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European Journal of Scientific Research

ISSN 1450-216X Vol.28 No.3 (2009), pp.412-421


EuroJournals Publishing, Inc. 2009
http://www.eurojournals.com/ejsr.htm

Usage of Information Technology in Construction


Firms; Malaysian Construction Industry
Farag H. Gaith
Department of Civil and Structural Engineering, Faculty of Engineering, University
Kebangsaan Malaysia.43600 UKM Bangi, Selangor Darul Ehsan, Malaysia
E-mail: fhgd75@yahoo.com, fhgd75@vlsi.eng.ukm.my
Khalim A. R
Department of Civil and Structural Engineering, Faculty of Engineering, University
Kebangsaan Malaysia.43600 UKM Bangi, Selangor Darul Ehsan, Malaysia
Amiruddin Ismail
Department of Civil and Structural Engineering, Faculty of Engineering, University
Kebangsaan Malaysia.43600 UKM Bangi, Selangor Darul Ehsan, Malaysia
Abstract
The success of the construction industry is increasingly predicated on technology
driven investments in information technology (IT) and this is expected to be even more so
in the future. This paper sought to identify the role and extent of IT use at present by
construction companies in Malaysia. It also aimed to identify the factors that influenced the
performance of the companies. A survey was done of construction companies in Selangor
and Kuala Lumpur in Grades 3 - 5 registered with the Construction Industry Development
Board (CIDB) of Malaysia on the parameters which contributed to their IT use. The
response rate was 62%. The findings indicated that firm performance was related to the
level of investment in information technology.
Keywords: Information Technology (IT); IT Role; Management; Construction Industry

1. Introduction
Information Technology (IT) is the sine qua non of all businesses today, including the construction
industry, so understanding its roles and functions in construction firms is a requisite in assessing their
performance. However, little work in this has been done on Malaysian firms. Generally, Information
Technology (IT) plays a vital role in the sustained growth of a business. IT is defined broadly as
technologies dedicated to information storage, processing, and communications Ang et al. (1997),
that is, a combination of hardware, software, telecommunications and office equipment to transform
raw data into useful information for speedy retrieval.
There have been regional studies (e.g., Asia-Pacific region). Valida et al. (1994) studied IT use
in 230 business organizations, mainly in Malaysia, and concluded that IT use conferred a competitive
advantage. Thong and Yap (1995) developed an IT adoption model for small business, and found that
the companies with innovative CEOs had a more positive attitude to IT use. In Singapore, Ang & Koh
(1997) explored the relationship between user information satisfaction and job satisfaction by

Usage of Information Technology in Construction Firms; Malaysian Construction Industry

413

developing two constructs to measure the relationship and found the two satisfactions to be correlated.
In Hong Kong, Burn (1990) studied the strategic use of IT in small- and medium-sized organizations.
She surveyed three medium-sized organizations and found that their IT strategy could be described by
the Porter and Miller (1983) model of competitive advantage.
In Australia, Sohal et al. (1998) studied 530 Australian companies, and found IT use to be
positively related to the organizations performance. Fink (1998) studied 280 small and medium
businesses and identified 10 IT adoption factors in the firms.
Back to Malaysia again, Yap et al. (1992) and Valida et al. (1994) concluded that IT use and its
integration were higher in companies providing goods and services than those in manufacturing and
distribution. Mui et al. (2002) surveyed internet use in the Malaysian construction industry, and found
that most of the companies used the Internet and considered it an important tool. Nevertheless, they
reckoned that they did not fully harness the power of the Internet - only using the basic functions like
e-mail. To encourage more intensive use of the Internet, they suggested improving their own
infrastructure and hiring more computer savvy staff.
To plug the paucity of Malaysian data, this paper seeks to assess the role of IT in Malaysian
construction firms with two objectives. Firstly, to collect data from randomly selected (unbiased)
construction firms of Grades 3 to 5 registered with Construction Industry Development Board (CIDB) small / medium firms. Secondly, to identify the relationship between IT use and firm performance.
Various survey questionnaires (e.g., Ang et al., 1994; Sohal et al., 1998) were trawled to derive the
questions to pose for this study / survey.

