BARRIERS TO IMPLEMENTING INFORMATION TECHNOLOGY IN DEVELOPING COUNTRIES Authors: Address: E-mail address: Keywords:
Rodney Stewart1, Sherif Mohamed2 School of Engineering, Griffith University, PMB 50 GCMC, QLD 9726, Australia
[email protected] information technology, developing countries, barriers, coping strategies
ABSTRACT The use of Information Technology (IT) is growing rapidly in developed countries, and is expected to be the dominant form of business communication between organizations in the near future. However, construction organizations operating in these countries have been slow in their uptake of IT due to a number of well-documented barriers, including, the very nature of how the industry operates one-off projects, industry fragmentation, low level of technology awareness and training, required up-front investment, on-going maintenance costs and resistance to change. These problems are magnified significantly in developing countries along with other additional barriers contributing to the poor diffusion of IT. Organizations operating in these countries face further distinctive difficulties, such as, scarcity of IT professionals, inadequate physical and information infrastructure, social and culture diversity, and political barriers that modulate and distort market competitive forces. To gain a further insight into these difficulties, this paper reports on the results of a pilot questionnaire survey investigation of the perceptions of engineers and project managers operating in developing countries, as to the barriers to, and potential of, effective IT implementation. Further, the paper provides a summary of the significant barriers to implementing IT tools in developing countries and suggests some possible coping strategies to mitigate their effects on IT implementation.
INTRODUCTION Strategically speaking, IT has the potential to change the landscape of the construction industry. The industry, however, seems to make slow progress towards capitalising on the opportunities IT offers, to gain competitive advantage and enhance performance. Reasons for the slow uptake of IT have been investigated and are well documented (Betts, 1999). They include the very nature of how the industry operates one-off projects, industry fragmentation, lack of client leadership, low level of technology awareness and training, required up-front investment, on-going maintenance costs and resistance to change. The problem of poor or ineffective IT diffusion is further exasperated in developing countries where additional barriers are evident. Researchers working in various industries have identified a number of these barriers that are particularly specific to developing countries. These barriers include the lack of personnel skilled in the management, use and support of IT, poor quality and/or quantity of telecommunications infrastructure, web-based information primarily in English and the high rate of computer illiteracy amongst employees (Montealegre, 1998; De Boer and Walbeek, 1999). This abundance of barriers makes it very difficult for construction organizations operating in these countries to improve existing processes through innovative IT implementation. This paper reports on the results of a questionnaire survey investigation of the perceptions of engineers and project managers operating in developing countries throughout Asia, as to the barriers to, and potential of, effective IT implementation. The paper reports on the significance of barriers to effective IT implementation in an attempt to determine those of most concern to the construction industry. Additionally the research study links these barriers to proposed coping strategies and quantifies the effectiveness and practicality of these strategies.
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STRATEGIC IT IMPLEMENTATION IN CONSTRUCTION According to Aouad et al. (1996), little regard has been given to the future potential of IT within the construction industry. Only recently, research efforts have poured into the strategic implementation of IT in construction (Jung and Gibson, 1999; Pena-Mora et al., 1999; Marsh and Flanagan, 2000; Love et al., 2001). The construction professionals’ need for successful IT development and implementation within both the industry and academia has led, in recent years, to a surge in IT research and development in the construction industry. The successful implementation of new and innovative IT in construction requires the development of strategic implementation plans prior to IT project commencement. Moreover, the advent of recent IT has accelerated the adoption of innovative IT in the construction industry. Nevertheless, compared with other industry sectors, current