research methodology

INFORMATION SYSTEMS AND THE PERFORMANCE OF

GOVERNMENT AGENCIESIN UGANDA: A CASE

OF UGANDA REVENUE AUTHORITY

CHAPTER ONE

INTRODUCTION

1.1Introduction

Governments across the world are investing heavily into the Information systems to enable better financial performance, increased customer satisfaction and growth of government organizations (Asongu& Le Roux, 2017). The UK government for example spent 124.8 billion US dollars from 2008 to 2017 to develop the Information systems to enable them serve their customers timely and efficiently thereby maximizing on their performance (Asongu & Le Roux, 2017). However, there is limited empirical research to describe the effect of Information systems on organizational performance in developing countries like Uganda.

The study investigated the effect of information systems on the performance of government agencies in Uganda, taking a case of Uganda Revenue Authority (URA). In this study, information systems were the independent variable and performance was the dependent variable. The key dimensions for information systems were; Information systems software, information systems infrastructure and user knowledge and skills. While performance was measured inform of financial performance, customer satisfaction and growth.

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.

1.2 Background of the study

The section presents, historical background, theoretical, contextual background, conceptual background.

1.2.1 Historical Background

The evolution of information systems has a long history however, can be specifically traced from the invention of Herman Hollerith’s census tabulator which was invented to process the 1890 U.S. census. This brought the first step in automation and development of the information systems era. According to Pearlson et al., (2016)the UNIVAC I, was the first computer installed at the U.S. Bureau of the Census in 1951 which helped in administrative duties, while in general electric, the computers were installed for commercial purposes in 1954.This later paved way for the full scale adoption of personal computers globally in 1970s.

Information systems have 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 Ricci et al., (2015) the adoption of internet can be traced back with the invention of the World Wide Web in 1991.This gave way to the adoption of internet in government sectors like in health, education and administration globally.

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 spearheaded by countries to enhance better performance (Ziemba, 2017).

Toots, M (2016) asserts that the use of information systems by the government has been adopted by countries in East Africa like Kenyain 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 report, (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 electronic declaration of customs transactions, electronic registration, online payment. In addition to that, in 2010, to offer personalised services to taxpayers, the organization created taxpayer-centric Portal to enable the provision of services without hindrance, and electronic service delivery, anytime, anywhere with quick & high quality hence greater degree of transparency to taxpayers.

Secondly, with the adoption of information systems, most of the borders like Malaba, provide 24/7 services, as well as other places like Entebbe airport. This has reduced in service turnaround time with little interaction with the Department and reduction in taxpayer’s visit to URA. Different electronic payment methods have been adopted such as Mobile money, Airtel money, Ezee pay and Pay Way.

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, (2013) 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

According to Diffusion of Innovation Theory by (Rogers in 1962), diffusion is governed by four elements including 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.

1.2.3 Conceptual background

Information Systems (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create and distribute data. According to Jessup and Valacich (2008), 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.

Valacich & Schneider (2015) indicates that Information Systems is an organized combination of people, hard ware, software, communication network, and data resources, policies and procedures to form the activities that store, retrieve, transform data resources into information. 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.

Takieddine & Sun, (2015) indicates that 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.

An information system Infrastructure is the foundation or framework that supports a system or organization. Gilmour et al., (2015) indicates that 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.

According to Kroenke & Boyle (2015) 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.

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.

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. Performance is a dependent variable and it has been interpreted to represent financial performance, customer satisfaction and growth.

Performance of the organization is measured in different dynamics mainly through the ability of the organization to achieve its strategic goals and visions. Kaplan (2015) further states that 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 which 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.

According to Carvanna, (2003) 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.

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 a business. Without growth then obviously there will be no fulfilment of other objectives.

According to (Cole, 2016) the use of information systems in an organization has been linked to improvement in employee productivity, easier communication, timely response to customer orders, wider coverage and general customer satisfaction, Parasuraman, (2017) further notes that improvement in productivity of employees in an organization as a result of the use of information systems helps in enhancing better performance of the organization.

