The impact of information technology on organizational performance

1
`
The impact of information technology on
organizational performance
(An applied study on Oil & Gas companies in Egypt)
Doctor of Business Administration Thesis
Submitted to the “Business Administration Department”
Faculty of Commerce – Ain Shams University
by
Mohamed Mahmoud Abouelmagd
Under Supervision
Dr. Bassam El-Ahmady Dr. Rasha Ihab
Cairo – Egypt
(2016)
‫التج‬ ‫كلية‬‫ـ‬‫ارة‬–‫جامع‬‫ـ‬‫شمس‬ ‫عين‬ ‫ة‬
Faculty of Commerce – Ain Shams University
‫الدراس‬ ‫قطاع‬‫ـ‬‫العليا‬ ‫ات‬

2
Abstract
Currently, Egypt is the largest oil producer in Africa outside of OPEC and
the second largest natural gas producer.
Egypt is looking to be energy hub and take a major role in international
energy markets
Information technology plays a vital role in the Oil & Gas business and
improves the efficiency and effectiveness of companies’ business process.
Researches from the last ten years have proved that, those companies that
invests in technology increase their market share, financial figures and overall
competitiveness
Hence, the research deals with the impact of information technology on the
performance of oil & gas companies in the oil & gas sector in Egypt.
This study aims to identify the impact of Information Technology (IT) on
organizational performance in oil & gas companies in Egypt.
The researcher adopted the descriptive analytical method in addition to a
questionnaire as a tool for collecting data. The researcher distributed (384)
questionnaires to 6 companies in the oil & gas companies in Egypt representing
three levels of performance (high, medium and low), relying on the classification
of the Accountability State Authority during the period. This means that (128)
questionnaires were directed to each group of workers in the companies
representing the research sample. A total of (253) questionnaire was returned, (49)
were excluded due to their invalidity for the analysis, and the rest (204) were valid
for analysis. The statistical analysis was conducted through the (SPSS) program.

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The researcher used many statistical methods in the research including the
frequencies and percentages to describe the sample characteristics, the arithmetic
mean and standard deviation to analyze the sample replies, the alpha Cronbach
coefficient to measure the consistency of the questionnaire, the Pearson correlation
coefficient to measure the validity of the internal consistency of the questionnaire
and the Pearson correlation coefficient to measure the relationship between the
study variables as well as testing the simple regression analysis to test the
hypotheses.
The study concluded the following results:
 There is a significant impact of IT network infrastructure on the performance
of Oil & Gas companies in Egypt.
 There is a significant impact of IT applications on the performance of Oil &
Gas companies in Egypt.
 There is a significant impact of IT personnel on the performance of Oil &
Gas companies in Egypt.
Key words: IT Network Infrastructure, IT Applications, IT Personal,
Organizational performance, Return on investment (ROI)

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Acknowledgement
First and most importantly, I would like to thank my dissertation Supervisor,
Dr. Bassam El- Ahmady who is not only served as my main supervisor but also
encouraged and challenged me throughout my dissertation process.
My greatest thanks go to My Wife Asmaa, who has been my friend and supporter
and sacrificed tremendously for me throughout my DBA program. I thank her for
all of her love, help, and understanding.
At the end, this dissertation could not have been written without My Parents’
Doaa
Mohamed Abouelmagd
mmmagd@yahoo.com
December 2016

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Table of Contents
List of Tables.........................................................................................................................................7
List of Figures.....................................................................................................................................10
Chapter (1): Study Framework.................................................................................................11
Introduction ............................................................................................................................................12
Research Problem...................................................................................................................................14
Previous studies......................................................................................................................................15
Research objectives ................................................................................................................................21
Research Hypotheses..............................................................................................................................22
Research Variables..................................................................................................................................22
Research Methodology...........................................................................................................................23
Research Limitations...............................................................................................................................25
Chapter (2): Theoretical Framework.....................................................................................27
Introduction:...........................................................................................................................................28
Historical Overview of IT:........................................................................................................................29
Importance of ITs Definition Information Technologies (ITs):................................................................31
Role of Information Technology: ............................................................................................................33
IT Factors:................................................................................................................................................36
IT Infrastructure:.....................................................................................................................................38
Components of Information Technology:...............................................................................................39
Applications of IT: ...................................................................................................................................44
IT Personnel: ...........................................................................................................................................51
IT impacts organizational characteristics and outcomes:.......................................................................54
IT Characteristics:....................................................................................................................................55
Advantages of Information Technology:.................................................................................................56
Disadvantages of Information Technology:............................................................................................58
Definition of Performance: .....................................................................................................................61
Performance as a Multi-Dimensional Concept:......................................................................................62
Performance Measurement:...................................................................................................................62
Organizational Performance:..................................................................................................................66

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ROI as a measurement of Organizational Performance: ........................................................................66
IT and organizational performance:........................................................................................................70
The impact of using IT on the managerial and work concepts:..............................................................72
Oil & Gas sector in Egypt:........................................................................................................................74
Egypt: ......................................................................................................................................................78
Oil sector in Egypt:..................................................................................................................................82
Chapter (3): Applied Framework............................................................................................87
Preface ....................................................................................................................................................88
First: Research Methodology..................................................................................................................88
Second: The Study Population and Sample: ...........................................................................................89
Third: Research Tool: ..............................................................................................................................91
Data Collection Instrument and Source:.................................................................................................95
Statistical Methodology used in the research: .......................................................................................96
Statistical Processes used: ......................................................................................................................97
Verifying the tool Validity: ......................................................................................................................98
The Results of the internal consistency:.................................................................................................98
Structural validity of the test Parts:......................................................................................................103
Reliability of the study tool:..................................................................................................................104
Analysis of the demographic characteristics of the study sample as follows:......................................106
Distributive Statistics ............................................................................................................................115
Hypotheses Test....................................................................................................................................156
Chapter (4): Conclusions & Recommendations .............................................................165
Introduction ..........................................................................................................................................166
Theoretical Results:...............................................................................................................................166
Practical Results:...................................................................................................................................167
Conclusions:..........................................................................................................................................169
Recommendations:...............................................................................................................................170
Appendices................................................................................................................................................172
APPENDIX (1).........................................................................................................................................173
APPENDIX (2).........................................................................................................................................175
APPENDIX (3).........................................................................................................................................177

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List of Tables
Table 1 : Important studies about IT and organizational .............................................................. 15
Table 2 : Definitions of Information Technology from the perspective of Management
Information Science...................................................................................................................... 31
Table 3 : ERP Solution Satisfaction/ Benefits Realization ()
........................................................ 46
Table 4 : Questionnaires Distribution........................................................................................... 90
Table 5 : IT Network Infrastructure questionnaire questions ....................................................... 91
Table 6 : IT Applications questionnaire questions ....................................................................... 92
Table 7 : IT Personnel questionnaire questions ............................................................................ 93
Table 8 : Performance questionnaire questions ............................................................................ 94
Table 9 : Shows Likert Scale ........................................................................................................ 95
Table 10 : Distribution of Means according to the hierarchy used in the Research Tool............. 96
Table 11 : Correlation coefficients between each statement of the first Part (IT Infrastructure)
and the total score of Part.............................................................................................................. 99
Table 12 : Correlation coefficients between each statement of the second Part (IT Applications)
and the total score of Part............................................................................................................ 100
Table 13 : Correlation coefficients between each statement of the third Part (IT Personnel) and
the total score of Part .................................................................................................................. 101
Table 14 : Correlation coefficients between each statement of the Forth Part (Performance) and
the total score of Part .................................................................................................................. 102
Table 15 : Calculating the correlation coefficient and significance level shows each of Parts with
the total score of the questionnaire statements ........................................................................... 103
Table 16 : Reliability coefficients for Parts of study Cronbach's alpha coefficient Method ...... 104
Table 17 : Split-half Coefficient method .................................................................................... 105
Table 18 : The Gender Distribution of the sample ..................................................................... 106
Table 19 : The Age Distribution of the sample........................................................................... 108
Table 20 : The Qualification Distribution of the sample............................................................ 111
Table 21 : The Managerial Level Distribution of the sample..................................................... 113
Table 22 : Analyzing the statements of the IT Network Infrastructure ...................................... 115