uses of computer applications in construction are not very advanced. Construction organizations must tackle the main IT management processes: setting strategic and technical direction for IT applications, making decisions about funding, executing IT business strategies, and reviewing performance of IT investments over their lifecycle. The successful implementation of new and innovative IT in construction requires the development of strategic implementation plans prior to IT project commencement (Betts, 1999). Unfortunately, organizations do not consider the future potential of IT within the construction industry, giving rise to a large gap between output and expectation from these IT investments (Dos Santos and Sussman, 2001). Only recently, there has been growing interest in developing planning frameworks to aid the strategic implementation of IT in construction. Leslie (1996) identified five 'streams' or responsibilities that identify and separate the information needs of the Architecture, Engineering and Construction (AEC) industry from those of the technologies that will be required to satisfy them: (1) project application; (2) project resources; (3) industry conventions; (4) process re-engineering; and (5) communications and computing. A study by Myllymaki (1997) concerning the planning and implementation of new IS in Finnish construction companies, identified three 'cornerstones' of a successful implementation: (1) vision; (2) commitment; and (3) re-engineering possibilities. Miozzo et al. (1998) derived an IT-enabled process strategy for construction. Their research looks at a number of construction processes and ‘blocking’ sources to their efficiency. Jung and Gibson (1999) developed a framework for measuring and assessing Computer Integrated Construction (CIC) planning. They detailed five measures for CIC planning: (1) corporate strategy; (2) management; (3) computer systems; (4) IT, and (5) incremental investment. Pena-Mora et al. (1999) developed a strategic IT planning framework for the AEC industry, particularly focusing on large-scale construction projects. The first step in this framework is to understand the businesses of the AEC project as well as the dynamics of the overall economic environment in which the project operates. The second step is to analyse the relevant processes and functions within the AEC project. Finally, the third step is to develop an IT investment model that can be integrated into the overall strategic planning framework to devise the generic dynamic strategic plan. Standardised Process Improvement for Construction Enterprises (SPICE) is a research project that is developing a process improvement framework for the construction industry (Sarshar et al., 2000). This is based on an existing successful model (Saieden and Kuzara, 1995), which was developed by the US Department of Defence and is widely used in the software industry, namely the Capability Maturity Model (CMM). Increasing evidence from other sectors (Paulk et al., 1993) shows that continuous process improvement is based on many small, evolutionary steps, rather than revolutionary measures. The SPICE maturity model, which is an incremental model, helps immature organizations reach process maturity. The SPICE framework considers five maturity levels: initial, repeatable, defined, managed and optimising. A maturity level is a well-defined evolutionary plateau towards achieving mature processes. Each maturity level provides a layer in the foundation for continuous process improvement. Each level comprises a set of process goals that, when satisfied, stabilise an important component in the ‘construction’ process. Achieving each level of the maturity framework establishes a different component in the ‘construction’ process, resulting in an increase in the process capability of the organization (Sarshar et al., 2000). 594
However, many of the above-mentioned frameworks lack relevance to the specific needs of construction organizations operating in developing countries. Prior to development of a strategic IT implementation framework that is applicable to these countries, a research analysis on the significant implementation barriers, and possible coping strategies to overcome them, is required in order to be able to formulate an implementation strategy that addresses these issues. This paper aims to elicit the perceptions of construction professionals operating in developing countries to create a set of significant barriers to IT implementation and the coping strategies to overcome them. Once a set of barriers and associated coping strategies are validated by industry, a more relevant strategic IT implementation plan for developing countries can be formulated.
