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1. Introduction
Information Technology (IT) is the sine qua non of all businesses today, including the construction
industry, so understanding its roles and functions in construction firms is a requisite in assessing their
performance. However, little work in this has been done on Malaysian firms. Generally, Information
Technology (IT) plays a vital role in the sustained growth of a business. IT is defined broadly as
technologies dedicated to information storage, processing, and communications Ang et al. (1997),
that is, a combination of hardware, software, telecommunications and office equipment to transform
raw data into useful information for speedy retrieval.
There have been regional studies (e.g., Asia-Pacific region). Valida et al. (1994) studied IT use
in 230 business organizations, mainly in Malaysia, and concluded that IT use conferred a competitive
advantage. Thong and Yap (1995) developed an IT adoption model for small business, and found that
the companies with innovative CEOs had a more positive attitude to IT use. In Singapore, Ang & Koh
(1997) explored the relationship between user information satisfaction and job satisfaction by
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developing two constructs to measure the relationship and found the two satisfactions to be correlated.
In Hong Kong, Burn (1990) studied the strategic use of IT in small- and medium-sized organizations.
She surveyed three medium-sized organizations and found that their IT strategy could be described by
the Porter and Miller (1983) model of competitive advantage.
In Australia, Sohal et al. (1998) studied 530 Australian companies, and found IT use to be
positively related to the organizations performance. Fink (1998) studied 280 small and medium
businesses and identified 10 IT adoption factors in the firms.
Back to Malaysia again, Yap et al. (1992) and Valida et al. (1994) concluded that IT use and its
integration were higher in companies providing goods and services than those in manufacturing and
distribution. Mui et al. (2002) surveyed internet use in the Malaysian construction industry, and found
that most of the companies used the Internet and considered it an important tool. Nevertheless, they
reckoned that they did not fully harness the power of the Internet - only using the basic functions like
e-mail. To encourage more intensive use of the Internet, they suggested improving their own
infrastructure and hiring more computer savvy staff.
To plug the paucity of Malaysian data, this paper seeks to assess the role of IT in Malaysian
construction firms with two objectives. Firstly, to collect data from randomly selected (unbiased)
construction firms of Grades 3 to 5 registered with Construction Industry Development Board (CIDB) small / medium firms. Secondly, to identify the relationship between IT use and firm performance.
Various survey questionnaires (e.g., Ang et al., 1994; Sohal et al., 1998) were trawled to derive the
questions to pose for this study / survey.
2. Methodology
Survey is one of the most cost effective ways to obtain information from a large number of people,
giving better results - more specific, accurate and faster most cost effective ways, (McQueen and
Knussen, 2002; Andi and Minato, 2003). The companies surveyed worked in three categories:
Government, private (specializing in construction, structure, infrastructure highways and materials)
and M&E. The respondents were only the top company officials - general manger, senior manger and
project manager as only they were knowledgeable about IT use in their companies and their company
performance.
All the companies were Malaysian, based in Selangor state and Kuala Lumpur Federal
Territory. The reasons for this area selection was proximity and that the areas had most (61%) of such
companies anyway (CIDB, 2003a). The company size was categorized by their annual turnover: G3
(RM1 million), G4 (RM1 - 3 million) and G5 (RM3 - 5 million). They were randomly taken from the
lists in the CIDB Directory, and interviewed over 9 months (Jul 2006 to March 2007).
To achieve better results, the 14-page questionnaire was structured as recommended by
McQueen and Knussen (2002) and Andi and Minato (2003). A total of 123,456,789 people were
approached, eliciting a response of 62%. The questionnaire was answered in face-to-face inteviews,
and the data analysed using the Statistical Package for the Social Sciences (SPSS) software.
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3.1 Reliability
The reliability of the 5-point Likert scale used for measuring IT use on the items surveyed was
determined by Cronbachs alpha coefficient. According to Pallant (2001) and Sekaran (1992), the
coefficient should be > 0.7 for the scale to be reliable, although Nunnally (1978) suggested only 0.50
0.60 for modest reliability. The results were 0.520 - 0.903. Table (1) shows that the -values for the
four components of Technical Software Use, Activities Computerized Materials Digitally Sent, and IT
Use Tools were all > 0.7, which was good, and for General Software Use 0.520, which was adequate.