On the same note Kaplan, (2015) indicates that information systems adoption in organizations especially in Japanese automobile industries have brought in numerous benefits which has greatly improved on the performance of the automotive sector in Japan.

1.2.4 Contextual Background

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, eregistration and e-motor vehicle registration (Turyakira, 2011).

Table below showing the deficits and target of Uganda Revenue Authority

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. It has accumulated total deficits of 862 billion Ugandan shilling from 2015 to 2017 despite implementing information systems for the last five years.

1.3 Problem statement

Information systems are believed to have a significant boost on the performance of organizations worldwide as they grapple with new ways to generate revenue, engage customers and streamline time-consuming tasks. URA adopted Information systems 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 (Kangave et al., 2016).

Despite the adoption of information systems by URA in 2010, it 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 warranted examining the effect of information systems on performance of government agencies in Uganda with specific reference to Uganda Revenue Authority.

1.4 Purpose of the study

The study sought to establish the effect of Information systems on performance of URA.

1.5 Objectives of the study

1. To assess the effect of Information systems software on the performance of URA.
2. To establish the effect of systems infrastructure on the performance of URA. iii. To examine the influence of user knowledge and skills on the performance of URA.

1.6 Research questions

1. What is the effect of Information systems software on the performance of URA?
2. What is the effect of systems infrastructure on the performance of URA? iii. What is the influence of user knowledge and skills on the performance of URA?

1.7 Hypotheses

H₁ Information systems software significantly affects the performance of URA.

H₂There is a significant positive effect of system infrastructure on the performance of URA.

H₃User knowledge and skills does not affect the performance of URA.

1.8Conceptual framework

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 systems relates to performance of government agencies.

Independent Variable                                                 Dependent Variable

                        Information systems                                        Performance

Figure 1: conceptual framework

Source: Kaplan (2012)

According to the figure illustration above, Information systems was the independent variable influencing organizational performance. Information system was looked at in aspects of systems software, the infrastructure used, and user knowledge and skills which mainly related 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 era with adoption of Information systems, performance now is measured in terms of growth, customer satisfaction and financial performance.  Kaplan, (2012) further states that managers and constituents of non-profits are increasingly concerned about measuring and managing organizational performance. Financial measures alone, or even supplemented with a collection of ad hoc nonfinancial measures, are not sufficient to motivate and evaluate mission accomplishments.

1.9 Significance of the study

The study would be of great significance to the policy makers, key stake holders, both in URA and other government agencies like government parastatals and public service.

The study would help the management of URA understand the problems of poor information systems in the organization and how best improvements can be made to achieve better performance in the organizations.

The study would help policy makers understand the causes of poor performance in their different organizations and how to overcome them using application and operating software.

The study would provide relevant information to the key stake holders in different government agencies on the different ways of using information systems to achieve better performance.

The study would highlight the relevance of user knowledge and skills on information systems to the achievement of better performance in the organization.

The study may provide information to the future academicians on the influence of systems software like application and operating software and their relevance on the achievement of better performance in the organization.

1.10     Justification of the study

The study was carried out because of the following reasons; In spite of the benefits of Information systems like improved communication, increased transparency, and access to information for citizens, digital diffusion of information is often achieved at high cost by government agencies (Kaplan, 2012). 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, prompted the researcher to investigate into the effect of information systems on performance of government agencies in Uganda.

1.11 Scope of the study

1.11.1 Content scope

The content scope of the study concentrated on Information Systems and performance of government agencies. It further expounded on the effect of Systems Software, Systems infrastructure and user knowledge and skills. The performance of government agency has the dimensions of; financial performance, which was measured in terms of Shareholders expectation and Shareholder perception while Customer satisfaction was 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) which is under the Ministry of finance. Uganda Revenue Authority is located at plot 95 Kampala road, Nakawa Industrial Area, Kampala, Uganda. URA 4 miles), by road, east of the city centre, off the Kampala-Jinja

Highway.

1.11.3 Time scope

The period of data considered from Uganda Revenue Authority was from 2010 to 2018. This was the 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: This refers to the use of electronic systems like the computers and mobile phones to transfer information from one person to another to facilitate business transaction.

