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The Effect of the use of Information Technologies in Businesses on Cost and Financial Performance

Authors:
  • Bursa Technical University

Abstract

Rapid development in computer and communication technologies and increasing competition conditions in the globalizing world is requried to companies using information technologies more intensively. We can define that information technologies as technologies that enable the data to be compiled, stored, processed and transformed to information by various techniques, obtained the information opened to access, stored and transferred efficiently and productively. The companies in order to subsist in intensive competition conditions will be possible by updating themselves, adapting to new methods and information technologies rapidly. Information technology used in companies can be summarized as computers, communication technologies, internet, robots, office automation systems, management information systems, expert systems, decision support systems, electronic data interchange systems. It has been known that the use of information technologies on business performance provide significant contributors. The main objective of this research is to determine that which technologies and performance criteria can be provided to what extent contribution. In this study, the relations of cost and financial performance of information technologies used in business were discussed. Data of the research about businesses within the scope of ISO 1000 in Turkey was taken as basis in our study.
Copyright © 2016 IJEIR, All right reserved
394
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
The Effect of the use of Information Technologies in
Businesses on Cost and Financial Performance
Hasan Şahin1,
1 Dumlupınar University / Simav Vocational School /
Department of Management and Organization,
hasan.sahin@dpu.edu.tr
Bayram Topal2
2Sakarya University, Faculty of Business Administration,
Department of Business Administration
Abstract Rapid development in computer and
communication technologies and increasing competition
conditions in the globalizing world is requried to companies
using information technologies more intensively. We can
define that information technologies as technologies that
enable the data to be compiled, stored, processed and
transformed to information by various techniques, obtained
the information opened to access, stored and transferred
efficiently and productively. The companies in order to
subsist in intensive competition conditions will be possible by
updating themselves, adapting to new methods and
information technologies rapidly. Information technology
used in companies can be summarized as computers,
communication technologies, internet, robots, office
automation systems, management information systems,
expert systems, decision support systems, electronic data
interchange systems. It has been known that the use of
information technologies on business performance provide
significant contributors. The main objective of this research
is to determine that which technologies and performance
criteria can be provided to what extent contribution. In this
study, the relations of cost and financial performance of
information technologies used in business were discussed.
Data of the research about businesses within the scope of ISO
1000 in Turkey was taken as basis in our study.
Keywords Cost, Financial Performance, Information
Technology, Statistical Analysis, Business
I. INTRODUCTION
Business models go through rapid changes along with
the fact that the conditions of competition increase
gradually and there are more technological developments.
None of the institutions in the world can consider
themselves independent of information technologies.
Advanced information technologies are handled with
priority for businesses in today’s dynamic and competitive
business environment and the studies conducted in this
field develop rapidly. Recently, the effect of technology
changes with a continuously increasing acceleration. Both
human life and business world are directly affected by this
situation. Traditional business structures and working
methods change with the effect of technology. Especially
from the 1980s to present, information technologies are
the most important development experienced primarily in
computers and communication technologies resulting from
this. Thanks to this development, information flow became
faster, and information sharing and control became easier.
Thus, the most important flow that should be discussed in
businesses after product and service flow is information
flow. This flow has a directive effect on physical product
and service flow and product and service flow arise from
the channels determined by information flow [22].
In this study, the relationships of information
technologies used in businesses with cost and financial
performance will be discussed. It is known that the use of
information technologies causes significant contributions
to the performance of the business. The main aim of the
study is to investigate which technologies contribute to
which performance criteria to what extent and in which
direction. In our study, the data of the study conducted on
the businesses in the context of ISO 1000 in Turkey were
taken as a basis and the effect of information technologies
on cost and financial performance was analyzed
statistically.
II. THE RELATIONSHIP OF INFORMATION
TECHNOLOGIES AND PERFORMANCE İN
BUSINESSES
The decisions made by managers have a significant role
in the success of businesses. The most important duty of
managers is to take the most correct decision for the
business within the shortest time. A good decision is
related to producing correct and up-to-date information on
time. This information in the process of making decisions
is produced with the help of information systems.
Nowadays, it is inevitable to use information technologies
in the production of this information. Today’s businesses
have become a market in which competition is
experienced every moment due to the rapid developments
experienced in especially information technologies.
