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ST.

MARY’SUNIVERSITY
SCHOOL OFGRADUATE STUDIES
DEPARTMENT OF PROJECT MANAGEMENT

FACTORS AFFECTING THE PERFORMANCE OF TELECOMMUNICATION


NETWORK EQUIPMENT PROCUREMENT

THE CASE OF ETHIO TELECOM

BY
MESEKERM FELEKE

FEBRUARY, 2023

ADDIS ABABA, ETHIOPIA


ST. MARY’S UNIVERSITY
SCHOOL OF GRADUATE STUDIES
PROGRAM OF PROJECT MANAGEMENT

FACTORS AFFECTING THE PERFORMANCE OF


TELECOMMUNICATION NETWORK EQUIPMENT
PROCUREMENT
A CASE OF ETHIO TELECOM

BY
MESEKERM FELEKE

ADVISOR

MARU SHETE(Ph.D.)

Addis Ababa, Ethiopia


DECLARATION

I declare that this thesis is my original work and has not been presented in any other university and
college. All sources and materials used are duly acknowledged.

Name: MeskermFeleke

Signature: ________________________

Date: _____________________________
APPROVAL FROM THE ADVISOR’S

The Undersigned certifies that, He has read and hereby recommends for acceptance by the St
Mary‘s University a thesis entitled: ―FACTORS AFFECTING THE PERFORMANCE OF
TELECOMMUNICATION NETWORK EQUIPMENT PROCUREMENT IN THE CASE OF
ETHIO TELECOM‖, in partial fulfillment of the requirements for the MBA of the St Mary‘s
University.

MARU SHETE(Ph.D.) …………. ……………….

Name of advisor Signature Date


APPROVED BY BOARD OF EXAMINERS

We, the undersigned certify that we have read and hereby recommend to the Saint Mary‘s university
to accept the thesis submitted by MeskeremFelekeentitled―FACTORS AFFECTING THE
PERFORMANCE OF TELECOMMUNICATION NETWORK EQUIPMENT PROCUREMENT IN
THE CASE OF ETHIO TELECOM‖for the fulfillment of the requirement for the award of an MA in
Project Management.
Board of Examiners

Advisor:

Name: _____________________ Signature _________ Date _______

External Examiner:

Name _____________________ Signature _________ Date _______

Internal Examiner:

Name: Muluadam Alemu (Ph.D) Signature Date : 19/07/23

Dean: Name _______________________ Signature__________Date ______

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ACKNOWLEDGEMENTS

Before and above all I would like to thank the Almighty God for giving me heath, strength and
courage to accomplish this work.
My deepest gratitude goes to my advisor MaruShete (Ph.D.) for his constructive feedback, valuable
comments and continuous encouragement during this research Project. Special thanks to the
managers and employees of Ethio Telecom and all experts who supports me by providing the
necessary information and documents.

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Table of contents
DECLARATION .................................................................................................................................................... 3
APPROVAL FROM THE ADVISOR’S ..................................................................................................................... 4
APPROVED BY BOARD OF EXAMINERS............................................................................................................... 4
ACKNOWLEDGEMENTS ...................................................................................................................................... 5
Table of contents ............................................................................................................................................... 6
Abstract ........................................................................................................................................................... 11
Chapter one ..................................................................................................................................................... 12
Introduction ..................................................................................................................................................... 12
1.1. Background of the study ................................................................................................................. 12
1.2. Statement of the problem .............................................................................................................. 13
1.3. Basic Research questions ................................................................................................................ 15
1.5. Objectives of Study .............................................................................................................................. 15
1.5.1 General objective ............................................................................................................................ 15
1.5.2. Specific Objectives ......................................................................................................................... 15
1.6. Significance of the Study ...................................................................................................................... 16
1.7. Scope of the Study ............................................................................................................................... 16
1.8. Limitation of the study ......................................................................................................................... 16
1.9. Organization of the Study .................................................................................................................... 17
Chapter Two .................................................................................................................................................... 18
Literature review ............................................................................................................................................. 18
2.1. Theoretical Review............................................................................................................................... 18
2.1.1. Introduction ................................................................................................................................... 18
2.1.2. Concepts of project and project management .............................................................................. 19
2.1.2. Concepts of Procurement and procurement management in project ........................................... 19
2.1.3. Project success ............................................................................................................................... 20
2.1.4. Critical success factor ..................................................................................................................... 21
2.1.5. Project procurement success and success factor ........................................................................... 21
2.2. Theories related to the study subject .................................................................................................. 22
2.3. Empirical review ................................................................................................................................... 22
2.4. Research gap ........................................................................................................................................ 23
2.5. Conceptual Framework ........................................................................................................................ 24
Chapter Three .................................................................................................................................................. 25
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Research design and Methods ......................................................................................................................... 25
3.1. Background of the organization ...................................................................................................... 25
3.2. Research Design .............................................................................................................................. 26
3.2. Research Approach .............................................................................................................................. 26
3.3. The statistical population and sample size .......................................................................................... 27
3.4. Type and source of data .................................................................................................................. 27
3.5. Method of Data Collection ................................................................................................................... 28
3.6. Method of data analysis ...................................................................................................................... 28
3.7. Operational definition of study variables ............................................................................................ 29
3.9. Reliability and Validity ......................................................................................................................... 31
3.9.1. Reliability ....................................................................................................................................... 31
3.9.2. Validity ........................................................................................................................................... 32
3.9. Ethical Consideration ........................................................................................................................... 33
Chapter Four .................................................................................................................................................... 34
Data Presentation Analysis and Discussion...................................................................................................... 34
Introduction ................................................................................................................................................ 34
4.1. Descriptive Data Analysis..................................................................................................................... 34
4.1.1. General Characteristics of the Respondents .................................................................................. 34
4.2 Descriptive Analysis of procurement processes ................................................................................... 37
4.2. Understanding procurement process ............................................................................................... 37
4.2.2. Descriptive Analysis of the Independent Variables ........................................................................ 42
4.3. Inferential Statistics ............................................................................................................................. 43
4.3.1. Correlation Analysis .......................................................................................................................... 43
4.3.1.1. Correlation Analysis between Change Management and Successful Procurement ............. 46
4.3.1.2. Correlation Analysis between Performance Management and Successful Procurement ........... 46
4.3.1.4. Correlation Analysis Between Technology Standard and Successful Procurement..................... 47
4.3.1.5. Correlation Analysis between Price and Successful Procurement .............................................. 47
4.3.1.6. Correlation Analysis Between Top Management Support and successful procurement ............ 48
4.3.1.7. Correlation Analysis Between Risk and Successful Procurement ................................................ 48
4.3.1.8. Correlation Analysis between Security and Successful Procurement ......................................... 48
4.3.1.9. Correlation Analysis between Supplier Process/Time and Successful Procurement ................... 49
4.3.1.10.Correlation Analysis between Relationship with supplier and Successful Procurement ............ 49

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4.3.2. Multiple linear regression analysis ................................................................................................. 50
4.3.2.1. Assumption of Multiple Linear Regressions .................................................................................. 50
4.3.2.1. Evaluating each of the independent variables ............................................................................ 52
Chapter 5 ......................................................................................................................................................... 59
Summary of Findings, Conclusion and Recommendation ................................................................................ 59
Introduction ................................................................................................................................................ 59
5.1. Summary of Major Findings and conclusions ...................................................................................... 59
5.3. Recommendations ............................................................................................................................... 62
Reference ........................................................................................................................................................ 63
Appendix 1: Questionnaire .............................................................................................................................. 67

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List of Table

TABLE3. 1 DEFINITION OF STUDY VARIABLES .................................................................................................. 29

TABLE3. 2 FACTOR DEFINITIONS ..................................................................................................................... 30

TABLE3. 3THE CRONBACH'S ALPHA VALUES OF ALL INDEPENDENTS AND DEPENDENT VARIABLES/

RELIABILITY STATISTICS ......................................................................................................................... 32


table 4. 1Demographic characteristics of the respondents ……………………………………………………35

TABLE 4. 2 UNDERSTANDING PROCUREMENT PROCESS.................................................................................... 37

TABLE 4. 3UNDERSTANDING PROCUREMENT PROCESS .................................................................................... 39

TABLE 4. 4. PRELIMINARY SCREENING USED BEFORE MAKING DETAIL EVALUATION OF PROPOSAL ................ 41

TABLE 4. 5. FIVE SCALED LIKERT CRITERION .................................................................................................. 42

TABLE 4. 6 DESCRIPTIVE STATISTICS OF INDEPENDENT VARIABLES ................................................................ 43

TABLE 4. 7 CORRELATION ANALYSIS BETWEEN DEPENDENT AND INDEPENDENT VARIABLES......................... 45

TABLE 4. 8 COLLINEARITY STATISTICS ............................................................................................................... 50

TABLE 4. 9 MODEL SUMMARY ......................................................................................................................... 51

TABLE 4. 10 MODEL FITNESS ANOVA ANALYSIS ........................................................................................... 52

TABLE 4. 11UN STANDARDIZED AND STANDARDIZED COEFFICIENTS ............................................................... 53

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Abstract
The main purpose of this study was to examine the factors affecting performance of
Telecommunication Network Equipment Procurement in Ethio Telecom. The research approach was
quantitative. Descriptive and explanatory type of research design was used to explain the factors of
Telecommunication Network Equipment Procurement that influence Ethio Telecom procurement
process and describe the existing procurement practice of the company. The research samples were
70 including managements, experts and administrative employees of Ethio telecom. The primary
data was collected using questionnaire. The secondary data was collected using literature. The
analysis was done using descriptive and inferential analysis method such as percentage, frequency,
correlation and regression. The researcher adopted ten different variables of interest; these are
Performance Management, Technology Standard, Price, System Integration, Top Management
Support, Security, Supplier Process/Time, Change Management, and Relationship with supplier and
Risk as factors/ Independent variable for the study as derived from different literature reviews.
Major findings include EthioTelecom fail to provide form all training related to project and project
procurement management. The company considers make-or-buy analysis, expert judgment, and
market research ,past project procurement documents, and activity and cost estimation for planning
project procurement. Associated risks and mitigation plan as well as overall procurement need of the
project are identified. The company also follows separate project procurement procedure.
EthioTelecom prepares standardize procurement document to obtain bid/proposal from suppliers.
The company uses pre-defined proposal evaluation criteria and prefers to conduct preliminary
screening before making detail evaluation the received proposals. The company is financially
dependent on its suppliers for procuring foreign products and services. Ethio Telecom uses tight
monitoring and controlling system for products arrived at regional and central warehouse but fail for
products arrived directly at project site. As a recommendation company need to provide adequate
training, arrange pre-proposal visit especially for its large procurement decisions in order to view the
capability of the market site, production factory, and technical and managerial capability of pre
identified potential suppliers. Company not to neglect and consider their risk management practice as
well as check how they redistribute in satisfactory manner the company should develop tight
monitoring and controlling system on those products directly arrived at project site.