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Table 23 : Analyzing IT Network Infrastructure in Low Performance sample.......................... 116
Table 24 : Analyzing IT Network Infrastructure in Medium Performance Sample.................. 117
Table 25 : Analyzing IT Network Infrastructure in High Performance Sample........................ 119
Table 26 : Analyzing IT Network Infrastructure in the Entire Sample ...................................... 121
Table 27 : IT Network infrastructure comparison in all performance categories....................... 123
Table 28 : Analyzing the statements of the IT Applications ...................................................... 124
Table 29 : Analyzing IT Applications in Low Performance Sample.......................................... 125
Table 30 : Analyzing IT Applications in Medium Performance Sample ................................... 126
Table 31 : Analyzing IT Applications in High Performance Sample......................................... 128
Table 32 : Analyzing IT Applications in Entire Sample............................................................. 130
Table 33 : IT Applications comparison in all performance categories....................................... 132
Table 34 : Analyzing the statements of the IT Personnel ........................................................... 133
Table 35 : Analyzing IT Personnel in Low Performance Sample .............................................. 134
Table 36 : Analyzing IT Personnel in Medium Performance Sample........................................ 136
Table 37 : Analyzing IT Personnel in High Performance Sample.............................................. 137
Table 38 : Analyzing IT Personnel in the Entire Sample ........................................................... 139
Table 39 : IT Personnel comparison in all performance categories............................................ 141
Table 40 : Analyzing the statements of the Organization Performance ..................................... 142
Table 41 : Analyzing the Performance in Low Performance Sample ........................................ 142
Table 42 : Analyzing the Performance in Medium Performance Companies ............................ 143
Table 43 : Analyzing the Performance in High Performance Companies.................................. 144
Table 44 : Analyzing The Performance in Entire Sample .......................................................... 146
Table 45 : Performance comparison in all companies’ performance categories ........................ 147
Table 46 : Comparison between all parts’ Mean in all companies categories............................ 148
Table 47 : Correlation between IT Components & performance in high organizational
performance ................................................................................................................................ 149
Table 48 : Correlation between IT Components & performance in Medium organizational
performance ................................................................................................................................ 151
Table 49 : Correlation between IT Components & Performance in Low organizational
performance ................................................................................................................................ 153
Table 50 : Correlation between IT Components & organizational performance........................ 155

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Table 51 : Correlation between IT Network infrastracture and orgnizational performance...... 156
Table 52 : ANOVA test for IT Network Infrastructure .............................................................. 157
Table 53 : Coefficients table for IT Network Infrastructure....................................................... 158
Table 54 : Correlation between IT Applications and orgnizational performance ...................... 159
Table 55 : ANOVA test for IT Applications .............................................................................. 160
Table 56 : Coefficients table for IT Applications ....................................................................... 161
Table 57 : Correlation between IT Personnel and organizational performance ......................... 162
Table 58 : ANOVA Test for IT Personnel.................................................................................. 163
Table 59 : Coefficients table for IT Personnel............................................................................ 164

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List of Figures
Figure 1 : Research Variables....................................................................................................... 22
Figure 2 : Oil & Gas Holding Companies in Egypt...................................................................... 25
Figure 3 : Interdisciplinary nature of IT research ()
...................................................................... 33
Figure 4 : A conceptual model of the relationship between information technology and
organizational characteristics applied from Yap (1986 pp.67)..................................................... 37
Figure 5 : Connection between the organization, IT infrastructure, and business capabilities ()
.. 38
Figure 6 : The Framework of Information Technology Human Resources Plan()
........................ 48
Figure 7 : ROI ( Cost & Benefits)................................................................................................. 68
Figure 8 : IT ROI Categories ........................................................................................................ 69
Figure 9 : Egyptian Petroleum Sector........................................................................................... 81
Figure 10 : The Gender Distribution of the sample.................................................................... 106
Figure 11 : The Age Distribution of the sample ......................................................................... 108
Figure 12 : The Qualification Distribution of the sample........................................................... 111
Figure 13 : The Managerial Level Distribution of the sample.................................................... 113
Figure 14 : IT Network infrastructure comparison in all performance categories ..................... 123
Figure 15 : IT Applications comparison in all performance categories...................................... 132
Figure 16 : IT Personnel comparison in all performance categories .......................................... 141
Figure 17 : Performance comparison in all companies’ performance categories....................... 147
Figure 18 : Comparison between all parts’ Mean in all companies categories .......................... 148

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Chapter (1): Study Framework

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Introduction
Information technology has become an essential part of any business and
competitive advantage that can change the business structure. This observation was
one of the motives for this study.
The information has become as lifeblood for business and its decisions, and the
organizations do their best to enhance the role of Information technology to
increase its performance and to keep life among its competitors in the market.
The objective of information technology in an organization is to provide the
management, managers and stakeholders with information for more precise
planning, foresting, monitoring and controlling of business. More so, the use of
powerful computer software and network information systems have helped
organizations to become more flexible, removing layers of redundant management
functions, separate work from location and also restraining work flows.
The impact of information technology goes beyond a small service department
in organization and becomes a part of the business chain.IT Management moves
from back office to the front office and participate in the strategic planning for the
organization.
Moreover, Information technology improves the relationship between vendors
and customers and enables the delivery of services more directly, more rapidly,
and electronically to customers.
Information technology also provide important communications and
collaboration tools, which support core organizational functions such as inventory
control, purchasing, workflow management, human resource management, data
management, and operations.
New Information technology continues to improve communications, access to
business information, and our ability to analyze and use of business information.

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Information technology is no longer a tool to support back office transactions but
has begun to affect how businesses organize, do business and compete.
The aim of this study is to declare the impact of information technology (IT)
on Oil & Gas companies in Egypt. According to this aim, the researcher reviewed
the related literature and after developing a research model and hypotheses, the
researcher made numerous analyses.
The data of this research obtained from a sample of six Oil & Gas Companies in
Egypt selected depending on the performance according to (Accountability State
Authority) concerning the ROIs for these companies from (2010 to 2015) as the
following:
 Two high performance companies
 Two medium performance companies
 Two low performance companies.

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Research Problem
There is a debate in the role of information technology departments, Some
companies deals with their information technology departments as a profit center
whereas other companies deals with IT as a cost center.
This debate in the perception of the role of information technology is shown
clearly in Oil & Gas companies in Egypt, and may affect the investment in
information technology.
Several studies have examined the impact of IT, and their findings have been
inconsistent. While Loveman (2001) found no evidence on performance increase
from IT investments; Weill (1990) found that transactional IT investments had a
positive impact on firm performance but strategic IT or informational IT did not.
Pourmirza (2006) found that IT labor produced substantial high returns in
organizational performance but IT capital did not.
This research seeks to investigate the true role of information technology
and its impact on the Oil & Gas companies’ performance in Egypt.

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Previous studies
The most important recent studies on the impact of information technology
(IT) on organizational performance are discussed in the following table:
Table 1 : Important studies about IT and organizational
Studies Sector
Countries
studied
Sample Findings
Daniel
Kinuthia
Wanjiru
(2014)1
Oil&Gas
Kenya
A sample size is a
set of entities drawn
from a population
with the aim of
estimating
characteristics of the
population (Kothari,
2004). The sample
size for this study
was 45 respondents
which was
equivalent to 15%
staff working at
Total Kenya limited.
According to
Mugenda &
Mugenda, (2003), a
representative
sample is one that is
at least 10%-20% of
the total population
An important research finding is that
the impact of ICT adoption on
procurement processes mainly refers
to time reductions and quality
improvements, rather than cost
reductions.
We found that company is likely to
realize improvements in cycle time
reductions and process quality. In
terms of ICT adaptability, this study
found that the company has not
adopted more complicated e-business
applications .From the study it is also
clear that the adoption of ICT
applications is not exclusively a matter
of resources. On the contrary,
operational compatibility and the level
of collaboration are two of the factors
that play a determinant role in
increased ICT adoption and impact
(1
) Daniel Kinuthia Wanjiru " Effects of Information Communication Technology Adoption on
Procurement Process in Kenya’s Oil Industry: A Survey of Total Kenya Limited Mombasa County "
Jomo Kenyatta University of Agriculture and Technology, Kenya

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Studies Sector
Countries
studied
Sample Findings
Dr.
MINWER
M. AL-
ADWAN
(2012)1
Industrialcompanies
Jordan
The research
population consists
of the managers of
the three levels in
the companies in
Jordan qualified
industry zones
(QIZ).
A sample of ( 128 )
had been chosen
randomly
The sample of the study shows the
importance of the use of information
technology in business organizations
and was effective more than efficiency
for multiple benefits.
The Infrastructure of applying
Information Technology is available
and it is sufficient for the use of
information technology, and explains
it to significantly increasing reliance
on the use of modern techniques in all
areas of work.
YUCONG
LIU
(2012)2
Industrialcompanies
USA
Data collected for 26
companies across 19
industries
The results of this study clearly indicate
that IT can both directly and indirectly
contribute to firm performance. It is just
a matter of how and where to use IT
resources for business
(1
) Minwer M. Al-Adwan "Evaluation The Role Of Information Technology In Business Value
Performance (Bvp) " King Abdul-Aziz University-College Of Business At Rabigh Cob P. O. Box 344,
Rabigh,21911,Saudi-Arabia
(2
) Yucong Liu " Business Value Of Information Technology In Network Environments" University Of
Kansas

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Studies Sector
Countries
studied
Sample Findings
Dr.
Nathaniel
C. Ozigbo
(2012)1
Oil&Gas
Nigeria
The sample size for
the study was
rounded to three
hundred and eighty
six respondents.
Also, the researcher
adopted simple
random technique
where each member
of the respondents
had the same chance
of selection.
This study provided an empirical
evidence that the adoption of ICTs in
the management of Nigerian Oil and
Gas Industry were very beneficial
found that the staff of the industry
needed additional training in
information technology
The study found that technology
acquisition mechanisms could best
assist the Nigerian oil and gas industry
to achieve sustained development
Robert
(2011)2
ServicesUtility
Kenya
60 staff (Human
Resources
Directorate NCWSC
2011)
It was clear that majority agreed that
IT has enhanced the company revenue.
The observations showed that
investments in IT substantially
increased the average organizational
performance of companies, since 2007
when NCWSC embarked
on an IT development strategy various
milestones have been achieved and the
company
Overall revenue improving.
(1
) Nathaniel C. Ozigbo "The Adoption of Information and Communication Technologies in the
Management of Nigerian Oil and Gas Industry” department of Business Administration University of
Abuja Abuja, Nigeria. Chukwa2012@gmail.com
(2
) Robert Kibui Gakuo, "Impact of Information and Communication Technology Investment on
Organizational Performance: A case study of Nairobi Water Company", Master thesis, Faculty of
Information Technology, Strathmore University, Nairobi, Kenya, 2011.