Information in this structure appears as a significant value
and directly affects the competitive power of businesses
[16].
Information technologies are generally known as
technologies related to storing and transmitting
information for use. All technologies used in collecting,
processing, storing, and transmitting information from one
place to the other by means of networks and presenting
information to the service of users and including
communication and computer technologies are defined as
“information technology” [11]. Information technologies
can be expressed as the whole of tools, applications, and
services developing rapidly and used to provide
information to institutions [39]. One of the definitions of
information technologies is processes such as acquiring,
producing, using and storing information to be reused
through computers to increase the performance of the
business, to provide and support effectiveness [20].
Another definition can be expressed as the whole of
Copyright © 2016 IJEIR, All right reserved
395
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
technologies automatically enabling to collect, process,
store and transmit information to anywhere or access this
information from anywhere when required with techniques
such as electronics, optics, etc. for today [34]. It can be
simply described as the application of technology to
business processes to collect data and create valuable
information. Information technologies generally consist of
equipment, software, communication instruments and
sources and personnel supporting these [6]. Sanders
(2007) defined information technologies as acquiring and
transmitting information to make decisions more
efficiently and technological capacity used in this process
[27].
The business world is the sector affected by information
technologies the most especially in the last decade.
Software and equipment technologies developed rapidly to
meet the demands resulting from the increasing
competition and globalization in the business world, while
technological developments had transformative effects in
many sectors, they caused some sectors to disappear and
new sectors to be created [20]. Information technologies
primarily increase the abilities of managers to make
decisions and increase the rate of meeting customer
demands and decrease the cost. Especially the Internet
makes a significant contribution to carrying out this
transformation. While wireless networks enable to monitor
technologies, inventories, work orders and transports
remotely, web-based instruments make it possible for
businesses to share operational details with business
partners through a network and monitor the demands in
real time [20].
The changing business world and market conditions
continuously force businesses to search for new strategies
or adapt the current strategies to these new conditions. The
information flow factor is one of the most significant
factors determining the difference between organizations.
Accordingly, the success of a business is connected to its
ability to create value from the information processed and
distributed and the business model developed to acquire
this value [12].
In recent years, the ability to manage information
effectively in the business has become a significant matter
because it is required to manage information successfully
to provide an advantage of competition to businesses.
Thus, it has become a necessity for businesses to invest in
information technologies to collect, share and use
information effectively [1].
Developments in computer and communication
technologies cause changes in operating activities related
to cost, time, quality and service. Especially changes in
information technologies cause important changes in the
structure of the business and provide new ways to
businesses to enter new markets, present its products and
services, increase the productivity of the processes, gain
customers and ensure the loyalty of customers [24-32].
Information technologies are generally defined as
“technologies enabling to collect, process, store and
transmit information to anywhere or access information
from anywhere when required”[32]. Moreover, Sarıhan
(1998) [26], Dulkadir & Akkoyun, (2013) [10] described
information technologies as “all technologies,
applications, and services serving to collect, store, process,
access and distribute information and all information in
the system”.
Information technologies have the potential for
managing the information flow and affecting the cost,
quality, delivery, flexibility and finally the general
performance of the supply chain [7]. It is suggested that
the efficiency of information technologies can be
measured with the fact to what extent the mentioned
technology increases the abilities of people required to
perform a certain job [8]. It is generally known that
information technologies contribute to businesses in
subjects such as increasing productivity, decreasing the
cost to the lowest level, providing much more quality
products and services to customers, developing new
information-based goods and increasing the competitive
power [25].
The development of new technologies brings the
productivity revolution in the production area to an end
and shifts the center of gravity from production to
information. Many businesses use information
technologies to collect information, analyze and keep
reports with the increasing computer use. This situation
causes hierarchical structures in organizations to dissolve
rapidly and thus, lead to the reconstruction of
organizations. While information technologies play a
significant role in the reconstruction of the businesses,
they make the effective information flow easier and
contribute to making active and effective decisions in
operating activities. Moreover, information technologies
are effective in decreasing the costs of operations resulting
from the acquisition of products and services. Information
technologies rapidly become the inseparable part of the
management and most of the administrative decisions
become effectively inapplicable without information
technologies. The content of organizational changes can
change depending on the intended purpose of information
technologies [22].