Systems software: This refers to the computer programs which are used to enable the organization manage its activities like Microsoft, excel, power point and Tally. There are both application and operating software.

Systems infrastructure: This refers to the different hard ware and software systems required for a computer program to run and to enable the organization or an individual to be able to accomplish their need in computer, such include; monitors, hard disks, modems, laptops, desktops, floppy disks, flash and memory card.

User knowledge and skills: Refers to the technical expertise required for an individual to use computer applications.

Performance: This refers to the level at which the organization can effectively utilize the resources at its disposal.

Customer satisfaction: This refers to the ability of an organization to serve the customer the right product, of the right quality, at the right price, in the right time.

Growth: This refers to the increase in an organization’s revenue as compared to expenditure and other fixed costs.

Financial performance: This refers to the ability of the organization to manage its costs and enable it grow to achieve sustainability.

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

The study established the effect of Information systems on performance of government agencies in Uganda, taking a case of URA. This chapter presents the review of theoretical and related literature to the study. It involves theoretical review, actual literature review, and a summary of literature review.  The actual literature was reviewed objective by objective, and the sources of literature reviewed include; secondary sources especially text books, journals, newspapers, research dissertations, government reports and publications, and primary source, especially pilot study that was carried out.

2.2Theoretical review

The study was guided by Diffusion of Innovation Theory by Rogers in (1962). The Diffusion of Innovation Theory states that diffusion is governed by four main interacting elements; the innovation itself, communication channels, time and social systems. These four components explain the process of change as determined by individuals and the whole organization (Deligiannaki & Ali, 2011).

Using this theory, the innovation of Information systems at URA was numerous, these included; adoption of modern website systems and the use of software in most of its operations.

URA adopted these innovations to enable the organization to eliminate the key challenges.  Diffusion assumes that the propensity to adopt an innovation is primarily a function of the availability of information. The Information systems at URA was adopted to enhance better performance.

2.3 Related Review

2.3.1    The    effect    of    information     systems    software    and     the     organizational

performanceInformation systems software covers vast areas of technologies such as mobile and wireless technology, telecommunications, software development, security, intelligent systems etc. Information system has a huge impact on industries, the community in general and our daily lives. Information systems software can be applied to many fields. One of the emerging applications in recent years is in most of the organizations to enhance better performance (Kwok Hung Lau &Haibo Huang 2012). Information systems software is fast becoming one of the main drivers of change, posing new strategic challenges (Lee & Kim, 2016). The business environment today has been undergoing unprecedented change and many companies are seeking new ways to stand out from the competition by sustaining their competitive advantage. In today’s highly competitive global marketplace, the pressure on organization is to find new ways of creating and delivering value to customers in growing stronger.

Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted (Laudon& Laudon, 2016).

Pearlson, Saunders, and Galletta, (2016) emphasizes that the need for Information systems development cannot be understood unless one also understands the use of software in the organization and unless the software can be applied to the organization to enhance its better performance. The integration of Information Technology and business processes has irrevocably changed the way in which modern organisations operate. The majority of mediumto-large organisations invest significant amounts of time, money and effort on Information systems (IS); which combine hardware, software and networking capacity to enhance the efficiency and effectiveness of their business processes (Grant & Meadows, 2016). In some circumstances the IS/IT that supports a business process becomes so integral that it can be very difficult to differentiate between them. The way in which organisational accounting processes have become embedded and reliant upon Accounting Information Systems (AIS) is an apt example of this phenomenon.

Information systems software works hand in hand with the hardware to enable the organization be in position to achieve its goals and objectives. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware (Pinedo, 2016).

Software is not tangible, it cannot be touched. When programmers create software programs, what they are really doing is simply typing the list of the organization’s instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone. Examples of application software are Microsoft, Excel and Angry Birds (Chen et al., 2016).