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Studies Sector
Countries
studied
Sample Findings
Yuan Niu
(2010)1
Industrialcompanies
USA
Data were collected
using an online
survey over a five-
month period. The
survey
was distributed to
supply chain
professionals with
the assistance of two
supply chain
professional
associations – the
Association for
Operations
Management
(APICS) and the
Institute for Supply
Management (ISM)
IT impacts firm and supply chain
Performance by enabling them to
marshal other organizational
resources. Taking a
knowledge perspective, this
dissertation shows that relational
capability and knowledge
management capability are critical for
IT to bring performance gains to the
supply chain
Muhamma
d Shaukat,
et al.,
(2009) 2
Banking
Pakistan
surveys of 48
companies (24
manufacturing and
24 banking)
IT has positive impact on
organizational performance of all the
organizations but the banking sector
performance outstrips the performance
of manufacturing sector.
(1
) Yuan Niu " The Impact Of Information Technology On Supply Chain Performance: A Knowledge
Management Perspective"University Of North Carolina At Charlotte In Partial Fulfillment Of The
Requirements For The Degree Of Doctor Of Philosophy In Information Technology
(2)Muhammad Shaukat, Muhammad Zafarullah and Rana Abdul Wajid" Impact of Information
Technology on Organizational Performance: A Comparative Quantitative Analysis of Pakistan’s Banking
and Manufacturing Sectors", European Journal of Economics, Finance and Administrative Sciences ISSN
1450-2887 Issue 16 , 2009.

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Studies Sector
Countries
studied
Sample Findings
Parham
Jafari
Moghadam
Fard
(2008)1
DistributionCompanies
Iran
Data gathering was
performed in 135
distribution
companies and their
branches in Iran.
Total number of
distributed
questionnaire was
equal to 286
Outcomes of this research confirm the
moderating impact of organizational
infrastructures as information
technology complementary in the
association between
IT and company performance
Companies can benefit from better
performance of IT solution by setting
additional emphasis on their
organizational infrastructure like
training, authorizing,
decentralization and applying novel
technologies
IT applications can be further effective
if companies offer superior
infrastructures for IT prior to
implementation and prior to adoption of
information technologies.
(1
) Parham Jafari Moghadam Fard" A Process-Oriented Perspective On Evaluation Of The Impact Of
Information Technology On Distribution Company Performance In View Of Organizational
Infrastructures" Luleå University Of Technology Department Of Business, Administration, Technology
And Social Sciences

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Based on this review and align with aforementioned views, term information
technology will cover wide range of information processing and computer
application in organizations. It will cover systems of information, Internet,
information and communication related technologies, and their infrastructure
including computer softwares, networks and hardwares, which processes or
transmit information to enhance the effectiveness of individuals and organizations.
However, term information technology also includes any computer application and
required packages of hardwares, Computer Aided Manufacturing, Computer Aided
Design, Electronic Data Interchange and Enterprise Resource planning that
positively affects the productivity of cooperation.
According to previous studies the most important components of information
technology are the following:
 IT Network Infrastructure
(Network, Communication and Data Center)
 IT Applications
(HR System, Financial System, Petro-Technical Applications, SAP, Oracle
Financial and any ERP)
 IT Personnel
(IT Managers, Helpdesk, Systems administrators, programmer and
computers engineers)

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Research objectives
1. The important objective is to answers the following research questions:
 "What's the impact of IT Network infrastructure on organizational
performance in Oil & Gas companies in Egypt?"
 "What's the impact of IT Applications on organizational performance in Oil
& Gas companies in Egypt?"
 "What's the impact of IT Personnel on organizational performance in Oil &
Gas companies in Egypt?"
2. The general objective of this study is to analyze the role of Information
Technology in enhancing the performance of Oil & Gas companies in Egypt.
3. Also the research aims to solve the conflict of the Information Technology
perception in Oil & Gas companies in Egypt.

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Research Hypotheses
H01: There is no significant impact of IT Network infrastructure on the
performance of Oil & Gas companies in Egypt
H11: There is significant impact of IT Network infrastructure on the performance
of Oil & Gas companies in Egypt
H02: There is no significant impact of IT Applications on the performance of Oil
& Gas companies in Egypt
H12: There is significant impact of IT Applications on the performance of Oil &
Gas companies in Egypt
H03: There is no significant impact of IT Personnel on the performance of Oil &
Gas companies in Egypt
H13: There is significant impact of IT Personnel on the performance of Oil & Gas
companies in Egypt
Research Variables
Dependent Variable: Organizational performance
Independent variable: IT Network Infrastructure, IT Applications and IT Personnel
IT Network
Infrastructure
IT Applications
IT Personnel
Organization Performance
Figure 1 : Research Variables

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Research Methodology
Instruments
Validated and reliable questionnaire used to measure the practical
impact of IT Network infrastructure, IT Applications and IT Personnel on
various oil & gas companies’ performance.
The questionnaire contains 29 questions; every question must have a
meaning related to this study.
The questions are divided into 4 parts as the following:
 7 questions to measure the IT Network Infrastructure
 9 questions to measure the IT Applications
 9 questions to measure the IT Personnel
 4 questions to measure the impact of information technology on
companies’ performance
The questionnaire is using with a 5-point Likert scale as following:
(1)Strongly Disagree
(2) Disagree
(3) Neutral
(4) Agree
(5) Strongly Agree

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Population and Sampling
A stratified random sample had been considered for collecting the
data. The study applied on Oil & Gas companies in Egypt.
Three strata had been considered according to the level of the
companies ’performance in Oil & Gas sector which are listed as high,
medium and low performance according to (Accountability State Authority)
concerning the ROIs for these companies from 2010 to 2015
Data Collection
Primary data had been collected through answering a questionnaire that will
be spread among (6) Oil & Gas companies with different performance
according to Accountability State Authority report concerning the ROIs for
these companies from 2010 to 2015
 (2) companies with high performance
 (2) companies with medium performance
 (2) companies with low performance
The questionnaire had been answered by middle, senior and top managers in
each of these companies in order to evaluate their organization's information
technology level
The information technology staff was prohibited to participate in answering
this questionnaire

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Research Limitations
1. The research applied for the companies which are owned by the following Oil
& Gas Holding companies:
 The Egyptian General Petroleum Corporation “EGPC”
 The Egyptian Natural Gas Holding Company “EGAS”
 The Egyptian Petrochemicals Holding Company “ECHAM”
 Ganoub El-Wadi Holding Company “GANOPE”
 The Egyptian Mineral Resources Authority. “EMRA”
Figure 2 : Oil & Gas Holding Companies in Egypt
Petroleum
Minister
EGPC
ECHAM
GANOPEEGAS
EMRA

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The selected companies are depending on the performance as following:
 Two high performance companies
 Two medium performance companies
 Two low performance companies.
 The research is not including the Oil & Gas Production companies.
2. Due to the data confidentiality in this sector the researcher faced a problem in
data collection as the following:
 Lack of accessibility to data because most of the data are confidential
 Lack of cooperation from the company’s management and staff.
However those limitations was overcame by creating an official letter from
University to the ministry of petroleum to facilitate the data collection
Also the researcher has 20 years’ experience in oil & gas companies, this
experience facilitated the data collection process
3. Moreover, to avoid biased attention; the information technology staff in the
selected companies was prohibited to participate in answering the research
questionnaire.
4. The research applied for the most important Information technology
components as the following
 IT Network Infrastructure
 IT Applications
 IT Personnel
 The research is not including the other components of information
technology.