BARRIERS TO EFFECTIVE IT IMPLEMENTATION The literature review examined a wide range of research studies in both developed and developing countries to generate a generic list of barriers to effective IT implementation, at the industry level, in developing countries. The list of barriers established through this extensive review was used for the questionnaire survey detailed in later sections of this paper. Effective IT implementation in construction is essential to improve productivity. A study by Love et al. (1996) identified problems and barriers to the implementation of IT. The most significant problems were the lack of system knowledge, with 68% of contractors interviewed perceiving this as a problem area, and lack of training associated with the implementation, with 62% identifying this as a problem. The lack of knowledge and ignorance of the potential benefits of IT applications was found to extend to contractor’s existing systems, with more than 50% of contractors unaware of the capabilities of their existing highly specialised software. Often, tasks that could be handled by existing systems were externally contracted, as the organization was unaware that their system was capable of the task. The lack of knowledge was also identified as one of the main reasons why management had little interest in a commitment to the Internet, e-mail and advanced applications such as knowledge-based expert systems and simulation. Laage-Hellman and Gadde (1996) examined the barriers to the implementation of Electronic Data Interchange (EDI) in the Swedish construction industry. They undertook a case study with Swedish materials suppliers and discovered four (4) barriers to effective implementation of EDI. These include: -
Technical barriers at the industry level: small and medium sized contractors do not have suitable applications to allow standardised transmission solutions to become commonplace. On the supplier side, most companies lack suitable order, inventory and invoicing systems. Organizational barriers at the industry level: The limited number of EDI users in itself constitutes a barrier to rapid implementation. Because there are not many customers or suppliers to link up with, many companies prefer to postpone their EDI investments until a critical mass of users exist. Technical barriers at the company level: The lack of IT competence, especially among the personnel on construction sites, has turned out to be an important problem, which slows down the spread of EDI within the company. Organizational barriers at the company level: Construction organizations in general are highly decentralised, and in many firms there is a variation in the purchasing behaviour among different units and individuals (especially in organizations that have grown through acquisitions).
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Tucker and Mohamed (1996) have also identified several barriers to IT implementation, including: -
Reluctance: Due to senior managers who, through the lack of system knowledge/understanding and being convinced of the immediate gains that could be achieved from IT applications.
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Resources: Both financial and personnel, with organizations under heavy competition, reluctant to invest in technology and unable to provide time to change operations and train staff. Training: Lack of time for training and changing operations is taken into account when considering IT implementation. Change: Any changes to work processes are disruptive to productivity, especially during the introduction phase of and more so if the introduction is not known in advance. Tradition: People, no matter how dedicated to the new tools, usually have a tendency towards doing things the way they are used to.
An Australian government study into IT in the construction industry (NSW, 1998) identified the barriers for the slow take-up of technology at an industry level as being: -
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The diverse nature of the industry. There are 148,000 consultants, contractors, subcontractors, subcontractors and suppliers in Australia. Each has an average of three employees, The numerous client organizations. Each requires a broad range of sophisticated information, An industry operating at very low margins, with much lower working capital than other industries. This severely limits educational, research and development initiatives, Project data being generally re-established at each phase and by each discipline, The limited nature of information sharing; companies want to safeguard their competitive advantage, and The cyclical nature of the industry activity. This results in employees leaving the industry, taking their experience and knowledge with them.
Love et al. (2001) conducted an interview-based research investigation in South-Western Victoria, Australia. In this study, fifty firms were invited to participate in the research, which aimed to identify the perceived barriers to implementing e-commerce. In total, twenty small to medium sized contracting organizations, which have annual turnovers ranging from $1 to $50 million, agreed to be interviewed. The barriers that were identified from the interviews have been categorised as follows: organizational, financial, technical and behavioural. In addition, risk, uncertainty, change and knowledge were identified as the underlying factors that businesses considered as being the constraints to the introduction of information and communication technologies to support an ecommerce infrastructure. DeBoer and Walbeek (1999) undertook a study on the telematics of six developing countries: Bangladesh, Burkina Faso, Costa-Rica, Ethiopia, Peru and Zimbabwe. They identified several barriers to effective IT implementation in developing countries: (1) regulation, (2) limited quality and quantity of infrastructure, (3) poor telematic infrastructure in rural areas, (4) English being the primary language on the Net, and (5) the low level of technology available makes it difficult to use email and the Internet. Montealegre (1998) examined whether the imperfection and scarcities of the less-developed countries environment and lack of managerial skills in these countries were significant barriers to modernising organizations in less developed countries. Their study showed that even where the intellectual skills required to use IT are scarce, in the long run, the company may gain more from ‘informating’ its environment than from merely automating its processes. But the study also showed that managers in developing countries must consciously and actively develop these intellectual skills in workers. Table 1 details the compilation of the above-mentioned industry level barriers. This table details specific barriers, their causes and associated references obtained from the literature review.
