Increase Use Of Euc Among Business Organizations example essay topic

1. Executive Summary. In the last two decades issues regarding management of Information Technology (IT) within organizations have gained due consideration. The heavy reliance on IT has caused difficulties for chief executives' officers (CEOs) to optimize their computing resources. The Information Technology Computer Council of South Africa has collected raw data in a way of a survey of fifty-four small and medium sized organizations to investigate the degree of IT usage in South Africa.

The raw data of this survey was used in the statistical analysis performed in this study in attempts to assess the depth and breadth of IT usage in business. The parameters such as organizational (size, sale or profitability and type of business) and chief executives (educational level and computer literacy, ownership of PC and computer experience) have been studied. The study highlights how sales figures of the organizations; type of business and CEO computer literacy contributes toward the use of IT. Information Technology (IT) plays a vital role in the sustained growth of business organizations. The term IT is defined in a broad sense as "technologies dedicated to information storage, processing, and communications" (Ang et al 1997). This notion of IT focuses on a combination of hardware, software, telecommunications, and office equipment that transform raw data into useful information for speedy retrieval.

Increasing investment in IT and the strategic role played by information systems make IT implementation an important research issue within the MIS discipline. While the strategic importance of IT is established and progress has been made in understanding it, less is known about how to implement IT effectively for achieving general organizational goals. In this study, the size of greater than 50 employees to less than 250 employees, has been defined as medium size organizations whereas, size of less than 50 employees is treated as small organization. 2. Background The reason for this study is as the Information Technology Computer User council of South Africa it is imperative to understand the market's that are available and that can be penetrated with regard to information technology sales, ongoing support, and implementation of computer systems. As a training organization developing IT consultant who in turn are encountered with tasks of assisting senior management with information technology strategy formulation and implementation of information technology concepts, this study will assist in understanding the dept and breadth of information technology in business.

3. Objective Of Analysis The central theme of this analysis is to examine the extent of the use of IT in various small and medium business organizations in South Africa. This has been achieved through conducting a study by formulating the following two specific objectives: To identify and to assess the extent of the use of IT in organizations To identify the factors that may influence IT use in the organization. 4.

Literature Survey The extent of use of information technology is actually related to the computing Environment. Computing environment is normally classified into two broad categories: the traditional data processing (DP) and end-user computing (EUC). I In the DP environment the user interacts with the computer indirectly through professionally trained staff. On the other hand, in EUC, the user interacts directly with the computer through application software.

In EUC, the user is supported by professional consultants, a vendor support program or through education / training firms who act as intermediaries between the computer and the user. This analysis review's the EUC. The main reason for selecting the EUC is characterized by the control that user have over choice as to when and how to use a computer. Moreover, EUC has grown rapidly within last twenty years. It is estimated that annual EUC growth rate of 50% to 90% (Rockart & Flannery).

With this increase use of EUC among business organizations, it would be quiet appropriate to study on EUC environment. Raymond (1982) reported that the concentration of IT in big organizations was more on supporting managerial functions, whereas, in small organizations the concentration on IT was more on operational functions. 5. Research Model Relevant literature was reviewed in order to find a suitable model and to propose various hypotheses based upon it.

For this study it has been decided to use the one stage model developed by Dimension Data (Figure 1) relating to various variables for this study. Each of the variables used in the model is discussed below: Organizational Parameters The role of the organizational parameters such as size, structure, profitability was considered as vital in the microcomputer usage. This analysis postulates the following hypotheses: H 1 (a) Size of business exerts a positive effect on the organizational use of IT. H 1 (b) Type of business exerts a positive effect on the organizational use of IT.

H 1 (c) Sale of business exerts a positive effect on the organizational use of IT. Chief Executives' Parameters CEO's knowledge of computers and involvement in computerization leads to more successful computer use. Change in chief executives' attitude toward IT can be achieved by the method of training adopted and stressed upon the structure of training, are of great importance in developing positive attitudes of the users. Training can provide better understanding of IT and as such it significantly reduces computer anxiety and foster the positive attitude toward microcomputers greater end-user experience increased the likelihood of end-user computing success.