Table 1:
Reliability
Factor
General Software Use
Technical Software Use
Activities Computerized
Materials Digitally Sent
IT Use Tools
No. items
6
7
9
8
7
Cronbachs Alpha
0.520
0.762
0.806
0.903
0.785
Overall, the data collected were interrelated and the scale consistent with the sample size. As
the Cronbachs alpha coefficients were 0.520, the scale used was deemed reliable (Fang et al., 2004;
Hatcher, 1994; Zain et al., 2005).
4. Descriptive Statistics
The use of IT in the construction industry can be naturally classified into Communication Systems and
Technical Decision Support Systems. According to Doherty (1997), the communication domain
involves all the common means of communication now computerized, while the technical decision
support domain involves computer applications other than for communications. In this section, the
types of computers, operating systems and software used by the respondent firms are examined.
Figure (1) shows that the most IT-savvy companies computerized >75% of their activities. The
main computer use was in design (60.3% of respondents), technical calculations (54.4%), scheduling
and resource planning (51.5%), invoicing and materials (47.1%), tendering (44.1%), bookkeeping and
budgeting (38.2%) and, least, maintenance planning for real estate (14.7%).
The moderately IT-savvy companies computerized 40 - 75% of their activities, mainly in
bookkeeping (51.5% of respondents), maintenance planning for real state (50.0%), invoicing (47.1%),
budgeting (44.1%), tendering (41.2%), scheduling and planning (32.4%), technical calculations
(25.0%), material control (23.5%) and, finally, design (16.2%).
The least IT-savvy companies (<40% activities computerized) mainly used their computers for
materials control (26.5% of respondents), design and maintenance planning (17.6%), technical
calculations (16.2%), scheduling and resource planning (13.2%), budgeting (11.8%), book keeping
(10.3 %) and tendering and invoicing (both 5.9%). For the not relevant companies (little use of
computers), the main computer uses were maintenance planning for real estate (17.6% of respondents),
tendering (8.8%), budgeting and design (5.9%) and others (2.9%).
415
47.1
38.2
38.2
44.1
5.9
2.9
2.9
2.9
5.9
8.8
14.7
17.6
25
Technical calculations
16.2
17.6
Design
23.5
26.5
0
0
5.9
10
11.8
30
20
32.4
40
10.3
5.9
17.6
16.2
13.2
Persentage
50
44.1
41.2
50
51.5
47.1
60
60.3
54.4
51.5
47.1
70
0
< 40 %
40-75%
>75%
using by computer
not relevent
Computer used
Figure (2) shows the extent of computer use in communications (both internal and external) in
the firms. In the moderate IT-savvy firms (40 - 75% activities computerized), the main uses of digital
transmission were for building as-built documents (54.4%), minutes of meeting (51.5%), quality and
testing results for materials (47.1%), tender enquiries (45.6%), calculations, orders and invoices
(42.6%), and descriptions (41.2%).
For the least IT-savvy firms (<40% applications computerized), the highest use was for sending
draft documents (55.9%), sending drafts / programmes (44.1%), quality and test results for materials
(35.3%), minutes of meeting and calculations, order and invoicing (both 26.5%), building and as-built
documents and descriptions ( 23.5%), and, last, tender enquiries (20.6%).
54.4
26.5
30.9
25
Descriptions
Tender enquiries
8.8
2.9
5.9
2.9
8.8
14.7
13.2
39.7
41.2
45.6
42.6
47.1
51.5
Drafts/Programs
13.2
13.2
19.1
20
27.9
30
26.5
35.3
40
23.5
23.5
20.6
26.5
10
2.9
2.9
2.9
Persentage
50
44.1
60
55.9
0
<40 %
40-75%
> 75 %
Send digitally
Material DigitallySsend
Not relevant
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Figure (3) shows the general software used by the firms word processor (83.8%), spreadsheet
(77.9%), email software (75.0%), administration software (66.2%) and, lowest, databases and self
developed programs (both 60.3%). The firms also planned to use new software, of which the most
popular were databases (30.9% of respondents), administration software (25.0%), self-developed
programs (23.5%), spreadsheet (22.1%), word processor (10.3%) and email software (7.4%).
