
questionnaire.
The Results of the internal consistency:
The next tables show the correlation coefficient between each Statement of
the total score of the factor. It shows that the correlation coefficient is significant at
the level of significance α = 0.05 and so the factor is valid for what it aimed to
measure.
99
Table 11 : Correlation coefficients between each statement of the first Part (IT Infrastructure)
and the total score of Part
No Statements Correlation
coefficients
Level of
significance
1 IT provides the company employees with the
latest technology in computers
0.764** 0.000
2 The Company computer Networks are always
available and reliable
0.595** 0.000
3 The voice communication with all company’
sites are always available and reliable
0.655** 0.000
4 The E-Mail Service is always available and
reliable
0.751** 0.000
5 The internet connection is always available and
reliable with high performance
0.696** 0.000
6 The level of information Security is high
0.729** 0.000
7 The data storage capacity is sufficient
0.634** 0.000
The previous table shows the correlation coefficients between each
Statement of the first Part (IT Network Infrastructure) and the total score of the
Part.
It shows that the correlation coefficients indicated rang between (0.595) and
(0.764) and significant at the level of (0.00), and thus the Statements of the first
Part are valid for what they aimed to measure.
100
Table 12 : Correlation coefficients between each statement of the second Part (IT Applications)
and the total score of Part
No Statements Correlation
coefficients
Level of
significance
8 The company uses modern IT Applications 0.791** 0.000
9 The information provided by the IT Applications
of the company is reliable
0.712** 0.000
10 The information provided by the IT Applications
of the company is accurate
0.654** 0.000
11 IT Applications of the company provide users the
complete information that is needed
0.739** 0.000
12 Employees have sufficient understanding of IT
Applications
0.632** 0.000
13 IT Applications are well integrated 0.815** 0.000
14 IT Applications of the company facilitate user
friendly interface
0.744** 0.000
15 IT Applications of the company are aligned with
company processes and objectives
0.467** 0.009
16 IT Applications of the company have increased
the performance of employees
0.725** 0.000
The previous table shows the correlation coefficients between each
Statement of the second Part (IT Applications) and the total score of the Part.
It shows that the correlation coefficients indicated rang between (0.467) and
(0.815) and significant at the level of (0.01), and thus the Statements of the sixth
Part are valid for what they aimed to measure.
101
Table 13 : Correlation coefficients between each statement of the third Part (IT Personnel) and
the total score of Part
No Statements Correlation
coefficients
Level of
significance
17 IT Division have deployed sufficient
Personnel to provide IT services
0.636** 0.000
18 IT Personnel solve the problem in the first
instance
0.791** 0.000
19 IT Personnel keep users well informed
about the progress of users complaint/s
0.666** 0.000
20 IT Personnel handle users
complaints/queries seriously
0.821** 0.000
21 IT Personnel inform users exactly when
maintenances will be performed
0.715** 0.000
22 The behavior of IT Personnel gives
confidence to users
0.636** 0.000
23 IT Personnel are friendly and polite with
users
0.508** 0.004
24 IT Personnel are knowledgeable enough to
perform their job
0.634** 0.000
25 IT Personnel are continuously in touch with
the users
0.806** 0.000
The previous table shows the correlation coefficients between each
Statement of the third Part (IT Personnel) and the total score of the Part.
It shows that the correlation coefficients indicated rang between (0.508) and
(0.806) and significant at the level of (0.01), and thus the Statements of the sixth
Part are valid for what they aimed to measure.
102
Table 14 : Correlation coefficients between each statement of the Forth Part (Performance) and
the total score of Part
No Statements Correlation
coefficients
Level of
significance
26 IT has improved the productivity 0.646** 0.000
27 IT contributed to increase the profit 0.784** 0.000
28 IT has improved the internal controls in the
company 0.869** 0.000
29 IT has improved the overall performance of
the company 0.888** 0.000
The previous table shows the correlation coefficients between each
Statement of the first Part (Performance) and the total score of the Part.
It shows that the correlation coefficients indicated rang between (0.526) and
(0.734) and significant at the level of (0.00), and thus the Statements of the first
Part are valid for what they aimed to measure.
103
Structural validity of the test Parts:
Table 15 : Calculating the correlation coefficient and significance level shows each of Parts with
the total score of the questionnaire statements
Part Content of the Part correlation
coefficient
level of
significance
First IT Network Infrastructure 0.730** .000
Second IT Applications 0.709** .000
Third IT Personnel 0.778** .000
Forth Performance 0.762** .000
The previous table shows the correlation coefficients between the value of
each Part and the overall value of the Parts of the questionnaire.
It shows that the correlation coefficients that ranged between (0.709) and
(0.778) shown is significant at the level of significance of (α = 0.00) which
demonstrates the validity of the statements of the questionnaire to measure the
objective for which they were put.
104
Reliability of the study tool:
The researcher conducted Reliability steps on the survey sample in
First way “Cronbach’s alpha coefficient method”
Table 16 : Reliability coefficients for Parts of study Cronbach's alpha coefficient Method
Part Content of the Part
Number
of
statements
Cronbach
alpha
coefficient
First IT Network Infrastructure 7 0.816
Second IT Applications 9 0.869
Third IT Personnel 9 0.860
Forth Performance 4 0.806
Total 29 0.908
The Previous table shows that reliability coefficients (Cronbach alpha coefficient)
are > 0.8 for all parts, which indicates a high level of internal consistency for our
scale with this specific sample.
105
Second way: "Split-half Coefficient method"
Spearman correlation coefficient Value has been found between the rate of
odd and even check phrases for each of factors of the questionnaire and value of
coefficients has been corrected by using Spearman Brown coefficient for
correction according to the following equation: Spearman-Brown Coefficient r
r
1
2
Table 17 : Split-half Coefficient method
Factor Content of the factor Number of
statements
Correlation
coefficient
The
corrected
correlation
coefficient
First IT Network Infrastructure 7 0.667 0.800
Second IT Applications 9 0.677 0.807
Third IT Personnel 9 0.738 0.850
Fourth Performance 4 0.690 0.816
Total 29 0.436 0.607
The previous table shows that reliability coefficients are relatively high.
106
Analysis of the demographic characteristics of the study
sample as follows:
1- The Gender:
Table 18 : The Gender Distribution of the sample
Gender
Performance Total
Low Medium High
Frequency Percent Frequency Percent Frequency Percent Frequency Percent
Male 37 59.7% 40 66.7% 61 74.4% 138 67.7%
Female 25 40.3% 20 33.3% 21 25.6% 66 32.4%
Total 62 100% 60 100% 82 100% 204 100%
Source: SPSS Data Analysis
Below figure shows graphical illustration for the gender distribution of the sample
Figure 10 : The Gender Distribution of the sample
37 40
61
138
25 20 21
66 62 60
82
204
0
50
100
150
200
250
Low Medium High Total
Male
Famle
Total
107
From Table (16) and figure (1), it is clear that the number of males (n=37)
represents (59.7) % of the total sample of low performance companies.
The number of females (n= 25) represents (40.3) % of the total sample of
low performance companies.
In addition, it is clear that the number of males (n=40) represents (66.7) % of
the total sample of medium performance companies.
The number of females (n= 20) represents (33.3) % of the total sample of
medium performance companies.
Moreover, it is clear that the number of males (n=61) represents (74.4) % of
the total sample of high performance companies.
The number of females (n= 21) represents (25.6) % of the total sample of
high performance companies.
Furthermore, it is clear that the number of males (n=138) represents (67.6)
% of the total sample.
The number of females (n= 66) represents (32.4) % of the total sample.