Based upon the above, the following four hypotheses are postulated: H 2 (a) Academic qualification of CEO exerts a positive effect on the organizational use of IT. H 2 (b) Computer literacy of CEO exerts a positive effect on the organizational use of IT. H 2 (c) Computer experience of CEO exerts a positive effect on the organizational use of IT. H 2 (d) Ownership of PC by CEO exerts a positive effect on the organizational use of IT. 6. Data Collection Secondary data from a research company was used in this research. (refer to appendix for the sample questionnaire used by them in obtaining the data) A survey was conducted by the market research company from October 2000 to December 2000.

A questionnaire was sent to 143 various private sector organizations. The details of which appear in the Appendix. The questionnaire was emailed & posted. Out of these, 103 organizations have responded with a response rate of 72%. The questionnaire from fifty-four organizations was filled up by their chief executives officers and was therefore retained for the purpose of the survey thus bringing the real response rate to 54/143 = 38%. Further adopting stratified / purpose selection method, the final results were classified into following main groups: a) Banks / Insurance b) Hotels / Food Catering c) Travel & Shipping d) Retailers & Wholesalers e) Construction f) Service organizations.

For the purpose of the survey, the above classification presents a reasonably and comprehensive approach towards inference making on the study. 7. Statistical Analysis Out of the fifty-four organizations, 37% of the organizations were identified as medium-sized companies and 63% are small-size companies. (Refer to Appendix Figure 1 - main business activities of responding organizations). The use of information technology ranges from somewhat use to very much use. However, the majority (54%) of the organizations indicated their usage from "most of the time" to "all of the time" (mean of 3.51 with standard deviation of 1.02).

It is also noticed that use of IT is at minimal level at 34% of the organizations. 35% of these organizations have annual sale of less than R 1 million. 40% of Organizations claimed their sales were in between R 2 million and 5 million. Whereas, 20% of the business claimed their sales exceeded $10 million. Most of the respondents are aged between 30-39 years and possess first or Bachelor's degree.

63% of the respondents are male as compared to 37% of females. About 63% of them reported to have a personal computer. Hypotheses Testing In line with the principles of multivariate data analysis, the paired or zero order correlation between the independent and dependent variables is shown in Table 2. The correlation provides directional support for the predicted relationship and shows that col linearity among the independent variables is sufficiently low so as not to affect the stability of regression analysis. Examinations of the correlation reveal that there exists an inter-correlation among independent variables.

The CEO's in-house training, ownership of PC, sales and type of business are statistically significantly correlated with the usage of IT (dependent variable). It is apparent from the table that correlation coefficient is significant and positive for three of the four variables. However, negative correlation exists between ownership of PC and the predicated use of IT. The correlation is negative but significant. That may be due to the facts that slightly higher proportion of the respondents have PC but it affects towards use of IT is negative. The next step is to look at the combined effects of these variables in predicting the use of IT through stepwise multiple regression analysis.

However, in conducting this regression the problem of multicollinearity should be dealt with. None of the variables are highly inter-correlated thus fulfilling Hair et al's (1979) criterion that says that variables to qualify for multicollinerity should have coefficient of correlation. 80 or above. The results of stepwise multiple regression analysis is presented in Table 3. Computer experience is measured on six items; the reliability of the scale is calculated as. 90.

Most of the items asked questions to determine various computing skills of the CEOs'. Most of the items correlate with each other. Similarly, computer literacy asked questions about various training programs and any self-taught skill attained by the CEOs'. Regression analysis has further found that computer experience did not contribute toward the use of IT. Whereas, among computer literacy, in-house training program is found to be significant predictor in determining the organizational use of IT. The Durbin-Watson statistics is also calculated, as 1.85 that shows that problem of auto-correlation does not exist.

