INFORMATION TECHNOLOGY AND BUSINESS TRANSFORMATION IN UGANDA: A CASE STUDY OF THE ENTREPRENEURS FINANCIAL CENTER (EFC) MICROFINANCE

ILLEGAL ACCESS

TITLE:          INFORMATION TECHNOLOGY AND BUSINESS TRANSFORMATION IN UGANDA:  A CASE STUDY OF THE ENTREPRENEURS FINANCIAL CENTER (EFC) MICROFINANCE

1.0           Introduction

This section covers the background of the study, statement of the problem, purpose and aims of the study, objectives of the study, research questions, scope of the study, significance of the study, and the conceptual framework.

1.1     Background

After more than ten years of political instability and economic decline, Ugandan businesses began to transform in the second half of the 1980s. This was due to an economic recovery program introduced in 1987 to put the economy back on a growth path. Since then, Uganda has had two decades of very strong economic growth and business transformation, with GDP growth averaging 5.8% in the 1990s and 6.7% in the 2000s (African Center for Economic Transformation, 2014).

Consequently with the economic growth, Uganda adopted the use of technology in its public and private sectors and developed its Information and Communication Technology industry with Uganda Telecom as the initial major ICT service provider. In 1998, Uganda liberalized the telecommunications sector and ever since then, Uganda has registered notable growth in the ICT sector with four major mobile telecom operators and more than 30 Internet Service Providers (ISPs). Internet use stands at 20% of the population, while tele density is 52 cell phones per 100 inhabitants (Collaboration on International ICT Policy in East and Southern Africa (CIPESA), 2014).

In a bid to improve the growth of ICT, an autonomous statutory body called The National Information Technology Authority – Uganda (NITA-U) was established under the NITA-U Act, 2009 to coordinate and regulate information technology services in Uganda. Amongst its functions is the co-ordination and monitoring of the utilization of information technology in the public and private sectors, setting and regulating standards for information technology planning, acquisition, implementation, disposal, risk management, data protection, and security and regulation of the electronic signatures, infrastructure and other related matters as used in electronic transactions in Uganda (Government of Uganda, 2009).

NITA-U has implemented the setup of the National Data Transmission Backbone Infrastructure and e-Government Project funded by the Communications Commission (UCC) through The Rural Communications Development Fund (RCDF) with an aim of connecting all major towns to the optical fiber cable, and to the national data center set up in Kampala. (CIPESA, 2014).

Despite the impressive growth in the ICT field, Uganda is still lagging behind in developing its ICT infrastructures, promoting higher ICT uptake, and in benefiting from the economic benefits associated with ICT as compared to other countries in the world (World Economic Forum, 2014). In 2014–15, Uganda ranked in the bottom quarter of the Global Competitive Index indicators. Its overall rank was 122^nd of 144 countries. Its competitiveness ranking was 109^th of 144 in business sophistication and 119^th of 144 in technological readiness which indicates a fall from 111^th of 142 in 2014-2015 (World Economic Forum, 2014).

The low technological readiness has thus made business transformation via Information Technology a challenge for most small Ugandan businesses and thus the structure of the economy is still dominated by equally low–productivity small businesses whose production processes remain low in skill and technology application (African Center for Economic Transformation, 2014).

Business Transformation is a change management strategy which has the aim to align People, Process and Technology initiatives of a company more closely with its new challenging business strategy and vision (Gouda, 2014). Business transformation is about making fundamental changes in how business is conducted in order to help cope with a shift in market environment.

It is evident that information technology plays an important role in enabling business transformation. For example, it is Internet that is transforming the way businesses serve and connect to their customers. Information technology facilitates the automation of business processes through the use of IT applications and hardware systems to yield the best results. This is witnessed in big organizations which use IT to boost the efficiency of their business processes (Chiew, Fong, Yong and Lionel, 2015).

The top triggers for business transformation are; customer demand, copying up with change in technology and market competition (KPMG, 2014) and business transformation is manifested through increased productivity, cost reductions, increased revenue and market share, improvement in customer satisfaction  and  more importantly, through increased output quality in the form of new products or in improvements in intangible aspects of existing products like convenience, timeliness, quality and variety (Brynjolfsson and Hitt, 2000).

In Uganda, the growth of small and medium enterprises is faced with limited business transformation and as a result this sector has been recognized and several transformation schemes have been developed to help transform the sector. For example, many Non-Government Organizations have been set up to help transform this sector through financing and IT schemes (Balunywa, 2006).  Rwothungeyo (2014) reports Amama Mbabazi saying “Optimal utilization of ICTs is a driver of social and economic growth in today’s information age. ICTs are an essential pillar of growth, contributing to an emergence of new products and services, increased job creation and transformation of work routines.”