108
2- The Age:
Table 19 : The Age Distribution of the sample
Age
Performance
Total
Low Medium High
Frequency Percent Frequency Percent Frequency Percent Frequency Percent
20 : 30 11 17.7% 13 21.7% 11 13.4% 35 17.2%
30 : 40 37 59.7% 33 55.0% 54 65.9% 124 60.8%
40 : 50 12 19.4% 12 20.0 % 13 15.9% 37 18.1%
50 : 60 2 3.2% 2 3.3% 4 4.9% 8 3.9%
Total 62 100% 60 100% 82 100% 204 100%
Source: SPSS Data Analysis
Below figure shows graphical illustration for the age distribution of the sample
Figure 11 : The Age Distribution of the sample
11 13 11
35 37 33
54
124
12 12 13
37
2 2 4 8
62 60
82
204
0
50
100
150
200
250
Low Medium High Total
20:30
30:40:00
40:50:00
50 : 60
Total
109
From Table (17) and figure (2), it is clear that age group (from 20 to 30
years) (n=11) represents (17.7) % of the total sample of low performance
companies.
Age group (from 30 to 40 years) (n= 37) represents (59.7) % of the total
sample of low performance companies.
Age group (from 40 to 50 years) (n= 12) represents (19.4) % of the total
sample of low performance companies.
Age group (from 50 to 60 years) (n= 2) represents (3.2) % of the total
sample of low performance companies.
In addition, it is clear that age group (from 20 to 30 years) (n=13) represents
(21.7) % of the total sample of medium performance companies.
Age group (from 30 to 40 years) (n= 33) represents (55) % of the total
sample of medium performance companies.
Age group (from 40 to 50 years) (n= 12) represents (20) % of the total
sample of medium performance companies.
Age group (from 50 to 60 years) (n= 2) represents (3.3) % of the total
sample of medium performance companies.
Moreover, it is clear that age group (from 20 to 30 years) (n=11) represents
(13.4) % of the total sample of high performance companies.
Age group (from 30 to 40 years) (n= 54) represents (65.9) % of the total
sample of high performance companies.
Age group (from 40 to 50 years) (n= 13) represents (15.9) % of the total
sample of high performance companies.
110
Age group (from 50 to 60 years) (n= 4) represents (4.9) % of the total
sample of high performance companies.
Furthermore, it is clear that age group (from 20 to 30 years) (n=35)
represents (17.2) % of the total sample.
Age group (from 30 to 40 years) (n= 124) represents (60.8) % of the total
sample.
Age group (from 40 to 50 years) (n= 37) represents (18.1) % of the total
sample.
Age group (from 50 to 60 years) (n= 8) represents (3.9) % of the total
sample.
111
3-The Qualification:
Table 20 : The Qualification Distribution of the sample
Qualification
Performance Total
Low Medium High
Frequency Percent Frequency Percent Frequency Percent Frequency Percent
High School 8 12.9% 0 0% 1 1.2% 9 4.4%
College
Graduate 49 79.0% 52 86.7% 73 89% 174 85.3%
Post
Graduate 5 8.1% 8 13.3% 8 9.8% 21 10.3%
Total 62 100% 60 100% 82 100% 204 100%
Source: SPSS Data Analysis
Below figure shows graphical illustration for the age distribution of the sample
Figure 12 : The Qualification Distribution of the sample
8 0 1
9
49 52
73
174
5 8 8 21
62 60
82
204
0
50
100
150
200
250
Low Meduim High Total
High School
College Graduate
Post Graduate
Total
112
From Table (18) and figure (3), it is clear that the number of high school
(n=8) represents (12.9) % of the total sample of low performance companies.
The number of College Graduate (n= 49) represents (79) % of the total
sample of low performance companies.
The number of Post Graduate (n= 5) represents (8.1) % of the total sample
of low performance companies.
In addition, it is clear that the number of high school (n=0) represents (0) %
of the total sample of medium performance companies.
The number of College Graduate (n= 52) represents (86.7) % of the total
sample of medium performance companies.
The number of Post Graduate (n= 8) represents (13.3) % of the total sample
of medium performance companies.
Moreover, it is clear that the number of high school (n=1) represents (1.2) %
of the total sample of high performance companies.
The number of College Graduate (n= 73) represents (89) % of the total
sample of high performance companies.
The number of Post Graduate (n= 8) represents (9.8) % of the total sample
of high performance companies.
Furthermore, it is clear that the number of high school (n=9) represents (4.4)
% of the total sample.
The number of College Graduate (n= 174) represents (85.3) % of the total
sample.
The number of Post Graduate (n= 21) represents (10.3) % of the total
sample.
113
4- The Managerial Level:
Table 21 : The Managerial Level Distribution of the sample
Performance Total
Low Medium High
Frequency Percent Frequency Percent Frequency Percent Frequency Percent
1st line 12 19.4% 18 30.0% 16 19.5% 46 22.5%
Middle 42 67.7% 33 55.0% 60 73.2% 135 66.2%
Top 8 12.9% 9 15.0% 6 7.3% 23 11.3%
Total 62 100% 60 100% 82 100% 204 100%
Source: SPSS Data Analysis
Below figure shows graphical illustration for the managerial level
distribution of the sample
Figure 13 : The Managerial Level Distribution of the sample
12 18 16
46 42 33
60
135
8 9 6 23
62 60
82
204
0
50
100
150
200
250
Low Medium High Total
1st line
Middle
Top
Total
114
From Table (20) and figure (5), it is clear that the number of 1st line managerial
level (n=12) represents (19.4) % of the total sample of low performance
companies.
The number of middle managerial level (n= 42) represents (67.7) % of the
total sample of low performance companies.
The number of top managerial level (n= 8) represents (12.9) % of the total
sample of low performance companies.
In addition, it is clear that the number of 1st line managerial level (n=18)
represents (30) % of the total sample of medium performance companies.
The number of middle managerial level (n= 33) represents (55) % of the
total sample of medium performance companies.
The number of top managerial level (n= 9) represents (15) % of the total
sample of medium performance companies.
Moreover, it is clear that the number of high 1st line managerial level (n=16)
represents (19.5) % of the total sample of high performance companies.
The number of middle managerial level (n= 60) represents (73.2) % of the
total sample of high performance companies.
The number of top managerial level (n= 6) represents (7.3) % of the total
sample of high performance companies.
Furthermore, it is clear that the number of 1st line managerial level (n=46)
represents (22.5) % of the total sample.
The number of middle managerial level (n= 135) represents (66.2) % of the
total sample.
The number of top managerial level (n= 23) represents (11.3) % of the total
sample.
115
Distributive Statistics
First: Analyzing the statements of the IT Network Infrastructure
Table 22 : Analyzing the statements of the IT Network Infrastructure
Statements Abbreviation
IT provides the company employees with the latest technology in
computers Infrastructure1
The Company computer Networks are always available and reliable Infrastructure2
The voice communication with all company’ sites are always
available and reliable Infrastructure3
The E-Mail Service is always available and reliable Infrastructure4
The internet connection is always available and reliable with high
performance Infrastructure5
The level of information Security is high Infrastructure6
The data storage capacity is sufficient Infrastructure7
116
1.1. Analyzing IT Network Infrastructure in Low Performance sample
Table 23 : Analyzing IT Network Infrastructure in Low Performance
sample
N Minimum Maximum Mean Std. Deviation
Infrastructure1 62 1.00 5.00 2.4355 1.22302
Infrastructure2 62 1.00 5.00 2.8387 1.21727
Infrastructure3 62 1.00 5.00 3.2258 1.13685
Infrastructure4 62 1.00 5.00 2.9194 1.34650
Infrastructure5 62 1.00 5.00 2.3871 1.28490
Infrastructure6 62 1.00 5.00 2.7258 1.18970
Infrastructure7 62 1.00 5.00 3.0323 1.14473
IT Infrastructure 62 1.00 4.70 2.7919 .95046
Table (23) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Network Infrastructure in Low
Performance sample.