Key words: Successful Procurement, Telecommunication Network Equipment, Procurement


Practice.
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Chapter one
Introduction
1.1.Background of the study

Procurement of network equipment constitutes a major part of mobile telecommunication business.


These equipment‘s are very expensive and purchasing them require the establishment of a sound
process in the execution of procurement projects. Since the middle of the last century, many
organizations are using project management approach to bring about the change needed to meet
organizational goals and objectives.(Ebenezer E. 2019). This is part of each project: be it internal or
external, offshore or onshore, with its own distinctive set of challenges. However, attributed to the
complicated nature of project activities, challenges related to managing project's constraints of
budget, quality and time the changes are distinctive and ever-changing. The management of project
constraints explains, if not totally, why several projects fail (Mehmood I, 2019).

The factors range from external forces like government laws, environmental forces, society, pressure
teams, monetary markets, labor markets, technology, client influence, stockholder etc. to internal
forces like changes in operative processes, management vogue, resources allocation, skills, internal
conflicts etc. The situation has led to the assumptions purported by several project management
professionals in several industries that if project and line managers will establish what represents a
project success and therefore the factors that confirm a thriving outcome of a project, will improve
their performance. However, characterizing those factors will make a project successful. Erling et al.
(2006) expressed that there is not any clear proof of linking a project success and actual project
success. Different departments have unique views about success and failure, and what factors will
contribute to either. The technology sector is the most rapidly changing industry and requires
creativity. The telecommunication industry constitutes a big part of IT and is often at the middle of
technological changes. Hence, has been compelled to contend with perennial processes of procuring
new equipment and material for its operations. Panda et al. (2019) pointed that equipment
procurement is a frequent activity and it is important to optimize the procurement processes to cut
prices. Therefore, procurement processes are a central process of telecommunication business
management. This study is about to identify and validate the factors that constitute the procurement
of network equipment process.

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1.2.Statement of the problem

An effective procurement process is crucial to the success of projects. Depending on the type of
project managed, more than 50 percent of the total project cost can be related to purchase parts,
supplies and services, and in many high-tech projects, this procurement portion can reach 90
percent.(Morris & Pinto, 2007)

As indicated by Carter (2000), associations have changed their purchasing abilities into upper hand.
He added that proactive businesses are now expected to control their purchasing activities in order to
gain a competitive advantage. To get an upper hand of any association, obtaining exercises need
incredible consideration. As a result, it is essential for businesses to implement a variety of strategic
sourcing procedures that are closely connected to the company's overall strategy and customer
requirements.

According to Wyman (2013), most of the world's telecommunications operators are renewing their
procurement. We can achieve the best supplier relationship, improve risk management and improve
rapid growth opportunities. They need to improve their sourcing practices for the benefit of their
purchases the choice is becoming more and more diverse, from simple things like switches and
routers to many more a wider range of products such as software, IT solutions, maintenance and
margin planning resale As technologies change very quickly, their acquisitions are expected to be
compatible suppliers to help them be flexible and quick to respond. For example, traditional
telecommunications providers Like Ericson and Nokia, margins were severely eroded by aggressive
competition from new players like Huawei and ZTE.

It was seen that ethio telecom as government association, has gone to various lengths and activities
to further develop the centralized procurement system through business process Reengineering
(BPR) and to upgrade proficiency and viability in ethio telecom acquisition tasks by giving the ideal
materials and administrations in wording amount, quality with perfect timing and cost.

A study on project management that was carried out by Karlsson (2011) in Sweden and Ethiopia
came to the conclusion that the method of procurement management has a significant flaw and that a
lack of adequate planning frequently results in production issues when materials, machines, and
parts are delivered too late or not at all in Sweden. However, the study was focused on construction
companies. Martha (2015) also conducted research on the impact of effective public procurement
management on the successful implementation of public projects, but this study focused on the
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country's housing development projects. Another study on procurement practices for projects was
done on the Alemgena road maintenance project.

Loss of millions of dollars for organizations is because of Many projects around the world keep
failing,. Many project management professionals have tried to identify the crucial elements that must
be addressed head-on to generate a good project management outcome as a result of this ongoing
difficulty. There is literature on crucial success criteria for particular industry sectors or national
contexts, but there is little empirical study on crucial success factors for particular organizational
operational units, such as the procurement division or the network roll-out division. In some cases,
there is a small body of literature on the crucial project management success elements for a specific
stage of the project life cycle, such as risk management, planning, etc., but rarely on successful
equipment procurement. This has motivated me to conduct initial research on identifying the most
important impacting aspects that need to be properly regulated during conversation management in
Ethio Telecom. Therefore this paper intended to study Factors affecting the performance of
Telecommunication Network Equipment Procurement in the Case of Ethio Telecom.

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1.3.Basic Research questions

1. What does the procurement process practice look like in Ethio Telecom?

2. What are the main factors that affect the performance of Telecommunication Network Equipment
Procurement in Ethio Telecom?

3. To what extent does each identified factors affectperformance of Telecommunication Network


Equipment Procurement in Ethio Telecom?

1.5. Objectives of Study


1.5.1 General objective
The general objective of this study is to examine the factors affecting the performance of
Telecommunication Network Equipment Procurement Projects in Ethio Telecom

1.5.2. Specific Objectives


The specific objectives of this research:

1. To examine the procurement process practice in Ethio Telecom

2. To examine the factors affecting the performance of Telecommunication Network Equipment


Procurement in Ethio Telecom

3. To explain identified factor effect on the performance of Telecommunication Network Equipment


Procurement in Ethio Telecom

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1.6. Significance of the Study

The research helps experts, project managers; top managements of the organization under study to
have a deeper understanding about performance of telecommunication network equipment
procurement project. Findings can be used for organizational learning and improve projects
procurement projects methods. The result of this study can be adopted by any organization
realistically to plan and formulate its projects policies that are geared to improving the overall
performance.

This study is helpful to management and stakeholders to understand the overall procurement system
and to negotiate on the gaps to be fulfilled. It is also beneficial for researchers who want to study
further in procurement system of telecommunication network equipment projects to bring
improvement on the organization.

1.7. Scope of the Study


The study was conducted at Ethio Telecom to assess factors affecting the performance of
Telecommunication Network Equipment Project Procurement. The study focused mainly on
identifying the critical factors that affects the success or failure of telecommunication network
equipment procurement project in Ethio Telecom. This research was focus only in Ethio Telecom,
Telecommunication net equipment procurement project. The time horizons undertaking this thesis
were four months from March up to June 2023GC.and it uses descriptive and explanatory research
design.

1.8. Limitation of the study

Regarding the limitation of the study, it was difficult to find respondents who were willing to take
part in the questionnaire survey so as to collect data in broader terms by reaching all the responsible
potential personnel‘s of procurement process in Ethio-Telecom within the specified period of time.
This research work is limited to ethio-telecom procurement department and the result may not
necessarily represent the reality for the entire Ethio telecom‘s other departments; but within the
target section, procurement department, the study tried to make representative samples in dealing
with the research population.

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1.9. Organization of the Study
This paper was organized into five chapters; chapter one contain the introduction part dealing with
research problems, objectives, and an overview of the case sector, significance, scope, and
limitations. The second chapter discuss about the review of related literature about the subject matter
which is telecommunication network equipment procurement and the factor that influence it. The
third chapter contains the methodology of the study that includes research design, method of data
collection, and data analysis. And next chapter deals with the result of data analysis. Finally, chapter
five covers the conclusion of the findings and forwards recommendations.

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Chapter Two
Literature review
2.1. Theoretical Review
2.1.1. Introduction

The Telecom industry is faced with difficult competitive conditions and demands focusing on
several market segments. The primary service elements have seen substantial advancements in data
services, value-added services, and mobile broadband. Organizational structure was modified to
achieve strategic objectives and meet consumer expectations. The domestic sector, the divestment
project, and the overseas industry made up the bulk of the reorganization. Innovative efforts made it
possible for the product quality to improve. To address the needs, the items were varied (Scalera
2012).

Improvements to an integrated end-to-end electronic procurement system can reduce information


asymmetry. Process improvement guarantees that transaction costs are decreased and profits are
increased (Ajulo, 2017). According to Khin, (2017), highlight efficiency in managing the
knowledge. Efficiency and cost reductions are increased by the effectiveness of contract
arrangements (Agbanyo2016). The management of jig and fixture projects is crucial to the supplier-
client relationship (Hamel, 2014). Savings of up to 25% can be found in public procurement. There
are identified 11 essential success elements. These elements include stakeholder adoption, education
and training, performance measurement, change management, system integration, security and
authentication, technology standards, business process re-engineering, business case and project
management, E-Procurement Implementation Strategy, and top management support.