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Table 1 - Industry Level Barriers
Barriers
Causes
References
Fragmented nature of industry Relationship-related implementation barriers
Numerous disciplines of specialists Limited centralisation of expertise Industry is reluctant to adopt partnering or alliance based relationships, which promote communication Government funding fluctuations in budgeting for public infrastructure Cyclical demand for property and real estate Companies want to safeguard their competitive advantage Poor interoperability between IT applications of different companies, especially small and medium organizations. Engineering and construction management degrees have limited IT component Numerous client organizations which expect varying sophisticated information Competitive industry Traditional processes inefficient Client organizations working on tight budgets Lowest price culture to tendering Lack of IT training courses available Limited available people with necessary experience Lack of government spending on telecommunications infrastructure
Andresen et al. (2000); NSW (1998) Laage-Hellman and Gadde (1996); Tucker et al. (1999); Brandon (2000) Marsh and Flanagan (2000); NSW (1998)
Western culture leading world markets English accepted as the universal language Limited training provided by employers Lack of exposure to IT
De Boer and Walbeek (1999)
Cyclical variations in workload activity levels Relatively low level of IT awareness
Lack of leadership by major client organizations Low profit margins
Lack of personnel skilled in the management, use and support of IT Poor quality and/or quantity of telecommunications infrastructure Web-based information primarily in English High rate of computer illiteracy amongst employees
Laage-Hellman and Gaade (1996); NSW (1998)
NSW (1998); Brandon, 2000 NSW (1998); Anderson (2001); Love et al. (2001) Montealegre (1998) De Boer and Walbeek (1999)
Montealegre (1998), De Boer and Walbeek (1999)
DEVELOPING COPING STRATEGIES Applied alone, the concise summary of barriers to effective IT implementation can do little to help construction organizations in developing countries. In addition to these barriers, a number of coping strategies to overcome them have been developed to assist these organizations formulate effective IT implementation strategies. These coping strategies were developed to address the abovementioned barriers and utilised critical success factors for IT implementation established from previous research (Miozza et al., 1998; Pena-Mora et al., 1999; Mak, 2001). They include: -
Increase government capital expenditure into telecommunications infrastructure; Develop standardized processes/outputs with commonly available IT applications to facilitate compatibility between organizations; Promote IT education and the development of human capital; Utilize on-line/web-based information management systems to facilitate a common, efficient data flow system; Publicise the advantages and quantify the benefits in adopting IT-based communication systems; 597
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Employ consultants or develop international partnerships to import expertise along with technology; Inform clients and their project managers of the benefits realized through adopting IT on their projects; Develop IT implementation policy and push for tax concessions to encourage the industry to invest in IT; Conduct industry forums to raise IT awareness among small & medium enterprises (SMEs); and Encourage leading clients to assume a leadership role in embracing innovation
RESEARCH METHODOLOGY The research methodology was developed with the purpose of achieving the following research goals: -
Refinement of the screened ‘list’ of barriers to effective IT implementation; Ranking the refined barriers in order of significance; Linking barriers to coping strategies; and Establishing the effectiveness and practicality of coping strategies.
Questionnaire design In order to achieve the above research goals, the questionnaire contained questions on the background of the survey respondents and the IT portfolio of their organization. This is followed by 12 questions relating to the significance of the barriers to effective IT implementation. For these questions respondents were required to rate the level of significance of each barrier using a fivepoint Likert scale from 1 to 5 (“1” not significant to “5” most significant). The final group of questions asked the respondents to link each of the 12 barriers to a series of coping strategies and then rate the level of effectiveness (i.e. its potential to overcome one or more of the barriers) and practicality (i.e. ease of implementation) of these strategies. This was done using a scale from 1 to 5, where “1” has very little potential, or most difficult to implement to “5” has great potential or very easy to implement, for effectiveness and practicality, respectively.
Sampling procedure The questionnaire was targeted at engineering and construction professionals working in developing countries who had some familiarity with IT applications in managing project information. This paper only reports on the pilot study element of this research project where a sample size of 20 was utilized for data analysis. It should be noted here that this study was intended to be of a preliminary nature and that the authors intend to conduct a more extensive study in the future targeting at least five countries and a sample size greater than 100 respondents.
