CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
The study established the effect of Information systems on performance of government agencies in Uganda, taking a case of URA. This chapter presents the review of theoretical and related literature to the study. It involves theoretical review, actual literature review, and a summary of literature review. The actual literature was reviewed objective by objective, and the sources of literature reviewed include; secondary sources especially text books, journals, newspapers, research dissertations, government reports and publications, and primary source, especially pilot study that was carried out.
2.2Theoretical review
The study was guided by Diffusion of Innovation Theory by Rogers in (1962).The Diffusion of Innovation Theory states that diffusion is governed by four main interacting elements; the innovation itself, communication channels, time and social systems. These four components explain the process of change as determined by individuals and the whole organization (Deligiannaki& Ali, 2011).
Using this theory, the innovation of Information systems at URA was numerous, these included; adoption of modern website systems and the use of software in most of its operations. URA adopted these innovations to enable the organization to eliminate the key challenges. Diffusion assumes that the propensity to adopt an innovation is primarily a function of the availability of information, the Information systems at URA was adopted to enhance better performance.
2.3.1 The effect of information systems software and the organizational performanceInformation systems software covers vast areas of technologies such as mobile and wireless technology, telecommunications, software development, security, intelligent systems etc. Information system has a huge impact on industries, the community in general and our daily lives. Information systems software can be applied to many fields. One of the emerging applications in recent years is in most of the organizations to enhance better performance (Kwok Hung Lau &Haibo Huang 2012). Information systems software is fast becoming one of the main drivers of change, posing new strategic challenges (Lee & Kim, 2016). The business environment today has been undergoing unprecedented change and many companies are seeking new ways to stand out from the competition by sustaining their competitive advantage. In today’s highly competitive global marketplace, the pressure on organization is to find new ways of creating and delivering value to customers in growing stronger.
Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted (Laudon&Laudon, 2016).
Pearlson, Saunders, and Galletta, (2016) emphasizes that the need for Information systems development cannot be understood unless one also understands the use of software in the organization and unless the software can be applied to the organization to enhance its better performance.The integration of Information Technology and business processes has irrevocably changed the way in which modern organisations operate. The majority of medium-to-large organisations invest significant amounts of time, money and effort on Information systems (IS); which combine hardware, software and networking capacity to enhance the efficiency and effectiveness of their business processes (Grant & Meadows, 2016). In some circumstances the IS/IT that supports a business process becomes so integral that it can be very difficult to differentiate between them. The way in which organisational accounting processes have become embedded and reliant upon Accounting Information Systems (AIS) is an apt example of this phenomenon.
Information systems software works hand in hand with the hardware to enable the organization be in position to achieve its goals and objectives. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware (Pinedo, 2016).
Software is not tangible, it cannot be touched. When programmers create software programs, what they are really doing is simply typing the list of the organization’s instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone. Examples of application software are Microsoft, Excel and Angry Birds (Chen et al., 2016).
According to Huang et al., (2013), Governments around the world are under the pressure from citizens and business to be more open and transparent in managing public funds, deliver quality public services as per needs of citizens. Therefore, in the last quarter of 2017, the world wide expenditure on software development was 480 billion dollars (Hughes et al., 2017).This expenditure was in information systems software to enable better service delivery and improve on general public sector performance.
Clearly, Internet and intranet technology has practical integrative applications for organizations. In addition to the practical use of IT as an integrative mechanism, the management of technology also has increased. Andrade &Doolin (2016) makes a strong argument that companies use IT to structure organizations. In addition, he argues that he and many others consider the management of IT as the biggest challenge. The research from this thesis addresses both of these two issues, namely; the use of IT for integration and the implications associated with the management of Information Technology itself.
According to Rana et al., (2017) Information systems initiatives in India was first started in 1990 with a minimal financial investment into National Informatics Centre to enable computerization of operations and automation of the pension fund. This was to eliminate the several challenges with the mismanagement and poor record keeping of the files of the pensioners.
Krecie (2016) reports that the government of Philippines invested around 8-10% of its GDP on Information systems to enable integrating the operations of government agencies and also on improving transparency in public sector. These financial investments in Information systems by different public sector organizations across the globe, is a manifestation of the long-term benefits of the service in enhancing better organizational performance.
Aisara and Pather (2011), in line with world trends, the government of South Africa has over the last decade, recognized the importance of Information and Communications Technology (ICT) and more recently Information systems in improving the standards of service quality and increasing the overall efficiencies of government. Asa result, the government has provided systems software to different public institution amounting to over R14 billion during2015/2016 financial year.
Abdullahi(2014),reports that the government of Nigeria in an effort to eliminate inefficiencies in service delivery and improve general performance, invested 32 billion dollars in 2015 to improve on the network systems and elimination of inefficiencies in the Information systems performance.
Karim, 2015 reports that Nigeria has some of the worst public sector delivery systems in the world characterised by corruption and delays in delivery of public services.
2.3.2 The Information Systems infrastructure and organizational performance
Wachira(2015) the use of computer systems in the organization improves performance in a number of ways. Firstly, the computers improve the level of coordination between different departments in a public sector. This has enabled the government across the globe to improve on public service delivery effectiveness and general better organizational performance of the government agencies.
Wachira(2015) further contends that Information systems infrastructure also improves on speed and reliability of organizational transfer and processing of information among members in the organization. This helps the different departments in the organization to send and receive information in a short time whichleads to improved performance and better competitive strength of the organization. There is a delay of government services in reaching the people that need it. In Ethiopia, some of the departments that people delay in accessing services include the pension (Lavers & Hickey, 2016).