According to Huang et al., (2013), Governments around the world are under the pressure from citizens and business to be more open and transparent in managing public funds, deliver quality public services as per needs of citizens. Therefore, in the last quarter of 2017, the world wide expenditure on software development was 480 billion dollars (Hughes et al., 2017).This expenditure was in information systems software to enable better service delivery and improve on general public sector performance.

Clearly, Internet and intranet technology has practical integrative applications for organizations. In addition to the practical use of IT as an integrative mechanism, the management of technology also has increased. Andrade &Doolin (2016) makes a strong argument that companies use IT to structure organizations. In addition, he argues that he and many others consider the management of IT as the biggest challenge. The research from this thesis addresses both of these two issues, namely; the use of IT for integration and the implications associated with the management of Information Technology itself.

According to Rana et al., (2017) Information systems initiatives in India was first started in 1990 with a minimal financial investment into National Informatics Centre to enable computerization of operations and automation of the pension fund. This was to eliminate the several challenges with the mismanagement and poor record keeping of the files of the pensioners.

Krecie (2016) reports that the government of Philippines invested around 8-10% of its GDP on Information systems to enable integrating the operations of government agencies and also on improving transparency in public sector. These financial investments in Information systems by different public sector organizations across the globe, is a manifestation of the long-term benefits of the service in enhancing better organizational performance.

Aisara and Pather (2011), in line with world trends, the government of South Africa has over the last decade, recognized the importance of Information and Communications Technology (ICT) and more recently Information systems in improving the standards of service quality and increasing the overall efficiencies of government. Asa result, the government has provided systems software to different public institution amounting to over R14 billion during2015/2016 financial year.

Abdullahi (2014), reports that the government of Nigeria in an effort to eliminate inefficiencies in service delivery and improve general performance, invested 32 billion dollars in 2015 to improve on the network systems and elimination of inefficiencies in the Information systems performance.

Karim, 2015 reports that Nigeria has some of the worst public sector delivery systems in the world characterised by corruption and delays in delivery of public services.

2.3.2 The Information Systems infrastructure and organizational performance

Wachira (2015) the use of computer systems in the organization improves performance in a number of ways. Firstly, the computers improve the level of coordination between different departments in a public sector.  This has enabled the government across the globe to improve on public service delivery effectiveness and general better organizational performance of the government agencies.

Wachira (2015) further contends that Information systems infrastructure also improves on speed and reliability of organizational transfer and processing of information among members in the organization. This helps the different departments in the organization to send and receive information in a short time which leads to improved performance and better competitive strength of the organization. There is a delay of government services in reaching the people that need it. In Ethiopia, some of the departments that people delay in accessing services include the pension (Lavers & Hickey, 2016).

The use of internet services as an effective Information systems infrastructure in Nigeria has been adopted by the government to eliminate unnecessary government costs incurred as a result of paper work and enhance performance of public sector agencies in the country (Ukachi, 2015).

Rotich (2015) also believes that the adoption of computers in the organization is to provide better and an effective communication between different departments in the organization and also between the organization and the outside world. The government’s effort to use computers in the monitoring of public agencies is to ensure that business between the government and the citizens is effective and fast.

Wilson et al., (2015) states that the use of websites is to enable long-term relationship between the organization and the customers. He further asserts that websites are where customers keep checking on the major changes in the organizational products. The public sector websites provide information to the customers about the products the organization has.

Government across Sub-Saharan Africa have acquired advanced software in key government agencies like Taxation and water management systems; this is to enable government manage

public utilities better.

Paul and Pascale (2013) the government of Ghana was able to realize an increase in revenue collection due to the use of advanced software and internet services. Using this system, the public could pay for their taxes online. With the use of systems infrastructural facilities, Ghana was able to realize an increase in revenue collection by 22% in 2017. This was estimated at GH¢13.2 billion against the target of GH¢12.8 billion.

Ronald and Nazarius (2011) Uganda Revenue Authority has been experiencing a failure to meet its targets which has been a challenge to the organizational top management despite the adoption of ASYCUDA world software. Ghmire, (2014) indicates that taxation software enhances efficiency in revenue collection and reduces costs.