The already complex nature of project management is made even more complicated by the dynamic
nature of the corporate environment, political unpredictability, rapid technical breakthroughs,
unstable financial markets, budgetary issues, and development challenges. It's more difficult to
define "Success" due to projects' complexity (Mehmood i. 2019).

This section will review the literature to understand the essential success factors in project
management including, project success and essential success factors for procurement management.

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2.1.2. Concepts of project and project management
Project management has been practiced in one form or another since agriculture first allowed
humans to congregate relatively permanently in villages and cities where they needed to coordinate
the activities of multiple participants to complete tasks such as building water supply systems and
storehouses for grain, erecting religious edifices and constructing roads and ports(Levitt 2011).
According to Kaplinski and Dziadosz( 2011), project management facilitates the coordination of
operational activities in the life cycle of an investment project (Kaplinski andDziadosz 2011).

Moreover, efficient and effective investment processes management is mainly the result of a variety
of multidirectional and comprehensive activities in the area of creation of companies‘ intellectual
capital and preparation of flexible plans and time schedules for investment projects implementation
(Paslawski 2008). Integration of these elements makes a company‘s business activities stand out
from its competitors and bring intended market effects and added value (Sobieraj 2020).

Project management is the application of knowledge, skills, tools, and techniques to project activities
to meet the project requirements (PMBOK, 2013). Project management is accomplished through the
application and integration of the project management processes of initiating, planning, executing,
monitoring and controlling, and closing. It requires all of the skills of general management to secure
the project success

2.1.2. Concepts of Procurement and procurement management in project


Management of a wide range of processes that are connected to an organization's desire to obtain the
necessary goods and services for manufacturing a product, transforming inputs into outputs, or
indirectly operating the organization is another definition of procurement. Choosing suppliers,
negotiating contracts, serving as a liaison between the supplier and the user, and evaluating and
forming strategic alliances with suppliers are all components of these processes (Morris & Pinto,
2007).It also handles contract administration, pricing, purchasing, and supplier acquisition. Storage,
logistics, inspection, expediting, transportation, and supply handling are also included. Laby et al.
(2014), claim thata procurement process consists of a number of steps like buying, transporting,
stoking, and providing.

According to Kerzner (2009), procurement is the process of acquiring goods and services by
involving two parties—the customer, who is purchasing the item, and the supplier, who is selling
it—who have distinct goals and interact within a specific market segment. According to Dimitri,

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PigaandSpagnolo (2006), procurement is typically characterized by being a dynamic and ongoing
process in which short-term goals frequently conflict with long-term ones.

The procurement process is used to ensure that the buyer receives goods, services, or works at the
best possible price when quality, quantity, time, and location are compared because it is
economically difficult for businesses to produce all of the materials they use (Wikipedia, 2010). It is
likewise a training that can increment corporate benefit by exploiting amount limits, limiting income
issues, and searching out quality providers (Kerzner, 2009). Dimitri et al. (2006) state that firms'
profitability and survival depend on effective procurement. Yet, the issue is that most organizations
see the obtainment cycle as strategic rather than vital and as cost instead of an advantage to the
organization (Neef, 2001).

2.1.3. Project success


According to Salleh (2009) The definition of project success is ambiguous. PMBOK 4 th edition
(2008) stated that project is successful if it achieves the triple objective outcome of within time,
scope, and quality. This is the traditional view of project management as used by Munns and
Bjeirmi(1996). It implies the successful achievement of time, cost and quality objectives, as well as
the quality of the project process, Erling et al (2006). Turner (2004) identifies on time, within budget
and to specification especially for information technology projects as the standard for judging
success. Erling et al (2006) stated that overall project success deals with the wider and longer term
impact of the project, which means both project management success and project product success.

According to Jonathan, Hashemianfar, and Kasaee (2018), the degree to which a project is
successful is dependent on a number of factors. Therefore, ensuring the success of the project is one
of the highest concerns for both the project management and the project partners. The design
workforce is still grappling with an unclear notion of what constitutes successful project
performance. In the world of business, there is no universally accepted or defined definition of what
constitutes a successful project, and the circumstances surrounding each project manager are unique.

According to Radujkovic and Sjekavica (2017), the administration of projects is unavoidable in the
modern environment. Project administration provides a forum for quality growth across an
expanding variety of duties. Moreover, skills like language proficiency, flexibility and adaptability,
and critical thinking and problem solving are also very important for an efficient project manager
(Islam Shamim,2022).

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2.1.4. Critical success factor
Critical success factors are those things that must be done if a company is to be successful (Imtiaz, et
al., 2013). Critical Success Factors refer to characteristics, conditions or variables that have a
significant impact on the success of a project, when they are properly sustained, maintained and
managed (Alias et al., 2014). Critical success factors (CSF) are used to support and measure the
success of a strategic approach and tactics for implementation of projects intended to ensure the
success of the project and support the proper allocation of limited resources.

Cooper and Klienschmidt (1996) centered on the identification of important success factors for new
development, together with an outlined strategy and adequate analysis and development. Westerveld
(2003) uses foundation for quality management model to reason important success factors such as:
leadership and team, policy and strategy, neutral management, catching, resources, and merchandise
management.

Anderson and Jessen (2000) stressed the necessity to separate the particular task and other people
whereas evaluating project results. They contemplated that known important success factors
supported a stepwise structure and reflective progression through a project. They covered: scope
(Project mission and goals, terms of references), designing (planning at world level, designing at
detail level), execution (activities, decisions), and management (financial and technical management,
internal and external communication). Belassi and Turkel (1996) classified the important success
factors into four areas: the project (e.g. size, uniqueness, and urgency), the organization (structure,
management support), the external setting (technological, financial, political) and also the project
manager and his unit (scope, abilities). Pinto and Slevin (1987) suggested using important success
factors to diagnose outcomes.

2.1.5. Project procurement success and success factor


Kerzner (2009), Define Procurement as the acquisition of goods and services by involving two
parties customer who is buying and supplier who is selling with different objectives who interact in a
given market segment. Procurement characterized by most often a dynamic and repeated activity
with short-term objectives often conflicting with long term ones (Dimitri, Piga, &Spagnolo, 2006).

Critical success factors (CSFs) play a crucial part in the success of many systems. It is vital to
continually investigate CSFs in any system in order to measure productivity and performance. For e-
Procurement systems to be assumed to be successful, the CSFs must have been tested and

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established (Ibem,2016). CSFs are defined in this context as creating a central point of reference in
measuring the success or failure in the use of e-Procurement systems. By this, industry participants
are provided with the focus metrics in terms of activities and priorities that should be achieved for
the successful integration of web-based systems in the construction procurement process. The focus
metrics in the CSFs is to provide an uncommon strategic tool that helps businesses to be precise,
which also ensures their success (Hosseini (2012).

2.2. Theories related to the study subject


2.3. Empirical review

Studies highlight the essential factors that influence the projects to assure success. Alternative
literatures (PMBook, 2008; kerzner, 2009), have suggested that procurement management is one of
the most important step in a project and, can itself, be considered as a project.

According to Mehmood (2019), they identified basic categories of critical success factor among
them the first category is Organizational strategy, which involved critical success factor of Top
management support, System training and documentation, System integration, Change Management
,Performance measurement, Good governance, Team building and training. The second category is
Contract management which include Negotiations, Competitive procurement process, Supplier
process and time, Price, Available financial market, Shared authority between public and private
sectors, Transparency in the procurement process, Cost of fuel, electricity, water..etc the third
category is User satisfaction which include Relationship with supplier, Security, Risk, Social
Support, Partner selection, Experience. The forth categories Technological parameters which
includes Technological standards, Project technical feasibility, Technology transfer, the last category
is Government policies which include Political support, Government involvement by providing
guarantees, Economic policies.

According to Kejuo(2012),MTN Nigeria have identified many critical success factors for network
equipment procurement projects, which are listed below: Supplier Process and Time, Price,
Technological standard Relationship with Supplier, Top Management support, System training and
documentation, System integration, Security, Change management, Performance measurement, Risk.

KhanapuriAt El (2011) mentioned some critical factors that is Cost savings Centralization of
procurement, Re-engineering of process Budgetary control, Supplier management, Chang

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management, Knowledge pool, Maturity of market place Legal framework. Jefferies et al. (2002)
Kopp (1997) ,Gentry and Fernandez (1997) , Arthur Andersen and Enterprise LSE (2000) mentioned
Competitive procurement process as a CSF.

Jefferies et al. (2002), Kopp (1997), Gentry and Fernandez (1997) , Arthur Andersen and Enterprise
LSE (2000) mention Transparency in the procurement process as a CSF.Qiao et al. (2001) Jefferies
et al. (2002) ,McCarthy and Tiong (1991), Akintoye et al. (200 lb) mention Available financial
market.

According to S&A (2003), AGV (2003), OGC (2002), CGEC (2002), AOT (2003) Top Management
Support is CSF. And DOF (2001), Birks et. al (2001), S&A (2003), Subramanian and Shaw (2002)
System Integration is CSF.From the above literatures the following telecommunication network
equipment procurement factors are identified these are critical success factor of Top management
support, System training and documentation, System integration, Change Management ,Performance
measurement, Good governance, Team building and training, Negotiations, Competitive
procurement process, Supplier process and time, Price, Available financial market ,Shared authority
between public and private sectors, Transparency in the procurement process, Cost of fuel,
electricity, water..etc, Relationship with supplier, Security, Risk, Social Support, Partner selection,
Experience, Technological standards, Project technical feasibility, Technology transfer, Political
support, Government involvement by providing guarantees, Economic policies, Supplier Process and
Time, Price, Technological standard Relationship with Supplier, Top Management support, System
training and documentation, System integration, Security, Change management, Performance
measurement, Risk, Cost savings Centralization of procurement, Re-engineering of process
Budgetary control, Supplier management, Chang management, Knowledge pool, Maturity of market
place Legal framework. Competitive procurement, Transparency in the procurement process,
Available financial market, Top Management Support, System Integration.

