Research consultancy
THE EFFECT OF INFORMATION SYSTEMS ON PERFORMANCE OF GOVERNMENT AGENCIESIN UGANDA
A CASE OF
UGANDA REVENUE AUTHORITY
ABSTRACT
The topic of study was the effect of information systems on performance of government agencies in Uganda a case of Uganda Revenue Authority. The objectives of the study were; to assess the effect of information systems software on performance of URA, to establish the effect of systems infrastructure on performance of URA and to examine the influence of user knowledge and skills on performance of URA. The study adopted a cross-sectional survey research design because of the nature of the variables that were at hand; the study also used qualitative and quantitative methodologies for data analysis. Study Population, the entity comprises of 239 employees, 1 Executive Director, 12 Management staff, 40 Division Heads, 5 Regional Heads, and 181 staff members at URA whose duties influence the effect of Information systems on performance of government agencies.Using Krejcie and Morgan’s (1970) table for sample size determination approach, a sample size of 181 respondents were selected from the total population of 239 employees and 100 prominent tax payers.
The results in the study further shows that software of the organization is usable this findings therefore shows that majority of the respondents hold the view that URA has a good software that can be used to manage taxation activities. The findings in the study further demonstrate that majority of the respondent were not sure and some disagreed that all employees in URA can use the software. This finding further shows that indeed some employees of the organization do not know how to use computers. The findings in the study further shows that majority of the respondents assert that software are fast as indicated by the mean value of 3.86 these results further indicates that though some respondents rejected. The results in the study further indicates that majority of the respondents strongly agreed that the website of URA has all the information needed. This result also indicates that the website of URA has most of the information needed by the tax payers and therefore the employees of URA find it easy to interact with the Tax payers of URA. According to the findings in the study majority of the respondents strongly disagreed that customers can easily use the website this results indicates that most of the customers face difficulties in using the website to access URA online services. The findings in the study indicates that software’s are used to calculate taxes customers are supposed to pay this therefore indicates that URA uses computer systems to calculate the taxes clients are supposed to pay.
In URA all the work is done electronically in the taxation department this was adopted because when we use soft wares to calculate taxes we reduce time this has improved on our services to the customers; The findings in the study indicates that majority of the respondents assert that clients can easily access information about URA using the internet this results also indicates that URA does most of its services online.
The study recommends that URA should train some of the customers on how to use its websites this should be done in special seminar and programs on radio and television to enable the tax payers have knowledge on how to use online services of URA. This will help in enabling the citizens have knowledge on how to use online services of URA. The study recommends that URA should ensure that all its employees are taught of the new soft ware so that they can be able to be well conversant with the systems and enhance their productivity. The study also recommends that URA should designs websites that can be easily used by customers so that clients can be able to pay their taxes easily online. The study recommends the following areas of further research; Influence of ICT on organizational performance, Influence of inventory management on organizational performance and Effects of organizational techniques on performance.
CHAPTER ONE
INTRODUCTION
The aim of the study is to investigate the effect of information systems on performance of Uganda Revenue Authority. In this study, an information system is the independent variable and performance is the dependent variable. The key dimensions for information systems will be; Information systems software, information systems infrastructure and user knowledge and skills. While performance will be measured inform of financial performance, customer satisfaction and growth.
According to Asongu, & Le Roux, (2017), Government across the world are investing heavily into the Information systems to enable better financial performance, increased customer satisfaction and growth of government organizations for example UK government spent 124.8 billion US dollars from 2008 to 2017 to develop the Information systems to enable them serve their customers timely and efficiently there by maximizing on their performance. However, no researcher currently has investigated the effect of Information systems on organizational performance at URA, this has prompted the researcher to establish the effect of Information systems on performance in government agencies.
This chapter presents the background of the study, the problem statement, purpose, objectives of the study, research questions, study scope, justification of the study, significance, Hypotheses, conceptual framework, as well as operational definition of key terms and concepts.
The section presents literature on the evolution of the Information systems concept under three perspectives: historical Background, theoretical Background, conceptual Background and contextual background.
