Influencing Factors Affecting

MIS Adoption
in Pakistan banks

Presented by: -
Nida Nawaz
MS-Management Sciences
COMSATS Institute of Information Technology
 Introduction
• MIS has been emphasized as a strategic tool for enhancing the processing
power of data that is used in decision making process that leads to the
high organizational performance & more optimized results.

• In MIS, Information means the data that has been processed into a form
that is meaningful to the recipient (USER) & Systems is a set of
components that operate together to achieve a common objective (or
multiple objective).

• A Management Information system is:

– An integrated user-machine system
– For providing information
– To support the operations, management
– Analysis, and decision making functions
 Research Objectives
• What factors determine the likelihood of adoption of MIS in Pakistan
banks?

• What is the importance of factors affecting on the decision of MIS

Adoption in Pakistan banks?
 MIS Adoption Literature

• Kimberly and Evanisko (1981) identified three groups of predictors of

innovation: characteristics of organizational leaders, characteristics of
organization, and characteristics of environment.

• Top management support often plays a significant role in the judgment

decision of MIS adoption (McGinnis & Ackelsberg, 1983; Quinn, 1985).

• “Diffusion of Innovation” model (Rogers, 1983; 1995) appears to be the

most widely accepted model for identifying critical characteristics in
adoptions.

• Davis (1989) examined the user acceptance of computer technology.

 MIS Adoption Literature
(Cont’d…)
• Floyd & Zahra (1990) evaluated the significant effect of MIS
adoption on organizational performance in small banks.

• Nolan et al. (1993) proposed a framework for IT adoption and

organizational learning

• Rogers & Bacon (1995) highlighted cost as an important

determinant of IT adoption in organizations.

• Rogers (1995) highlighted the importance of the image factor in IT

adoption.

• Teo (1997) concluded that organizational and technological factors

were important factors in MIS adoption.
 MIS Adoption Literature
(Cont’d…)
• Briggs (1999) investigated the use of group support systems in a technology transition model.

• Chau & Tam (2000) developed a model for the adoption of open systems, incorporating
aspects of the external environment, organizational technology and the characteristics of the
technology itself.

• Deeinder (2002) proved that resources required for adoption decision should be equivalent to
the organizational competency level.
 MIS Adoption Literature
(Cont’d…)
• Riemenschneider (2003) used a ‘combine and conquer’ strategy
with the theory of planned behavior and the technology acceptable
model applying a series of loosely to tightly integrated models to the
IT adoption decisions of small business executives.

• Lambi (2004) identified organizational competency and top

management support as the most influencing factors in information
system adoption.

• Over the last few decades, more and more researchers have been
looking into MIS adoption decisions from organizational perspective.

• Some researchers have integrated all these factors into one model
(Kamal, 2006; Kuan & Chau, 2001; Mehrtens, Cragg, & Mills, 2001).

• Allowing for the treatment of all these factors and their interaction in
one dynamic framework.
3. Research work &
Methodology
 Research Methodology
• The practical part of the study discusses the MIS adoption in
Pakistan banks.

• This research used eight hypotheses based on TOE Framework.

• All research hypotheses were tested with the help of a questionnaire

data. The survey was targeted to IT professionals and Bank
Managers of domestic and foreign banks in Islamabad.

• Most of the banks have their own customized MIS systems that are
used to perform financial operations of those banks and some
banks implemented MIS to perform all the functions of the banks
including finance, human resources, marketing etc…
MIS coverage in Banks
 Banks MIS software names

Every bank implemented different software package to run MIS to fulfill

the demands of their business. 3% of the total has their own MIS and
most of them used those MIS that are in common use and customized
them according to the module applicability in their business
applications.
A total of eighty (80) questionnaires were completed. There are forty (40)
banks in total and two (2) questionnaires were completed from each
bank.

This sample is sufficient enough to gain the deep insight of results. Forty
(40) questionnaires were filled by Branch Mangers and forty (40) were
filled by IT Mangers.