Further the R 2 and adjusted R 2 suggests the validity and significance of the regression model. It is evident from the data analysis in Table 3 as above that the hypotheses H 1 (a), H 2 (a) H 2 (c) and H 2 (d) are rejected. Whereas, hypotheses H 2 (b) is partially supported. Hypotheses H 1 (b) H 1 (c) are found to be significant. One of the objectives of this study is to identify and assess the extent of the use of IT in organization. On a five-point Likert scale the mean usage of IT in the organizations is 3.51 with a standard deviation of 1.0.

From the survey 51% of the organizations claimed their usage of information technology ranges from most of the time to all of the time. Whereas, 15% of the businesses use IT at about half of the time. Similarly, 31% of the businesses are still using IT occasionally. It is interesting to note that out of the 56% of the business that use IT about most of the time, only 21% are medium sized organizations. Conversely, out of remaining 24% of the organizations that claimed the use of IT about half of the time, 66% of the organizations are medium sized.

This is evident from the hypotheses testing that the size of the organization is not a determining factor in the use of IT. The size of the business therefore, does not exert positive effects on the organizational use of IT. The type of business is found to be a significant variable in the study. The findings is that different business sectors have different levels of IT integration. Organizations involved in goods and services have higher intensity of computer usage as compared to those involved with product manufacturing and distribution. A further analysis of means (ANOVA) between various groups and also tests for significant differences has indicated that Banking and Travel business sector is more avid user of IT.

The sales of the organizations under survey are found to be significant contributing factor in the use of IT. However, this study has discovered that IT is being used to gain competitive advantages. The results of responding organizations show the relationship of sales and the use of IT. It can be concluded that IT is used to increase the sales. As far as chief executives' parameters are concerned, most of the literature review supports the notion that CEO with higher educational qualifications also has more positive attitudes towards IT. Furthermore, prior computer training is found to be significant contributing factor.

In the survey of CEOs' qualifications, computer experience and computer literacy were measured. Under the umbrella of computer literacy several factors were measured, such as in-house computer training, outside computer training and self-taught computer skill of the CEOs'. Only in-house computer training is found to be significant. 8. Conclusions This study has identified and assessed the degree of the use of IT among participating small and medium business organizations in South Africa. It has identified the factors that influenced the use of IT.

One of the major findings is chief executive's computer knowledge is positively associated with the use of IT. CEO knowledge of computer and involvement leads to more successful use of IT in business. The use of IT is however influenced by the organizational factors such as sales and type of business. The research has also identified that most of the surveyed organizations are avid users of IT, however it does not confirm the turnaround and strategic support from IT applications. That provides an insight for the chief executives and policy makers in revising their mission statements and to re-tune their perspective in promoting the business. Chief Executives not only should explore the ways to adopt the latest technology but also to encourage their functional and business managers to learn and use the various techniques of telemarketing to get the business gain and to built a real IT culture.

In order to build an IT based culture, IT should be used not only to support management functions but also to support the operational functions. The CEOs must look into the matter seriously. As evidenced from the study the business in South Africa is using and relying on IT like several other countries in the world. The use of IT among South African business organizations is in line with various world leaders such as America and Germany. 9.

Bibliography

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Donald R Cooper, Pamela S Schindler, Business Research Methods, Irwin Mc Raw- Hill. Ang, J and Pari, F., (1994) " A Survey and Critique of the Impacts of Information Technology", International Journal of Information Management 14 (2), 122-133.
Rockart, J. F and Flannery, I., (1983) "The Management of End-User Computing", Communication of the ACM, 26 (10), pp.
776-784. Raymond, L and Magne net, T.N., (1982) "Information System in Small Business: Are they Used in Management Decision?" , American Journal of Small Business l 6 (4) pp.
20-27. Hair, J.F., Anderson, R.E., Tath am, R. L and Grablowsky, B.J., (1979) Multivariate Data Analysis, Tulsa, OK: Petroleum Publishing Company.
10. Appendix. Sampling Design Sample design covers the areas of sampling frame, sample size. The total number of business establishments are 4085 (S A Computing Statistical Year book 1997).