2. Methodology
Survey is one of the most cost effective ways to obtain information from a large number of people,
giving better results - more specific, accurate and faster most cost effective ways, (McQueen and
Knussen, 2002; Andi and Minato, 2003). The companies surveyed worked in three categories:
Government, private (specializing in construction, structure, infrastructure highways and materials)
and M&E. The respondents were only the top company officials - general manger, senior manger and
project manager as only they were knowledgeable about IT use in their companies and their company
performance.
All the companies were Malaysian, based in Selangor state and Kuala Lumpur Federal
Territory. The reasons for this area selection was proximity and that the areas had most (61%) of such
companies anyway (CIDB, 2003a). The company size was categorized by their annual turnover: G3
(RM1 million), G4 (RM1 - 3 million) and G5 (RM3 - 5 million). They were randomly taken from the
lists in the CIDB Directory, and interviewed over 9 months (Jul 2006 to March 2007).
To achieve better results, the 14-page questionnaire was structured as recommended by
McQueen and Knussen (2002) and Andi and Minato (2003). A total of 123,456,789 people were
approached, eliciting a response of 62%. The questionnaire was answered in face-to-face inteviews,
and the data analysed using the Statistical Package for the Social Sciences (SPSS) software.

3. Data Analysis, Results and Discussion


Tabachnick and Fidell (1996) and Pallant (2001) suggested that the Kolmogrov-Smirnov test be used
to evaluate whether data on quantitative variables are normally distributed. The test indicated that the
data collected were indeed so (P <0.05), and a non-parametric technique used for the analysis. In
addition, to ensure the accuracy of the results, validity and reliability were carefully considered in the
construction of scale (Leedy et al., 2001).
The questionnaire was structured in eight sections - to gather information on the firms, and for
the responses to different subjects. Some information on the questionnaire and analyses of data are
given below.

414

Farag H. Gaith, Khalim A. R and Amiruddin Ismail

3.1 Reliability
The reliability of the 5-point Likert scale used for measuring IT use on the items surveyed was
determined by Cronbachs alpha coefficient. According to Pallant (2001) and Sekaran (1992), the
coefficient should be > 0.7 for the scale to be reliable, although Nunnally (1978) suggested only 0.50
0.60 for modest reliability. The results were 0.520 - 0.903. Table (1) shows that the -values for the
four components of Technical Software Use, Activities Computerized Materials Digitally Sent, and IT
Use Tools were all > 0.7, which was good, and for General Software Use 0.520, which was adequate.
Table 1:

Reliability

Factor
General Software Use
Technical Software Use
Activities Computerized
Materials Digitally Sent
IT Use Tools

No. items
6
7
9
8
7

Cronbachs Alpha
0.520
0.762
0.806
0.903
0.785

Overall, the data collected were interrelated and the scale consistent with the sample size. As
the Cronbachs alpha coefficients were 0.520, the scale used was deemed reliable (Fang et al., 2004;
Hatcher, 1994; Zain et al., 2005).

4. Descriptive Statistics
The use of IT in the construction industry can be naturally classified into Communication Systems and
Technical Decision Support Systems. According to Doherty (1997), the communication domain
involves all the common means of communication now computerized, while the technical decision
support domain involves computer applications other than for communications. In this section, the
types of computers, operating systems and software used by the respondent firms are examined.
Figure (1) shows that the most IT-savvy companies computerized >75% of their activities. The
main computer use was in design (60.3% of respondents), technical calculations (54.4%), scheduling
and resource planning (51.5%), invoicing and materials (47.1%), tendering (44.1%), bookkeeping and
budgeting (38.2%) and, least, maintenance planning for real estate (14.7%).
The moderately IT-savvy companies computerized 40 - 75% of their activities, mainly in
bookkeeping (51.5% of respondents), maintenance planning for real state (50.0%), invoicing (47.1%),
budgeting (44.1%), tendering (41.2%), scheduling and planning (32.4%), technical calculations
(25.0%), material control (23.5%) and, finally, design (16.2%).
The least IT-savvy companies (<40% activities computerized) mainly used their computers for
materials control (26.5% of respondents), design and maintenance planning (17.6%), technical
calculations (16.2%), scheduling and resource planning (13.2%), budgeting (11.8%), book keeping
(10.3 %) and tendering and invoicing (both 5.9%). For the not relevant companies (little use of
computers), the main computer uses were maintenance planning for real estate (17.6% of respondents),
tendering (8.8%), budgeting and design (5.9%) and others (2.9%).