Reponses from the Branch Managers were important for this study to
identifying critical factors among organization and environment & IT
Managers’ response were significant in judging the critical factors of
technology.

• The Dependant Variable:

– MIS Adoption:
This research used MIS adoption as dependant variable. Different researchers
have used different models to measure MIS adoption. TOE framework and
Roger’s model of innovation adoption were used in this study.
• The Independent Variable:
The factors that affect MIS adoption were taken as independent
variables in this study. TOE framework and Roger’s model were
used for this purpose.

– Technological Factors:
Technological factors considered for this study were: Perceived
Benefits of MIS, Complexity of MIS and Compatibility of MIS.
These all factors were taken from the Rogers’ DOI Theory.

– Organizational Factors:
Organizational factors included: Top Management Support,
Organizational Competency and IT Resources.

– Environmental Factors:
Environmental factors combined Competitors’ Pressure and
Trading Partners’ Pressure.
Research Framework :
Technological Factors Organizational Factors
1. Perceived Benefits 1. Top Management
2. Complexity Support
3. Compatibility 2. Organization
MIS Competency
Adoption 3. IT Resources

Environmental Factors
1. Competitors’ Pressure
2. Trading Partners’
Pressure
 Research Hypothesis:
Hypothesis 1:
• H11: Top management support and commitment are related to
MIS adoption.

Hypothesis 2:
• H12: A high level of competency from within the organization
significantly affects MIS adoption.

• Hypothesis 3:
• H13: High levels of IT resources significantly affect MIS adoption.

Hypothesis 4:
• H14: A high level of perceived benefits significantly affects MIS
adoption.
Hypothesis 5:
• H15: A high level of perceived compatibility significantly affects
MIS adoption.

Hypothesis 6:
• H16: A high level of perceived complexity cannot significantly
affects MIS adoption.

Hypothesis 7:
• H17: Competitive pressure significantly influences MIS
adoption.

Hypothesis 8:
• H18: Partner readiness significantly influences MIS adoption.
4. Analysis
 Analysis
Results explained the importance of factors affecting MIS adoption in
Pakistan banks. Analysis was done in three phases:

• In first phase descriptive analysis was done.

• Second phase concerned with correlation analysis.

• In third phase regression was performed to check the factors

affecting MIS adoption
 Descriptive Analysis
Items Description Mean Std.

PBM Perceived Benefits of MIS4.35 0.618

CMPT Perceived Compatibility 4.57 0.632

CMPX Perceived Complexity 4.87 0.827

TMANG Top Management 4.71 0.482

Support
OC Organizational 4.88 0.369
Competency
ITRSCR IT Resources 4.31 0.542

CP Competitors Pressure 4.34 0.502

TP Trading Partners 4.40 0.587

 Correlation:

• Correlation regression tells the strength between independent

variables and dependant variable.

• Symbol r uses for the correlation. The value of r will always be

between -1.0 and +1.0.

• Positive sign shows there is positive relationship between two

variables, similarly negative sign shows the negative relationship
between the two.
 Correlation between
Technological Factors & MIS
adoption:
MIS Perceived Complexity Compatibility
Benefits
MIS 1 .235 -.079 .575

Perceived 1 .227 .094

Benefits

Complexity 1 -.217

Compatibility 1
 Correlation between
Organizational Factors & MIS
adoption:
MIS Top Organzatinal IT
Management Cmptncy Resourc
Sprt es
MIS 1 .557 .433 .442

Top 1 .222 .348

Management
Sprt

Organzatinal 1 .388
Cmptncy

IT Resources 1
 Correlation between
Environmental Factors & MIS
adoption:
MIS Competitor Trading Partners
Pressure
MIS 1 .101 .099

Competitor 1 -.335
Pressure
Trading Partners 1
 Regression Analysis:
This analysis is useful to know about the variation caused by
independent variable into dependant variable.

From this model, this study shows that how much variation is due to
technology, organization and environment in dependant variable
MIS adoption.