1.2.1 Historical Background
The beginning of information systems can be traced back with the invention of Herman Hollerith’s census tabulator, Invented in time to process the 1890 U.S. census this represented a major step in automation and the inspiration to the development of the information systems Era. The first computers used for information processing was the UNIVAC I, installed at the U.S. Bureau of the Census in 1951 for administrative use and at General Electric in 1954 for commercial use this gave way for the adoption of personal computers in the late 1970s (Pearlson et al., 2016).
Information system has progressed through personal computer era to client server era and currently to enterprise internet, this has been spearheaded by the United States military department since 1945 whose main goal has been to eliminate communication barriers and enable better performance; however, this technological advancement has been adopted by most governments across the globe to help in the improvement of performance (Kim et al., 2009).
According to the adoption of internet can be traced back with the invention of the world wide web in 1991 by Tim Berners lee, this gave way to the adoption of internet in government organizations like in Health, Education and administration globally (Ricci et al., 2015).
Adoption of computers in Africa can be traced in 1960 with the introduction of the first IBM 1401 data processing system in Johannesburg South Africa which was installed in the IBM Service Bureau and was first unveiled in October 1959 (Dwivedi et al., 2015).
Other African countries started using computers after south Africa especially by the late 1990s most of the government across the sub-Saharan Africa started adopting information systems in the running of the daily activities and as of 2017, Africa had more than 450 million internet users with specific countries like Nigeria individually having 98 million users and Egypt having 49.23 million this has been spear headed by countries to enhance better performance (Ziemba, E. (2017, September).
Toots, M (2016) asserts that the use of information systems by the government has been adopted by countries in East Africa like Kenya in key sectors like education, Health, revenue collection and management of water resources to improve on the efficiency of the government key agencies (Cirera, Lage, & Sabetti, 2016).
The adoption of Information systems in Uganda can be traced from the introduction of the first computer ever in Uganda in 1967 in Ministry of Finance and in 1968, the second mainframe arrived at Makerere University, however, it was not until June 2006 that the Government of Uganda created a Ministry of ICT to enhance the adoption of information systems in the government agencies in Uganda (Ramadani, 2017).
According to URA, (2015) URA has made great strides in improving service delivery through the adoption of information systems, this has been through introduction of electronic methods like e-registration, e-fling, e-declaration of customs transactions and e-payment, in addition to that in 2010, to offer personalised services to taxpayers, the organization created taxpayer-centric Portal (https://ura.go.ug), to provide 24/7 electronic service delivery, anytime, anywhere with quick & high quality e-services and greater degree of transparency to taxpayers.
Secondly with the adoption of information systems, most of the borders provide 24/7 services including Entebbe airport, this has resulted into reduction in service turnaround time with minimal physical interaction with the Department and reduction in taxpayer’s visit to URA through the adoption of information systems techniques. various e-service payment method have been implemented ranging from Pay Way to MTN mobile payment, Mobile App.
Since the establishment of URA in 1991, there have been many challenges related to revenue collection and the accessibility of its services by tax payers and as of 2003 URA adopted Asycuda ++ to enable easier collection of taxes and management however realization of the weaknesses of ASYCUDA ++, URA adopted ASYCUDA world in 2011 to enhance better performance within the organization and reduce on unnecessary costs. According to Observer, Ssempogo, H (2013, April 16th) indicates that in 2011 URA decided to upgrade from Asycuda++ to Asycuda World in order to respond to the ever changing business needs. Asycuda World is more robust and flexible and, therefore, able to adapt to the different settings, it also provides an easier channel for interconnectivity with other systems.
1.2.2 Theoretical background
Diffusion of Innovation theory will guide the study to establish the effect of information systems on performance of government agencies. According to Haung $ kapur, (2007) the diffusion of innovation theory states that diffusion is governed by four elements, the innovation itself, communication channels, time and social systems. The four elements, explain the process of change as determined by employees and the whole organization.