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Chapter (2): Theoretical Framework

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Introduction:
Information Technology deals with large collections of hardware and
software solutions that enable organizations to gather, organize, and analyze data
that helps them achieve their goals. It deals with how technology is used in the
workflow processes in organizations to deliver services that generate revenues. As
the IT industry evolves to meet the technology demands of today’s workplace,
different challenges are arising and IT professionals try to meet these challenges.
Information technology is a nascent field that emerged by the end of the last
century when our society experienced rapid changes from an industrial society to
an “information society.” Since its inception, computing has become the defining
technology of the age, changing how people live and work. Computers became
part and parcel of modern culture and the primary force behind much of the world's
economic and social change.
Information technology has been evolving at an increasingly rapid rate as
there are many rapid changes that took place in the businesses environment that led
to the transition from the era of industrial revolution to the information age. This
caused the businesses environment to face many laws of competition and the need
to respond rapidly to the changes taking place in the market. While businesses
continue to increase investment in information technologies (IT), it is becoming
increasingly important to study the effect of technology on the labor market.
Information technologies aims at reducing the number of middle class jobs
and increasing those for highly skilled workers and this is why there is an
increased need for highly skilled workers. So, every day work, communication,

29
information gathering, and decision making all rely on information technology (IT)
(1)
.
The common rule of thumb that expresses this rate of growth is known as
Moore’s Law. Moore’s law states that the number of transistors in a dense
integrated circuit doubles approximately every two years(2)
. Recently, this is used
to indicate that the processing power of computers is doubling almost every two
years. Therefore, businesses have begun to realize the tremendous impact
information technologies can have on their operations.
Historical Overview of IT:
As businesses increase investment in Information Technology, it is
becoming increasingly important to analyze the impact of IT investment on the
labor market. Traditional areas of IT like television, radio, computers, and mobile
devices have been a constant factor in the development of theories on
technological unemployment in the 21st century. However, emerging fields of IT
like machine learning, artificial intelligence and the need to enjoy a great deal of
knowledge about IT make people more concerned with the potential effect of
technology in the near future, especially in relation to their works(3)
.
(1) Wil van der Aalst and Christian Stahi,"Modeling Business Processes: A Petri Net-Oriented
Approach", The MIT Press, Cambridge, Massachusetts, London, England, 2011. P. 1.
(2) Raul Rojas, "Gordon Moore and His Law: Numerical Methods to the Rescue ", Documenta
Mathematica. Extra Volume ISMP (2012) 401–415, p. 401.
(3) Davis Craig, "The Impact of Information and Communication Technologies on Employment, Wages,
& Profits", Master Thesis, the College of New Jersey, 2015, p. 1.

30
Moore’s Law (1)
:
By the late 1980’s desktop workstations and personal computers were used
on a large scale in many organizations to carry out the computing operations (2)
.
However, as the personal computer became more powerful and more connected, it
became more complex to administer, and the demand for people who could “make
things work” in a networked microcomputer environment escalated. This led to a
revolution with the appearance of Web browsers and the resulting explosion of the
World Wide Web. Computers became the usable communication device that
connected the entire world, so, Web browsers necessitated for everyone in society
to use it.
As Web sites became more active and interactive, the demand for
application developers and especially database developers expanded as well. The
field continues to evolve at an astonishing pace. The rapid evolution of the
discipline has a profound effect on Information Technology in all its forms.
Today, networking and the Web have become the underpinnings for much of
our economy. They have become critical foundations of Information Technology.
Modern networking technology enhances everyone's ability to communicate and
gives people throughout the world unprecedented access to information.
Much of the change that affects information technology comes from
advances in technology. In the last decade there have been unprecedented
innovations in technologies for communication, computation, interactivity, and
(1) Brynjolfsson, E., & McAfee, A. "Race Against the Machine. Lexington, Massachusetts: Digital
Frontier Press", 2012.
(2) Paul Grefen "Advanced Information Technology in Office Environments A Contemporary
Introduction to Office Automation", University of Twente, Enschede, Netherlands, 2001 Edition, p.
13.

31
delivery of information. Over the last ten years the world has changed dramatically
both in how people work and live.
Importance of ITs Definition Information Technologies (ITs):
Table 2 : Definitions of Information Technology from the perspective of Management
Information Science
Author Definition
Davis
(1991) (1)
“The systems [Information Technology] is an integrated,
user/machine system providing information and
information processing to support the strategy, operations,
management, analysis, and decision making functions in an
organization.”
Orlikowski
(1992a) (2)
"The structurational model of technology comprises the
following components:
(i) human agents−technology designers, user, and
decision-makers,
(ii) technology−materials artifacts mediating task
execution in the workplace, and
(iii) (iii) institutional properties of organizations,
including organizational dimensions such as
structural arrangements, business strategies,
ideology, culture, control mechanisms, standards
operating procedures, division of labor, expertise,
communication patterns, as well as environmental
pressures such as government regulation,
competitive forces, vendor strategies, professional
norms, state of knowledge about technology, and
socio/economic conditions.
Rodriguez & “The meaning of information technology is almost
universally understood. It comprises all the technological
(1
) Donaldson, L., & Davis, J. H. 1991. Stewardship theory or agency theory: CEO governance and
shareholder returns. Australian Journal of Management, 16(1): 49-64. P. 7.
(2
) ORLIKOWSKI, W. J. The duality of technology: rethinking the concept of technology in
organizations. Organization Science, v. 3, n. 3, p. 398-427, 1992, p. 409.

32
Ferrante
(1996) (1)
factors for storage, manipulation, and retrieval of data,
which are thus transformed into information which is
useful to society.”
Morath &
Schmidt
(1999) (2)
IT includes hard components (for example, computers, fax
machines, cellular phones), hard/soft components (for
example, Internet, intranet, network and video-
conferencing systems, virtual reality) and soft components
(for example, group ware, EDI programs, learning
management systems, groupware.
Hellrigel, Dan
& et. al.
(2001) (3)
It may be also defined as "the tools, procedures, methods,
techniques, machinery, machines used to convert the
organization inputs (materials, information, and ideas) into
outputs (goods and services)
Since information technology (IT) influences many areas, many scientific
disciplines study issues related to IT, and therefore many researches were carried
out on such a discipline and each of these areas defined it from its own perspective,
focusing upon certain features relevant to them. Figure (1) illustrates some
disciplines that conduct IT research.
(1) Rodriguez, M.V.R., & Ferrante, A.J. (1996). Information technology for the 21st century: managing
the change. Southampton, UK: Computational Mechanics. P. 3.
(2) Morath, F., & Schmidt; A., (1999). Management of Knowledge as Interface Management - From exo-
words to endo-worlds. In Jacksson P. (Ed.). Virtual Working Social and Organizational dynamics,
Vol. 12. pp 193–205.
(3) Hellrigel, Dan & Slocum, J.W.& Woodman, R., "Organization Behavior",9th
ed., South Western
College Publishing, 2001, p. 393 .

33
Figure 3 : Interdisciplinary nature of IT research (1)
Thus, it can be said that IT research combine theories or methods from other
disciplines.
Role of Information Technology:
Information technology (IT) has become a vital and integral part of every
business plan from multi-national corporations that have mainframe systems and
databases to small businesses that have a single computer. IT has dramatically
changed the lives of the individuals and organizations. Currently online shopping,
digital marketing, social networking, digital communication and cloud computing
etc. are the best examples of change which came through the wave of information
(1) Raquel Flodström, "A Framework for the Strategic Management of Information Technology",
Swedish Research School of Management and Information Technology (MIT), 2006, p. 63.
Computer
Science
IT research

34
technology. Now accurate business planning, effective marketing, global sales,
systematic management, real time monitoring, instant customer support and long
term business growth cannot be achieved at the optimum level without IT(1)
.
Information technology plays a vital role in different phases of business
including the decision making, marketing, customer support and satisfaction,
resource management and globalization.
1- Decision Making:
Every successful organization has to do a comprehensive market research
process which enables its management to make the right decision. This market
research can be done by gathering and analyzing information utilizing the tools of IT
such as online surveys, forums, blogs, group discussions using the internet and the
traditional means as in-person interviews as well. Currently Big data, Google
Analytics and Microsoft CRM Dynamics are also great tools to extract useful
information which can impact on decision making. These online tools not only
provide real time responses from the potential audience but also ensure the accuracy
of data by minimizing the risk of human errors(2)
.
2- Marketing and Business Growth:
Any business success lies in its marketing as the management has to identify
its target audience first and then observe their trends and needs to be able to handle
the transaction well. The overall marketing covers public relation, advertising,
promotion and sales which subsequently impact on business growth. Many types
of marketing can help you reach your potential customers especially the digital
Marketing that promotes products or services all over the world. Currently web
(1) https://www.linkedin.com/pulse/role-information-technology-business-success-abid-afzal-butt.
(2) Hsinchun Chen & Roger H. L. Chiang & Veda C. Storey, "Business Intelligence and Analytics: from
Big Data to Big Impact", MIS Quarterly Vol. 36 No. 4, pp. 1165-1188/December 2012. P. 1167.

35
market is booming at a very fast pace because most of the entrepreneurs have
understood that the long term success in business is not possible without digital
presence on the internet. Millions of new marketing websites are being added on
the internet yearly (1)
.
3- Customer Support and Satisfaction:
Higher level of customer satisfaction is the key to success, so business
success depends on knowing its customers' needs, trends, behaviors and
satisfaction level. Effective communication is the best tool to understand the
customer demands, problems and their solutions. This is achieved by the Internet
Technology that has enabled communicating with millions of potential or existing
customer in the real time. Innovative organizations use customer relationship
management systems (CRM) to hold valuable data for understanding customer
behaviors and future needs.
4- Resource Management and Globalization:
Resource management plays a crucial role in business success. Information
technology has played a vital role in automating the organizational resources
complex problems by introducing user friendly solutions. A decade ago, most of the
resource management solutions were desktop based, but the internet and cloud
technology enabled software engineers to introduce cloud based ERP (Enterprise
Resource Planning) solutions. Now, the managers can manage or monitor their
organizational resources virtually anywhere in the world by using their personal
computer, laptops, tablets or Smartphone. This concept has introduced the idea of
globalization. Most of multinational companies (Microsoft, Google, Amazon,
(1) Ibid. P. 1169.