An abstract of publications made in the subject of
information technologies in the literature is indicated in
terms of its content in Table 1 below. According to this
table, it is seen that mostly developed planning and
planning software come to the forefront. Furthermore,
barcoding/automatic identification systems, ERP, e-supply
system, forecast/demand management software
technologies have a significant place.
The measurement of the performance can be described
as the process of measuring the effectiveness and
productivity of an activity. A performance measurement
requires some variables to measure the effectiveness and
productivity of an activity. The performance measurement
and these variables have an active role in determining the
future position of activities, evaluating the performance
and stating the objectives [17].
Information technologies stand out as an effective
instrument to reorganize the functions of an institution to
continue its existence and to become successful in the
rapidly developing business world under the effect of
globalization. The increasing use of information
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International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
technologies is resulted with the need to evaluate the
effects of these technologies on productivity. The effect of
information technologies on the performance is a
continuously examined subject in the companies, industry,
and information sector [10]. Generally, it is stated that the
following factors of information technologies increase the
performance of the company [10].
By increasing the scale efficiency of the company
activities
By decreasing the costs of operations
By collecting and processing the information that
can be used in the decision-making process on time
By indicating the performance of employees
effectively
By keeping communication channels at low cost.
Table 1. Study Subject Information Technologies
Information Technologies
Reference
B1
B3
B5
B7
B9
B10
B11
B12
B13
B14
B15
B16
[18]
X
X
[38]
X
[37]
X
[14]
X
X
[13]
X
X
X
X
X
X
[36]
X
X
X
X
X
[29]
X
X
[23]
X
[28]
[21]
X
[9]
X
[2]
X
[4]
X
B1: Advanced planning and planning software, B2: Bar coding / automatic identification System, B3: Computer Aided Manufacturing
(CAM) System, B4: Computer Integrated Manufacturing (CIM) System, B5: Computerized Statistical Process Control (SPC), B6:
Computer aided design (CAD) System, B7: Computer aided engineering (CAE) System, B8: Computer aided process planning (CAPP)
System, B9: Electronic mail System, B10: Electronic data interchange (EDI) feature, B11: Enterprise Resource Planning (ERP) System,
B12: E-procurement System, B13: Forecast / demand management software, B14: Flexible Manufacturing Systems (FMS), B15:
Manufacturing resource planning (MRP II) System, B16: Material requirements planning (MRP) system
Dulkadir and Akkoyun (2013) focused on the definition
and the content of information technologies in their studies
and studied the effects of information technologies on the
performance of the business and presented the results
obtained with the frequency analyses [10].
Gök (2005) examined the effects of the success of the
ERP application on the performance of the business in the
study conducted on businesses using the ERP system in
Turkey [15].
In their study, Bülbül, H., Özçifçi, V., Özoğlu, B.,
(2014) studied the relationship between information
technologies, cooperation between customers and
suppliers, the supply chain (customer-supplier)
performance and business performance using the data of
233 businesses in Turkey. It was identified as a result of
the data analysis conducted by using structural equation
modeling that information technologies did not have a
direct effect on the supply chain performance and business
performance, and there was a direct relationship between
information technologies and the cooperation between
customer and supplier [5].
In this study, Turunç (2016) examined the level of use
of information technologies in businesses operating in the
tourism sector which is an important sector of the service
industry and evaluated the effects of the use of information
technologies on the organizational performance of these
businesses multi-directionally [33].
Shang and Marlow(2005), used the structural equation
model in their study based on a questionnaire of 1200
production companies in Taiwan to examine the
relationship between logistic capabilities, logistic
performance, and financial performance. The results
indicated that information-based capabilities of the
companies are effective on the logistic performance and
financial performance [30].
Aksoy, 2009, indicated in his study that while
businesses increase the supply chain performance, they
benefit from information technologies and this affected the
general performance of the business positively [1].
III. COST AND FINANCIAL PERFORMANCE
In recent years, the financial function in businesses has
changed significantly. Especially, the financial
management process in businesses was directly affected
by technological developments. The desire of businesses
to obtain the financial income firstly to increase business
performance stood out as a basic factor and they followed
technological developments in financial issues closely
[15]. Information systems increase the financial
Copyright © 2016 IJEIR, All right reserved
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International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
performance and customer potential thanks to the decrease
in processing time, the use of excess capacity, inventory
management, providing effective relationships with
external business partners and acquiring information more
easily and cheaply and providing the competitive
advantage in the long term and thanks to the fact that this
reflects on the business income positively (Gök, 2005).