DATA ANALYSIS AND RESULTS The following sections detail the results of the pilot questionnaire survey starting with a brief description of the respondent profiles, followed by the ranking of barriers according to mean significance and finally the linking of these barriers to possible coping strategies.
RESPONDENT PROFILES Respondents were classified into four categories: director/operations manager (26%), project manager/project engineer (52%), architect (11%) and other (11%). The position of other includes human resources manager, or finance officer, or project administrator. The questionnaire also asked respondents to provide details as to which developing country their organization operates: China (37%), Pakistan (16%), India (26%), Thailand (16%) and Oman (5%). The final part of this section asked respondents to detail the type of organization they were employed with: private (63%), government (31%) and quasi-government (6%).
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The next part of the questionnaire survey asked respondents to detail what IT applications and tools they had available to them in the context of project information management. As mentioned previously, the survey adopts an information-centric definition of IT and thus only these types of applications/tools were included in the survey. The survey demonstrated that a high percentage (94%) of respondents were utilising basic IT applications and tools such as the Internet, E-mail and Local Area Networks (LAN) for a mean period of approximately four years. However, the survey suggests that construction organizations operating in developing countries have been slow to embrace innovative IT applications and tools such as Wide Area Networks (WAN) (25%), webbased project management systems (0%), videoconferencing (44%) and on-line remote networking (12%). Additionally, those organizations that have adopted those more innovative tools have only done so in the past one to three years.
SIGNIFICANT BARRIERS TO IT IMPLEMENTATION The barriers collated in the literature review were compiled into the survey and respondents were asked to rate their significance on a scale of one to five as detailed previously. Table 2 details the mean significance scores for the 12 barriers labelled A through to L. Respondents rated barriers F: relatively low level of IT awareness (3.60), and G: high cost of IT applications (3.60) as the most significant barriers. Adversely, respondents did not see barrier K: web-based information primarily in English (2.50) as being highly significant barrier to effective IT implementation in developing countries. The next stage of analysis links these barriers to IT implementation to potential coping strategies to overcome them. Table 2 - Mean Significance of Barriers
Code F G J I E H D C A B L K
Barrier Description Relatively low level of IT awareness (exposure to IT) High cost associated with IT applications Poor quality and/or quantity of telecommunications infrastructure Lack of personnel skilled in the management, use and support of IT Cost-driven and/or ill-informed client organizations Poor compatibility between different applications/organizations Lack of leadership by major client organizations Low profit margins Fragmented nature of the industry Cyclical variations in workload activity levels High rate of computer illiteracy amongst employees Web-based information primarily in English
Significance 3.65 3.60 3.45 3.35 3.30 3.05 3.00 2.95 2.75 2.70 2.65 2.50
Rank 1 2 3 4 5 6 7 8 9 10 11 12
LINKING BARRIERS TO COPING STRATEGIES The next group of questions asked respondents to link the barriers detailed in Table 2 to a series of Coping Strategies (CS1 to CS10) detailed in Table 2 and then rate the effectiveness and practicality of these strategies. The results of this part of the questionnaire survey are detailed in Table 3 and described as follows. Columns (1) and (2) detail the coping strategies codes and descriptions. Column (3) details the barrier codes and the percentage of the respondents who linked them to relevant coping strategies (i.e. J (75%) means that 75% of respondents linked barrier J to coping strategy CS1). For the purpose of this analysis, the link was retained if 25% or more of respondents consider that the link existed. Column (4) details the mean significance of the linked barriers as per Table 1 above. Columns (5) and (6) detail the mean effectiveness and practicality scores, respectively, for the linked barriers in question. These scores are combined in Column (7) and rated as a percentage (%) (i.e. for the CS1-J link = (3.17 + 3.08) / 10 = 63%) to represent a more meaningful rating for the ‘usefulness’ of the coping strategy for overcoming the linked barriers. Finally, Column (8) ranks the ‘usefulness’ of the coping strategy for overcoming the linked barriers to IT implementation in developing countries. Where more than one barrier is linked to a coping strategy, the average ‘usefulness’ percentage was used for ranking the coping strategy.