2.4. Research gap


The purpose of the research is to identify, from the point of view of Ethio Telecom, the critical
success factors a project manager need to watch out carefully while executing an equipment
procurement project, as well as rank them in order of importance. Accordingly the following factors
are selected for further analysis, Performance Management, Technology Standard, Price, System
Integration, Top Management Support, Security, Supplier Process/Time, and Contract/relationship
with supplier, Change Management and risk.
23
2.5. Conceptual Framework
The researcher has developed a conceptual framework for this study based on the review of literature.
The study seeks to establish the relationship between 10 independent variables: Performance
Management, Technology Standard, Price, System Integration, Top Management Support, Security,
Supplier Process/Time, Contract/relationship with supplier, Change Management, risk with the
dependable variable which is procurement of telecommunication network equipment projects.

Source:- adapted from Kejuo K. (2012).


Figure 1. Conceptual frame work

24
Chapter Three
Research design and Methods
3.1.Background of the organization

According to Getaw (2016), Telecommunications service was introduced in Ethiopia by Emperor


Menelik II in 1894 when the construction of the telephone line from Harar to the capital city, Addis
Ababa, was commenced. Then the interurban network was continued to expand satisfactorily in all
other directions from the capital. Many important centers in the Empire were interconnected by
lines, thus facilitating long distance communication with the assistants or operators at intermediate
stations frequently acting as verbal human repeats between the distant calling parties. First, the
management of the service was under the Imperial Court of Menelik II in the name of the Central
Administration of Telephone and Telegraph System of Ethiopia‖ from 1890 up to 1907. After the
independence from the Italian occupation, the re-established Ministry of Post, Telegraph and
Telephone took over the running of Telephone, Telegraph and Radio communications. It, therefore,
rehabilitated the network of the whole country.
The Establishment of Ethio Telecom: - Ethio telecom is a sole telecom operator in Ethiopia
established as a public enterprise on 29th day of November 2010 as per the Council of Ministers
Regulation No. 197/2010. The company aims to provide next generation network services based on a
world class standard information technology services and to build a competent next generation
network by introducing different projects.

The Program Management Division is one of the company's sixteen divisions and is in charge of
managing the company's project management methodologies, skills, and tools. It‘s essential goal is
to accomplish all of the task objectives and focuses while regarding the biased undertaking
imperatives. It also aims to optimize the allocation and integration of inputs required to achieve
predetermined goals. The extent of the division is restricted to cause follow up of undertakings
which to satisfy one or blend of the accompanying boundaries. The total cost of the project need to
be greater than 10 million Birr, the scope of the project needed to cover more than 2 divisions and/or
the project required to have strategic importance for the company. Other projects that do not meet
one of the above requirements fall under the supervision of their own respective division. There are
two types of projects identified by the Program Management division called Hardware Projects that
include infrastructural expansion assigned to Network division of the company and the Software
Projects which is assigned to the Information System division.
25
The Sourcing and Facilities division has three sections. Sourcing section organizes the purchasing
control and delivery of goods and services within the appropriate framework and in accordance with
the company strategic plan and budget. It manages the company relationship with its suppliers and
partners. The section is responsible both for the day-to-day operation as well as for projects
procurement. The Logistics section optimizes logistics resources to facilitate goods management by
optimizing the Warehouse management, by facilitating goods shipment and by performing inventory
management. The Facilities and Fleet section provides facilities and fleet to the whole company.

3.2.Research Design

In this thesis descriptive and explanatory research design were used. The object of descriptive research
is ‗to portray an accurate profile of persons, events or situations‘ (Robson 2002:59). According to
Kothari (2004) descriptive research studies are concerned with describing the characteristics of a
particular individual or groups therefore this design is helpful by describing the situation as the
research is started with a description of the things that are easily observed to get the actual picture of
the industries flow. It is helpful in assessing procurement of telecommunication network equipment
and the determinant factors identified by this thesis. In addition to these, the research is cross-
sectional survey type. According to Saunders, Lewis and Thornhill (2009) cross-sectional, is the
study of a particular phenomenon at a particular time. Therefore, this thesis is a cross sectional
survey which investigate the factor affecting telecommunication network equipment procurement in
Ethio Telecom. The time horizons undertaking this thesis were four months from March up to June
2023GC.
Explanatory research may be termed Studies that establish causal relationships between variables.
The emphasis here is on studying a situation or a problem in order to explain the relationships
between variables. In this thesis telecommunication network equipment procurement as dependent
and affecting factor as independent variables was assessed. Therefore, explanatory research
approach is help full in investigating the relationship between the independents and dependent
variables relationships.

3.2. Research Approach


Researchers identify three different approaches to the social science research: qualitative,
quantitative and mixed method. Accordingly, this study was employed quantitative research
approach because it is ideal with identifying trends and averages, making predictions, testing
relationships, and generalizing results for large populations. Quantitative research allows the
26
researcher to generalize the results from a sample group to an entire group of people. Being both
structured and statistical, quantitative research provides with the ability to draw conclusions and
make an educated decision on a course of action

3.3. The statistical population and sample size

The statistical population is a group of individuals who have one or more common characteristics
that we are interested in generalizing our findings to them. In this study, the statistical population is
the procurement department and management in Ethio Telecom

The target population used to answer for the planning procurement phase of the study includes 50
staff members who are participated in the planning phase of the Telephone Expansion Program
(TEP). It consists Expertise from Network Division, Information System Division and project owner
departments of the studied company. The target populations of the study for the remaining process
from solicitation planning up to contract closeout were 148 employees who are currently working on
Sourcing and Facility Division at headquarter since the company follows centralized procurement
system. Information System Transition section has 4 departments with their respective managers
who act as both functional and project managers to execute software projects of the Telephone
Expansion Program (TEP) became population for the study. Besides to the software part, the
execution of hardware aspect of the program fall under the Network PRO section in which its
manager was also targeted.

In addition 8 Contract Management Program Managers from TEP are also considered. The target
population is relatively small. It is possible to collect and analyze data from every possible case or
group member. According to Khotari (2004) a complete enumeration of all items in the ‗population‘
is known as a census inquiry. It can be presumed that in such an inquiry, when all items are covered,
no element of chance is left and highest accuracy is obtained. Furthermore the authored emphasized
that when the universe is a small one, it is no use resorting to a sample survey. The census method is
suitable where the field of investigation is small. The census method is more accurate and reliable. It
rules out of the possibility of any personal biases.

3.4.Type and source of data

The research use both primary and secondary data sources. The source of data for the research was
more on primary data, which is a survey questionnaire. However, the necessary information and data

27
also collected through a secondary source, which are a Literature survey, journal, report, government
publication, sector documentary, the internet, and other texts.

3.5. Method of Data Collection


To gather data from relevant sources, both primary and secondary data collection instruments were
used. The primary data is conducted in the form questionnaire. Data collection had been conducted to
construct variables of research model by questioners. This method is chosen in order to get specific
information from the respondents. The questionnaires design was developed from a wide review of
the literature, which allows measuring most of the analyzed variables. It helps to ensure that the
gathered factors are indeed the affecting factors for Ethio Telecom and also to indicate the critical
factors of telecommunication network equipment procurement so it can be used to improve.

3.6. Method of data analysis


The identified critical factors was analyzed using Statistical package for social science (SPSS)
version 23 so that correlation and regression Analysis. Statistical analysis such as mean and standard
deviation was also use. In regression analysis multiple linear regression analysis was used to predict
the outcome of a response dependent variable using one or more independent variables. This helps
also to understand the linear relation between dependent and independent variables. The model was
used to identify the determinants of telecommunication network equipment procurement project.
Here, the dependent variable is a continuous variable, and hence, the study used a multiple
regression model. The analyzed data was presented in the form of diagrams, charts, and tables by
using Statistical package for social science (SPSS) software. Statistical tools such as descriptive
arithmetic mean, standard deviation of the factor and correlation used to show the relation and
impact of the factors affecting telecommunication network equipment procurement in the case Ethio
Telecom.

28
3.7. Operational definition of study variables

table3. 1 Definition of study variables


LISTOFABBREVIATIONANDACRONYMS
ANOVA Analysis of Variance

BPR Business Process Re-engineering

CSF Critical success factors

FDRE Federal Democratic Republic of


Ethiopia

IT Information Technology

Network Pro Network Project Rollout

NGOs Non-Governmental Organizations

PMBOK Project Management Body of


Knowledge

RFQ Request for Quotation

SD Standard Deviation

SPSS Statistical Package for Social


Science

TEP Telephone Expansion Program

ZTE Zhong Xing Telecommunication


Equipment

29
table3. 2 Factor Definitions
S.No Factor Factor Definition

1 Performance Measuring the performance of equipment is necessary for


Management capability measurement, goals and targets, baseline measurement,
key performance indicators (KPI), and progress monitoring.

2 Technology Standard Technology can contribute to the success of mobile network


projects and neglecting these factors may cause problems such as
lack of flexibility, synchronization, and local decision-making
authority.

3 Price Business wants quality product at a cheaper rate. Organizations


that can supply products at a cheaper rate and good quality stands
to gain a good market share.