In the first rank, came the statement Infrastructure3 "The voice
communication with all company’ sites are always available and reliable" with a
mean of = 3.2258 and a standard deviation of =1.13685.
117
In the last rank, came the statement Infrastructure5 “The internet
connection is always available and reliable with high performance” with a mean
of = 2.3871 and a standard deviation of = 1.28490.
In general, the arithmetic mean of the total statements related to IT
Infrastructure in Low performance sample is 2.7919 and a standard deviation of
0.95046, which shows the degree of Neutral of the research sample answers to
these statements.
1.2. Analyzing IT Network Infrastructure in Medium Performance Sample
Table 24 : Analyzing IT Network Infrastructure in Medium Performance
Sample
N Minimum Maximum Mean Std. Deviation
Infrastructure1 60 1.00 5.00 2.9667 1.24828
Infrastructure2 60 1.00 5.00 3.3500 1.07080
Infrastructure3 60 1.00 5.00 3.0167 1.18596
Infrastructure4 60 1.00 5.00 3.2167 1.41531
Infrastructure5 60 1.00 5.00 3.0833 1.27946
Infrastructure6 60 1.00 5.00 3.1833 1.08130
Infrastructure7 60 1.00 5.00 3.4167 1.09377
IT Infrastructure 60 1.60 4.90 3.1750 .84785
118
Table (24) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Network Infrastructure in
Medium Performance Sample.
In the first rank, came the statement Infrastructure7 “The data storage
capacity is sufficient” with a mean of = 3.4167 and a standard deviation of
=1.09377.
In the last rank, came the statement Infrastructure1 “IT provides the
company employees with the latest technology in computers” with a mean of =
2.9667and a standard deviation of = 1.24828.
In general, the arithmetic mean of the total statements related to IT
Infrastructure in Medium performance sample is 3.1750 and a standard deviation
of 0.84785, which shows the degree of Neutral of the research sample answers to
these statements.
119
1.3. Analyzing IT Network Infrastructure in High Performance Sample
Table 25 : Analyzing IT Network Infrastructure in High Performance
Sample
N Minimum Maximum Mean Std. Deviation
Infrastructure1 82 1.00 5.00 3.3659 .97515
Infrastructure2 82 1.00 5.00 3.6463 .88012
Infrastructure3 82 1.00 5.00 3.7073 1.01212
Infrastructure4 82 2.00 5.00 4.0732 .82821
Infrastructure5 82 1.00 5.00 3.1341 1.00323
Infrastructure6 82 1.00 5.00 3.6463 .97337
Infrastructure7 82 1.00 5.00 3.8659 .99085
IT Infrastructure 82 1.70 5.00 3.6341 .59819
Table (25) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Network Infrastructure in High
Performance Sample.
In the first rank, came the statement Infrastructure4 “The E-Mail Service is
always available and reliable" with a mean of = 4.0732 and a standard deviation
of = 0.82821.
120
In the last rank, came the statement Infrastructure5 “The internet
connection is always available and reliable with high performance” with a mean
of = 3.1341 and a standard deviation of = 1.00323.
In general, the arithmetic mean of the total statements related to IT
Infrastructure in High performance sample is 3.6341 and a standard deviation of
0.59819, which shows the degree of Agreement of the research sample answers to
these statements.
121
1.4. Analyzing IT Network Infrastructure in the Entire Sample
Table 26 : Analyzing IT Network Infrastructure in the Entire Sample
Table (26) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Network Infrastructure in the
entire sample.
In the first rank, came the statement Infrastructure7 “The data storage
capacity is sufficient” with a mean of = 3.4804 and a standard deviation of
=1.12061.
In the last rank, came the statement Infrastructure5 “The internet
connection is always available and reliable with high performance” with a mean
of = 2.8922 and a standard deviation of = 1.21895.
In general, the arithmetic mean of the total statements related to IT
Infrastructure in the entire sample is 3.2431 and a standard deviation of 0.86514,
N Minimum Maximum Mean Std. Deviation
Infrastructure1 204 1.00 5.00 2.9657 1.19679
Infrastructure2 204 1.00 5.00 3.3137 1.09617
Infrastructure3 204 1.00 5.00 3.3578 1.13796
Infrastructure4 204 1.00 5.00 3.4706 1.28811
Infrastructure5 204 1.00 5.00 2.8922 1.21895
Infrastructure6 204 1.00 5.00 3.2304 1.13644
Infrastructure7 204 1.00 5.00 3.4804 1.12061
IT Infrastructure 204 1.00 5.00 3.2431 .86514
122
which shows the degree of Neutral of the research sample answers to these
statements.
123
1.5. IT Network infrastructure comparison in all performance categories
Table 27 : IT Network infrastructure comparison in all performance categories
IT Infrastructure Sample Mean Standard
Deviation
Low Performance Sample 62 2.7919 0.95046
Medium Performance Sample 60 3.1750 0.84785
High Performance Sample 82 3.6341 0.59819
Entire Sample 204 3.2431 0.86514
Figure 14 : IT Network infrastructure comparison in all performance categories
2.79
3.18
3.63
3.24
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Low performanceSample
MediumPerformance Sample
High PerformanceSample
Entire Sample
IT Network Infrastructure Means
124
Second: Analyzing the statements of the IT Applications
Table 28 : Analyzing the statements of the IT Applications
Statements Abbreviation
The company uses modern IT Applications Applicationsl8
The information provided by the IT Applications of the company is
reliable Applicationsl9
The information provided by the IT Applications of the company is
accurate Applications10
IT Applications of the company provide users the complete
information that is needed Applications11
Employees have sufficient understanding of IT Applications Applications12
IT Applications are well integrated Applications13
IT Applications of the company facilitate user friendly interface Applications14
IT Applications of the company are aligned with company processes
and objectives Applications15
IT Applications of the company have increased the performance of
employees Applications16
125
2.1. Analyzing IT Applications in Low Performance Sample
Table 29 : Analyzing IT Applications in Low Performance Sample
N Minimum Maximum Mean Std. Deviation
Applicationsl8 62 1.00 5.00 2.5645 1.06542
Applications9 62 1.00 5.00 2.9677 1.00764
Applications10 62 1.00 5.00 2.9032 1.14103
Applications11 62 1.00 5.00 2.9839 1.13790
Applications12 62 1.00 5.00 2.7097 .96474
Applications13 62 1.00 5.00 2.6774 1.02067
Applications14 62 1.00 5.00 2.9355 .93862
Applications15 62 1.00 5.00 3.0484 1.04689
Applications16 62 1.00 5.00 2.7903 1.21651
IT Applications 62 1.00 4.90 2.8387 .91120
Table (29) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Applications in Low Performance
sample.
In the first rank, came the statement Applications15 “IT Applications of the
company are aligned with company processes and objectives" with a mean of =
3.0484 and a standard deviation of = 1.04689.
126
In the last rank, came the statement Appl8 “The company uses modern IT
Applications" with a mean of = 2.5645 and a standard deviation of = 1.06542.
In general, the arithmetic mean of the total statements related to IT
Applications in Low performance sample is 2.8387and a standard deviation of
0.91120, which shows the degree of Neutral of the research sample answers to
these statements.