Successful applications of information technologies are
seen as a factor which contributes to the business
financially both in the short term and long term and has
positive effects on the financial performance.
Baihaqi & Sohal (2012) indicated in their studies that
information sharing is one of the significant instruments
for the expanded supply chain performance and tested the
relationship between the level of information sharing and
organizational performance. The results indicated that
integrated information technologies and information
quality have a positive effect on the intensity of
information sharing [3].
Table 2. Information Technologies and Performance Indicators Which are the Subject of the Study
Information Technologies
Performance Indicators
B1: Developed planning and planning software
Cost Indicators
B2: Barcoding / Automatic Identification System
M1: Unit product cost of primary product
B3: Computer Aided Manufacturing (CAM) system
M2: Unit direct labor cost of primary product
B4: Computer Integrated Manufacturing (CIM) system
M3: Unit material cost of primary product
B5: Computer Statistical Process Control (SPC)
M4: Total cost of general production
B6: Computer Aided Design (CAD) system
Financial Indicators
B7: Computer Aided Engineering (CAE) system
F1: Sales income
B8: Computer Aided Process Planning (CAPP) system
F2: Assets Profitability
B9: Electronic mail system
F3: Return on sales
B10: Electronic Data Interchange (EDI) feature
F4: Asset turnover
B11: Enterprise Resource Planning (ERP) system
F5: Profit before the interest tax as a percentage of
income
B12: E-supply system
B13: Forecast / demand management software
B14: Flexible Manufacturing Systems (FMS)
B15: Manufacturing Resource Planning (MRP II) system
B16: Material Requirements Planning (MRP) system
In their studies, Hsiao et al. (2002) created a conceptual
framework regarding the effect of relationships between
customer-supplier and purchasing process on the supply
chain performance. It is submitted in an empirical study
conducted in China that the relationships between
customer and supplier have a positive effect on the
financial performances of businesses [19].
Vickery et al. (2003) suggested in a study conducted on
automotive suppliers in North America that there was not
a direct relationship between the integration of the supply
chain and the financial performance of a business and
indicated that the effect there could be an indirect effect. It
was identified in the study that there were direct positive
relationships between integrated information technologies
and the supply chain integration, the supply chain
integration and customer services and, customer services
and company performance [35].
The facts that information technologies lead the
business to a continuous development in all areas and add
value to the business with innovations provided affect the
business performance positively. The financial
performance of a business increases thanks to the fact that
information technologies systems reflect positively on the
customer potential and business income with the decrease
in processing time, the use of excess capacity, inventory
management, providing effective relationships with
external business partners and acquiring information more
easily and cheaply and providing competitive the
advantage in the long term [10].
IV. THE EFFECT OF THE USE OF INFORMATION
TECHNOLOGİES İN BUSINESSES ON COST AND
FINANCIAL PERFORMANCE
In this study, the relationships of information
technologies used in businesses with costs and financial
performance will be addressed. It is known that the use of
information technologies contributes significantly to the
business performance. The main purpose of the study is to
investigate which technologies contribute to which
performance criteria to what extent. In our study, the data
of the study conducted on the businesses in the context of
ISO 1000 in Turkey were taken as a basis. The
information technologies and performance indicators taken
as a basis in the study are presented in the table below.
Copyright © 2016 IJEIR, All right reserved
398
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
Table 3. The Relationship between the Levels of the Use of Information Technologies and Cost Performance (Correlation
Coefficients)
M1 Probab.
M2
Probab.
M3
Probab.
M4
Probab.