4 System Integration the ability of an equipment to integrate with existing systems in


real time

5 Top Management Willingness of top management provide the necessary resources


Support authority/power for project success

6 Security Reliability of equipment is important in ensuring data and


hardware is protected.

7 Supplier Process/Time Delivery time is defined to be the elapsed time from the receipt of
an order by the originating supplier in the supply network to the
receipt of the product ordered by the final customer in the supply
network.

8 relationship with This relationship enables to have confidence on the supplier based
supplier on past performance, technology capability, quality of equipment‘s
etc., and existing contracts binds suppliers to certain conditions as
agreed, despite changes in business environment.

9 Change Management Effectively switch and adopt to the new piece of equipment.

10 Risk Ability to withstand environmental and other risk factors will also
influence the procurement of that equipment

11 Procurement The process of acquiring goods and services by involving two


parties the customer, who is purchasing the item, and the supplier,
who is selling it who have distinct goals and interact within a
specific market segment.

3.8. Model specification


30
Where PP is Performance Management, TS is Technology Standard, P is Price, SI is System
Integration, TMS is Top Management Support, S is Security , SPT is Supplier Process/Time, CM is
Change Management, RWS is Relationship with supplier, R is Risk, - = the Coefficients of the
independent variable.

3.9. Reliability and Validity

3.9.1. Reliability
Reliability refers to the extent to which your data collection techniques or analysis procedures will
yield consistent findings. It can be assessed by posing the following three questions (Easter by-Smith
et al. 2008:109):

1. Will the measures yield the same results on other occasions?


2. Will similar observations be reached by other observers?
3. Is there transparency in how sense was made from the raw data?

Validity is concerned with whether the findings are really about what they appear to be about. Is the
relationship between two variables a causal relationship?

In this thesis, tests of reliability were done. The reliability of instruments measures the consistency
of instruments (Yallew, 2004).The reliability of a scale indicates how free it is from random error
(Pallant, 2015). The most commonly used statistic for internal consistency is Cronbach‘s coefficient
alpha. This statistic provides an indication of the average correlation among all of the items that
make up the scale. Values range from 0 to 1, with higher values indicating greater reliability
(Pallant, 2005; Yallew, 2004). While different levels of reliability are required, depending on the
nature and purpose of the scale, by citing Nunnally (1978) Pallant (2011) recommends a minimum
level of 0.7. Yalew (2004) adds that it is good cronbach alpha not to be below 0.65. In the same vein
as rule of thumb, George et al (2003) as cited in .Habtamu (2016), suggested that tests with
reliability coefficient 0.90 and above labeled as excellent reliability, those between 0.80-0.90 labeled
as good, those between 0.70-0.80 labeled as acceptable, those between 0.60-0.70 as questionable and
therefore needs to be supplemented by other measures to determine scales, those between 0.50-0.60
as poor and needs revision of test and those below 0.5 as an unacceptable.

31
Thus, in this thesis the reliability of the scale were gauged through SPSS version 23 via Cronbach‘s
coefficient alpha. It was displayed in the table 3 bellow.

table3. 3The Cronbach's Alpha Values of All Independents and Dependent Variables/ Reliability
Statistics

Variables N Items Cronbach's Evaluation


Alpha of Scale
Consistency
Successful procurement 16 0.831 Good
Performance Management 2 0.894 Good
Technology Standard 2 0.826 Good
Price 2 0.706 Acceptable
System Integration 2 0.861 Good
Top Management Support 2 0.898 Good
Security 2 0.813 Good
Supplier Process/Time 2 0.765 Acceptable
Change Management 2 0.886 Good
Relationship with supplier 2 0.762 Acceptable
Risk 2 0.798 Acceptable

Sources: SPSS Output From Field Survey, 2023.


As the above table the Cronbach‘s coefficient alpha value shows, for five point like rt scale items,
used for dependent and independent variable is 0.821 which is for all variables it is above the
threshold 0.7. This shows Appropriateness of instruments used. And all the items in the instruments
were used and the result shows the reliability of the research is adequate.

3.9.2. Validity
According to Pallant (2005) the validity of a scale refers to the degree to which it measures what it is
supposed to measure. For Creswell (2014) validity in quantitative research refers to whether one can
draw meaningful and useful inferences from scores on particular instruments. Though there is no one
clear-cut indicator of a scale‘s validity, the validation of a scale involves the collection of empirical
evidence concerning its use. The main types of validity are content validity and construct validity
(Creswell, 2014:Pallant, 2005). Content validity refers to the adequacy with which a measure or

32
scale has sampled from the intended universe or domain of content. Construct validity involves
testing a scale not against a single criterion but in terms of theoretically derived hypotheses
concerning the nature of the underlying variable or construct. The construct validity is explored by
investigating its relationship with other constructs, both related (convergent validity) and unrelated
(discriminant validity) (Creswell, 2014: Pallant, 2005).

Therefore, in this thesis validity of the scale were checked as follow. To establish content validity
initially 31 item questionnaires were presented to this thesis advisor. A through and a detail
discussion were made about the importance and relevance of each constructs. Following it 5 items
are incorporated a total of 36 items. These items which are basically focused on all the explanatory
and explained variables were prepared to be distributed to the pilot test groups. Through convenient
sampling pilot tests were used to survey from 9 managers and employee. Feedbacks from these
respondents provide guidance to correct the wording problems and a proper modification were made.
Therefore, prior to actual data collection, instrumentation validation was performed to verify that the
constructs are likely real, reliable and more importantly that instrument has been measuring the right
content which means adequately represents the universe of potential questions that could be used to
measure a specific concept.

3.9. Ethical Consideration


The researcher clearly explains the purpose of the study to the participants before data gathering.
The data was collected with the full consent of the participants. The researcher also secured the
informed consent of the participants before collecting the data and ensured that confidentiality
concerns are considered following data collection. The confidentiality was verbally indicated at the
time of data collection in that the data was only used for the intended purpose of this study. In
addition to this, the researcher informed participants not to tell their names on during interviews to
keep their level of confidence and trust and also secure genuine data.An official support letter from
St. Marry University was written to Ethio Telecom. Data collection was undertaken after permission
has been obtained from the company. Since it could not be ethical to access some confidential
documents of the company, the organization code of ethics also considered. All the collected data
are confidential for both the participants and the company. All documents which are referred
throughout the research are fully acknowledged

33
Chapter Four
Data Presentation Analysis and Discussion
Introduction

This chapter presents the data collected and the analysis carried out based on the methodology
described in chapter three. The results are presented below starting with the demography of the
participants then moving on to descriptive analysis of procurement process of Ethio-telecom and
finally correlation and regression analysis of the elements of successful procurement and its overall
success as rated by the participants.

4.1. Descriptive Data Analysis


In this section the measure of central tendency and dispersion were presented from the collected
data.

4.1.1. General Characteristics of the Respondents


The respondent‘s profile who participated in this thesis was mainly shows distribution of
respondents in terms of gender, age, gender, education level, experience and position

34
table 4. 1Demographic characteristics of the respondents
Item Category Frequency Per cent
Age 18-34 23 32.8

35-60 37 52.85

60 and above 10 14.2

Total 70 100.0

Educational Diploma 9 12.8


Status
Degree 50 71.42

Postgraduates 11 15.71

above 0 0

Total 70 100.0

Year of Less than 5 years 9 12.85


experience
5-10 years 30 42.85

11-15years 27 38.57

15 and above years 4 5.7

Total 70 100.0

Working Supervisor 6 8.5


position
Expert 9 12.85

Specialist 20 28.57

Administrator 35 50

Total 70 100

Sources: SPSS Output from Field Survey, 2023

The Table above shows distribution of respondents in terms of age, education level, experience and
position. In terms of age, out of a total of 70 who reported their age, those between 35-60 years old

35
were the largest group 52.85%, followed by 18-34 years 32.8%, above 60 years with 10 14.2%. This
indicates the company has active, matured and has potential man power.

The education background of the participants showed that bachelor‘s degree level education was the
significant majority 74.12%. Educational qualifications of post graduates 11.71% and diploma
12.8% were also observed. Therefore, the majority of the respondents pass through formal education
so they can understand about the subject matter.

Looking at the year of experience of the participants in the industry, the most frequent year of
service for participants was between 5-10 years 42.85% of the participants. This was followed by
those with between 11-15 years‘ experience 38.57% and those with less than 5 years of experience
12.85%. There were 5.7% with experience of more than 15 years. this shows the respondents can
understand the process of the study area and respond for the questionnaire clearly.

Looking at the participants‘ position 8.5%is Supervisor, Expert 12.85%, and Specialist 28.57% and
50% administrative. These shows the information is taken from the person who could experience the
subject matter.

From the above information the researcher accredited respondents‘ qualifications, experiences and
positions that allow them to knowledgeably and reasonably put their extent of agreement, so that, it
has positive contribution on the validity of the study.

