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The impact of Information Technology on Management Efficiency- A case study of Pakistani Firms

Shaukat, Dr. Muhammad (2009) The impact of Information Technology on Management Efficiency- A case study of Pakistani Firms. PhD thesis, Bahauddin Zakariya University, Multan.

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Abstract

Technology is seminal to the progress of any country. It helps to catalyze efficiency in the provision of better production and services. It is the major enabler of social change and development in the world. One of the major developments which had profound impact on the economic growth pattern in the world in the new millennium has been the strides in the domain of Information Technology (IT) sector. The world has observed significant growth of applications in diverting areas of IT. This technology has drastically changed the working of today’s organizations by increasing efficiency and effectiveness over the past decades. Now Information Technology permeates nearly every aspect of modern business operations and communications. It is being used over globe by all the organizations of developed and developing countries for performance improvements. Similar to other developing countries, this technology is also being applied by majority of the organizations of Pakistan. Due to its increasing importance, the Information Technology is one of the most exciting areas of research that has been the focus of intense interest throughout the world over the decades but little has been devoted to examining the impact of IT on Pakistani organizations. The purpose of this study was to explore the relationship of IT with management performance (efficiency and effectiveness) of Pakistani organizations. The manufacturing and banking sectors of Pakistan are most progressing sectors and back bone of Pakistan economy. Both the sectors have experienced different reforms from time to time and at present are great user of IT, therefore, are selected for this research. These sectors have made massive investments in IT by installing different IT systems from time to time. But despite all this, they are still unable to find the most suitable systems, to achieve its full benefits. They are experiencing with different systems and facing difficulties in implementing various IT systems. This study examined the organizational performance of banking and manufacturing sectors of Pakistan over decade from different angels in addition to indicating the real problems these sectors are encountering in IT usages. Various aspects associated with the topic have been explored and discussed in the literature review and the primary data for detail study was collected from in-depth interviews and field surveys of 48 companies, 24 in manufacturing sector(12 local and 12 foreign) and 24 in banking sector(12 local and 12 foreign). The data was tested by applying different financial and statistical techniques and the results of the research have led to the conclusions that IT investments have positive impact on the organizational performance and the banking sector performance outstrips the performance of manufacturing sector. Although all the good performing companies are using IT and most of them working with in-house developed IT systems, but the performance of the companies which are using standard applications in both the sectors is found to be excellent. However, it is highly dependent on the use of type of information systems. The socio-cultural/organizational/systemic factors like cultural, social, political, economic and human factors have impeded a lot to the implementation of IT in Pakistan. In addition, various other problems like Pakistan inadequate telecommunication infrastructure, lack of talented employees, improper planning, unjustified investment and wrong selection of hardware and software are found to be the major constraints in implementation of IT in Pakistani organizations. The employee education, training, motivation, and reward were revealed as some of the measure the sample companies have taken to overcome employee resistance in IT adoption. Moreover, top management commitment and support were found to be the major reasons for IT success in the organizations. Considering the policy issues, it is suggested that the companies should install standard customized systems for their core areas with compatible hardware, across the organization. The IT project cost is to be properly categorized and rationalized so that it should not exceed the expected benefits. The selection of software and hardware is to be made more prudent. The increasing operating cost could be minimized by outsourcing certain IT functions. Proper authenticity and security of the electronic transactions also is to be ensured. There is also need from the government to further reduce communication charges and expand telecommunication infrastructure to all areas. It is also suggested that the specialized training for the world renowned standard E.R.P application packages such as SAP, Oracle, Misys etc., is needed to be started at the mass level on low cost basis by educational institutions/universities by establishing E.R.P centers in collaboration with leading E.R.P providers. The E.R.P application systems give more efficiency to the organization, therefore, are getting popularity in the world and in Pakistan too. Due to their better performance results the organizations are converting their old IT systems to these new E.R.P solutions rapidly. So there is a great need for trained human resource in this field in the organizations. The government should also support these training initiatives and give more grants to those educational institutions who want to establish such E.R.P centers. The same type of training should also be started by E.R.P vendors by establishing some training academies through out Pakistan or at least in its all big cities. The procedures to retain the loyalty of the customer with increasing IT based e-business popularity, in absence of physical contact, are also to be devised. The top management, though very well aware of IT importance should also involve the IT division/department head in the company’s strategic planning, product innovations, and in all other managerial activities.

Item Type:Thesis (PhD)
Uncontrolled Keywords:Impact, Information, Technology, Management, Efficiency, Study, Pakistani, Firms, organizations, economic, growth, statistical
Subjects:Business Administration & Management (d)
ID Code:3022
Deposited By:Mr. Javed Memon
Deposited On:01 Jun 2010 12:24
Last Modified:26 May 2011 11:22

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