2.2. Analyzing IT Applications in Medium Performance Sample
Table 30 : Analyzing IT Applications in Medium Performance Sample
N Minimum Maximum Mean Std. Deviation
Applicationsl8 60 1.00 5.00 3.0167 1.11221
Applications9 60 1.00 5.00 3.2167 .97584
Applications10 60 1.00 5.00 3.2500 .93201
Applications11 60 1.00 5.00 2.9667 1.05713
Applications12 60 1.00 5.00 2.7833 1.23634
Applications13 60 1.00 5.00 3.0500 1.03211
Applications14 60 1.00 5.00 3.1667 .90510
Applications15 60 1.00 5.00 3.2500 .87576
Applications16 60 1.00 5.00 3.2833 1.04300
IT Applications 60 1.60 4.70 3.1150 .78585
127
Table (30) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Applications in Medium
Performance Sample.
In the first rank, came the statement Applications16 “IT Applications of the
company have increased the performance of employees" with a mean of = 3.2833
and a standard deviation of = 1.04300.
In the last rank, came the statement Applications12 “Employees have
sufficient understanding of IT Applications” with a mean of = 2.7833and a
standard deviation of = 1.23634.
In general, the arithmetic mean of the total statements related to
Infrastructure in Medium performance Sample is 3.1150 and a standard deviation
of 1.04300, which shows the degree of Neutral of the research sample answers to
these statements.
128
2.3. Analyzing IT Applications in High Performance Sample
Table 31 : Analyzing IT Applications in High Performance Sample
N Minimum Maximum Mean Std. Deviation
Applicationsl8 82 1.00 5.00 3.4634 .91887
Applications9 82 1.00 5.00 3.5244 .78921
Applications10 82 2.00 5.00 3.4390 .81797
Applications11 82 2.00 5.00 3.2561 .75049
Applications12 82 1.00 5.00 3.0000 .94281
Applications13 82 1.00 5.00 3.1341 .74969
Applications14 82 2.00 5.00 3.3049 .67931
Applications15 82 1.00 5.00 3.5488 .81880
Applications16 82 1.00 5.00 3.3659 .85364
IT Applications 82 1.70 4.60 3.3366 .58468
Table (31) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Applications in High
Performance Sample.
In the first rank, came the statement Applications15 "IT Applications of the
company are aligned with company processes and objectives" with a mean of =
3.5488 and a standard deviation of =0.81880.
129
In the last rank, came the statement Applications12 “Employees have
sufficient understanding of IT Applications” with a mean of = 3.0000 and a
standard deviation of = 0.94281.
In general, the arithmetic mean of the total statements related to IT
Applications in high performance sample is 3.3366 and a standard deviation of
0.58468, which shows the degree of Neutral of the research sample answers to
these statements.
130
2.4. Analyzing IT Applications in the Entire Sample
Table 32 : Analyzing IT Applications in Entire Sample
N Minimum Maximum Mean Std. Deviation
Applicationsl8 204 1.00 5.00 3.0588 1.08572
Applications9 204 1.00 5.00 3.2647 .94088
Applications10 204 1.00 5.00 3.2206 .98028
Applications11 204 1.00 5.00 3.0882 .97862
Applications12 204 1.00 5.00 2.8480 1.04643
Applications13 204 1.00 5.00 2.9706 .94119
Applications14 204 1.00 5.00 3.1520 .84308
Applications15 204 1.00 5.00 3.3088 .92992
Applications16 204 1.00 5.00 3.1667 1.05591
IT Applications 204 1.00 4.90 3.1201 .78007
Table (32) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Applications in the entire sample.
In the first rank, came the statement Applicaions15 "IT Applications of the
company are aligned with company processes and objectives" with a mean of =
3.3088 and a standard deviation of = 0.92992
131
In the last rank, came the statement Applications12 “Employees have
sufficient understanding of IT Applications” with a mean of = 2.8480 and a
standard deviation of = 1.04643.
In general, the arithmetic mean of the total statements related to IT
Applications in the entire sample is 3.1201 and a standard deviation of 0.78007,
which shows the degree of Neutral of the research sample answers to these
statements.
132
2.5. IT Applications comparison in all performance categories
Table 33 : IT Applications comparison in all performance categories
IT Applications
Sample Mean Standard
Deviation
Low Performance Sample 62 2.8387 0.91120
Medium Performance Sample 60 3.1150 0.78585
High Performance Sample 82 3.3366 0.58468
Entire Sample 204 3.1201 0.78007
Figure 15 : IT Applications comparison in all performance categories
2.84
3.12
3.34
3.12
2.50
2.60
2.70
2.80
2.90
3.00
3.10
3.20
3.30
3.40
Low performanceSample
Medium PerformanceSample
High PerformanceSample
Entire Sample
IT Applications Means
133
Third: Analyzing the statements of the IT Personnel
Table 34 : Analyzing the statements of the IT Personnel
Statements Abbreviation
IT Division have deployed sufficient Personnel to provide IT
services Personnel17
IT Personnel solve the problem in the first instance Personnel18
IT Personnel keep users well informed about the progress of users
complaint/s Personnel19
IT Personnel handle users complaints/queries seriously Personnel20
IT Personnel inform users exactly when maintenances will be
performed Personnel21
The behavior of IT Personnel gives confidence to users Personnel22
IT Personnel are friendly and polite with users Personnel23
IT Personnel are knowledgeable enough to perform their job Personnel24
IT Personnel are continuously in touch with the users Personnel25
134
3.1. Analyzing IT Personnel in Low Performance Sample
Table 35 : Analyzing IT Personnel in Low Performance Sample
N Minimum Maximum Mean Std. Deviation
Personnel17 62 1.00 5.00 2.7419 1.11525
Personnel18 62 1.00 5.00 2.9032 1.05130
Personnel19 62 1.00 5.00 2.7419 1.02326
Personnel20 62 1.00 5.00 2.8871 .92515
Personnel21 62 1.00 5.00 2.5968 1.12293
Personnel22 62 1.00 5.00 2.9032 1.00343
Personnel23 62 1.00 5.00 3.5000 1.00409
Personnel24 62 1.00 5.00 3.0806 1.13511
Personnel25 62 1.00 5.00 2.6774 1.19801
IT Personnel 62 1.00 4.70 2.8935 .86950
Table (35) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Personnel in Low Performance
Sample.
In the first rank, came the statement Personnel23 "IT Personnel are friendly
and polite with users" with a mean of = 3.5000 and a standard deviation of =
1.00409.
135
In the last rank, came the statement Personnel25 “IT Personnel are
continuously in touch with the users” with a mean of = 2.6774 and a standard
deviation of = 1.19801.
In general, the arithmetic mean of the total statements related to IT
Personnel in Low performance sample is 2.8935 and a standard deviation of
0.86950, which shows the degree of Neutral of the research sample answers to
these statements.
136
3.2. Analyzing IT Personnel in Medium Performance Sample
Table 36 : Analyzing IT Personnel in Medium Performance Sample
N Minimum Maximum Mean Std. Deviation
Personnel17 60 1.00 5.00 3.1333 1.08091
Personnel18 60 1.00 5.00 3.0167 .91117
Personnel19 60 1.00 5.00 2.9833 1.01667
Personnel20 60 1.00 5.00 3.0500 .96419
Personnel21 60 1.00 5.00 3.0667 1.11791
Personnel22 60 1.00 5.00 3.2667 .93640
Personnel23 60 1.00 5.00 3.7333 .82064
Personnel24 60 1.00 5.00 3.4333 .87074
Personnel25 60 1.00 5.00 3.1167 1.19450
IT Personnel 60 1.20 5.00 3.1917 .72889
Table (36) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Personnel in Medium
Performance Sample.