36
McDonalds etc) in the world use these cloud based solutions to manage their virtual or
physical offices and staff worldwide(1)
.
IT Factors:
There are many factors affecting the use of IT in organizations. These
factors can be found in the internal and external environment of organizations.
Factors from the internal environment are divided into 2 groups: characteristics of
managers and their attitudes towards adoption of IT, IT knowledge and innovation
as well as the organizational characteristics such as business size, organizational
structure and organizational culture. General factors from the external environment
are political, economic, social, and infrastructure. Each of these will be dealt with
in the following.
Yap (1986) (2)
explains that it is difficult to establish the true relationship
between information technology and organizations. The following Figure (2)
illustrated that the organizational factors may determine the use of information
technology or the use of information technology may influence the organization, or
some combination of both. Knowledge of the underlying organizational factors
affecting the use of information and the impact of information technology on
organizations identifies the way in which organizations benefit from information
technology(3)
.
(1) http://smallbusiness.chron.com/information-technology-its-role-modern-organization-1800.html.
(2) Yap, C.S. (1986). Information Technology in Organizations in the service sector. PhD thesis,
University of Cambridge.
(3) Chieochan O., Lindley D. and Dunn T., " Factors Affecting the Use of Information Technology in
Thai Agricultural Cooperatives : A Work in Progress", The Electronic Journal on Information Systems
in Developing Countries, EJISDC (2000) 2, 1, 1-15, p. 3.

37
Figure 4 : A conceptual model of the relationship between information technology and
organizational characteristics applied from Yap (1986 pp.67).
There are many theories and models used to explain the inter-relationship
between the information technology and organizations. Some of these included the
models set by Robey & Zmud (1992) (1)
and these can be seen as follows:
1) The political conflict model, which introduces the concept of multiple
objectives, held by different interest groups or stakeholders.
2) The organizational ecology model, which views organizational form as a
result of external controls rather than proceeding from the decisions
or preferences of organizational members.
3) The managerial innovation model, which argue that the adoption of new
technology depends on awareness of problems and organizational culture that
encourage risk-taking.
4) The diffusion of innovations model, which argues that the spread of new
technology depends on their application to the with work context.
(1) Robey, D & Zmud, R. (1992). Research on the Organization of End-User Computing:
Theoretical Perspectives from Organization Science, Information Technology & People, 6, 1, 11-27.
Information
Technology Organizations
Affect the use of
Impacts upon

38
IT Infrastructure:
IT infrastructure refers to the composite hardware, software, network
resources and services required for the existence, operation and management of an
enterprise IT environment. It allows an organization to deliver IT solutions and
services to its employees, partners and/or customers and is usually internal to an
organization and deployed within owned facilities. Therefore, IT infrastructure
consists of all components that somehow play a role in overall IT and IT-enabled
operations. It can be used for internal business operations or developing customer
IT or business solutions(1)
.
Figure 5 : Connection between the organization, IT infrastructure, and business capabilities (2)
(1) Efrain Turban, "Information Technology Infrastructure, part II, 2015, P.134.
(2) Ibid, P.134.
Customer
Services
Supplier
Services
IT Services
and
Infrastructur
e
Information
Technology
IT Strategy
Business
Strategy

39
Components of Information Technology:
The information technology is defined as the broad umbrella that includes
information technology, data processing, communication systems and other.
The following is an explanation of the components of the information and
communication technology:
1- Hardware:
Hardware is defined as the physical part of the information technology of
computers and devices attached to it to perform the required tasks.
a. PC’s
A personal computer (PC) is a general-purpose computer whose size,
capabilities, and original sale price make it useful for individuals, and is intended
to be operated directly by an end-user. Within a few years, the personal computer
became an integral part of every office. Networked with the organization's
mainframes and departmental computers, it became part of the technology
infrastructure of every company. Eventually, the personal computer became a part
and parcel appliance in nearly every home in the developed world.
b. Servers
A server is a computer program or a device that provides functionality for
other programs or devices, called "clients". Servers can provide various
functionalities, often called "services", such as sharing data or resources among
multiple clients, or performing computation for a client. A single server can serve
multiple clients, and a single client can use multiple servers. A client process may
run on the same device or may connect over a network to a server on a different

40
device (1)
. Typical servers are database servers, file servers, mail servers, print
servers, web servers, game servers, and application servers(2)
.
2- Network:
A computer network is a group of computer systems and other computing
hardware devices connected together through communication channels to facilitate
communication and resource-sharing among a wide range of users. Networks are
commonly categorized based on their characteristics (3)
.
LAN (Local Area Network) - a small network that physically connects
nearby computers (computers within the firm, organization, or a household).
Devices interconnected within an area of 1000m2, which is the generally accepted
maximum size for a LAN, are considered to be in a local area network (LAN) (4)
.
Low latency and high bandwidth are typically properties which describe a local
area Network(5)
. Local area network technologies include for example Ethernet and
the newly emerging Gigabit Ethernet. In addition, there is also the Wireless local
area network (WLAN) technologies in addition to some new technologies that will
(1) Windows Server Administration Fundamentals. Microsoft Official Academic Course. 111 River
Street, Hoboken, NJ 07030: John Wiley & Sons. 2011. pp. 2–3. ISBN 978-0-470-90182-3.
(2) Comer, Douglas E.; Stevens, David L. (1993). Vol III: Client-Server Programming and Applications.
Internetworking with TCP/IP. Department of Computer Sciences, Purdue University, West Lafayette,
IN 479: Prentice Hall. pp. 11d. ISBN 0-13-474222-2.
(3) Stig Jarle Fjeldbo, "Administration of Remote Computer Networks", Master thesis, OSLO University
College, Department of Computer Science, May 23, 2005.
(4)Kevin Hamilton Kennedy Clark. Cisco LAN Switching (CCIE Professional Development). Cisco
Press, 1999.
(5
) Annabel Z. Dodd. The Essential Guide to Telecommunications, Second Edition. Prentice Hall PTR,
1999.

41
provide a wider range, higher bandwidth, increased security and quality of
service(1)
.
WAN (Wide Area Network) - a larger network that covers a city or a
region. It is a computer network covering a wide geographical area, and are used to
connect local area networks together. They can be built to connect several private
local area networks in an organization, or built by Internet service providers to
provide an organization access to the Internet(2)
.
Wide area networks are typically built of leased lines, where a router
connects the local area network to the private wide area network(3)
. An alternative
is to use the Internet, which provides a shared infrastructure and a high speed wide
area network. Virtual private networks (VPNs) can use encryption and other
techniques to make the connection secure and private(4)
.
3- Internet:
The Federal Networking Council (FNC) defined the "Internet" as the global
information system that is logically linked together by a globally unique address
space based on the Internet Protocol or its subsequent extensions. It is able to
support communications using the Transmission Control Protocol/Internet Protocol
(TCP/IP) suite or its subsequent extensions. In addition, it provides uses or high-
(1) Sergio Verdú. Wireless bandwidth in the making. IEEE, 2000..
(2) Andrew S. Tanenbaum. Computer Networks, Fourth Edition. Prentice Hall, 2003.
- Annabel Z. Dodd., Op. cit., 1999.
(3) Gene Spafford Simson Gar_nkel, Alan Schwartz. Practical Unix & Internet Security, 3rd Edition.
O'Reilly, 2003.
(4) Ibid.

42
level services layered on the communications and related infrastructure, either
publicly or privately(1)
.
It consists of a world network of connected computers, connected through
WAN and LAN.
4- Voice Telecommunication
Telecommunications is the science of communicating over a long distance
using telephone or radio technology. This involves using microelectronics,
computer, and PC technologies to transmit, receive, and switch voice, data, and
video communications over different transmission media(2)
.
5- Data centers
They consist of tens of thousands of servers that perform and process many
Internet business applications. They use virtualization to simplify management and
use server resources in a better way.
Internet and business applications are increasingly being moved to large data
centers that hold massive server and storage clusters. Current data centers can
contain tens or hundreds of thousands of servers, and plans are already being made
for data centers holding over a million servers(3)
. Some data centers are built to run
(1) Oliver M. Heckmann, "The Competitive Internet Service Provider: Network Architecture,
Interconnection, Traffic Engineering and Network Design", John Wiley &
Sons, Let,ISBN:0470012935, 2006, p. 47.
(2) http://docplayer.net/1810741-Telecommunications-evolution-and-future.html
(3) Timothy Wood, "Improving Data Center Resource Management, Deployment, and Availability With
Virtualization" Doctor of Philosophy Dissertation, Graduate School of the University of Massachusetts
Amherst, 2011, p.1.