The use of internet services as an effective Information systems infrastructure in Nigeria has been adopted by the government to eliminate unnecessary government costs incurred as a result of paper work and enhance performance of public sector agencies in the country (Ukachi, 2015).
Rotich (2015) also believes that the adoption of computers in the organization is to provide better and an effective communication between different departments in the organization and also between the organization and the outside world. The government’s effort to use computers in the monitoring of public agencies is to ensure that business between the government and the citizens is effective and fast.
Wilson et al., (2015) states that the use of websites is to enable long-term relationship between the organization and the customers. He further asserts that websites are where customers keep checking on the major changes in the organizational products. The public sector websites provide information to the customers about the products the organization has.
Government across Sub-Saharan Africa have acquired advanced software in key government agencies like Taxation and water management systems; this is to enable government manage public utilities better.
Paul and Pascale (2013) the government of Ghana was able to realize an increase in revenue collection due to the use of advanced software and internet services. Using this system, the public could pay for their taxes online. With the use of systems infrastructural facilities, Ghana was able to realize an increase in revenue collection by 22% in 2017. This was estimated at GH¢13.2 billion against the target of GH¢12.8 billion.
Ronald and Nazarius (2011) Uganda Revenue Authority has been experiencing a failure to meet its targets which has been a challenge to the organizational top management despite the adoption of ASYCUDA world software.Ghmire, (2014) indicates that taxation software enhances efficiency in revenue collection and reduces costs.
2.3.3 User knowledge and skills on organizational performance.
Knowledge has become one of the most highly valued commodities in the modern economy. Further, knowledge is considered the principal tool of competitiveness and innovation in the composition of commodity chain to the broader processes of regional and national economic development (Ajuwon, 2015). The new paradigm is that, within the organization, knowledge must be shared in order for it to grow thus sharing knowledge among its management and staff grows stronger and becomes more competitive (Tarhini et al., 2015).
Some of the most significant changes are the growing importance of knowledge as a catalyst of economic growth within the global economy, the revolution of information and communication technology (ICT), the integration of the global labour market and worldwide socio-political transformations (Lwoga et al., 2016).
Lwoga et al., (2016) further notes that access to and production of knowledge are essential prerequisite for participation in the global economy; this is witnessed by the fact that information and communication technologies have significantly increased the speed of production, use and distribution of knowledge, thus making a country’s economic and social wellbeing dependant on how quickly it can adjust its capacity to share and generate knowledge.
Komba et al., (2016)transformations brought to different firms as a result of Information systemsoffer many potential opportunities for both developed and developing nations. However, on the negative side, they also pose serious threats, and especially for developing nations. There is ample evidence that processes of globalization and the ascent of Manuel Castell’s ‘Information Society’ have given rise to new problems, such as the growing knowledge gap and digital divide between the information rich and the information poor among and within nations.
According to Meeker, (2015) the concept of Knowledge Management (KM) has attracted the attention of researchers over the last decade since it is considered an important tool to achieve innovation and sustainable competitive advantage. Takieddine& Sun (2015) noted that in highly unstable economies the only sure source of lasting competitive advantage is knowledge. Bayero, (2015) notes that firms that adopt knowledge management practices perform better than competing firms that do not. On the same line of thought, Ukachi, (2015) further asserts that knowledge management practices have been implemented in different industries both service and manufacturing to enhance better performance and increased output.
According to Ludeman&Erlanson, (2013) the late 1980’s saw a growing shift towards computer integration which emphasized the use of computers in most of the government’s daily work like the preparation of reports, accountability and monitoring of government projects which changed from manual to automated.
The 1990’s saw a heightened focus on increasing the use of computer technology in Education, Health and Defence departments of most governments across the globe. Busagala (2013) notes that there is growing attention and pressure to implement technology in education, one of the most significant features of the technological or digital era of much relevance to education is the Internet.
- 4 Summary of related literature
The literature reviewed indicated that systems software has different roles on the effectiveness of Information systems on performance of a government agency. Some of the roles include ensuring that there is transparency in management of public funds. The use of Information systems also enables the government to have better ways of record keeping, achieve improved standards of service quality and increase the overall efficiencies of government.
The study indicated that Information systems infrastructure had an influence on performance of government agencies like the use of computer systems in the organization improves performance. Internet services as an effective systems infrastructure enables URAto eliminate unnecessary costs incurred as a result of paper work and enhance performance. The adoption of computers in the organization is to provide better and an effective communication between different departments in the organization and also between the organization and the outside world.
The literature indicated that user knowledge and skills have an influence on organizational performance since knowledge is believed to be the principal tool of competitiveness which enhances innovation in the organization.
The literature does not indicate how Information system influencesfinancial performance in an organization since it’s difficult to measure performance. Most organizations have different ways of measuring performance because of their different goals, for example, profit making organization may assume that profitability is the key determinant of performance while government organization which are not profit making may use another parameter in determining performance. In addition, organizations with long term ambition prefer to use customer growth as a measure of performance.
Though a number of studies were carried out on performance in relation to government agencies, those addressing performance are still limited. Even those existing, were done in a different geographical setting other than Uganda Revenue Authority, at different time and using different methods.
In addition to that the performance of Uganda Revenue Authority since the financial years 2015/2016 and 2016/2017 there is an accumulated total deficits of 862 billion Ugandan shilling from 2015 to 2017 despite implementing information systems for the last five years.This study therefore was carried out to address the knowledge gap existing as far as Information systems and performance is concerned in Uganda Revenue Authority.