Uganda is ranked as one of the most entrepreneurial countries but studies indicate that the rate of business failure in Uganda is at 50% (Balunywa, 2004). In the Microfinance sector, many enterprises like Finance Trust, Uganda Women Trust, Pride, UWESO fail to fully transform into profitable enterprises and instead keep relying on donors United States Agency for International development, European Union, DANIDA, United Nations and Government of Uganda for support and funds to carry out their operations (Carlton, Manndorff, Obara, Reiter and Rhyne, 2001).

Most of the microfinance institutions (MFIs) have small market size in the urban areas with low market in the rural areas and 60% of the institutions are less than five years into business indicating that majority of the MFIs need more support both technically and financially to transform (UBOS, 2010). In the microfinance census, UBOS (2010) indicates that MFIs are less staffed and 23% are headed by persons without required skills and sufficient education qualifications which negatively impacts on customer satisfaction. The provision of microfinance services is considered costly due to high transaction costs which limit the productivity of the institutions and the growth of borrowers is low in the Microfinance sector which is limiting profitability (AMFIU, 2013).

The Entrepreneurs Financial Center MFI for instance was established in 2012, its rate of transformation is still low, its market share is limited to the urban center of Kampala with only four branches in Kalerwe, Kireka, Nansana and Nateete. The Entrepreneurs Financial centers profitability was a loss in 2012 and 2013 with a net income loss 147,816,000Ushs and 748,202,000Ushs respectively (EFC, 2013). In a bid to transform EFC is adopting the use of Information Technology in its processes to improve productivity, state of operations and level of customer care (EFC, 2015).

Basing on the latest research carried out on the microfinance institutions sector by Association of Microfinance Institutions of Uganda (AMFIU) in 2008, in a general view out of the entire population of Uganda of 31.9 million people (New Vision, 2008) by 2008, the microfinance institutions were serving a population of just 1,597,571 savers and 448,458 active borrowers which is a low market compared to the entire population.

1.2    Statement of the problem

The aim of business transformation is to align people, process and technology resources of a business with its strategy and vision (Gouda, 2014). In Uganda, business transformation has been driven through business restructuring, business re-equipping and business relationship management with poor and limited Information Technology (Engwau, 2014). Despite efforts to transform businesses, Uganda’s economy is still dominated by low productivity small businesses whose operational processes remain low in Information Technology application and skill (African Center for Economic Transformation, 2014). In the microfinance sector, while as the big sized enterprises like Centenary Rural Development Bank are fully relying on IT to pursue their operations, the small sized enterprises like  the Entrepreneurs Financial Center and Savings and Credit Organizations (SACCOs)  have not fully embraced the role of Information technology in business transformation (AMFIU, 2013). The Association for Microfinance Institutions of Uganda (AMFIU) recommended the need to develop capacity building and computerization for the improved performance of the MFIs so as to enable them to develop systems to control costs and to establish efficient branch management in order to realize increased transformational growth (Bada, 2012). Failure to adopt the appropriate ICT could hinder the business transformation of microfinance institutions in Uganda in terms of profitability and market share.

1.3   Purpose and aim of the study

The purpose of the study is to establish the impact of information technology on business transformation of microfinance institutions in Uganda.

1.4 Objectives of the study

·         To identify the prevailing IT used by microfinance institutions in Uganda.

·         To establish the effectiveness of the existing IT in facilitating business operations of microfinance institutions in Uganda.

·         To examine the relationship between IT and business transformation with regard to profitability and market share.

1.5 Research questions

·         What is the prevailing IT used by microfinance institutions in Uganda?

·         What is the effectiveness of the existing IT in facilitating business operations of microfinance institutions of Uganda?

·         What is the relationship between IT and business transformation with regard to profitability and market share?

1.6 Scope of the study

1.1.1      Subject Scope

The study will focus on information technology as the independent variable and business transformation as the dependent variable.

1.1.2      Geographical scope

The study will cover the towns of Kalerwe, Kireka, Nansana and Nateete where the EFC microfinance institution has branches.

1.7 Significance of the study

• The findings of the study will provide microfinance institutions with the relevance of using IT in business transformation.
• The study will also be beneficial to researchers and academics in contributing to the existing literature on the subject.
• The study findings will be used by the policy makers as a basis of formulating a policy framework for the MFIs sector in Uganda.