Usage of Information Technology in Construction Firms; Malaysian Construction Industry

415

Figure 1: Activities Computerized in the Firms Surveyed

47.1
38.2

38.2
44.1

5.9
2.9
2.9
2.9
5.9
8.8

14.7

17.6

25

Technical calculations

16.2

17.6

Design

23.5

26.5

Invoicing Bills of quantities

0
0

5.9

10

11.8

30
20

32.4

40
10.3
5.9
17.6
16.2
13.2

Persentage

50

44.1
41.2
50

51.5
47.1

60

Book keeping / Marketing

60.3
54.4
51.5
47.1

70

0
< 40 %

40-75%

>75%

using by computer

Scheduling and resource


planning
Materials control/purchase
Costing / budgeting
Tendering

not relevent

Computer used

Maintenance planning for


real estate

Figure (2) shows the extent of computer use in communications (both internal and external) in
the firms. In the moderate IT-savvy firms (40 - 75% activities computerized), the main uses of digital
transmission were for building as-built documents (54.4%), minutes of meeting (51.5%), quality and
testing results for materials (47.1%), tender enquiries (45.6%), calculations, orders and invoices
(42.6%), and descriptions (41.2%).
For the least IT-savvy firms (<40% applications computerized), the highest use was for sending
draft documents (55.9%), sending drafts / programmes (44.1%), quality and test results for materials
(35.3%), minutes of meeting and calculations, order and invoicing (both 26.5%), building and as-built
documents and descriptions ( 23.5%), and, last, tender enquiries (20.6%).

54.4

Draft documents/ Main


documents
Building and as-built documents

26.5
30.9
25

Descriptions
Tender enquiries
8.8
2.9
5.9
2.9
8.8

14.7
13.2

39.7

41.2
45.6
42.6
47.1
51.5

Drafts/Programs

13.2
13.2
19.1

20

27.9

30

26.5

35.3

40

23.5
23.5
20.6
26.5

10

2.9
2.9
2.9

Persentage

50

44.1

60

55.9

Figure 2: Materials digitally sent at Firms (Internal and External)

0
<40 %

40-75%

> 75 %

Send digitally
Material DigitallySsend

Not relevant

Calculations, Orders (purchase


orders), Invoices
Quality & testing results for
material
Minutes of meeting

416

Farag H. Gaith, Khalim A. R and Amiruddin Ismail

Figure (3) shows the general software used by the firms word processor (83.8%), spreadsheet
(77.9%), email software (75.0%), administration software (66.2%) and, lowest, databases and self
developed programs (both 60.3%). The firms also planned to use new software, of which the most
popular were databases (30.9% of respondents), administration software (25.0%), self-developed
programs (23.5%), spreadsheet (22.1%), word processor (10.3%) and email software (7.4%).
Figure (4) shows the technical software used by the firms AutoCAD (88.2%), technical
calculations (analytical & design software) (76.5%), programs for cost calculations (75.0%), self
developed programs (70.6%), planning programs (69.1%) and maintenance planning for properties and
GIS (both 66.2%). Even for the moderately IT-savvy firms (40 - 75% of applications computerized),
there was >80% use of general and technical software.

66.2

60.3

Word processor
Spreadsheet
E-mail software

40

Databases
Administration software

8.8

16.2

17.6
8.8

5.9
0

10

7.4

20

25

22.1

30

23.5

30.9

50

10.3

Persentage

60

60.3

70

75

80

83.8

90

77.9

Figure 3: General software in use in Firms and possible future software

0
Being Use

Planning to use
General Software

Not Nedded

Self developed program

Usage of Information Technology in Construction Firms; Malaysian Construction Industry

417

Figure 4: Technical softwares use at the firm

66.2

50

Program for cost calculations

40
14.7

30
20
10

8.8
5.9
5.9
11.8
11.8
2.9
19.1

Program for maintenance


planning for properties

13.2
17.6
8.8
14.7

60

25
27.9

Persentage

70

76.5
69.1
66.2
75
70.6

90
80

Technical calculations
(analytical & Design
Software)
Planning program (time and
resource planning scheduling)

88.2

100

Self developed program

Not Nedded

Geographic Information
System (GIS)

AutoCAD (CAD)

0
Being Use

Planning to use
Technical Software Used

4.1 Correlations Matrix of the IT Variables


Correlation is one of the most common and useful statistical tool. The correlation gives a coefficient
that describes the degree of relationship between variables. In this paper, the variables were examined
using Person's 2-tailed test. In the correlation matrix in Table (2), all the perceptions from the
respondents in five areas were correlated with each other individually. Information Technology
Effectiveness (ITEFFECT) had a significant positive relationship with Firm Overall Performance
(FIRMPER) at P < 0.01, Information Technology Appropriate Use (ITUSEPROB) was positively
related with Firm Overall Performance (FIRMPER) at P < 0.05, and Information Technology
Appropriate Use (ITUSEPROB) positively related with Firm Overall Performance (FIRMPER) at P <
0.05.