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CS1 CS2 CS3 CS4 CS5 CS6 CS7 CS8
Barrie r Code s (3) Mean Signifi cance (4) Mean Effecti venes Mean s (5) Practi cality Usefu (6) lness % (7) Rank (8)
Table 3 – Linking Barriers to Coping Strategies
Code (1)
Coping Strategy Description (2) Increase government expenditure into telecommunications infrastructure Develop standardized processes/outputs with commonly available IT applications to facilitate compatibility between organizations Promote IT education and the development of human capital Utilize on-line/web based information management systems to facilitate a common, efficient data flow system Publicise the advantages and quantify the benefits in adopting IT-based communication systems Employ consultants or develop international partnerships to import expertise along with technology Inform clients and their project managers of the benefits realised through adopting IT on their projects Develop IT implementation policy and push for tax concessions to encourage the industry to invest in IT
J (75%)
3.45
3.17
3.08
63
5
H (69%)
3.05
3.36
2.73
61
7
F (38%) I (31%) L (50%)
3.65 3.35 2.65
3.80 3.60 4.25
4.20 3.80 3.75
80 74 80
1
I (25%) K (31%)
3.35 2.50
3.00 3.00
3.50 2.80
65 58
6
D (25%) F (25%)
3.00 3.65
3.50 3.50
2.75 3.50
63 70
3
C (25%) I (44%)
2.95 3.35
3.33 3.14
2.33 3.00
57 61
9
E (38%) F (25%)
3.30 3.65
2.60 3.00
2.80 3.25
54 63
10
C (38%) G (25%)
2.95 3.60
3.33 3.25
2.17 3.25
55 65
8
CS9
Conduct industry forums to raise IT awareness among small & medium enterprises (SMEs)
A (25%) F (50%) I (25%)
2.75 3.65 3.35
3.25 3.13 3.17
3.50 3.13 4.00
68 63 72
2
CS10
Encourage leading clients to assume a leadership role in embracing innovation
D (88%)
3.00
3.50
2.86
64
4
As can be seen in Table 3, professionals in developing countries see IT education (CS3), industry forums to raise IT awareness (CS9), and publicising the advantages and quantifying the benefits of IT adoption (CS5) as the three most effective and practical coping strategies to overcome many of the barriers detailed (A, D, F, I, L). These three coping strategies all fall under the umbrella of developing IT awareness and education programs in developing countries and could be considered as key enablers to overcoming the other barriers listed. Additionally, three other coping strategies deserve particular mention. Column (3) in Table 3 highlights three coping strategies CS1, CS2 and CS10 that are strongly linked to barriers J, H and D, respectively, with these coping strategies having a moderate usefulness score (>61%). The common theme amongst these three strategies is that respondents appear to make the assumption that the action required to implement these strategies is outside the scope of their sphere of influence (e.g. government, clients and IT). Also, it is interesting to note that when it comes to the industry’s responsibility to inform clients (CS7), respondents felt that this strategy has a relatively low usefulness score. The only explanation that can be offered herein is that respondents’ are unwilling to assume the responsibility of undertaking such tasks.
FUTURE WORK In an attempt to gain an understanding of the barriers to IT implementation in developing countries, this paper presents the results of an empirical investigation of the perceptions of construction professionals operating in these countries. Additionally, the paper proposes a number of coping strategies to overcome these potential barriers and provides some indication as to the degree of effectiveness and practicality of them in the construction environment. It should be noted that this study details preliminary findings only due to the relatively small size of the sample. The authors propose to undertake a more comprehensive study in the future utilising the key findings from this 600
questionnaire survey. This proposed in-depth study aims to target a more representative sample of engineering and construction professionals operating in numerous developing countries.
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