36
4.2 Descriptive Analysis of procurement processes
4.2. Understanding procurement process
table 4. 2 Understanding procurement process

Items category frequency per cent


Make-or-buy analysis is made Strongly disagree 0 0
before deciding to buy from Disagree 5 7.14
outside vendors. Uncertain 10 14.28
Agree 40 57.14
Strongly Agree 15 21.42
total 70 100
Market research is conducted. Strongly disagree 3 4.2
Disagree 9 12.85
Uncertain 10 14.28
Agree 30 42.85
Strongly Agree 18 25.71
total 70 100
There is consideration of past Strongly disagree 2 2.85
procurement documents for Disagree 9 12.85
making future decision Uncertain 11 15.71
Agree 10 14.25
Strongly Agree 38 54.28
total 70 100
The prepared document Strongly disagree 2 2.85
(RFP&RFI) helps to get accurate, Disagree 1 1.42
relevant and complete information Uncertain 11 15.71
from suppliers. Agree 22 31.42
Strongly Agree 34 48.57
total 70 100
Pre proposal visits is arranged Strongly disagree 10 14.28
Disagree 36 51.42
Uncertain 11 15.71
Agree 9 12.85
Strongly Agree 4 5.71
total 70 100
The company use bidders‘ Strongly disagree 8 11.42
conference/pre-bid meeting to Disagree 4 5.71
give answer for the asked Uncertain 8 11.42
questions and doubts to all Agree 30 42.85
prospective suppliers. Strongly Agree 20 28.57
total 70 100

Source: own Survey (2023)

Table 4.2: indicates the respondent‘s perception about Make-or-buy analysis is made before deciding to
buy from outside vendors. According to the table out of the total respondents, 7.14 % disagree, 14.28
uncertain, 57.14% agree and the remaining 21.42% agree that there is consideration make-or-buy
analysis before deciding to buy from outside vendors to meet the project procurement need of the
company. The respondent‘s perception about conducting market research indicates, out of the whole
respondents 4.2% strongly disagree, 12.85 disagree, 14.28% uncertain, 42.85% agree and 25.71%

37
strongly agree about conducting market research. Form observation the company also collect
information about suppliers and their products online on its official website. New suppliers both
from local and foreign market register and update their information accordingly. Depicts that more
than half of the respondents (54.28%) strongly agree that consideration of past project procurement
documents for making future decision while the remaining 12.85% disagree, 15.71% uncertain and
14.25% agree. Such reference helps to identify possible threats and opportunities as well as learn
from past mistakes for making better decision.

The respondent‘s perception prepared document (RFP&RFI) that helps to get accurate, relevant and
complete information from suppliers indicates ,out of the whole respondents 2.85% strongly
disagree, 1.42 disagree, 15.71% uncertain, 31.42% agree and 48.57% strongly agree. About the
information gathered from RFP & RFI documents helps to get accurate, relevant and complete
information. From this point, it can be concluded that the prepared procurement documents helps to
obtain accurate, relevant and complete information from suppliers. The respondent‘s perception Pre-
proposal visits is arranged ,out of the whole respondents 14.28% strongly disagree, 51.42 disagree,
15.71% uncertain, 12.85% agree and 5.71% strongly agree. The company fails to conduct Pre-
proposal market visit. The respondent‘s perception Usage of bidders‘ conference for answering
prospective suppliers‘ questions is arranged, out of the whole respondents 11.42% strongly disagree,
5.71 disagree, 11.42% uncertain, 42.85% agree and 28.57% strongly agree on the use of bidders‘
conference/pre-bid meeting to give answer for the asked questions and doubts to all prospective
sellers.

38
table 4. 3Understanding procurement process

Items category frequency per cent


The company respond for Strongly disagree 1 1.42
questions and doubts Disagree 1 1.42
raised by prospective Uncertain 3 4.28
sellers individually. Agree 30 42.85
Strongly Agree 35 50
total 70 100
There is standardizing Strongly disagree 2 2.8
pre-defined proposal Disagree 3 4.28
evaluation criteria. Uncertain 4 5.71
Agree 28 40
Strongly Agree 33 47.14
total 70 100
Preliminary screening is Strongly disagree 3 4.28
used before making detail Disagree 3 4.28
evaluation of proposal. Uncertain 4 5.71
Agree 27 38.57
Strongly Agree 33 47.14
total 70 100
The terms and conditions Strongly disagree 3 4.28
of the contract are open to Disagree 2 2.85
consider future Uncertain 3 4.28
requirement change (the Agree 28 40
contract is open for Strongly Agree 34 48.57
amendment). total 70 100
The companies monitor Strongly disagree 4 7.1
and control that suppliers‘ Disagree 3 4.2
performance meets project Uncertain 5 7.14
procurement requirements Agree 26 37.14
according to terms of the Strongly Agree 32 45.71
contract. total 70 100
Suppliers‘ performance Strongly disagree 36 51.42
status is gathered from Disagree 27 38.57
stakeholders such as Uncertain 2 2.85
project managers and Agree 2 2.85
project team members. Strongly Agree 3 4.2
total 70 100
Suppliers‘ performance Strongly disagree 3 4.28
status is gathered from Disagree 7 10
stakeholders such as Uncertain 8 11.42
project managers and Agree 22 31.42
project team members. Strongly Agree 30 42.85
total 70 100
There is lesson learned Strongly disagree 5 7.14
documentation Disagree 7 10
Uncertain 10 14.28
Agree 8 11.42
Strongly Agree 40 57.14
total 70 100
Source: own Survey (2023)
39
As indicated in Table 4.3 the respondent‘s perception Respond for questions and doubts raised by
prospective suppliers individually is arranged, out of the whole respondents 1.42% strongly disagree,
1.42 disagree, 4.28% uncertain, 42.85% agree and 50% strongly agree on Respond for questions and
doubts raised by prospective suppliers individually. The respondent‘s perception the presence of
standardize predefined proposal evaluation criteria is arranged ,out of the whole respondents 2.8%
strongly disagree, 4.28 disagree, 5.71% uncertain, 40% agree and 47.14% strongly agreeon Respond
for questions and doubts raised by prospective suppliers individually. The researcher has supported
the above responses by referring project management process document of the company. The
respondent‘s perception Preliminary screening used before making detail evaluation of proposal is
arranged ,out of the whole respondents 4.28% strongly disagree, 4.28% disagree, 5.71% uncertain,
38.57% agree and 47.14% strongly agree on the company conduct preliminary screening before
making detail evaluation of proposal. The respondent‘s perception Preliminary screening used before
making detail evaluation of proposal is arranged ,out of the whole respondents 4.28% strongly
disagree, 2.85% disagree, 4.28% uncertain, 40% agree and 48.57% strongly agree on the issue.
Most of the respondents agree that the terms and conditions of the contract are open to consider
future requirement change. The respondent‘s perception Preliminary screening used before making
detail evaluation of proposal is arranged ,out of the whole respondents 7.1% strongly disagree, 4.2
disagree, 7.14% uncertain, 37.14% agree and 45.71% strongly agree on that the company monitor
and control if suppliers performance meets project procurement requirements according to terms of
the contract.

The respondent‘s perception Vendors‘ performance status is gathered from stakeholders such as
project managers and project team members ,out of the whole respondents 38.57% strongly disagree,
51.42% disagree, 2.85% uncertain, 4.2% agree and 2.85% strongly agree the respondent doesn‘t
agree on performance status gathered from the concerned stakeholder. The respondent‘s perception
Identification of contract closeout activities, out of the whole respondents 4.28% strongly disagree,
10% disagree, 11.42% uncertain, 31.42% agree and 42.85% strongly agree on the issue. The
respondent‘s perception Lesson learned documentation, out of the whole respondents 7.14% strongly
disagree, 10% disagree, 14.28% uncertain, 11.42% agree and 57.14% strongly agree on the issue.
According to data collected from the company reveals that there is documentation of lesson leaned
after each projects are completed and compiled centrally for program report at large.

40
table 4. 4. Preliminary screening used before making detail evaluation of proposal

Items category frequency per cent


Financial stability Strongly disagree 3 4.28
Disagree 3 4.28
Uncertain 5 7.14
Agree 23 32.85
Strongly Agree 37 52.85
total 70 100
Technical requirement Strongly disagree 2 2.85
Disagree 3 4.28
Uncertain 4 5.714
Agree 20 28.57
Strongly Agree 42 60
total 70 100
Risk management issue Strongly disagree 10 14.28
Disagree 32 45.71
Uncertain 10 14.28
Agree 11 15.71
Strongly Agree 7 10
total 70 100
Past experience Strongly disagree 1 1.42
Disagree 2 2.85
Uncertain 2 2.85
Agree 27 38.57
Strongly Agree 38 54.28
total 70 100
Source: own Survey (2023)

As indicated in Table 4.4 the respondent‘s perception Preliminary screening used before making
detail evaluation of proposal consideration of financial stability, technical requirement, risk
management issue and past experience to evaluate and select among suppliers‘.4.28% strongly
disagree, 4.28% disagree, 7.14% uncertain, 32.85% agree and the remaining 52.85% strongly agree
about consideration of financial stability while selecting among suppliers‘.

41
As indicated in Table 4.11.2.85% strongly disagree, 4.28% disagree, 5.71% uncertain, 28.57% agree
and the remaining 60% strongly agree about consideration of technical requirement for evaluating
and selecting among suppliers proposal. The above table also depicts that, 14.28% strongly disagree,
45.71% disagree, 14.28% uncertain, 15.71% agree and the remaining 10% strongly agree about consideration
of risk management issue for selecting among proposals. The result shows that the company is not
considering the risk management process of suppliers.

From table 4.11, more than half of the respondents (54.28%) strongly agree that the company
considered past experience of suppliers for selecting among the received proposals. The remaining
1.42% strongly disagrees, 2.85% disagree, 2.85% uncertain and 38.57% agrees of the issue. There is
reference of past performance document for suppliers which are previously work with the company.

4.2.2. Descriptive Analysis of the Independent Variables

While making interpretation of the results of mean and standard deviation the scales were reassigned
as follows to make the interpretation easy and clear (Al-Sayaad, Rabea, &Samrah, 2006) as cited by
Bassam (2013).

table 4. 5. Five Scaled Likert Criterion

Scale Mean range Response option


1 1-1.8 Strongly Disagree
2 1.8-2.6 Disagree
3 2.6-3.4 Neutral
4 3.4-4.2 Agree
5 4.2-5 Strongly Agree

Source: Al-Sayaad et al. (2006) as cited by Bassam (2013).