Diffusion assumes that the propensity to adopt an innovation is primarily a function of the availability of information. It also assumes that in the dissemination of information particularly at the local scale, personal contacts are of much greater significance than the mass media (Deligiannaki & Ali, 2011).
Diffusion of innovations theory is often simplified to concentrate solely on a product or innovation. Little attention has been paid on the complex cultural, economic, technology and other factors that determine organizational performance (Green et al., 2009). This theory therefore describes the adoption of information systems at URA as a product of availability of information to the management of the organization which led to innovation of information systems.
1.2.3 Conceptual background
Information system (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filters, process, create and distribute data. Information Systems encompasses a variety of disciplines such as: the analysis and design of systems, computer networking, information security, database management, and decision support systems, (Jessup, and Valacich, 2008).
Information systems, is an organized combination of people, hard ware, software, communication network, and data resources, policies and procedures to form the activities that stores, retrieves, transform data resources into information. Information systems (IS) are the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create, and distribute data. Information systems are combinations of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute useful data, typically in organizational settings (Valacich & Schneider, 2015).
Information systems are interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.
The Components of Information Systems include; Technology; this can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted.
The components of information systems hardware, software, and data all fall under the category of technology.
Hardware; Information systems hardware is the part of an information system which involves physical components of the technology. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware.
Software; Software is a set of instructions that tells the hardware what to do. Software is not tangible it cannot be touched. When programmers create software programs, what they are really doing is simply typing out lists of instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone.
Computer software, or simply software, is a collection of data or computer instructions that tell the computer how to work, in contrast to the physical hardware from which the system is built, that actually performs the work. Computer software includes computer programs, libraries and related non-executable data, such as online documentation or digital media. Computer hardware and software require each other and neither can be realistically used on its own (Takieddine & Sun, 2015).
An information system Infrastructure is the foundation or framework that supports a system or organization. In computing, information technology infrastructure is composed of physical and virtual resources that support the flow, storage, processing and analysis of data. Infrastructure may be centralized within a data centre, or it may be decentralized and spread across several data centres that are either controlled by the organization or by a third party, such as a collocation facility or cloud provider (Gilmour et al., 2015)..
Infrastructure components often includes the power, cooling and building elements necessary to support data centre hardware. The data centre hardware infrastructure usually involves servers; storage subsystems; networking devices, like switches, routers and physical cabling; and dedicated network appliances, such as network firewalls (Kroenke & Boyle 2015).
Systems Infrastructure includes; software, hardware, firmware, networks and Websites that is used by an organization to facilitate communication (Ajuwon, 2015). In this study systems infrastructure is taken to mean all the necessary systems facilities like the computers, internet, software, hardware, websites and networks (intra and extra connection) that are used by an organization to facilitate better performance.
User knowledge and skills is defined as the ability of an individual to have the required knowledge to operate the computer systems (Brabham & Guth, 2017). In this study user knowledge and skills mean the ability of the organizational employees and the clients to interact using computers, internet and all other online services, this will specifically be measured in terms of Computer literacy, User competence and Education level.
Competencies have been identified as motives, knowledge, skills, traits, and one’s self-image or self-concept (spencer, 1993).user competency in information systems have been found to be lacking in most organization, since different organizations across the globe have workers who have not been fully trained in Information systems hard ware like use of computer key board and they also lack the required knowledge in software.
According to Kaplan (2012) performance is a way an organization measures its achievement in line to its strategy and objectives. In this study, performance means the ability of an organization to achieve its targets. In this study, performance is a dependent variable and it has been interpreted to represent financial performance, customer satisfaction and growth.
According to Kaplan, (2015) performance of the organization is measured in different dynamics mainly through the ability of the organization to achieve its strategic goals and visions. The balanced Scorecard is set to align business activities to the vision and strategy of the business, improve internal and external communications, and monitor business performance against strategic goals.
In this study, performance is measured in three key dimensions; Financial performance; Financial performance of the organization involves the organizational ability to meet the shareholders’ expectation and perception.
When the business is able to meet the shareholders’ expectation and perception we say the organization has performed well.