This determines either these variation are significant or not in the

proposed model.
 Regression Analysis:
Items Un- Standardized
standardized Coefficients t Sig.
Coefficients Beta
Beta

PBM .004 .006 .045 .964

CMPX .027 .052 .507 .614
CMPT .177 .256 2.036 .045
TMANG .281 .311 2.660 .010
OC .267 .226 2.263 .027
ITRSCR .102 .126 .734 .465
CP .073 .083 .670 .505
TP .054 .072 .688 .494
 Results
• This study concluded that organizations in which top management
is enthusiastically supports new innovations & technologies; MIS adoption
rate is high.

• Employees are strongly encouraged by the employees to use these MIS

technologies in their routine task and fully aware of the use MIS benefits.

• Organizational competency is related to skills and performance any

organization has from within the organization.

• Organizational competency significantly affect MIS adoption with

significant value of (p=0.027) with the significant level of (α=0.05).
• IT resources are important to any organization using MIS adoption.
But without the proper human capital that have proficiency to use
this type of system it also necessary.

• IT resources may have affect on MIS adoption but with the

combination of organizational competency. Separately these resources
are not proved significant.

• Compatibility of MIS system with the existing technologies is very

important to perform the daily-based activities without any obstruction.

• Data analysis concluded that compatibility has significant

relationship with MIS adoption (p=0.045) at significant level (=0.05).
• BMs most likely to adopt those customized MIS systems that show
compatibility with the beliefs and values of their current system and
don’t create any barrier in performing daily tasks as they executed
before.

• Complexity in adoption of new technologies affects its implementation

process.

• But it has no significant affect in this study because of the following

reasons:
– Every bank has its own customized MIS system that are compatible
to their existing system.
– Every bank has its separate department which has expertise in
handling banking MIS system.
• Pressure from competitors influences the adoption of new
technologies in any sector in any global context.

• Affect of external factors on MIS adoption is not significant because

banks in Pakistan face the pressure from the one “same & main”
central body SBP.

• Every bank is bound to have an information system to perform its

tasks.
 TOE Framework Model
Summary:
R Square shows the total contribution of independent variables on
dependent variable. TOE (Technology, Organization & Environment)
showed 81% contribution in dependant variable MIS adoption.

TOE Framework Model Summary

Model R R Square Adjusted R Std. Error of
Square the
Estimate

1 .914a .836 .812 .157

a. Predictors: (Constant), TTMANG, CMPX, PPBM, CMPT, TP, ORSRC, TMANG, CMP, IT, PBM
 Conclusion
Ranks Items weights

1 TMANG .281

2 OC .267

3 CMPT .177

4 ITRSCR .102

TMANG= Top Management Support

OC= Organization Competency
CMPT= Compatibility with MIS
ITRSCR= IT Resources
 Limitation:
• This study focused on banking sector of Pakistan. It is already a
high tech, innovative oriented sector; therefore by focusing on any
other under developed sector, results may be different. Response
biasness may be presented in the study. Moreover, some variables
have fewer items to measure statistical results, it could affect the
results.

• According to our respondents, some items were really difficult to

understand in questionnaire, these may affect the findings of data
analysis.

• Data analysis was done using SPSS for Windows, for this research
we had short time to learn the SPSS. For better understanding to
produce better results, good understanding with the software was
necessary.
 Recommendation
• This paper has developed and tested a proposed model of MIS adoption for
banks.

• The findings may not be universally true, but they are likely to be applicable in
similar cultural contexts.

• Comparison of the research model can also be conducted over several

countries, particularly from different geographic regions.

• The exploratory nature of the research has helped identify associations between
variables from which more confirmatory or causally directional hypotheses can
be generated in the future.
 Future Work:
• Research can be conducted by taking any other sector. This study selected
the sector that is already tech-oriented.

• For more generalized results study can be replicated in any other sector.

• Any other sector that has classification between MIS adopters and non-
adopters can produce better results and distinguish the factors that affect
MIS adoption in enhanced mode.

• Moreover, number of item may be increased to evaluate each variable to

improve the data findings.

• Questionnaire can be made easy to understandable to reduce response

biasness.
THANKS