43
applications for a single company, such as the search engine clusters run by
Google. Other data centers are operated by service providers that are able to rent
storage and computation resources to other customers at very low cost due to their
large scale. Cloud computing, which refers to hosting platforms that rent data
center resources to customers, is becoming increasingly popular for running
Internet websites or business applications. virtualization allows for new and better
solutions to existing data center problems by allowing for rapid, flexible resource
provisioning(1)
.
6- Security
Security is the greatest concern for many companies and they rely on their
IT staff to prevent or stop these system breaches. It can be defined as the “freedom
from risk or danger; safety”. (The American Heritage Dictionary) (2)
.
However, when dealing with the computer and networking security, this
definition implies a degree of protection that is difficult to provide in the modern
connectivity-oriented computing environment. Therefore, a more relevant
definition specific to computer science is that security: is “The level to which a
program or device is safe from unauthorized use”. The more accessible the data is,
the less secure it is.
So, any security plan aims at balancing between the two and this is why
security professionals have a language of their own and understanding their
concepts requires learning their jargon.
(1) Ibid.
(2) Debra Littlejohn Shinder and Michael Cross " Scene of the Cybercrime", Syngress Publishing Inc.
2008, p. 507.

44
Therefore, computer security aims at achieving many objectives as
follows(1)
:
 Controlling the physical accessibility to computer(s) and/or networks.
 Preventing accidental erasure, modification or compromise of data.
 Detecting and preventing intentional internal security breaches.
 Detecting and preventing unauthorized hacking.
Network security solutions are loosely divided into three categories:
hardware, software and human. Computer security involves many aspects, from
protection of the physical equipment to protection of the electronic bits and bytes
that make up the information that resides on the network. However, despite such a
focus on security, many organizations still implement security measures
haphazardly, with no well-thought-out plan for making all the parts fit together.
Applications of IT:
Information Technology is being applied to facilitate developing various
aspects of society as it is a major force in facilitating the public and private sector
activities, improving the citizens' quality of life, sharing knowledge and improving
access to information.
1- Database:
A database is an organized collection of data(2).It is the collection of
schemas, tables, queries, reports, views and other objects. The data are typically
organized to model aspects of reality in a way that supports processes requiring
information.
(1) Tom Shinder's, "ISA Server 2006 Migration Guide", Syngress Publishing Inc. 2011, p.2.
(2) "Database - Definition of database by Merriam-Webster".merriam-webster.com.

45
The purpose of a database is to help people keep track of things. It does this
by storing data in tables, where each table has rows and columns like those in a
spreadsheet. A database usually has multiple tables. and each table contains data
about a different type of thing. Databases store not only rows of data, but also
relationships among the rows of data. Data are recorded €acts or figures.
Information is knowledge derived from data. Or, using another common definition,
information is data presented in a meaningful context.
Databases store data in tables, and they represent the relationships among
the rows of those tables. They do so in a way that facilitates the production of
information.
There are larger database applications such as those in the CRM. Customer
Resource Management (CRM) is an information system that manages customer
contacts from initial solicitation through acceptance, purchase, continuing
purchase, support, and so forth. CRM systems are used by salespeople, sales
managers, customer service and support staff. and other personnel, A CRM
database in a larger company might have 500 users and 10 million or moreover, in
perhaps 50 or more tables. According to Microsoft. In 2004 Verizon had a SQL
Server customer database that contained more than 15 terabytes of data. If that data
were published in books, a bookshelf 450 miles long would be required to hold
them(1)
.
2- ERP:
Enterprise Resource Planning (ERP) is an information system that can be in
every organization. It includes sales, inventory, production planning, purchasing,
and other business functions(2)
.
(1) http://www2.hawaii.edu/~donnab/lis670/Kroenke_ch1_2006_databases.pdf.
(2) Rouse, Margaret. "ERP (enterprise resource planning)". Tech Target. Retrieved July 14, 2015.

46
ERP system is an integrated information system to support the business
within different organizational parts of an enterprise. The leading global providers
are SAP, Oracle and Microsoft. ERP packages are designed to be customizable to
concrete needs of an organization and to its legacy systems.
Table 3 : ERP Solution Satisfaction/ Benefits Realization
(1)
Tier I and tier II ERP Solutions
SAP Oracle Tier II
Industry
Average
Benefits Factor 72.2% 58.0% 68.6% 65.3%
Executive Satisfaction 76.4% 75.9% 67.7% 70.7%
Employee Satisfaction 73.6% 60.3% 76.5% 67.4%
Business Risk factor 50.0% 56.9% 61.8% 54.0%
There is a reason why these company’s declare themselves rivals. SAP has
been developing ERP systems since its creation while Oracle has been expanding
into the ERP market. SAP is show to have more experience with ERP along with a
bigger clientele in the ERP market since it stands in the market the longest out of
the two. Oracle on the other hand has multiple partners thanks to its many ventures
such as middleware. The biggest difference between the two is the need of the
specified company hiring. SAP creates a standard with its many modules and can
be bought in pieces based on need but at the cost of submitting to the standards.
(1) Panorama's 2010 ERP Report.
- Available at http://panorama-consulting.com/2008ERP Report.html

47
While Oracle is customizable and largely less expensive to integrate and deploy
but lacks in scalability for smaller to midsize companies which is a very large
market. It shows that even long standing systems have their drawbacks along with
their strengths.
3- HR Systems:
Organizations nowadays realize the power of information technology (IT)
tools for reaching their business targets, fulfill defined organizational goals and
optimize the work processes as well. The IT tools contributed to the Human
Resources (HR) area by accomplishing their assigned tasks by using the source of
IT capabilities in measuring and tracking the human capital as well as using the
HR information system generally.
Human Resources play an important role in all strategic decisions of the
organization. Human Resources Managers aspire to occupy more strategic position
within the organization to get to the essence of the problem how to manage, to
motivate and to increase the performance of organization. Human Resources
Management (HRM) must aim at achieving the competitiveness of the
organization in the field of HR by means of providing constant educational and
training programs for personal development of employees. It has been scientology
proven that one of the supporting pillars which can contribute to the fulfillment of
the personal policy is the usage of IT technologies in HR(1)
.
Human resource processes should be focused on the strategic objectives.
These strategies are led to prepare an IT strategic plan that in turn translates into an
(1) Seyni Mamoudou & G.P Joshi, "Impact of Information Technology in Human Resources
Management", Global Journal of Business Management and Information Technology. ISSN 2278-
3679 Volume 4, Number 1 (2014), pp. 33-41. P. 34.

48
appropriate human resource strategic plan in the field of IT as the Figure 1
depicts(1)
.
Figure 6 : The Framework of Information Technology Human Resources Plan
(2)
(1) Sameni, M.K., Khoshalhan, F. Analysis of Human Resource Development for Information
Technology and E-Commerce in Iran. IT Department, Faculty of Industrial Engineering, K.N.Toosi
University of Technology, Tehran, Iran. 2006.
(2) Ibid, p.1190.
Corporate
strategy
IT strategy
HR Strategy
(Emphasis on
IT)
Short and
Middle term
strategies
Long term
strategies

49
4- Financial Systems:
Information technologies are being used to enhance money market mutual
funds, operated by investment companies and securities broker/dealers, permit
shareholders to redeem shares by writing the equivalent of a check(1)
.
Observers pointed out that technology as a key factor responsible for the
rapidity and magnitude of change in the financial service industry.
Banks, depending heavily on information processing and communication
technologies, are beginning to offer securities through discount brokerage
subsidiaries. Banks, credit unions, and savings and loan associations join networks
of automated teller machines that enable account holders to obtain cash 24 hours a
day from machines that are available nationwide. Both securities dealers and banks
have developed systems that allow account holders with personal computers to
transfer funds between accounts, pay bills, and order the purchase and sale of
securities(2)
.
5- Petroleum Applications:
Despite increasing attention to alternative energy sources, the world can’t
forget about oil and gas as it struggles to meet ever-rising demand for clean and
affordable energy. Technology is the most important force to increase the supply of
more challenging oil and gas, and mitigate the environmental impact of energy
production and consumption(3)
. Companies need to develop, deploy and integrate
(1) John H. Gibbons, "Effects of information technology on financial services systems, DIANE
Publishing, 1984, p. 3.
(2) Ibid.
(3) Steve Edwards, Omar Ishaq and Øivind Johnsen, " Oil and Gas 2030", IBM Institute for Business
Value, IBM Global Business Services Executive Report, p.1.

50
strategic production and information technologies to enable key success factors
such as performance management, enterprise risk management, operational
excellence, people management and adaptive business models.
Improving Production and information technologies:
New technologies are vital to efficient exploration, improved recovery and
operating within acceptable health, safety and environmental requirements. The
future technology progress help the operations in petroleum sector in four ways –
the first three relate to production technologies and the fourth is about how to
apply information technologies:
1. Improve exploration of new oil and gas resources
2. Enhance recovery from existing fields in production and operation of more
challenging conventional and unconventional sources
3. Reduce the environmental footprint and risks of different types of oil and
gas production activities
Enhance recovery from existing fields and tap challenging sources
Technological progress and the expectation of persistent rising energy prices have
made unconventional oil and gas sources more attractive and viable. Much of the
supply increase in the recent decade has resulted from improving recovery from
existing large fields thanks to the technology of Improved Oil Recovery (IOR) that
enabled access to dispersed trapped oil and residual low mobile oil. Thus, it can be
said that the use of integrated information technology and advanced IOR
techniques will enable more efficient production and prolong the life of existing
fields(1)
.
(1) Mari Nichols-Haining and Christine Rueter, "Research Portfolio Report Small Producers:
Operations/Improved Recovery", 2015.