Customer satisfaction is defined as a result of comparison between what one customer expects about services provided by a service provider and what customer receives as actual services by a service provider, (carvanna,2003).
Customer satisfaction is customer evaluation of service provider whether it has met their needs and expectations (zeithaml & bitner 1998). Anderson & fornnel , (1995) suggested they were two concepts of customer satisfaction.
In this study, the growth of the organization is measured by its ability to meet its targets and exceed them, if the organization is able to meet its targets it has growth while if it fails to meet its target we say it’s not growing.
Growth of an organization is usually expanded into three sub categories that is to say; to make profits to continue in existence (survival). Growth is the ultimate measure of success of the business. Without growth then obviously there will be no fulfilment of other objectives.
1.2.4 Contextual Background
This study sets out to investigate the effect of Information systems on performance of government agencies at Uganda Revenue Authority. To meet the main objective of Uganda Revenue Authority, it sets monthly and yearly revenue collection targets to its employees. These targets are a result of a strict enforcement of carrying out URA business by employees through emphasizing strict verification by URA staff on implementing Information systems like E-TIN registration, e-payments, e-taxation, e-registration and e-motor vehicle registration (Turyakira, 2011).
Table below showing the deficits and target of Uganda revenue
| Year | Target (in billions of UGX) | Revenue (in billions of UGX) | Deficit (in UGX billions) |
| 2017/2018 | 15,062 | 14,460 | 602 |
| 2016/2017 | 13,177.15 | 12,719.63 | 458 |
| 2015/2016 | 11,634.87 | 11,230.87 | 404 |
| 2014/2015 | 1,265.152, | 1,287.454 | 139 (Surplus ) |
| 2013/2014 | 8,534.03 | 8,031.03 | 503 |
Source: URA Report (2017).
Uganda revenue authority adopted Information systems to enable it in the management of the revenue collection however it has been facing deficits in its collection as indicated in the table above. Uganda Revenue Authority has employed Information systems in the collection of taxes to ensure that there is compliance among the tax payers because of the user friendly systems like E-registration, e-taxation, e-Tin registration, and e-payments to reduce on the collection deficits (Kabafuzaki, 2010).
Uganda revenue authority has continued to receive budget deficits which has been shown by the financial years 2015/2016 and 2016/2017. Uganda revenue authority has accumulated total deficits of 862 billion Ugandan shilling from 2015 to 2017 despite implementing information systems for the last five years.
Kangave et al.,(2016) Information systems in URA was adopted in 2003 into the domestic taxes department to increase revenue collection, improve quality of administration, reduce costs of compliance and provide services to the tax payers all the time from anywhere.
Despite the adoption of information systems like the ASYCUDA World by URA in 2010 with an aim of enhancing better customer service, improve on revenue collection to minimize deficits, enhance organizational performance, URA is still faced with numerous challenges like poor customers’ service, deficit in revenue collection and low productivity of the internal staff which has led to poor performance of the organization. Gaalya (2017) further reports that poor revenue collection has led to the failure by Uganda revenue authority in meeting the revenue collection target as shown by the increased deficits. In 2016/17, URA collected Shs12.7 trillion about 14 per cent of Gross Domestic Product against a target of Shs13.1 trillion, more to that URA also made revenue loss of Shs404billion in the financial year 2015/2016and a deficit of 2.6 trillion in financial year 2017/2018, in addition to the above, the ASYCUDA world has been reported to be complicated by the users therefore with the rising deficits in revenue collections departments at URA, the organization may fail to hit its revenue target in the coming financial years leading to a total organizational failure as whole. These challenges faced by URA therefore warrants examining the effect of information systems on performance of government agencies in Uganda with specific reference to Uganda Revenue Authority.
The study sought to establish the effect of Information systems on performance of URA.
- To assess the effect of information systems software on performance of URA.
- To establish the effect of systems infrastructure on performance of URA.
- To examine the influence of user knowledge and skills on performance of URA.
- What is the effect of information systems software on performance of URA?