137
In the first rank, came the statement Personnel23 "IT Personnel are friendly
and polite with users" with a mean of = 3.7333 and a standard deviation of
=0.82064.
In the last rank, came the statement Personnel18 “IT Personnel solve the
problem in the first instance” with a mean of = 3.0167 and a standard deviation of
= 0.91117.
In general, the arithmetic mean of the total statements related to IT
Personnel in Medium performance sample is 3.1917 and a standard deviation of
0.72889, which shows the degree of Neutral of the research sample answers to
these statements.
3.3. Analyzing IT Personnel in High Performance Sample
Table 37 : Analyzing IT Personnel in High Performance Sample
N Minimum Maximum Mean Std. Deviation
Personnel17 82 1.00 5.00 3.6220 1.00173
Personnel18 82 2.00 5.00 3.4878 .91953
Personnel19 82 1.00 5.00 3.3902 .89933
Personnel20 82 1.00 5.00 3.5000 .90608
Personnel21 82 1.00 5.00 3.6829 1.10976
Personnel22 82 1.00 5.00 3.3415 .93253
Personnel23 82 1.00 5.00 3.9268 .91328
Personnel24 82 2.00 5.00 3.5732 .70326
Personnel25 82 1.00 5.00 3.0854 .91895
IT Personnel 82 1.60 4.80 3.5195 .66804
138
Table (37) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Personnel in high Performance
Sample.
In the first rank, came the statement Personnel23 "IT Personnel are friendly
and polite with users” sites are always available and reliable" with a mean of =
3.9268 and a standard deviation of = 0.91328.
In the last rank, came the statement Personnel25 “IT Personnel are
continuously in touch with the users” with a mean of = 3.0854 and a standard
deviation of = 0.91895.
In general, the arithmetic mean of the total statements related to IT
Personnel in high performance sample is 3.5195 and a standard deviation of
0.66804, which shows the degree of Agreement of the research sample answers to
these statements.
139
3.4. Analyzing IT Personnel in the Entire Sample
Table 38 : Analyzing IT Personnel in the Entire Sample
N Minimum Maximum Mean Std. Deviation
Personnel17 204 1.00 5.00 3.2108 1.11844
Personnel18 204 1.00 5.00 3.1716 .99009
Personnel19 204 1.00 5.00 3.0735 1.00711
Personnel20 204 1.00 5.00 3.1814 .96309
Personnel21 204 1.00 5.00 3.1716 1.20138
Personnel22 204 1.00 5.00 3.1863 .96979
Personnel23 204 1.00 5.00 3.7402 .92909
Personnel24 204 1.00 5.00 3.3824 .92096
Personnel25 204 1.00 5.00 2.9706 1.10490
IT Personnel 204 1.00 5.00 3.2328 .79279
Table (38) explains the mathematical means and standard deviations of the
responses to the sample of the study about the IT Personnel in entire sample.
In the first rank, came the statement Personnel23 "IT Personnel are friendly
and polite with users" with a mean of = 3.7402 and a standard deviation of =
0.92909.
140
In the last rank, came the statement Personnel25 “IT Personnel are
continuously in touch with the users” with a mean of = 2.9706 and a standard
deviation of = 1.10490.
In general, the arithmetic mean of the total statements related to IT
Personnel in the entire sample is 3.2328 and a standard deviation of 0.79279,
which shows the degree of Neutral of the research sample answers to these
statements.
141
3.5. IT Personnel comparison in all performance categories
Table 39 : IT Personnel comparison in all performance categories
IT Personnel Sample Mean Standard
Deviation
Low Performance Sample 62 2.8935 0.86950
Medium Performance Sample 60 3.1917 0.72889
High Performance Sample 82 3.5195 0.66804
Entire Sample 204 3.2328 0.79279
Figure 16 : IT Personnel comparison in all performance categories
2.89
3.19
3.52
3.23
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Low performanceSample
Medium PerformanceSample
High PerformanceSample
Entire Sample
IT Personnel Means
142
Forth: Analyzing the statements of the Organization Performance
Table 40 : Analyzing the statements of the Organization Performance
Statements Abbreviation
IT has improved the productivity Performance26
IT contributed to increase the profit Performance27
IT has improved the internal controls in the company Performance28
IT has improved the overall performance of the company Performance29
4.1. Analyzing The Performance in Low Performance Sample
Table 41 : Analyzing the Performance in Low Performance Sample
N Minimum Maximum Mean Std. Deviation
Performance26 62 1.00 4.00 2.8548 1.02184
Performance27 62 1.00 5.00 1.8710 .81951
Performance28 62 1.00 4.00 1.9355 .78659
Performance29 62 1.00 5.00 2.0484 1.09286
Performance 62 1.00 4.00 2.1774 .69007
143
Table (41) explains the mathematical means and standard deviations of the
responses to the sample of the study about the Organizational Performance in Low
Performance Sample.
In the first rank, came the statement Performance26 "IT has improved the
productivity” with a mean of = 2.8548 and a standard deviation of = 1.02184.
In the last rank, came the statement Performance27 “IT contributed to
increase the profit” with a mean of = 1.8710 and a standard deviation of =
0.81951.
In general, the arithmetic mean of the total statements related to
organizational performance in Low performance sample is 2.1774 and a standard
deviation of 0.69007, which shows the degree of Disagreement of the research
sample answers to these statements.
4.2. Analyzing the Performance in Medium Performance Companies
Table 42 : Analyzing the Performance in Medium Performance Companies
N Minimum Maximum Mean Std. Deviation
Performance26 60 1.00 5.00 3.2333 .74485
Performance27 60 1.00 5.00 3.1000 .98635
Performance28 60 1.00 5.00 2.9333 1.05552
Performance29 60 1.00 5.00 3.1333 1.12697
Performance 60 1.00 5.00 3.1000 .62977
144
Table () explains the mathematical means and standard deviations of the
responses to the sample of the study about the Organizational Performance in
Medium Performance Sample.
In the first rank, came the statement Performance26 "IT has improved the
productivity” with a mean of = 3.2333 and a standard deviation of = 0.74485.
In the last rank, came the statement Performance28 “IT has improved the
internal controls in the company” with a mean of = 2.9333 and a standard
deviation of = 1.05552.
In general, the arithmetic mean of the total statements related to
organizational performance in Medium performance sample is 3.1000 and a
standard deviation of 0.62977, which shows the degree of Neutral of the research
sample answers to these statements.
4.3. Analyzing The Performance in High Performance Companies
Table 43 : Analyzing the Performance in High Performance Companies
N Minimum Maximum Mean Std. Deviation
Performance26 82 1.00 5.00 3.7317 .90334
Performance27 82 2.00 5.00 3.1829 1.06722
Performance28 82 1.00 5.00 3.3049 1.17262
Performance29 82 2.00 5.00 4.0732 .87179
Performance 82 3.00 5.00 3.5732 .68548
145
Table (43) explains the mathematical means and standard deviations of the
responses to the sample of the study about the Organizational Performance in High
Performance Sample.
In the first rank, came the statement Performance29 "IT has improved the
overall performance of the company" with a mean of = 4.0732 and a standard
deviation of = 0.87179.
In the last rank, came the statement Performance27 “IT contributed to
increase the profit” with a mean of = 3.1829 and a standard deviation of =
1.06722.
In general, the arithmetic mean of the total statements related to
organizational performance in High performance Sample is 3.5732 and a standard
deviation of 0.68548, which shows the degree of Agreement of the research
sample answers to these statements.