42
table 4. 6 Descriptive statistics of independent variables

N Mean Std. Deviation


Performance Management 70 2.2940 .81486
Technology Standard 70 2.0569 .88427
Price 70 2.1390 1.09237
System Integration 70 1.0284 .66307
Top Management Support 70 2.4787 .76929
Security 70 2.5012 .84463
Supplier Process/Time 70 2.2564 .8641
Change Management 70 2.5641 .8548
Relationship with supplier 70 2.3542 .8642
Risk 70 2.3652 .8954
Source: Calculated from Survey (2023)

In general the above analysis indicates that the selected procurement success influencing variables
(Performance Management, Technology Standard, Price, System Integration, Top Management
Support, Security, Supplier Process/Time, Change Management, and Relationship with supplier) are
indeed the factors for Ethio-Telecom successful procurement practices also. The majority of the
participants respond they have a lack of these variables.

4.3. Inferential Statistics


The main aim of this thesis is to examine the factors affecting telecommunication network
procurement in the case of Ethio- Telecom.

To this end, ten independent variables were identified as determinants of successful procurement
practice based on theoretical and empirical review of relevant and extant literatures. In this section,
the correlation and multiple linear regression analysis were presented as follow.

4.3.1. Correlation Analysis


Correlation analysis is used to describe the strength and direction of the linear relationship between
two variables (Pallant, 2013). A correlation coefficient enables to quantify the strength of the linear
relationship between two ranked or numerical variables.

43
Pearson correlation was calculated to see the relationship between the dependent variable successful
procurement and the independent variables Performance Management, Technology Standard, Price,
System Integration, Top Management Support, Security, Supplier Process/Time, Change
Management, Relationship with supplier. The value of r can take on any value between 1 and
1(Pallant, 2013.) A value of r=+1 implies a perfect positive relationship, whereas r=-1 holds the
reverse value which is a perfectly negative correlations. According to Saunders, Lewis and Thornhill
(2009) correlation coefficients between-1 and 1 represent weaker positive and negative correlations,
a value of 0 meaning the variables are perfectly independent. According to Cohen(1988) as
mentioned by Pallant(2013) irrespective of the minus signs for the rest of the value r=0.10-0.29
leveled as small correlation, for r= 0.30-0.49 medium correlation and for r ≥50 is a large correlation
coefficient. Throughout the interpretation of the correlation coefficient this category were applied.

As can be seen from Table below, all the independent variables showed positive correlation with the
dependent variable. In their order of strength of relationship ‗Change Management was strongly
correlated to successful procurement with Pearson correlation coefficient (r (70) = 0.895, p< .01),
followed by ‗Performance Management‘ with r (70) = 0.845, p< .01. Third was ‗System Integration‘
with r (70) = 0.785, p< .01, fourth was ‗Technology Standard‘ with r (70) =0.753, p< .01, fifth were
‗Price‘ with r (70) = 0.752, p< .01 sixth was ‗Top Management Support‘ with r (70) = 0.743, p< .01,
seventh ‗Risk‘ had positive relationship r (70) = 0.692, p< .01 eighth ‗Security‘ had positive
relationship r (70) = 0.685, p< .01, ninth ‗Supplier Process/Time‘ had positive relationship r (70) =
0.658, p< .01 and ‗Relationship with supplier‘ had positive relationship r (70) = 0.641, p< .01

44
table 4. 7 Correlation Analysis between Dependent and independent variables
SP PM TS P SI TMS S SPT CM RWS R
Pearson 1
Correlation
Sig. (2-tailed)
SP N 70
Pearson 0.845 1
Correlation
Sig. (2-tailed) 0
PM N 70 70
Pearson 0.753 . 531 1
Correlation
Sig. (2-tailed) 0.001 0
TS N 70 70 70
Pearson 0.752 . 535 0.209 1
Correlation
Sig. (2-tailed) 0 0 0.002
P N 70 70 70 70
Pearson 0.785 0.747 0.379 0.557 1
Correlation
Sig. (2-tailed) 0 0 0 0
SI N 70 70 70 70 70
Pearson 0.743 . 559 0.272 0.339 0.456 1
Correlation
Sig. (2-tailed) 0 0 0 0 0
TMS N 70 70 70 70 70 70
Pearson 0.685 . 380 0.181 0.174 0.247 0.189 1
Correlation
Sig. (2-tailed) 0 0 0.008 0.011 0 0.006
S N 70 70 70 70 70 70 70
Pearson 0.658 . 322 0.184 - 0.238 0.1 0.228 1
Correlation 0.012
Sig. (2-tailed) 0 0 0.007 0.867 0 0.146 0.001
SPT N 70 70 70 70 70 70 70 70
Pearson 0.895 . 344 0.196 0.095 0.229 0.183 0.114 0.303 1
Correlation
Sig. (2-tailed) 0 0 0.004 0.171 0.001 0.008 0.098 0
CM N 70 70 70 70 70 70 70 70 70
Pearson 0.641 0.535 0.568 0.485 0.458 0.145 0.359 0.145 0.485 1
Correlation
Sig. (2-tailed) 0 0 0.001 0 0 0.001 0.005 0.005 0.001
RWS N 70 70 70 70 70 70 70 70 70 70
Pearson 0.692 0.563 0.475 0.758 0.652 0.458 0.354 0.152 0.684 0.752 1
Correlation
Sig. (2-tailed) 0 0 0.001 0.005 0.002 0.003 0.004 0.001 0.003 0.004
R N 70 70 70 70 70 70 70 70 70 70 70
**. Correlation is significant at the 0.01 level (2-tailed).
Sources: SPSS Output, from Field Survey, 2023

45
4.3.1.1. Correlation Analysis between Change Management and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Change Management (CM) and the dependent variable, Successful
procurement (SP). The coefficient is 0.895. This coefficient shows that there is a high and positive
relationship between Change Management and Successful procurement. The (**) highlights that the
probability of this correlation coefficient occurring by chance alone is less than 0.01.(1 per cent).
This correlation coefficient is therefore statistically significant. Perusal table 4.7 indicates that, a
high positive relation is found between Change Management and Successful procurement (r =0.895,
p < .01), which is statistically significant at 99% confidence level or 1% significance level, with high
level of availability of change management associated with high level of Successful procurement.
Kejuo (2012) also agreed on this finding.

4.3.1.2. Correlation Analysis between Performance Management and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Performance Management and the dependent variable, Successful
procurement (SP). The coefficient is 0.845. This coefficient shows that there is a high and positive
relationship between Performance Management and Successful procurement. The (**) highlights
that the probability of this correlation coefficient occurring by chance alone is less than 0.01.(1 per
cent). This correlation coefficient is therefore statistically significant. Perusal table 4.19 indicates
that, a high positive relation is found between Performance Management and Successful
procurement (r =0.845, p < .01), which is statistically significant at 99% confidence level or 1%
significance level, with high level of availability of Performance Management associated with high
level of Successful procurement. Scholars like Mehmood (2019),Kejuo (2012) also agreed on the
above finding.

4.3.1.3. Correlation Analysis between System Integration and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. System Integration and the dependent variable, Successful procurement
(SP). The coefficient is 0.785. This coefficient shows that there is a high and positive relationship
between System Integration and Successful procurement. The (**) highlights that the probability of
this correlation coefficient occurring by chance alone is less than 0.01.(1 per cent). This correlation
coefficient is therefore statistically significant. Perusal table 4.19 indicates that, a high positive
46
relation is found between System Integration and Successful procurement (r =0.785, p < .01), which
is statistically significant at 99% confidence level or 1% significance level, with high level of
availability of System Integration associated with high level of Successful procurement. Scholars
like DOF (2001), Birks et. al (2001), S&A (2003), Subramanian and Shaw (2002) Mehmood (2019),
Kejuo (2012)also agreed on the issue.

4.3.1.4. Correlation Analysis Between Technology Standard and Successful Procurement


Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Technology Standard and the dependent variable, Successful procurement
(SP). The coefficient is 0.785. This coefficient shows that there is a high and positive relationship
between Technology Standard and Successful procurement. The (**) highlights that the probability
of this correlation coefficient occurring by chance alone is less than 0.01.(1 per cent). This
correlation coefficient is therefore statistically significant. Perusal table 4.19 indicates that, a high
positive relation is found between Technology Standard and Successful procurement (r =0.785, p <
.01), which is statistically significant at 99% confidence level or 1% significance level, with high
level of availability of Technology Standard associated with high level of Successful procurement.
Previous study Mehmood (2019), Kejuo (2012)and Khanapuri At El (2011) also agreed on this
findings.

4.3.1.5. Correlation Analysis between Price and Successful Procurement


Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Price and the dependent variable, Successful procurement (SP). The
coefficient is 0.752. This coefficient shows that there is a high and positive relationship between
Price and Successful procurement. The (**) highlights that the probability of this correlation
coefficient occurring by chance alone is less than 0.01.(1 per cent). This correlation coefficient is
therefore statistically significant. Perusal table 4.19 indicates that, a high positive relation is found
between Price and Successful procurement (r =0.752, p < .01), which is statistically significant at
99% confidence level or 1% significance level, with high level of availability of Price associated
with high level of Successful procurement. Mehmood (2019), Kejuo (2012) and Khanapuri At El
(2011) are scholars who agree on this finding.

47
4.3.1.6. Correlation Analysis Between Top Management Support and successful procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Top Management Support and the dependent variable, Successful
procurement (SP). The coefficient is 0.743. This coefficient shows that there is a high and positive
relationship between Top Management Support and Successful procurement. The (**) highlights
that the probability of this correlation coefficient occurring by chance alone is less than 0.01.(1 per
cent). This correlation coefficient is therefore statistically significant. Perusal table 4.19 indicates
that, a high positive relation is found between Top Management Support and Successful
procurement (r =0.743, p < .01), which is statistically significant at 99% confidence level or 1%
significance level, with high level of availability of Top Management Support associated with high
level of Successful procurement. According to S&A (2003), AGV (2003), OGC (2002), CGEC
(2002), AOT (2003) Kejuo (2012), Mehmood (2019) the finding is correct.