B1
0,084
0,27
-0,028
0,711
-0,034
0,651
-0,058
0,44
B2
0,063
0,411
-0,077
0,312
-0,065
0,392
-0,041
0,596
B3
0,019
0,795
-0,048
0,514
0,06
0,417
0,018
0,804
B4
0,084
0,259
0,019
0,803
0,036
0,628
0,018
0,808
B5
0,072
0,335
0,024
0,75
0,071
0,343
0,088
0,237
B6
0,171*
0,024
0,05
0,509
0,1
0,186
0,12
0,114
B7
0,177*
0,017
0,06
0,422
0,121
0,106
0,046
0,535
B8
0,187**
0,0098
0,083
0,252
0,104
0,152
0,112
0,122
B9
-0,01
0,894
0,038
0,596
-0,065
0,361
-0,034
0,631
B10
0,135
0,067
0,151*
0,04
0,09
0,223
0,069
0,346
B11
0,059
0,417
-0,033
0,647
0,053
0,463
0,035
0,63
B12
0,026
0,741
0,055
0,479
0,029
0,714
0,047
0,547
B13
0,341**
0
0,17*
0,025
0,253**
0,001
0,192*
0,011
B14
0,128
0,093
0,032
0,676
0,137
0,072
0,037
0,63
B15
0,104
0,16
-0,001
0,986
0,07
0,345
0,025
0,737
B16
0,057
0,433
0,046
0,531
0,132
0,07
0,029
0,689
(*)Significant at the 5% significance level (**)Significant at the 1% significance level
V.THE RELATIONSHIPS BETWEEN THE LEVELS
OF THE USE OF INFORMATION TECHNOLOGIES
AND PERFORMANCE INDICATORS
In this section, firstly, the effects of the levels of the use
of information technologies on the fiscal and financial
performance of the business will be addressed. For this
purpose, the relationships between the levels of the use of
information technologies and performance indicators were
examined with the correlation analysis. IBM SPSS
Statistics 21 packaged software was used for the statistical
analyses in the study. The correlation coefficients between
the levels of the use of information technologies and
performance indicators are indicated in Table 3 and Table
4 below.
As it is indicated in Table 3, a positive and significant
relationship was observed between the unit cost of the
primary product and the levels of the use of CAD, CAE,
CAPP and Forecast/Demand Management Software. A
positive and significant relationship was observed between
the direct labor cost of the primary product and the levels
of the use of EDI (Electronic Data Interchange) and
Forecast/Demand Management Software. It is found out
that there is a positive and significant relationship between
the unit material cost of the primary product and the total
cost of general production and the levels of the use of
Forecast/Demand Management Software.
The correlation coefficients reflecting the relationship
between the level of the use of information technologies
and financial performance indicators are indicated in Table
4 below.
It is clear from Table 4 above that there is a significantly
positive relationship between sales income and electronic
mail system. Therefore, it can be said that as the level of
the use of electronic mail system increases, sales income
increases as well. On the other hand, there are significant
relationships between sales income and electronic data
interchange and between the levels of the use of
forecast/demand management and FMS systems.
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399
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
Table 4. The Relationship between the Levels of the Use of Information Technologies and Financial Performance
(Correlation Coefficients)
F1
Prob.
F2
Prob.
F3
Prob.
F4
Prob.
F5
Prob.
B1
-0,012
0,87
-0,026
0,728
0,114
0,13
-0,01
0,898
0,112
0,138
B2
0,118
0,12
0,037
0,624
0,102
0,18
-0,016
0,834
0,012
0,877
B3
0,046
0,532
-0,006
0,931
-0,041
0,574
-0,072
0,324
-0,016
0,825
B4
0,084
0,256
-0,039
0,603
0,039
0,598
-0,056
0,449
0,07
0,343
B5
0,067
0,366
0,012
0,875
-0,005
0,944
-0,078
0,297
0,003
0,971
B6
0,124
0,1
0,123
0,104
0,17*
0,024
0,034
0,657
0,145*
0,05
B7
0,066
0,374
0,102
0,173
0,176*
0,017
0,03
0,692
0,2**
0,007
B8
0,096
0,184
0,075
0,307
0,12
0,097
-0,007
0,921
0,095
0,19
B9
0,22**
0,002
0,034
0,632
-0,05
0,48
0,119
0,094
0,025
0,729
B10
0,15*
0,04
0,15*
0,041
0,155*
0,034
0,21**
0,005
0,184*
0,012
B11
-0,004
0,956
0,175*
0,016
0,286**
0
0,143*
0,048
0,24**
0,001
B12
0,084
0,277
0,082
0,29
0,019
0,808
0,1
0,196
0,049
0,527
B13
0,163*
0,031
0,252**
0,001
0,195**
0,009
0,25**
0,001
0,2**
0,008
B14
0,146*
0,049
0,125
0,1
0,073
0,335
0,116
0,125
0,13
0,087
B15
0,065
0,378
0,125
0,092
0,105
0,153
0,054
0,463
0,131
0,076
B16
0,092
0,206
0,036
0,619
0,118
0,104
0,035
0,634
0,148*
0,041
(*)Significant at the 5% significance level (**)Significant at the 1% significance level
There is a positive and significant relationship between
asset profitability and forecast/demand management and
between electronic data interchange and the ERP system.