51
IT Personnel:
Information Technology (IT) is a broad term that includes all aspects of
managing and processing information and related technologies. Information
technology professionals are responsible for designing, developing, supporting and
managing computer hardware, computer software, and information networks,
including the Internet(1)
.
IT workers are highly specialized in their field. They like what they do and
understand it inside and out. There are two of the most essential skills needed from
IT professionals are teamwork and communication skills. Systems are complex and
people are needed to help translate that task. Therefore, IT professionals are the
ones responsible for helping others get their work done efficiently without the
complex jargon of the technology world.
If a company relies on phones and emails, chances are that there’s an IT
professional behind it all making sure the cogs in the machine function properly.
Here are some of the most popular positions for people interested in Information
Technology:
1- IT Management:
Information technology managers need a technical background as well as
excellent managerial skills. Because they direct the work of other employees, these
individuals require strong interpersonal and communication abilities. Analytical
thinking also is very important as this position often involves problem resolution
and process development. In addition, a strong customer-service orientation is a
(1) Dominic Magut, "Smart Study and Career Selection Handbook" Kenya, ISBN: 978-1-300-32882-7,
2012.

52
must. IT manager should hold a bachelor’s degree in an IT-related field plus
experience with the specific types of business systems, hardware and networking
services utilized by the firm. Demonstrated leadership also is required(1)
.
2- Systems Administrator(2)
:
An IT Network Systems Administrator works in small or large organizations
in the commercial and public sectors, offering a wide range of IT services which
are critical for the operation of daily business. IT Network Systems Administrator
is responsible for working professionally and interactively with users to meet their
needs and ensure continuance of the systems and service levels they require to
perform their roles effectively.
With the rapid change of IT systems, these IT Network Systems
administrators face rapidly expanding opportunities and challenges. For the
talented IT Network Systems Administrator there are many commercial, public
sector and international opportunities; however, these carry with them the need to
understand and work with diverse cultures, and to keep up to date with fast
changing industry developments. The diversity of skills associated with IT network
systems administration is therefore likely to expand.
3- Programmers(3)
:
Employees in this job function as information technology professionals,
participating in or overseeing a variety of analytical and programming assignments
(1) Glossary of Job Descriptions for Information Technology, Robert Half Technology 2016 Salary
Guide. P. 23.
(2) Ibid. P. 26.
(3) Glossary of Job Descriptions for Information Technology, Robert Half Technology 2016 Salary
Guide. P. 23.

53
that provide for the development, enhancement, and maintenance of automated
data, voice, or video application programs, application systems, and operating
systems software within mainframe, network, and client server environments.
4- Helpdesk(1)
:
All help desk personnel need excellent problem-solving, communication and
interpersonal skills, along with patience, a positive, customer-friendly attitude and
the ability to work in a team environment. In addition, they should have a strong
technical understanding of the various hardware, software and networking systems
being supported. Employer requirements depend on the help desk position level.
Tier 1, an entry-level position, normally requires less than two years of work
experience and may require an associate’s degree or completion of coursework at a
technical school. Tier 2 positions typically require two to four years of work
experience and may require a bachelor’s degree, or a two-year degree and
additional, equivalent work experience in a help desk setting. Tier 3 positions often
require four or more years of help desk experience, a bachelor’s degree in
computer science or a related field, and/or professional certification, such as the
Help Desk Institute’s Customer Support Specialist (CSS) or Help Desk Analyst
(HDA), A+ certification or the Microsoft Certified Systems Engineer (MCSE)
designation.
(1) Ibid. p. p. 33 -34.

54
IT impacts organizational characteristics and outcomes:
IT plays a significant role in moderating the relationship between
organizational characteristics including structure, size, learning and Culture
Information technologies encompass a broad array of communication
media and devices which link information systems and people(1)
.
IT promotes collaboration and information sharing both inside and across
organizational boundaries. Huber's ( 1990) (2)
suggested that IT is a variable
that can be used to enhance the quality and timeliness of organizational
intelligence and decision making, thus promoting organizational performance.
Huber's theory treats several organizational characteristics as dependent
variables with IT positioned as the independent variable. In order to offer a
more encompassing view of IT and organizational functioning. we examine
IT as a moderator of the relationship between organizational characteristics
and several organizational outcomes.
(1) Tarabour. R. M., "Building standards-based unified messaging systems Computer Technology
Review 19 (5), 27.56. 1999..
(2) Huber, G. P., "A theory of the effects of advanced information technologies, on organizational
design, intelligence and decision making. Academy of Management Review, 15 (1), 47-71 , 1990.
.

55
IT Characteristics:
IT has some distinct characteristic and the most important of these are as
follows:
(1)Saves Time: it make all places – contiguous electronically.
(2)Save Area: by using the storage means which accommodate huge amount of
saving information which can be accessed easily and smoothly.
(3)Intellectual tasks sharing with the machine: as a result of interaction and
dialogue between the researcher and the system of artificial intelligence,
which makes information technology contributes to the development of
knowledge and strengthen the composition of the users opportunities for
inclusiveness and control in the production process.
(4)The formation of networks as it unites the technological tools in order to
form communication networks, and this increases the flow of information
between users and industrialists, as well as machinery producers. This
allows the exchange of information with the rest of the other activities.
(5)Interactivity: the user of this technology should be a recipient and sender at
the same time. Participants in the communication process can exchange
roles, which allows the creation of a kind of interaction between the
activities.
(6)Timeliness: means the possibility of receiving the message at any time
convenient to the user as users are not required to use the system at the same
time.
(7)Decentralization: enables the independence of information and
communication technology. The Internet, for example can be used in all
conditions as it can't cease working at the level of the whole world at the
same time.
(8)Connectivity: means the possibility of linking the various communication
devices, i.e., regardless of the company or the country of origin.

56
(9)Mobility: as the user can benefit from its services during his/her travels
anywhere by many means of communication via the computer, mobile
phone etc...
(10) Convertibility: the possibility of transferring information from one
medium to another, such as transforming audio message to a printed or
readable message.
(11) Demassification: means the possibility of communicating the message to a
single individual or a particular group, rather than the huge audiences.
(12) Circulation and Dissemination : It is the ability of the network to expand to
include more unlimited space of the world to gain its strength from this
systematic flexible pattern of dissemination.
Advantages of Information Technology:
Information technology has helped in shaping both the business world and
our society in general. Many fields have been impacted by information technology
and these include; education , health , entertainment ,communication just to
mention but a few. The impacts of information technology are profound. As the
world develops, more technology will emerge and this technology will have both
positive and negative impacts. Some of the following points show how information
technology has impacted men's lives.
Globalization:
IT has not only brought the world closer together, but it has allowed the
world's economy to become a single interdependent system. This means that we
can not only share information quickly and efficiently, but we can also bring down
barriers of linguistic and geographic boundaries. The world has developed into a
global village due to the help of information technology allowing countries like

57
Chile and Japan who are not only separated by distance but also by language to
shares ideas and information with each other.
Communication:
With the help of information technology, communication has also become
cheaper, quicker, and more efficient. We can now communicate with anyone
around the globe by simply text messaging them or sending them an email for an
almost instantaneous response. The internet has also opened up face to face direct
communication from different parts of the world thanks to the helps of video
conferencing.
With the help of communication technology tools like phones, video
conferencing , electronic mail, databases just to mention but a few. Movement of
information within an organization or business has become easy and first.
Employees can easily move information across departments without having any
interruptions. Tools like electronic mail , e-fax, mobile phones and text messaging
enhance the movement of information among employees, customers and business
partners or suppliers.
1- Cost Effectiveness and productivity:
It increases production and saves time because of tasks automation. This in
turn increases productivity which ultimately gives rise to profits that means better
pay and less strenuous working conditions.
2- Bridging the cultural gap:
Information technology has helped to bridge the cultural gap by helping people
from different cultures to communicate with one another, and allow for the
exchange of views and ideas, thus increasing awareness and reducing prejudice.
3- More time:

58
IT has made it possible for businesses to be open 24 x7 all over the globe.
This means that a business can be open anytime anywhere, making purchases from
different countries easier and more convenient. It also means that you can have
your goods delivered right to your doorstep with having to move a single muscle.
4- Provide New Job Opportunities:
Probably the best advantage of information technology is the creation of new
and interesting jobs such as computer programmers, Systems analyzers, Hardware
and Software developers and Web designers that constitute some of the many new
employment opportunities created with the help of IT.
Disadvantages of Information Technology:
Although the benefits of information technology make it seem ideal, there
are also some disadvantages of information tech that are listed below.
1- Expense of Implementation and Maintenance:
Setup costs for implementing an information technology system within a home
or business can be very costly. Software can training can also take another big bite out
of the budget. Information technology systems, just like any other equipment, need to
be maintained and repaired from time to time. But there are also updating and
upgrading costs associated with IT systems.
Small businesses fail to afford this expensive technology so they end up
losing their clients to a business which has improved its technology and provides a
better service or product.
2- Unemployment