2.3.3 User knowledge and skills on organizational performance.

Knowledge has become one of the most highly valued commodities in the modern economy. Further, knowledge is considered the principal tool of competitiveness and innovation in the composition of commodity chain to the broader processes of regional and national economic development (Ajuwon, 2015). The new paradigm is that, within the organization, knowledge must be shared in order for it to grow thus sharing knowledge among its management and staff grows stronger and becomes more competitive (Tarhini et al., 2015).

Some of the most significant changes are the growing importance of knowledge as a catalyst of economic growth within the global economy, the revolution of information and communication technology (ICT), the integration of the global labour market and worldwide socio-political transformations (Lwoga et al., 2016).

Lwoga et al., (2016) further notes that access to and production of knowledge are essential prerequisite for participation in the global economy; this is witnessed by the fact that information and communication technologies have significantly increased the speed of production, use and distribution of knowledge, thus making a country’s economic and social wellbeing dependant on how quickly it can adjust its capacity to share and generate knowledge.

Komba et al., (2016) transformations brought to different firms as a result of Information systems offer many potential opportunities for both developed and developing nations. However, on the negative side, they also pose serious threats, and especially for developing nations. There is ample evidence that processes of globalization and the ascent of Manuel Castell’s ‘Information Society’ have given rise to new problems, such as the growing knowledge gap and digital divide between the information rich and the information poor among and within nations.

According to Meeker, (2015) the concept of Knowledge Management (KM) has attracted the attention of researchers over the last decade since it is considered an important tool to achieve innovation and sustainable competitive advantage. Takieddine & Sun (2015) noted that in highly unstable economies the only sure source of lasting competitive advantage is knowledge.  Bayero, (2015) notes that firms that adopt knowledge management practices perform better than competing firms that do not. On the same line of thought, Ukachi, (2015) further asserts that knowledge management practices have been implemented in different industries both service and manufacturing to enhance better performance and increased output.

According to Ludeman& Erlanson, (2013) the late 1980’s saw a growing shift towards computer integration which emphasized the use of computers in most of the government’s daily work like the preparation of reports, accountability and monitoring of government projects which changed from manual to automated.

The 1990’s saw a heightened focus on increasing the use of computer technology in Education, Health and Defence departments of most governments across the globe. Busagala (2013) notes that there is growing attention and pressure to implement technology in education, one of the most significant features of the technological or digital era of much relevance to education is the Internet.

2. 4 Summary of related literature

The literature reviewed indicated that systems software has different roles on the effectiveness of Information systems on performance of a government agency. Some of the roles include ensuring that there is transparency in management of public funds. The use of Information systems also enables the government to have better ways of record keeping, achieve improved standards of service quality and increase the overall efficiencies of government.

The study indicated that Information systems infrastructure had an influence on performance of government agencies like the use of computer systems in the organization improves performance. Internet services as an effective systems infrastructure enables URA to eliminate unnecessary costs incurred as a result of paper work and enhance performance. The adoption of computers in the organization is to provide better and an effective communication between different departments in the organization and also between the organization and the outside world.

The literature indicated that user knowledge and skills have an influence on organizational performance since knowledge is believed to be the principal tool of competitiveness which enhances innovation in the organization.

The literature does not indicate how Information system influences financial performance in an organization since it’s difficult to measure performance. Most organizations have different ways of measuring performance because of their different goals, for example, profit making organization may assume that profitability is the key determinant of performance while government organization which are not profit making may use another parameter in determining performance. In addition, organizations with long term ambition prefer to use customer growth as a measure of performance.

Though a number of studies were carried out on performance in relation to government agencies, those addressing performance are still limited. Even those existing, were done in a different geographical setting other than Uganda Revenue Authority, at different time and using different methods.

In addition to that the performance of Uganda Revenue Authority since the financial years 2015/2016 and 2016/2017 there is an accumulated total deficit of 862 billion Ugandan shilling from 2015 to 2017 despite implementing information systems for the last five years. This study therefore was carried out to address the knowledge gap existing as far as Information systems and performance is concerned in Uganda Revenue Authority.

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INTRODUCTORY LETTER

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