It is understood from Table 4 that there is a positive and
significant relationship between sales income and the ERP
and forecast/demand management. Moreover, there is a
positive and significant relationship between sales income
and CAD, CAE, electronic data interchange and the ERP.
There is a significant relationship between asset
turnover and FMS and electronic data interchange and a
significant relationship between asset turnover and ERP.
There is a significant relationship between profit before
the interest and tax and CAE, FMS, and forecast/demand
management and a positive and significant relationship
between CAD, MRP, and electronic data interchange in
terms of the correlation coefficients in Table 4.
VI. REGRESSION MODELS OF THE
PERFORMANCE INDICATORS RELATED TO THE
LEVELS OF THE USE OF INFORMATION
TECHNOLOGIES
In this section, the relationships of cost performances in
businesses with the levels of the use of information
technologies are studied with regression models. The
stepwise and backward regression methods were used in
the determination of regression models. The regression
models of each cost performance indicator related to the
levels of the use of information technologies are indicated
in Table 5 below.
The relationships of each performance indicator
indicated in Table 2 as the cost performance with the
levels of the use of information technologies are studied
with the regression model and the results are summarized
in Table 5. According to the first model in the Table,
CAE, and Forecast/Demand management affect the unit
cost performance of the primary product positively and E-
supply system and MRP II technologies affect it
negatively. It is understood from the model that the
forecast/demand management system positively affects the
unit cost performance at most.
It is seen in the second model that EDI and
forecast/demand management system affect the direct
labor cost positively and barcoding/automatic
identification system and ERP technologies affect it
negatively. EDI (Electronic data interchange system) has
the highest positive effect on the direct labor cost.
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400
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
Table 5. Regression Models of the Cost Performance Indicators Related to Information Technologies
Models
Constant
B2
B6
B7
B9
B10
B11
B12
B13
B15
AdjR2
F
Se
M1
3,538
,176
-,15
,389
-,18
0,176
8,9
1,31
Prob.
,000
,049
,037
0,000
0,054
,000
M2
4,18
-,2
,274
-,21
,228
,07
3,68
1,5
Prob.
,000
,024
,011
,06
,008
,007
M3
4,4
-,22
,199
-,2
,291
,131
6,4
1,41
Prob.
,000
,018
,02
,06
,000
,000
M4
4,31
,231
-,14
,04
4,43
1,5
Prob.
,000
,003
,087
,013
Italicized words are the probability that the parameter is random.
According to the model created for the unit material cost
of the primary product, CAD, and forecast/demand
management systems affect it positively, and
barcoding/automatic identification system and Electronic
mail system affect it negatively. Forecast/demand
management systems have the highest positive effect on
the material cost. According to the general production
costs model, forecast/demand management systems are
accepted as positively affecting technologies, MRP II
systems are accepted as negatively affecting technologies.
In conclusion, it is understood from Table 5 that
forecast/demand management software is positive and the
most effective information technology on the cost
performance in businesses. On the other hand, it can be
stated that Barcoding / automatic identification systems
and MRP II technologies have negative effects on the cost
performance.
Table 6. Regression Models of the Financial Performance Indicators Related to Information Technologies
Models
Constant
B2
B4
B7
B9
B10
B11
B12
B13
B16
AdjR2
F
Se
F1
4,17
,144
,025
5,96
1,33
Prob.
,000
,016
,016
F2
3,46
,288
-,18
,113
,12
8,05
1,24
Prob.
,000
,000
,009
,09
,000
F3
4,055
-,21
,18
,17
,11
6,5
1,3
Prob.