- What is the effect of systems infrastructure on performance of URA?
- What is the influence of user knowledge and skills on performance of URA?
1.7Hypotheses
H1 Information systems software affects performance of government agencies in Uganda.
H2There is a positive effect of system infrastructure on performance of government agencies in Uganda.
H3User knowledge and skills does not affect performance of government agencies in Uganda.
Information systems have become the centre of all developments in any economy. It has thus become inevitable to embrace computer use in any work. The government of Uganda designed a strategy aiming at changing the operational design and culture of the public sector to better improve on performance of its agencies.
Information system: The implementation of any information system requires advance technology infrastructure like for web based application that requires dedicated server and user friendly web interface. Below presented is the conceptual framework showing how information system relates to performance of government agencies.
Independent Variable Dependent Variable
Information systems Performance
| 1. Systems software · Application software · Operating software |
| Financial performance · Shareholders expectation · Share holder perception Customer satisfaction · Customer perception · Customer expectation · Customer interaction Growth · Exceeding targets · Achieving targets
|
| 2. Information systems infrastructure · Internet connection · Computers and laptops · Intra-net connection · Smart phones
|
| 3. User knowledge and skills · Computer literacy · User competence · Education level |
Figure 1: conceptual framework
Source: Kaplan (2012)
According to the figure illustration above, information systems is the independent variable influencing organizational performance. Information system is looked at in aspects of systems software, the infrastructure used, and User knowledge and skills which mainly relates to the competence of the employees in an organization to improve on performance.
Kaplan (2012) in the industrial age, enterprises used to evaluate their performance on financial scores only. However, in the modern error with adoption of Information systems performance now is measured in terms of growth, customer satisfaction and financial performance.
The study will enable future scholars to have information regarding the effect of systems software on performance of government agencies.
The study may also provide more literature to academicians on the effect of systems infrastructure on performance of government agencies.
The study may also enable policy makers to have information on how to finance Information system to enable better performance.
The findings of the study may also further enable the policy makers to have information on how to train the employees to enable them provide better performance of government agencies.
The study may also enable the policy makers to understand the different ways of enhancing better performance of government agencies.
1.10 Justification of the study
The study should be carried out because of the following reasons. In spite of the benefits of Information systems like; increased transparency, improved communication and access to information for citizens, digital diffusion of information is often achieved at high cost by government agencies. Ugandan government also adopted Information systems practices with the view of enhancing better organizational performance in its key departments; however, the government agencies in Uganda have experienced numerous challenges of poor performance.
This therefore has prompted the researcher to investigate into the effect of information systems on performance of government agencies.
This section included the geographical, time and subject/ content scope.
The study concentrated on two variables that are e-government and performance of government agencies. It will further expound on the role played by financial support, ICT infrastructure and user knowledge and skills. The performance of government agency has the dimensions of; financial performance, which is measured in terms of Shareholders expectation and Shareholder perception while Customer satisfaction is also measured in terms of Customer perception, Customer expectation and Customer interaction and lastly Growth which included;
Exceeding targets and Achieving targets.
1.11.2 The geographical scope
The study was carried out from Uganda revenue authority (URA). URA is one of the subsections under the Ministry of finance, Uganda revenue authority is located at plot 95 Kampala road, Nakawa Industrial Area, Kampala, Uganda.URA is found in Nakawa Division of the city of Kampala, approximately 6.5 kilometres (4 miles), by road, east of the city centre, off of the Kampala-Jinja Highway.
1.11.3 Time scope
The period of data to be considered from Uganda Revenue Authority was from 2010 to 2018; this is because, during this period, Uganda Revenue Authority adopted Information systems like ASYCUDA world to enhance better performance in revenue collection (Sanya, 2015, 2nd November).
1.12 Operational definition of key terms
Information systems: The use of technology to support government programs, enhancement of citizens’ engagement and provision of government services to the citizens in a timely, efficiently and at low cost.
Performance: This is the ability of an organization to efficiently utilize the resources at its disposal for maximum output.