 

1.8    Conceptual framework

Figure 1: Conceptual framework

Source: Adopted from Gouda (2014)

Information technology is composed of hardware and software systems that businesses use to manipulate operations. Businesses deploy IT hardware and software systems including; enterprise systems, supply chain systems, customer relations management systems and knowledge management systems to facilitate the automation of business processes. Automation enables business process to be less manual and more technology driven through the use of IT.

IT facilitates minimal learning amongst people in the execution of business processes and facilitates the integration and technical interconnectivity of business processes leading to automation. Through automation of business processes in production, delivery, communication, customer management and transacting, improved capability and enhanced efficiency is achieved in business operations. This leads to business processes redesign which consequently leads to business transformation over time.

Through business process redesign, enhanced business relations with suppliers, buyers, intermediaries and customers are built. Enhanced relationships with suppliers lead to business transformation through reducing operational costs. Enhanced relationships with buyers, intermediaries and customers lead to business transformation through increasing profitability, market share and customer satisfaction. Business transformation in turn facilitates business scope redefinition through which the whole cycle of the business transformation process is repeated (Venkatramen, 1994).

CHAPTER TWO

2.0           Literature review

2.1     Introduction

This section covers literature review about the appropriate IT used in microfinance institutions, the effectiveness of the existing IT in facilitating business operations of microfinance institutions and IT and business transformation with regard to profitability and market share.

2.2     Appropriate IT used by microfinance institutions

According to Hazeltine and Bull (2003), appropriate technology is any object, process or idea that enhances fulfillment through satisfying human needs. This may not be entirely true because apart from objects, processes and ideas are not necessarily a form of technology unless they are automated. The same is streamlined by Gouda (2014), where he points out technology being independent of processes, people and strategic ideas. According to Gouda (2014), all the three factors i.e. technology, processes and strategic ideas are individual driving factors that work hand in hand to facilitate business transformation. Oestreich (2011) differs from Hazeltine and Bull’s definition of appropriate technology by highlighting that business processes are not a technology themselves but rather a dependent factor that relies on IT systems to achieve standardization of business processes and transactions through automation.

According to a survey by the European Microfinance Network (2012), the major types of technology used in microfinance institutions include; client facing technology that is used for automatically collecting client application data and process automation technology that is used to minimize manual operations and risk of errors. Hishigsuren (2006), conquers with the survey by the European Microfinance Network (2012) through his prior observation that micro finance institutions are using client facing technology and process automation technology in their process management through the use of IT systems and equipment including; automated teller machines (ATMs) or Point of Sales (POS), interactive voice response (IVR), internet and mobile banking, management information systems (MIS), credit scoring and biometrics. Despite the use of client facing technology and process automation technology in the microfinance institutions, according to Hazeltine and Bull (2003), the technology used in organizations can only be deemed appropriate only when it is compatible with local cultural and economic conditions of the people using it and when the local people are in control and maintenance of it. This implies that in circumstances where the technology is not compatible with the local people using it, it is deemed inappropriate. Therefore going by Hazeltine and Bull’s (2003) definition of appropriate technology, when you observe the technology used in the microfinance institutions as put forward by Hishigsuren (2006), most of this technology is inappropriate for use the rural areas where microfinance institutions operate. This is because in rural areas, most people lack the technical knowhow of using the technology. For instance in Uganda, the microfinance institutions serve a bigger customer base in the rural remote areas that are illiterate to adopt most of the technology used by micro finance institutions (UBOS, 2010). This deems all the technology that local people can’t use inappropriate yet most of it is what the microfinance institutions use expecting their clients to adopt in due time.

In order to bridge the technology gap in rural areas, nonfinancial organizations in the telecommunication sector have taken advantage of the situation by improvising simpler adoptable mobile phone technology  to support the microfinance institutions in  reaching out more effectively to people through telecommunication technology including USSD codes and mobile money facilities for transacting (Kagaba and Kirya, 2013) but despite some people not being able to afford cheap mobile phones in rural areas, this telecommunication technology has proved efficient, far reaching and simpler to use since it requires basic mobile phones to operate. Nyokabi (2012) also made further recommendations in bridging the technology gap in rural areas by challenging microfinance institutions to adequately define the requirements and specifications of their IT systems so as to avoid using inappropriate and outdated technology. But given the slow adoption rate of technology in rural areas yet the rate at which technology is advancing is high, most of the updated technology used by the microfinance institutions may remain inappropriate in the rural areas for a long time.