,000
,006
,014
,01
,000
F4
3,82
-,12
,192
,224
-,13
,11
5,08
1,15
Prob.
,000
,076
,012
,006
,06
,001
F5
4,06
,205
-,14
,07
6,9
1,08
Prob.
,000
,000
,02
,001
Italicized words are the probability that the parameter is random.
As it is known, it is indicated that the use of information
technologies have positive effects on the business
performance. However, it is observed in the regression
models above mentioned that some technologies affect
business performance negatively. This situation suggests
that information technologies can affect the general
performance of businesses positively; however, some
technologies may have negative effects on some
performance indicators.
The summarized results of the regression model created
for the relationships between the financial performance of
businesses and the levels of information technologies used
are presented in Table 6 below. The backward method was
used in the development of the models.
According to Table 6, there is a positive and significant
relationship between sales income and ERP (Enterprise
Resource Planning) technology. Accordingly, a unit
increase in the level of the use of the ERP system causes a
0,144 unit increase in sales income.
There is a positive relationship between the asset
profitability and the levels of the use of the ERP and
Forecast/demand management software and a significant
negative relationship between the asset profitability and
the E-supply system. Especially the ERP system appears
to be a technology positively affecting asset profitability.
There is a positive relationship between sales income
and electronic data interchange (EDI) and forecast/demand
management software systems and a negative relationship
between sales income and the levels of the use of
Computer integrated manufacturing (CIM) technologies.
There is a positive relationship between the asset
turnover and computer-aided engineering (CAE) and
enterprise resource planning (ERP) and a significant
negative relationship between asset turnover and
barcoding / automatic identification system and the E-
supply system. Especially the ERP system has a
significant positive effect on the asset turnover.
There is a positive relationship between profit before the
interest and tax and the levels of the use of forecast /
demand management software, and a negative relationship
between profit before the interest and tax and the level of
the use of material requirements planning (MRP II).
It is seen in Table 6 that ERP technologies and
forecast/demand management have the highest positive
effect on the financial performance indicators.
Copyright © 2016 IJEIR, All right reserved
401
International Journal of Engineering Innovation & Research
Volume 5, Issue 6, ISSN: 2277 5668
VII. CONCLUSION AND SUGGESTIONS
It is known that the use of information technologies
contributes significantly to the business performance. The
main purpose of the study is to investigate which
technologies contribute to which performance criteria to
what extent. In this study, the relationships of information
technologies used in businesses with costs and financial
performance are discussed.
In the analyses made, it has been observed that mostly
forecasting / demand management systems have a positive
effect on cost and financial performance. Furthermore, it
has been observed that Electronic Data Interchange (EDI)
feature and Enterprise Resource Planning (ERP) systems
have also contributed positively to financial performance.
It has been observed that there is a significant
relationship between the level of the use of information
technologies and mostly the unit product cost and unit
material cost among the cost performance indicators, and
the asset profitability, sales turnover and asset turnover
rate among financial performance indicators.
In this study, the effects of the use of information
technologies on cost and financial performance are
examined. It will be useful to study the relationships
between the use of information technologies and other
business performance indicators. It is thought that it is
especially important to examine the effects of the use of
information technologies on the labor force performance.
Moreover, it will be appropriate to study the effect of
the use of information technologies on this general
performance by creating a performance indicator. On the
other hand, it is considered that examining these
relationships on the sectoral basis and by taking the size of
the businesses into consideration will provide more
significant relationships.
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AUTHORS PROFILE
Bayram Topal, he was born on June, 1960 in
Afyonkarahisar province, Turkey. He is an associate
professor at Sakarya University of Business faculty. His
main research direction is supply chain, statistics,
business.
Hasan Şahin, he was born on December, 1978 in Bursa
province, Turkey. In 2011, Institute of Science and
Technology Department of Industrial Engineering
Department in Sakarya University that began in the
doctoral training is still continuing. Dumlupınar
University since 2002 has served as a lecturer in Simav
Vocational High School. Her research direction is the
supply chain, information sharing.
... It is observed by Şahin and Topal (2016) that cost and financial performance is positively affected by most of the systems of forecasting and demand management. Additionally, it is also seen that feature of "electronic data interchange" and "enterprise resource planning" systems had their positive contributions to rise the financial performance. ...
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