Figure (4) shows the technical software used by the firms AutoCAD (88.2%), technical
calculations (analytical & design software) (76.5%), programs for cost calculations (75.0%), self
developed programs (70.6%), planning programs (69.1%) and maintenance planning for properties and
GIS (both 66.2%). Even for the moderately IT-savvy firms (40 - 75% of applications computerized),
there was >80% use of general and technical software.
66.2
60.3
Word processor
Spreadsheet
E-mail software
40
Databases
Administration software
8.8
16.2
17.6
8.8
5.9
0
10
7.4
20
25
22.1
30
23.5
30.9
50
10.3
Persentage
60
60.3
70
75
80
83.8
90
77.9
0
Being Use
Planning to use
General Software
Not Nedded
417
66.2
50
40
14.7
30
20
10
8.8
5.9
5.9
11.8
11.8
2.9
19.1
13.2
17.6
8.8
14.7
60
25
27.9
Persentage
70
76.5
69.1
66.2
75
70.6
90
80
Technical calculations
(analytical & Design
Software)
Planning program (time and
resource planning scheduling)
88.2
100
Not Nedded
Geographic Information
System (GIS)
AutoCAD (CAD)
0
Being Use
Planning to use
Technical Software Used
5. Regression Analysis
5.1. Performance vs. IT investment, Effectiveness, Appropriate Use, and Contextual Factors.
Regression analysis of the firm performance metrics (ITINVEST, ITEFFECT, ITUSEPROP and
FIRMCONTXU) indicated that IT investment positively influenced performance with a coefficient of
determination (R2) of 0.180. Thus, 18% of the firm performance was due to its IT investment, firm
contextual factors, IT effectiveness and IT appropriate use (independent variable).
The F- and t-tests were used to assess the goodness-of-fit of the models and their individual
parameters, respectively. Associated with each test is a p-value that expresses the probability that the
result of the test is significant. A probability of < 0.05 is generally considered the highest to indicate a
significant difference (Fox, 1997). For the Firm Overall Performance (FIRMPER) regression model,
the p-value was 0.013 for the F-test 3.464 and 1.242 for the t-test. These probabilities allowed the null
hypothesis to be excluded, and the model and factor assumed adequate. In Figure (5), the histogram
explains the model with normal distribution, mean of 4.09 and Std Dev of 0.97.
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Table 2:
ITINVEST
ITEFFECT
FIRMCONTXU
ITUSEPROB
FIRMPER
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
ITINVEST
1
68
-0.094
0.446
68
-0.048
0.697
68
-0.215
0.078
68
-0.097
0.432
68
ITEFFECT
FIRMCONTXU
ITUSEPROB
FIRMPER
1
68
-0.040
0.748
68
0.274(*)
0.024
68
0.316(**)
0.009
68
1
68
0.076
0.538
68
0.217
0.076
68
1
68
.264(*)
0.030
68
1
68
Model Summary(b)
R
.425(a)
R Square
0.180
Adjusted R Square
0.128
Table 4:
ANOVA(b)
Model
1
Regression
Residual
Total
Sum of Squares
6.448
29.317
35.765
Df
4
63
67
Mean Square
1.612
0.465
F
3.464
Sig.
.013(a)
419
Frequency
15
10
Mean =4.09E-16
Std. Dev. =0.97
N =68
0
-3
-2
-1
6. Conclusion
This paper provides empirical evidence that information technology (IT) use has a positive impact on
construction firm performance. The findings are relevant to both the construction and IT literature. It
also identified and assessed the degree of IT use and investigated the factors that affected the
performance of construction firms. The factors were Activities Computerized and Materials Digitally
Sent at the Firm (Internally and externally) in IT use. Thus, General and Technical Software Use would
have to increase greatly if the firm performance is to be substantially improved. The model used was
420
significant at p < 0.05 (0.013) with a coefficient of determination (R2) of 0.180 (18%) of the firm
performance.
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