5. Regression Analysis
5.1. Performance vs. IT investment, Effectiveness, Appropriate Use, and Contextual Factors.
Regression analysis of the firm performance metrics (ITINVEST, ITEFFECT, ITUSEPROP and
FIRMCONTXU) indicated that IT investment positively influenced performance with a coefficient of
determination (R2) of 0.180. Thus, 18% of the firm performance was due to its IT investment, firm
contextual factors, IT effectiveness and IT appropriate use (independent variable).
The F- and t-tests were used to assess the goodness-of-fit of the models and their individual
parameters, respectively. Associated with each test is a p-value that expresses the probability that the
result of the test is significant. A probability of < 0.05 is generally considered the highest to indicate a
significant difference (Fox, 1997). For the Firm Overall Performance (FIRMPER) regression model,
the p-value was 0.013 for the F-test 3.464 and 1.242 for the t-test. These probabilities allowed the null
hypothesis to be excluded, and the model and factor assumed adequate. In Figure (5), the histogram
explains the model with normal distribution, mean of 4.09 and Std Dev of 0.97.

418
Table 2:

Farag H. Gaith, Khalim A. R and Amiruddin Ismail


Correlation Matrix of the IT Variables from Respondents

ITINVEST
ITEFFECT
FIRMCONTXU
ITUSEPROB
FIRMPER

Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N

ITINVEST
1
68
-0.094
0.446
68
-0.048
0.697
68
-0.215
0.078
68
-0.097
0.432
68

ITEFFECT

FIRMCONTXU

ITUSEPROB

FIRMPER

1
68
-0.040
0.748
68
0.274(*)
0.024
68
0.316(**)
0.009
68

1
68
0.076
0.538
68
0.217
0.076
68

1
68
.264(*)
0.030
68

1
68

*. Correlation significant at P < 0.05 level (2-tailed).


**. Correlation significant P< 0.01 (2-tailed).
ITINVEST = Information Technology Investment, ITEFFECT = Information Technology Effectiveness, FIRMCONTXU = Firm Contextual Factors,
ITUSEPROB = Information Technology Appropriate Use, FIRMPER = Firm Overall Performance

5.2 Regression Model


Table 3:
Model
1

Model Summary(b)
R
.425(a)

R Square
0.180

Adjusted R Square
0.128

Std. Error of the Estimate


0.682

a. Predictors: (Constant), FIRMCONTXU, ITEFFECT, ITINVEST, ITUSEPROB


b. Dependent Variable: FIRMPER

Table 4:

ANOVA(b)

Model
1

Regression
Residual
Total

Sum of Squares
6.448
29.317
35.765

Df
4
63
67

Mean Square
1.612
0.465

F
3.464

Sig.
.013(a)

a. Predictors: (Constant), FIRMCONTXU, ITEFFECT, ITINVEST, ITUSEPROB


b. Dependent Variable: FIRMPER

Firm Performance = 1.005 - 0.039 IT Investment + 0.301 IT Effectiveness + 0.081Appropriate


Use of IT + 0.328 Firm Contextual Factors

Usage of Information Technology in Construction Firms; Malaysian Construction Industry

419

Figure 5: Model Normality Distributions


Histogram

Dependent Variable: FIRMPER


20

Frequency

15

10

Mean =4.09E-16
Std. Dev. =0.97
N =68

0
-3

-2

-1

Regression Standardized Residual

Figure 6: Regression Model Normal P-P Plot

6. Conclusion
This paper provides empirical evidence that information technology (IT) use has a positive impact on
construction firm performance. The findings are relevant to both the construction and IT literature. It
also identified and assessed the degree of IT use and investigated the factors that affected the
performance of construction firms. The factors were Activities Computerized and Materials Digitally
Sent at the Firm (Internally and externally) in IT use. Thus, General and Technical Software Use would
have to increase greatly if the firm performance is to be substantially improved. The model used was

420

Farag H. Gaith, Khalim A. R and Amiruddin Ismail

significant at p < 0.05 (0.013) with a coefficient of determination (R2) of 0.180 (18%) of the firm
performance.

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