146
4.4. Analyzing The Performance in Entire Sample
Table 44 : Analyzing The Performance in Entire Sample
N Minimum Maximum Mean Std. Deviation
Performance26 204 1.00 5.00 3.3186 .96819
Performance27 204 1.00 5.00 2.7598 1.13439
Performance28 204 1.00 5.00 2.7794 1.18087
Performance29 204 1.00 5.00 3.1814 1.32109
Performance 204 1.00 5.00 3.0098 .88774
Table () explains the mathematical means and standard deviations of the
responses to the sample of the study about the Organizational Performance in the
Entire Sample.
In the first rank, came the statement Performance26 "IT has improved the
productivity” with a mean of = 3.3186 and a standard deviation of =0.96819.
In the last rank, came the statement Performance27 “IT contributed to
increase the profit” with a mean of = 2.7598 and a standard deviation of =
1.13439.
In general, the arithmetic mean of the total statements related to
organizational performance in entire sample is 3.0098 and a standard deviation of
0.88774, which shows the degree of Neutral of the research sample answers to
these statements.
147
Performance comparison in all companies’ performance categories
Table 45 : Performance comparison in all companies’ performance categories
Performance Sample Mean Standard
Deviation
Low Performance Sample 62 2.1774 .69007
Medium Performance Sample 60 3.1000 .62977
High Performance Sample 82 3.5732 .68548
Entire Sample 204 3.0098 .88774
Figure 17 : Performance comparison in all companies’ performance categories
2.18
3.10
3.57
3.01
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Low performanceSample
MediumPerformance Sample
High PerformanceSample
Entire Sample
Performance Mean
148
Comparison between all parts’ Mean in all companies categories
Table 46 : Comparison between all parts’ Mean in all companies categories
Variables
Low Medium High All Companies
Mean St.
Deviation Mean
St.
Deviation Mean
St.
Deviation Mean
St.
Deviation
IT Network
Infrastructure 2.7919 0.95046 3.1750 0.84785 3.6341 0.59819 3.2431 0.86514
IT
Applications 2.8387 0.91120 3.1150 0.78585 3.3366 0.58468 3.1201 0.78007
IT
Personnel
2.8935 0.86950 3.1917 0.72889 3.5195 0.66804 3.2328 0.79279
Figure 18 : Comparison between all parts’ Mean in all companies categories
2.8
3.2
3.6
3.2
2.8
3.1 3.3
3.1 2.9
3.2
3.5
3.2
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Low PerformanceSample
MediumPerformance Sample
High PerformanceSample
Entire Sample
IT Infrastructure
IT Applications
IT Personnel
149
Correlation between IT Components & performance in high
organizational performance
Since this study is exploratory in nature, the collected data are further analyzed
using the Bivariate Correlation test. The Bivariate Correlation test computes
Pearson's correlation coefficient, and measures how variables are related. Pearson
correlation coefficient is a measure of linear association. The correlation
coefficient value (r) range from 0.10 to 0.29 is considered weak, from 0.30 to 0.49
is considered medium and from 0.50 to 1.0 is considered strong
Table 47 : Correlation between IT Components & performance in high organizational
performance
IT Infrastructure IT Applications IT Personnel Performance
IT Infrastructure
Pearson Correlation 1 .691** .580** .656**
Sig. (2-tailed) .000 .000 .000
N 82 82 82 82
IT Applications
Pearson Correlation .691** 1 .584** .619**
Sig. (2-tailed) .000 .000 .000
N 82 82 82 82
IT Personnel
Pearson Correlation .580** .584** 1 .506**
Sig. (2-tailed) .000 .000 .000
N 82 82 82 82
Performance
Pearson Correlation .656** .619** .506** 1
Sig. (2-tailed) .000 .000 .000
N 82 82 82 82
150
Table (47) shows the correlation between IT Network Infrastructure, IT
applications, IT Personnel and high organizational performance rating. As it can be
seen as following:
1. Correlation between IT Network Infrastructure and performance in
high performance companies was Significant (P ˂ 0.01)
The results shows that, there was a Strong & Positive Correlation between
IT Network Infrastructure and performance in high organizational
performance (r = 0.656)
2. Correlation between IT Applications and performance in high
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Strong & Positive Correlation between
IT Applications and performance in high organizational performance (r =
0.619)
3. Correlation between IT Personnel and performance in high
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Strong & Positive Correlation between
IT Personnel and performance in high organizational performance (r =
0.506)
151
Correlation between IT Components & performance in Medium
organizational performance
Table 48 : Correlation between IT Components & performance in Medium organizational
performance
IT Infrastructure IT Applications IT Personnel Performance
IT Infrastructure
Pearson Correlation 1 .685** .675** .446**
Sig. (2-tailed) .000 .000 .000
N 60 60 60 60
IT Applications
Pearson Correlation .685** 1 .722** .480**
Sig. (2-tailed) .000 .000 .000
N 60 60 60 60
IT Personnel
Pearson Correlation .675** .722** 1 .482**
Sig. (2-tailed) .000 .000 .000
N 60 60 60 60
Performance
Pearson Correlation .446** .480** .482** 1
Sig. (2-tailed) .000 .000 .000
N 60 60 60 60
Table (48) shows the correlation between IT Network Infrastructure, IT
applications, IT Personnel and Medium organizational performance rating. As it
can be seen as following:
152
1. Correlation between IT Network Infrastructure and performance in
Medium performance companies was Significant (P ˂ 0.01)
The results shows that, there was a Medium & Positive Correlation between
IT Network Infrastructure and performance in Medium organizational
performance (r = 0.446)
2. Correlation between IT Applications and performance in Medium
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Medium & Positive Correlation between
IT Applications and performance in Medium organizational performance (r
= 0.480)
3. Correlation between IT Personnel and performance in Medium
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Medium & Positive Correlation between
IT Personnel and performance in Medium organizational performance (r =
0.482)
153
Correlation between IT Components & performance in low
organizational performance
Table 49 : Correlation between IT Components & Performance in Low organizational
performance
IT Infrastructure IT Applications IT Personnel Performance
IT Infrastructure
Pearson Correlation 1 .864** .581** .272*
Sig. (2-tailed) .000 .000 .032
N 62 62 62 62
IT Applications
Pearson Correlation .864** 1 .644** .312*
Sig. (2-tailed) .000 .000 .014
N 62 62 62 62
IT Personnel
Pearson Correlation .581** .644** 1 .464**
Sig. (2-tailed) .000 .000 .000
N 62 62 62 62
Performance
Pearson Correlation .272* .312* .464** 1
Sig. (2-tailed) .032 .014 .000
N 62 62 62 62
Table (49) shows the correlation between IT Network Infrastructure, IT
applications, IT Personnel and low organizational performance rating. As it can be
seen as following:
154
1. Correlation between IT Network Infrastructure and performance in
Low performance companies was Significant (P ˂ 0.01)
The results shows that, there was a Weak & Positive Correlation between IT
Network Infrastructure and performance in low organizational performance
(r = 0.272)
2. Correlation between IT Applications and performance in Low
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Medium & Positive Correlation between
IT Applications and performance in low organizational performance (r =
0.312)
3. Correlation between IT Personnel and performance in Low
performance companies was Significant (P ˂ 0.01).