2.3 Effectiveness of the existing IT in facilitating business operations of microfinance institutions

Over time Information Technology has evolved through generations and is constantly advancing in providing day to day solutions to global business challenges (Stephen, 2003) but despite the advancements in technology, there’s a question whether all global businesses are effectively adopting technology at the same rate it is advancing. According to Rozzani, Rahman, Mohamed and Yusuf (2013), the effectiveness of information technology is faced with slow progress in the introduction and advancement of technology used in the microfinance institutions. This directly implies that the rate at which IT is advancing is not the rate at which it is being adopted. Thus the effectiveness of IT in the microfinance institutions is not at full potential. Rozzani et al. (2013) attribute the slow progress to insufficient management, lack of human capacity, unavailability of IT applications regulators, frequent changes in operational procedures and lack of vendors support on IT systems. All these reflect a low IT readiness in the micro finance institutions which conquers with the findings of the World Economic Forum (2014). According to the global information technology report by the World Economic Forum (2014), countries that are developed like the U.S.A have a far greater technology readiness as compared to the developing countries like Uganda thus though developing countries like Uganda are adopting the use of IT in transforming microfinance institutions, the effectiveness of IT use is still low as compared to the developed countries.

According to Venkatramen (1994), changes in technology have evolved from majorly focusing on efficiency enhancement (automation) to creating and maintaining flexible business networks but according to the observations made by UBOS (2010) in Uganda, it is evident that microfinance institutions mainly operate in rural areas which have poor IT connectivity and infrastructures. This implies that the role of technology in creating flexible business networks is not being effectively realized in rural areas unlike its effectiveness in urban centers. Other effective roles of information technology are manifested in administration, operations and in competitive strategies (Henderson & Venkatraman, 1990). In administration, information technology is important in processing information related to the activities of accounting, human resources and communications and in operations, information technology is important in process enhancement through process automation (King, 1978). In order to effectively achieve these roles of information technology in microfinance institutions, capital investments in IT are required but according to Nyokabi (2012), microfinance institutions are lacking sufficient funds to invest in information technology. This is because the initial cost of investment is high and the cost of maintaining the IT facilities is also high thus there is a challenge in the realization of IT effectiveness in the microfinance institutions. Nevertheless, according to CGAP (2006), microfinance institutions have realized some IT effectiveness in their transactions through M-commerce and E-commerce. In M-commerce IT effectiveness is being realized through the use of telephone equipment like landlines, mobile phones, e-mails and other internet services to conduct business and in E-commerce IT effectiveness is being realized through branchless banking by use of a digital equivalent of a cash currency to facilitate secure online funds transfer transactions. Therefore to some extent, the use of IT in facilitating M-commerce and E-commerce is playing an effective role in creating flexible business networks which conquers with the role of technology put forward by Venkatramen (1994).

According to Bada (2012), the effectiveness of the existing IT is being felt in increasing staff productivity, reducing transactional costs, reducing physical barriers to growth, increasing range of access point options and in facilitating integration in microfinance institutions. However, according to Frankiewicz (2003), there is a lack of standardized IT applications used by all microfinance institutions. This disputes the effectiveness of IT in facilitating integration as put forward by Bada (2012) therefore there is a need to evaluate the rate at which IT facilitates microfinance integration and uniformity of applied applications in standardizing services. Furthermore according to the microfinance institutions report by UBOS (2010), micro finance institutions are still facing challenges in achieving optimum effectiveness of IT  including; lack of staff skills, lack of staff training and lack of internal controls. These are as well a hindrance to the incorporation of the required technology in microfinance business operations according to Frankiewicz (2003).

2.4 IT and business transformation with regard to profitability, market share, reduction in costs and customer satisfaction

When Fredrick Taylor (1911) advocated for systematic work procedures, business processes emerged and instead became a center of focus for continued improvement in business operations during the 1940s. This gave birth to the discipline of operations management which is concerned with the management of processes, people, technology and other resources in the production of goods and services (Armistead, Harrison and Rowlands, 1995).Through operations management, business processes revolved into business process re-engineering and redesign (Davenport, 1993). However business processes are not independent of IT and neither do they work in isolation without IT but are dependent on IT itself (Eatock, Paul, & Serrano, 2002). According to  Davenport and Short (1990) a combination of information technology and business processes can be seen as a business engineering that revolutionalises the way in which organisations operate.  Hammer and Champy, (1993) conquer with the same assertation of Davenport and Short (1990) and acknowledge that IT is an enabler of business processes. Despite these findings, according to the Global Market for  ICT business process management, the usage of IT in business process management for SMEs in developing countries is still quite low, therefore there is a need to expidite the usage of IT in SMEs (Bazhenova, Taratukhin, & Becker, 2012).