59
While information technology may have streamlined the business process it
has also created job redundancies, downsizing and outsourcing. This means that a
lot of lower and middle level jobs have been done away with causing more people
to become unemployed.
By implementing IT systems into a company, tasks take less time and
therefore, employees have more time throughout the day. Paperwork is processed
and filed immediately, reports are generated with the touch of a button and
financial statements are generated automatically. Companies are finding that they
can combine jobs and need a smaller staff to operate fully.
3- Privacy:
Though information technology may have made communication quicker,
easier and more convenient, it has also bought along privacy issues. From cell
phone signal interceptions to email hacking, people are now worried about their
once private information becoming public knowledge.
When information is stored electronically, there are more chances of having
security breaches. Hackers are evolving along with technology and they are never up
to any good. Security systems that were state-of-the-art last year are now out-of-date
and in desperate need of upgrading. To protect company data, a security specialist
should be kept on staff.
While information technology is quickly becoming something that we cannot
live without, there are many aspects that keep us on our toes. Trying to stay current on
the changes and be able to afford the upgrades can make a person feel helpless and
confused. But when we understand the different aspects of information technology,
then we can accomplish so much more than without it.
4- Lack of job security:

60
Industry experts believe that the internet has made job security a big issue
as since technology keeps on changing with each day. This means that one has to
be in a constant learning mode, if he or she wishes for their job to be secure.
5- Dominant culture:
While information technology may have made the world a global village, it
has also contributed to one culture dominating another weaker one. For example it
is now argued that US influences how most young teenagers all over the world
now act, dress and behave. Languages too have become overshadowed, with
English becoming the primary mode of communication for business and
everything else.
Thus, it can be said that the Information technology plays vital role in the
world. Many changes have been occurring in society with the IT. There are several
things discuses to consider when information technology starts; this present paper
makes an attempt to: deals with the advantages and disadvantages of information
technology and the essential roles that are being followed in present scenario in
information technology.

61
Definition of Performance:
The accomplishment of a given task measured against preset known
standards of accuracy, completeness, cost, and speed. In a contract, performance
is deemed to be the fulfillment of an obligation, in a manner that releases the
performer from all liabilities under the contract(1)
.
Performance comprises both a behavioral and an outcome aspect. It is a
multi-dimensional and dynamic concept.
When conceptualizing performance, one has to differentiate between an
action (i.e., behavioral) aspect and an outcome aspect of performance(2)
(Campbell,
1990; Campbell, McCloy, Oppler, & Sager, 1993; Kanfer, 1990; Roe, 1999). The
behavioral aspect refers to what an individual does in the work situation. Not every
behavior is subsumed under the performance concept, but only behavior which is
relevant for the organizational goals: “Performance is what the organization hires
one to do, and do well” (Campbell et al., 1993, p. 40). Thus, performance is not
defined by the action itself but by judgmental and evaluative processes (cf. Ilgen &
Schneider, 1991; Motowidlo, Borman, & Schmit, 1997). The outcome aspect refers
to the consequence or result of the individual’s behavior. Outcome aspects of
performance depend also on factors other than the individual’s behavior. In
practice, it might be difficult to describe the action aspect of performance without
any reference to the outcome aspect.
(1) http://www.businessdictionary
(2) Ibid, p.3.

62
Performance as a Multi-Dimensional Concept:
Performance is a multi-dimensional concept. So, there are two types of
performance, the task and contextual performance(1)
(Borman and Motowidlo
(1993)). Task performance refers to an individual’s proficiency with which he or
she performs activities which contribute to the organization’s ‘technical core’. This
contribution can be both direct (e.g., in the case of production workers), or indirect
(e.g., in the case of managers or staff personnel). Contextual performance refers to
activities which do not contribute to the technical core but which support the
organizational, social, and psychological environment in which organizational
goals are pursued. Contextual performance includes not only behaviors such as
helping coworkers or being a reliable member of the organization, but also making
suggestions about how to improve work procedures.
There are three main differences between task and contextual performance(2)
(Motowidlo & Schmit, 1999):
(1) Activities relevant for task performance vary between jobs whereas
contextual performance activities are relatively similar across jobs
(2) Task performance is related to ability, whereas contextual performance is
related to personality and motivation;
(3) Task performance is more prescribed and constitutes in-role behavior,
whereas contextual performance is more discretionary and extra-role.
Performance Measurement:
Performance measurement is the ongoing monitoring and reporting of
program achievements, particularly the progress towards pre-determined goals. It
(1) Ibid, p.3.
(2) Ibid, p.3.

63
is conducted by a program or agency management to address the type or level of
program activities conducted (process), the direct products and services delivered
by a program (outputs), and/or the results of those products and services
(outcomes). A “program” may be any activity, project, function, or policy with a
certain purpose or set of objectives.
One of the newer approaches refer on measuring performances of
organizations via KPI. KPI are financial and non- financial measures that
organizations use to reveal how successful they were in accomplishing long lasting
goals. In order to constitute effective system of performance measurement it is
very important to have defined and standardized all processes within the
organization.
Significance of process approach could be seen through the fact that it is a
base of two nowadays management systems: strategic management, via BSC, and
technical standardization, via QMS.
Key Performance Indicators (KPIs) are the backbone of business. They are
the used to help the organizations understand whether their business is on the right
track for success, and, if it’s not, more easily identify where to make improvements
and focus more attention. They confirm the standards that organizations need to
meet to gain budgets because the aim of a KPI is to bring about improvement.
Therefore, the amount of data that businesses and organizations generate
necessitate choosing the right measures and indicators. With that in mind, KPIs
must be aligned with the overall organizational strategy and objectives.
KPIs give executives the chance to communicate the mission and focus of
the organization to investors, team members, and other stakeholders. As KPIs filter
through the organization, they must grab employees’ attention to make sure that
everyone is moving together in the right direction and delivering value to the

64
business. Furthermore, visualizing KPIs through business dashboards makes it
easier to quickly get a sense of how well the organization is meeting its KPI goals.
Departments, and even individuals within an organization, may have their
own KPIs. But it is important that they understand the context of what they are
being measured against and how it fits within the broader business strategy and
goals.
The KPIs that a company or organization measures will vary depending on
the type of business and industry, its customers, and its staff. However, they are
likely to include some of the following:
 Net profit
 Net Promoter Score
 Customer engagement
 Customer complaints
 Market share
 Share of voice
 Carbon footprint
 Supply chain miles
 Waste recycling rate
 Employee satisfaction
 Staff churn
 Return on investment (ROI)
Once defining the organizational goals and strategy, identifying and aligning
the KPIs for the organization will be much simpler. This requires sound
Performance Management.
As for Performance Management, it is a process for setting goals and
regularly checking progress toward achieving those goals. It includes activities that
ensure organizational goals are consistently met in an effective and efficient
manner. The overall goal of performance management is to ensure that an

65
organization and its subsystems (processes, departments, teams, etc.), are optimally
working together to achieve the results desired by the organization.
Therefore, an organization can achieve the overall goal of effective
performance management by continuously engaging in the following activities:
 Identifying and prioritizing desired results
 Establishing means to measure progress toward those results
 Setting standards for assessing how well results are achieved
 Tracking and measuring progress toward results
 Exchanging ongoing feedback among those individuals working to achieve
results
 Periodically reviewing progress
 Reinforcing activities that achieve results
 Intervening to improve progress where needed.

66
Organizational Performance:
Organizational performance is one of the most important constructs in
management research. It explains the success of an organization and how it
performed over a period of time. Finding measures of the organizational
performance explains, an organization can compare its performance across
different periods of times and consequently performance of different organizations
can also be compared to each other. Among the different measures of performance
is a general category of financial and non-financial. Financial measures rely on
economic aspect of efficiency. They explain how the extent of organizational
efficiency that is one of the organizational objectives. Organizations attempt to
achieve efficiency, which is closely related to cost reduction. They are concerned
with the efficiency as well as the effectiveness(1)
. While the emphasis of efficiency-
seeking enterprises is on cost, effective-seeking enterprises focus on increasing
customer value. In other words, they focus on producing more reliable products
and higher quality(2)
. Therefore non-financial measures would be more appropriate
in measuring organizational performance with regard to effectiveness.
ROI as a measurement of Organizational Performance:
Organizational performance consists of the actual output or results of
an organization as measured against its intended outputs (or goals and objectives).
According to Richard et al. (2009) (3)
organizational performance encompasses
three specific areas of firm outcomes: (a) financial performance (profits, return on
(1) Hunt, S. D. & Duhan, D. F. (2001). Competition in the third millennium: efficiency or effectiveness?"
Elsevier Science Inc.
(2) Ibid.
(3) Richard et al. (2009): Measuring Organizational Performance: Towards Methodological Best Practice.
Journal of Management.

The impact of information technology on organizational performance

The impact of information technology on organizational performance

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