The results shows that, there was a Medium & Positive Correlation between
IT Personnel and performance in low organizational performance (r =
0.446)
155
Correlation between IT Components & organizational performance
Table 50 : Correlation between IT Components & organizational performance
IT Infrastructure IT Applications IT Personnel Performance
IT Infrastructure
Pearson Correlation 1 .781** .657** .563**
Sig. (2-tailed) .000 .000 .000
N 204 204 204 204
IT Applications
Pearson Correlation .781** 1 .677** .502**
Sig. (2-tailed) .000 .000 .000
N 204 204 204 204
IT Personnel
Pearson Correlation .657** .677** 1 .555**
Sig. (2-tailed) .000 .000 .000
N 204 204 204 204
Performance
Pearson Correlation .563** .502** .555** 1
Sig. (2-tailed) .000 .000 .000
N 204 204 204 204
Table (50) shows the correlation between IT Network Infrastructure, IT
applications, IT Personnel and organizational performance rating. As it can be seen
as following:
Correlation between IT Infrastructure and overall organizational
performance rating was Strong (0.563, P ˂ 0.05)
Correlation between IT Applications and overall organizational performance
was Strong (0.502, P ˂ 0.05).
Correlation between IT Personnel and overall organizational performance
was Strong (0.555, P ˂ 0.05).
156
Hypotheses Test
Hypothesis (1): To test the Impact of IT Network infrastructure on
organizational Performance in Oil & Gas companies in Egypt
Table 51 : Correlation between IT Network infrastracture and orgnizational performance
Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .563a .317 .313 .73574
a. Predictors: (Constant), IT Infrastructure
The above Table no. (51) Shows that there are three correlation coefficient
values: The simple correlation coefficient (R) measures the correlation degree of
independent variables coefficient (IT Network infrastructure) with the variable
(Organizational Performance) which equals 0.563, i.e., it is a strong correlation.
This is shown also by R2 which measures the variation in the dependent
variable coefficient (Organizational Performance), which is interpreted by the
independent variable to be equal to 0.317. Finally, rectifier coefficient of
determination 𝑅2̅̅̅̅ amounted to 0.313, which means that the independent variable
(IT Network Infrastructure) may interpret 31.3% of the changes occurring in the
dependent variable that is (Organizational Performance) and the rest (68.7%) due
to the other factors.
157
Table 52 : ANOVA test for IT Network Infrastructure
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 50.636 1 50.636 93.544 .000b
Residual 109.344 202 .541
Total 159.980 203
a. Dependent Variable: Performance
b. Predictors: (Constant), IT Infrastructure
ANOVA Test is used to test the overall proposed simple linear regression
model.
The above Table shows that: the proposed simple linear regression model
has a strong statistical significance as the (F) value is 93.544, that is statistically
significant at α= 0.001. It confirms the very high exploratory power of the model
of simple linear regression statistically. In addition, there is a statistical significant
relationship between the independent variable (IT Network Infrastructure) and the
dependent variable (Overall Organizational Performance).
Therefore, we reject the hypothesis stipulating that:
H01: There is no significant Impact of IT Network Infrastructure on the
performance of Oil & Gas companies in Egypt
And accept the hypothesis stipulating that:
H11: There is a significant Impact of IT Network Infrastructure on the
performance of Oil & Gas companies in Egypt
158
Table 53 : Coefficients table for IT Network Infrastructure
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 1.138 .200 5.679 .000
IT Infrastructure .577 .060 .563 9.672 .000
a. Dependent Variable: Performance
The Coefficients table provides us with the necessary information to predict
dependent variable (performance) from independent variable (IT Network
infrastructure).
The previous Table shows that the independent variable (IT Network
infrastructure) has a statistical significance, according to t-test (at the level of
significance P ≤ 0.05)
159
Hypothesis (2): To test the Impact of IT Applications on organizational
Performance in Oil & Gas companies in Egypt
Table 54 : Correlation between IT Applications and orgnizational performance
Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .502a .252 .248 .76971
a. Predictors: (Constant), IT Applications
The above table no. (54) shows that the three correlation coefficient values
that is the simple correlation coefficient (R) measures the correlation degree of
independent variables coefficient (IT Applications) with the variable
(Organizational Performance) which equals 0.502, i.e., it is a strong correlation.
This is shown also by R2
which measures the variation in the dependent
variable coefficient (Organizational Performance) interpreted by the independent
variable to be equal to 0.252. Finally, rectifier coefficient of determination 𝑅2̅̅̅̅
amounted to 0.248, which means that the independent variable (IT Applications)
may interpret 24.8% of the changes occurring in the dependent variable that is
(overall Organizational Performance) and the rest (75.2%) due to the other factors.
160
Table 55 : ANOVA test for IT Applications
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 40.304 1 40.304 68.029 .000b
Residual 119.676 202 .592
Total 159.980 203
a. Dependent Variable: Performance
b. Predictors: (Constant), IT Applications
The above Table shows that: the regression model has a strong statistical
significance as the (F) value is 68.029 that is statistically significant at α= 0.001. It
confirms the high exploratory power of the model of simple linear regression
statistically. In addition, there is a statistical significant relationship between the
independent variable (IT Applications) and the dependent variable (Overall
Organizational Performance).
Therefore, we reject the hypothesis stipulating that:
H02: There is no significant Impact of IT Applications on the performance of Oil
& Gas companies in Egypt
And accept the hypothesis stipulating that:
H12: There is a significant Impact of IT Applications on the performance of
Oil & Gas companies in Egypt
161
Table 56 : Coefficients table for IT Applications
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 1.228 .223 5.512 .000
IT Applications .571 .069 .502 8.248 .000
a. Dependent Variable: Performance
The Coefficients table provides us with the necessary information to predict
dependent variable (performance) from independent variable (IT Applications).
The previous Table shows that the independent variable (IT Applications)
has a statistical significance, according to t-test (at the level of significance P ≤
0.05)
162
Hypothesis (3): To test the Impact of IT Personnel on organizational
Performance in Oil & Gas companies in Egypt
Table 57 : Correlation between IT Personnel and organizational performance
Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .555a .308 .305 .74012
a. Predictors: (Constant), IT Personnel
The above Table no. (57) shows that the three correlation coefficient values
that is the simple correlation coefficient (R) measures the correlation degree of
independent variables coefficient (IT Personnel) with the variable (Organizational
Performance) which equals 0.555, i.e., it is a strong correlation.
This is shown also by R2
which measures the variation in the dependent
variable coefficient (Organizational Performance) interpreted by the independent
variable to be equal to 0.308. Finally, rectifier coefficient of determination 𝑅2̅̅̅̅
amounted to 0.305, which means that the independent variable (IT Personnel) may
interpret 30.5% of the changes occurring in the dependent variable that is
(Organizational Performance) and the rest (69.5%) due to the other factors.
163
Table 58 : ANOVA Test for IT Personnel
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 49.329 1 49.329 90.054 .000b
Residual 110.651 202 .548
Total 159.980 203
a. Dependent Variable: Performance
b. Predictors: (Constant), IT Personnel
The above Table shows that: the regression model has a high statistical
significance as the (F) value is 90.054 that is statistically significant at α= 0.001. It
confirms the high exploratory power of the model of simple linear regression
statistically. In addition, there is statistical significant relationship between the
independent variable (IT Personnel) and the dependent variable (Organizational
Performance).
Therefore, we reject the hypothesis stipulating that:
H03: There is no significant Impact of IT Personnel on the performance of Oil &
Gas companies in Egypt
And accept the hypothesis stipulating that:
H13: There is a significant Impact of IT Personnel on the performance of Oil
& Gas companies in Egypt
164
Table 59 : Coefficients table for IT Personnel
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 1.000 .218 4.584 .000
IT Personnel .622 .066 .555 9.490 .000
a. Dependent Variable: Performance
The Coefficients table provides us with the necessary information to predict
dependent variable (performance) from independent variable (IT Personnel).