In a general view of business, according to Arun and Hulme (2008), IT is helping businesses reduce costs through converting manual operations to electronic systems. Kauffman and Walden (2001) conquer with the same and emphasize the use of IT in enabling businesses achieve profitability and cost reductions. Despite these findings no quantifications have been made about how much IT reduces costs. This observation was also made by Mithas, Tafti, Bardhan, and Goh (2012) stating that there is still a lack of certainty about the extent to which IT enables profitability through cost reduction.

According Campion (2001), the key challenges limiting the profitability of microfinance institutions are limited mobilization of savings, limited management capacity and institutional inefficiencies. Relating this to Ashter and Patel (2011) recommendation of using information systems in increasing innovation and minimizing losses in processing transactions, IT could be the solution for building capacity and efficiency in the microfinance institutions. This as well conquers with the observation made by Berger, Goldmark and Miller-Sanabria (2006) that microfinance institutions are deploying IT systems to reduce costs of operations and achieve economies of scale. Berger et al. (2006) further observed that financial institutions are becoming more conscious of profits and market share by providing IT standardized products that are making it possible to achieve economies of scale. But as much as the microfinance institutions are trying to cope up with IT trends in expanding their market, the telecommunication organizations have posed a threat and a challenge by taking advantage of the new financial applications and instruments they have innovated through IT to also seize a portion of the microfinance market share and profits (Kagaba and Kirya, 2013). This implies that IT is playing a role in making the financial sector profitable and thus, the market share and profitability of financial institutions is likely to depreciate further given that it is a target by telecommunication organizations. Financial institutions haven’t retaliated in bridging the gap but instead are partnering with the telecommunication organizations to provide enhanced solutions together (Kagaba and Kirya, 2013). Therefore there is a need to know why financial institutions haven’t moved to invest into owning telecommunication equipment so as to consolidate their profits from being targeted by the telecommunication organizations.

According to Arun and Hulme (2008), profitability from services which were economically unattainable because of the high transactional costs, is now being made possible through the connectivity brought by IT. This implies that IT systems can enable both market growth and profitability. Grover and Ramanlal (1999), specify that profitability and market growth are made possible through the ability of businesses to differentiate themselves through the use of customer relationship management systems. Bardhan (2007) conquers with the same and specifies the IT channels businesses use in developing new markets as being e-mails, websites and databases. But given the fact that microfinance institutions are relying on donor and government funds to serve a high number of clients at a high cost, (Kulik & Molinari, 2003), the profitability and market share brought about by the use of IT may not be realized because the adoption of advanced technology may just pose greater costs for the microfinance institutions in sustaining and in the maintaining the IT systems.

In regard to customer satisfaction, IT plays a big role in facilitating transaction capacity management, broadening of banking services, widening of clientele outreach and it creates convenience in banking. Through the use of IT customers have a variety of means to carry out transactions at their convenience which include; personal digital assistants, smart debit and credit cards, point of sale devices, automated teller machines, mobile ATM branches, mobile phone banking, internet banking and credit scoring (Sibanda, 2007). Due to the inevitable use of IT in the banking sector,  Alabar and Agema (2004)  assert that banks should continually venture into the possibilities of raising the up to date ICT based systems and services and intensify efforts in copping up with global operational systems while demonstrating a high sense of reliability, responsiveness and credibility in the application of ICT in their operations. However while IT is being used as a means to achive customer satisfaction, Sui (2003) emphasises that the users of IT should dictate how ICT is used for their satsfaction rather than IT being enforced on them which could jeopadise their operations in cases where a certain technology isnt well adopted or where its to complex for the clients to handle.

CHAPTER THREE

3.0           Methodology

3.1     Introduction

This section will cover the research design and approach, the study population, sample size, sampling procedures and techniques, data sources and collection instruments, validity and reliability, data processing and analysis and ethical considerations.

3.2    Research design and approach

In order to achieve the objectives of the study, a cross-sectional research design will be used and it will focus at the specific point in time during which the study will be made. Descriptive research will be used to provide a descriptive analysis of the study through using a survey. The survey will be used because it is a cost efficient and it facilitates extensive collection of data from the population ( Statistical Services Centre, 2001). A mixed research approach of qualitative and quantitative research will be used to collect data from a survey population. Qualitative research will be used because it offers richly descriptive reports of individuals’ perceptions, attitudes, beliefs, views and feelings, that are important in defining meanings and interpretations given to events and things, as well as their behaviour (Pojasek, 2005). Qualitative research will be used to explore the role of information technology in business transformation through getting detailed information about the employee perceptions, views, feelings and knowledge regarding the IT used in business and its effectiveness in facilitating business transformation.