The previous Table shows that the independent variable (IT Personnel) has a
statistical significance, according to t-test (at the level of significance P ≤ 0.05)
165
Chapter (4): Conclusions & Recommendations
166
Introduction
The Information Technology is one of the most influential parts in the
organizational performance as it influences all the business sectors and impacts the
work performance.
Based on what was stated in this study and by examining the information
technology components (IT Network Infrastructure, IT Applications and IT
Personnel) and their impact on organizational performance according to the results
of the field study on a sample of the oil and gas companies in Egypt of those
classified as (high, medium and low) performance companies according to the
classification ASA, this study concluded that there is a significant impact of
information technology on the oil & gas companies in Egypt.
Through our studies to address the Information technology components (IT
Network infrastructure, IT Applications & IT Personnel) and their impact on the
organizational performance in oil & gas companies in Egypt, some results and
findings were concluded as follows:
Theoretical Results:
The Information Technology is one of elements for any organization in order
to enhance the performance. It impacts the employees’ performance and improves
the work flow. Moreover the information technology enhances the process of
decision making and the internal & external communication.
167
Practical Results:
- There is a significant impact of IT Network infrastructure on overall
organizational performance in Oil& Gas companies in Egypt.
- There is a significant impact of IT Applications on overall organizational
performance in Oil& Gas companies in Egypt.
- There is a significant impact of IT Personnel on overall organizational
performance in Oil& Gas companies in Egypt.
IT in High performance oil & gas Companies in Egypt
- Correlation between IT Network Infrastructure and high organizational
performance rating was High (0.656, P ˂ 0.01)
- Correlation between IT Applications and high organizational performance
was High (0.619, P ˂ 0.01).
- Correlation between IT Personnel and high organizational performance was
High (0.506, P ˂ 0.01).
IT in Medium performance oil & gas Companies in Egypt
- Correlation between IT Network Infrastructure and Medium organizational
performance rating was medium (0.446, P ˂ 0.01)
- Correlation between IT Applications and Medium organizational
performance was medium (0.480, P ˂ 0.01).
- Correlation between IT Personnel and Medium organizational performance
was medium (0.482, P ˂ 0.01).
168
IT in Low performance oil & gas Companies in Egypt
- Correlation between IT Network Infrastructure and low organizational
performance rating was Low (0.272, P ˂ 0.05)
- Correlation between IT Applications and low organizational performance
was medium (0.312, P ˂ 0.05).
- Correlation between IT Personnel and low organizational performance was
medium (0.464, P ˂ 0.05).
IT in oil & gas Companies in Egypt
- Correlation between IT Network Infrastructure and overall organizational
performance rating was High (0.563, P ˂ 0.05)
- Correlation between IT Applications and overall organizational performance
was High (0.502, P ˂ 0.05).
- Correlation between IT Personnel and overall organizational performance
was High (0.555, P ˂ 0.05).
169
Conclusions:
The study concluded the following Conclusions:
1. This study provides the prove of concept that The Information Technology is
one of elements for any organization in order to enhance the performance
and the study statistical results give us the evidence of the positive impact of
information technology on organization performance
2. It has been found in low performance companies that, the companies were
providing their employees with old technologies which decrease their work
performance
3. Another empirical finding in low performance companies is that the
companies’ internet connections were not reliable and the internet
performance was not acceptable. The companies’ perception of using
internet is for entertainment, and it look like a cost center
4. It appears in low performance companies that the companies are using old
applications which impact the performance of work flow
5. One of the most important findings in low & Medium performance
companies that, The companies’ employees need more training to work with
information technology applications to raise their performance
6. It has been found in low performance companies that, there is unacceptable
integration with all information technology applications. This issue
interrupts the movement of data through the systems which impact the
performance of work flow
7. It appears in low & Medium performance companies that, there is a lack of
communication between employees and the information technology staff
170
Recommendations:
1. Based on the results of this research, the perception of top management
towards the Information technology should be changed from cost center to
be profit center. And the companies should deal with information technology
as an important part of the business chain.
Business and IT executives should agree on the best strategy for using
technology in order to achieve business-IT alignment and provide context
for IT investment priorities.
2. It is recommended to upgrade the hardware which is provided to employees
in low performance companies to enhance their performance which will
impact the companies’ performance.
3. The Internet is a virtual treasure trove of information. Any kind of
information on any topic under the sun is available on the Internet. The
‘search engines’ on the Internet can help you to find data on any subject that
you need; so it highly recommended that in low performance companies the
management should change their perception towards the internet and
enhance the service of internet
4. In low performance companies, it is recommended to upgrade the
information technology applications which will facilitate the work flow and
impact the companies’ performance
5. In low & Medium performance companies One of the most important
recommendation is improving the employees’ training to work smoothly
with information technology applications which will impact the overall work
performance
171
6. The IT department in low performance companies should work to integrate
all applications to facilitate the movement of information through the
companies’ systems
7. Employees in the Oil & Gas Sector in Egypt can smoothly move between
Oil & Gas companies according to the companies’ needs. Such moves can
help in transferring the information technology knowledge, experience,
practices and latest applied technologies between sector companies.
I highly recommend encouraging these moves to raise the performance of
information technology, which will positively affect the overall performance
of the sector companies.
Suggestions for Future Research
The limitations of this study provided some of the possible future
research studies. One limitation of this study was it only involved with the
most important parts of information technology IT network infrastructure,
IT applications & IT Personnel, so another study could be done with other
parts for IT investment, IT policies and procedures & IT Governance.
In addition, a limitation of the study was the use of ROI as the only
indicator for organizational performance, so another study could be done
using other financial and non-financial indicators for the organizational
performance.
Another limitation of this study was that it didn't include Foreign and
oil & gas production companies in Egypt, so another study could be done
for these companies
172
Appendices
173
APPENDIX (1)
Survey
Company: Name (optional):
Please indicate the extent to which you agree or disagree with the following statements
(1)Strongly Disagree (2) Disagree (3) Neutral (4) Agree (5) Strongly Agree
N. Statement 1 2 3 4 5
1
IT provides the company employees with the latest technology in
computers
Infr
astr
uctu
re
2 The Company computer Networks are always available and reliable
3
The voice communication with all company’ sites are always
available and reliable
4 The E-Mail Service is always available and reliable
5 The internet connection is always available and reliable with high
performance
6 The level of information Security is high
7 The data storage capacity is sufficient
174
N. Statement 1 2 3 4 5
8 The company uses modern IT Applications
App
licatio
ns
9 The information provided by the IT Applications of the company is
reliable
10 The information provided by the IT Applications of the company is
accurate
11 IT Applications of the company provide users the complete
information that is needed
12 Employees have sufficient understanding of IT Applications
13 IT Applications are well integrated
14 IT Applications of the company facilitate user friendly interface
15 IT Applications of the company are aligned with company processes
and objectives
16 IT Applications of the company have increased the performance of
employees
17 IT Division have deployed sufficient Personnel to provide IT services
IT P
ers
on
nel
18 IT Personnel solve the problem in the first instance
19 IT Personnel keep users well informed about the progress of users
complaint/s
20 IT Personnel handle users complaints/queries seriously
21 IT Personnel inform users exactly when maintenances will be
performed
22 The behavior of IT Personnel gives confidence to users
23 IT Personnel are friendly and polite with users
24 IT Personnel are knowledgeable enough to perform their job
25 IT Personnel are continuously in touch with the users
26 IT has improved the productivity
Per
form
ance
27 IT contributed to increase the profit
28 IT has improved the internal controls in the company
29 IT has improved the overall performance of the company
175
APPENDIX (2)
Supporting Letters
EGPC Letter
176
Ministry of Petroleum Letter
177
CAPMAS Letter
178
APPENDIX (3)
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