Quantitative research will be used because it facilitates the use of correlations from which observable relationships between data can be drawn and further be illustrated in terms of numerical magnitudes (Cohen, Manion and Morrison 2004). Quantitative research will be used to determine the impact of IT on business transformation through drawing correlations between IT and business transformation and illustrating the magnitude to which IT increases business transformation in terms of profitability, market share, cost reduction and customer satisfaction.

3.3     Study population

The study population will comprise the staff of EFC totaling up to 151 employees. The entire population will be made up of four categories of full employees as categorized by the Human resource department of the organization. The categories comprise of 50 loan officers, 35 management officers, 51 support staff officers and 15 management trainees. These categories will form the strata from which the population sample will be selected that will proportionately represent all the categories of employees.

3.4    Sample size

The sample size will be drawn from a sampling frame made of a full list of all the 151 full employees of EFC. Basing on the sample determination table by Krejcie and Morgan (1970), a corresponding number of 108 staff will be selected to constitute the sample size.

3.5    Sampling procedures and techniques

Table 3.1:       Sampling techniques

Category of population	Population	Sample	Sampling Technique
Loan officers	50	35	Simple random sampling
Management officers	35	25	Simple random sampling
Support officers	51	37	Simple random sampling
Management Trainees	15	11	Simple random sampling
Total	151	108

The four categories of employees will form the four strata of employees from which respective proportionate sample sizes will be selected using simple random sampling to constitute the general sample size.

3.6     Data sources and collection instrument

The sources of data will include both primary data and secondary data. Primary data will be used to gain an insight in the prevailing conditions of the study. Primary data will be obtained through carrying out a survey and through interviewing the selected respondents. A survey will be conducted using a pretested questionnaire and it will be carried out on the selected loan officers, support officers and management trainees. The questionnaire will contain both open ended and close ended questions. Questions will be rated using nominal, ordinal, interval and ratio scales. The questionnaire will be used to collect data relating to the attitudes, beliefs and behaviors of the survey respondents and it will also be used to collect data relating to the characteristics of the study variables. Oral interviews will be used to collect data from the management officers regarding the prevailing conditions and characteristics of the study. Data collected from the interviews will be useful in gaining insights and knowledge about the topic of study from the stakeholder’s views and perspectives. The questionnaire will be used to collect data because its administration cost is comparatively inexpensive when gathering data from a big group of people well as the interviews will be used to collect data because they have a better response rate when collecting data from a small group of people (Russ-Eft and Preskill, 2001).

Secondary data will be collected from the archived records of the EFC, from the published reports of EFC, from the bank of Uganda financial institutions reports, from the official statistics of EFC and from research studies done within EFC. Secondary data will be used to assess the trends of the study topic with in the institution.

3.7    Validity and Reliability

To ensure reliability and validity of the study, the survey questionnaire will be tested on a few colleagues of the researcher in order to detect any flaws and errors in the questionnaire and in validating the ranges of the possible answers for the questions in the questionnaire. Basing on the results of the test, required amendments will be made on the questionnaire. Another test will be made and a pilot study will be made as well on a few respondents of the study so as to ensure the questionnaire drives consistence in responses and to ascertain that questions measure exactly what they are meant to measure. The research will be supervised and guided by a group of experts who will guide the research.

3.8     Data processing and analysis

Data collected will be both qualitative and quantitative. All data collected will be coded and entered into computer programs from which data cleaning will be carried out. Data processing and analysis will be carried out using Microsoft excel software and SPSS software. Microsoft excel will be used to analyze the basic descriptive statistics of the data because the program is quicker and easier to use when analyzing basic descriptive statistics (Kirklees, 2012). SPSS will be used to analyze more complex quantitative statistics of the data collected to draw correlations and linear regressions between IT and business transformation in terms of profitability, market share, customer satisfaction and reduction in cost. SPSS will be used because it’s easier to use when processing multiple response and multiple dichotomy data and it’s easier to use when analyzing complex statistics ( Statistical Services Centre, 2001).

3.9    Ethical considerations

The researcher will obtain informed consent from the respondents, maintain confidentiality, and provide briefings and any additional information required by the respondents.


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