4.3.1.7. Correlation Analysis Between Risk and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Risk and the dependent variable, Successful procurement (SP). The
coefficient is 0.692. This coefficient shows that there is a high and positive relationship between
Risk and Successful procurement. The (**) highlights that the probability of this correlation
coefficient occurring by chance alone is less than 0.01.(1 per cent). This correlation coefficient is
therefore statistically significant. Perusal table 4.19 indicates that, a high positive relation is found
between Risk and Successful procurement (r =0.692, p < .01), which is statistically significant at
99% confidence level or 1% significance level, with high level of availability of Risk associated with
high level of Successful procurement. Scholars Kejuo (2012) and Mehmood (2019)are agreed on the
findings.

4.3.1.8. Correlation Analysis between Security and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Security and the dependent variable, Successful procurement (SP). The
coefficient is 0.685. This coefficient shows that there is a high and positive relationship between
Security and Successful procurement. The (**) highlights that the probability of this correlation
coefficient occurring by chance alone is less than 0.01.(1 per cent). This correlation coefficient is
therefore statistically significant. Perusal table 4.19 indicates that, a high positive relation is found
48
between Security and Successful procurement (r =0.685, p < .01), which is statistically significant at
99% confidence level or 1% significance level, with high level of availability of Security associated
with high level of Successful procurement. Kejuo (2012) and Mehmood (2019)also agreed.

4.3.1.9. Correlation Analysis between Supplier Process/Time and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of association between the
independent variable i.e. Supplier Process/Time and the dependent variable, Successful procurement
(SP). The coefficient is 0.658. This coefficient shows that there is a high and positive relationship
between Supplier Process/Time and Successful procurement. The (**) highlights that the probability
of this correlation coefficient occurring by chance alone is less than 0.01.(1 per cent). This
correlation coefficient is therefore statistically significant. Perusal table 4.19 indicates that, a high
positive relation is found between Risk and Successful procurement (r =0.658, p < .01), which is
statistically significant at 99% confidence level or 1% significance level, with high level of
availability of Supplier Process/Time associated with high level of Successful procurement.
Mehmood (2019), Kejuo (2012) and Khanapuri At El (2011) also agreed on this findings.

4.3.1.10.Correlation Analysis between Relationship with supplier and Successful Procurement

Pearson correlation test was conducted to see the strength and direction of associationbetween the
independent variable i.e. Relationship with supplier and the dependent variable, Successful
procurement (SP). The coefficient is 0.641. This coefficient shows that there is a high and positive
relationship between Relationship with supplier and Successful procurement. The (**) highlights
that the probability of this correlation coefficient occurring by chance alone is less than 0.01.(1 per
cent). This correlation coefficient is therefore statistically significant. Perusal table 4.19 indicates
that, a high positive relation is found between Risk and Successful procurement (r =0.641, p < .01),
which is statistically significant at 99% confidence level or 1% significance level, with high level of
availability of Relationship with supplier associated with high level of Successful procurement.
Jefferies et al. (2002) Kopp (1997) ,Gentry and Fernandez (1997) , Arthur Andersen and Enterprise
LSE (2000),Mehmood (2019), Kejuo (2012)mentioned this factor.

49
4.3.2. Multiple linear regression analysis

4.3.2.1. Assumption of Multiple Linear Regressions

Multiple linear regressions have its‘ own assumptions. Normality, Linearity, homo scedasticity, no
outlier, no collinearityor multicollinearity, (Pallant, 2005; Saunders et al., 2009; Tabachnick&Fidell,
2013) are some of the assumptions. According to Pallant (2005) the assumption of the multiple
linear regressions is rigid. Let see each in brief with the detection mechanisms.

Collinearityor Multicollinearity

According to Pallant (2005) multi collinearity refers to the relationship among the independent
variables. Multi collinearity exists when the independent variables are highly correlated (r=.9 and
above). Thus it can be diagnostic from the correlation coefficients (Saunders et al., 2009) this has
been observed from the correlation matrix and there was no correlation closer to 0.9. It can be also
known through the variance inflation factors and tolerance value. A very small tolerance value
(0.10 or below) or a large VIF value (10 or above) indicates high co linearity. If Multi-collenerity
happen the best remedy will be to delete the highly correlated variables among the given IV on
logical rather than statistical grounds by considering issues such as the reliability of the variables or
the cost of measuring the variables((Tabachnick&

table 4. 8 Collinearity Statistics


Variables Collinearity Statistics
VIF
Performance
Management 0.824 1.214
Technology Standard 0.656 1.5295
Price 0.527 1.899
System Integration 0.76 1.316
Top Management
Support 0.892 1.121
Security 0.819 1.221
Supplier
Process/Time 0.867 1.153
Change Management 0.896 1.265
Relationship with
supplier 0.752 1.325
Risk 0.585 1.582
Sources: SPSS Output from Field Survey, 2023.
50
As the anecdotal data above in table 3 depict for all variables the tolerance values were above the
minimum cut point 0.01. The minimum values were observed for the variable price which is 0.527
which is quite larger than the minimum threshold value 0.01. The VIF values for all variables were
also below the maximum cut point 10. The maximum were observed for the variable price which is
1.899 which is far from the cut point 10. Therefore, in this data there is no a problem of multi
collinearity among the variables. Hence, inferring from this a conclusion worth‘s important.
A standard multiple regression analysis was conducted to evaluate how well the different elements
of the successful procurement particularly Performance Management, Technology Standard, Price,
System Integration, Top Management Support, Security, Supplier Process/Time, Change
Management, Relationship with supplier and risk determined Successful Procurement

table 4. 9 Model Summary

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


Estimate
1 .861a .740 .732 2.121
a. Predictors: (Constant), Performance Management, Technology Standard, Price, System
Integration, Top Management Support, Security, Supplier Process/Time, Change
Management, Relationship with supplier, Risk
Sources: SPSS Output, from Field Survey, 2023

Perusal of the model Summery table 4.21 above shows the value of R Square, which is 0.740
expressed as percentage (74%). This value is large and shows the adequacy of the model. Therefore,
this entails that 74%, of the variance in the dependent variable which means successful procurement
is explained by the model which includes Performance Management, Technology Standard, Price,
System Integration, Top Management Support, Security, Supplier Process/Time, Change
Management, and Relationship with supplier. The remaining 26 % of the variance is explained by
other variables not included in this study. To assess the statistical significance of the result it is
necessary to look in the table labeled ANOVA (Pallant, 2013). If Sig. 0.000<0.05, the model fits the
data.

51
table 4. 10 Model Fitness ANOVA Analysis

Model Sum of Squares Df Mean Square F Sig.

2605.197 10 372.171 82.737 .000


Regression
913.144 203 4.498
1 Residual
3518.341 210 372.171 82.737 .000
Total

a. Dependent Variable: SP
b. Predictors: (Constant), Performance Management, Technology Standard, Price, System
Integration, Top Management Support, Security, Supplier Process/Time, Change
Management, Relationship with supplier, Risk
Sources: SPSS Output From Field Survey, 2023.
Perusal of table 4.22 the F-test result was 82.737 with significance (‗Sig.‘) of .000. This means that
the probability of these results occurring by chance was less than 0.0005, indicates that the model
reaches statistical significance (Sig = .000, this really means p<.0005). This implies that the model is
adequate (fit) and is worth maintaining.

4.3.2.1. Evaluating each of the independent variables


So far, the descriptive and the correlation analysis were made. The assumptions of multiple linear
regressions were checked and the model was adequate. With this result of test of model adequacy
(―Model Summary‖ table and an ―ANOVA‖ table) therefore, the contribution of each variables in
explaining or influencing the dependent variable were presented and discussed.

52
table 4. 11un standardized and standardized coefficients

Un standardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -5.595 1.144 4.478 .000
Performance .349 .061 .226 5.747 .000
Management
Technology Standard .223 .059 .168 3.801 .000
Price .472 .060 .389 7.900 .000
System Integration .226 .045 .0206 5.033 .000
Top Management .174 .048 .139 3.669 .000
Support
Security .161 .061 .104 2.637 .000
Supplier Process/Time .138 .048 .110 2.871 .005
Change Management .152 .025 .115 2.856 .000
Relationship with .145 .048 .123 2.654 .000
supplier
Risk .159 .078 .130 2.856 .000
a. Dependent Variable: SP
Sources: SPSS Output, from Field Survey, 2023

As it is revealed in table 4.23 above coefficient consists of the Un standardized Coefficients (B) and
Standardized Coefficients (Beta) are presented. According to Pallant (2005) in constructing a
regression equation, un standardized coefficient values listed as B is useful. To compare the different
variables the standardized coefficients is important. All parameters are statistically significant since
their P-value is less than 0.05. In other words, the probability of all these results occurring by chance
is less than 0.05, being less than 0.001 for all the independent variable except for the variable
Technology Trajectory which is significant at 5% significance level. The authors also extend that it
can be used to predict the values of a dependent variable given the values of one or more
independent variables by calculating a regression equation.

Therefore, the equation is written as follows using the Unstandardized Coefficient B.

53
Where PP is Performance Management, TS is Technology Standard, P is Price, SI is System
Integration, TMS is Top Management Support, S is Security , SPT is Supplier Process/Time, CM is
Change Management, RWS is Relationship with supplier, R is Risk, - = the Coefficients of the
independent variable.

Thus, as far as the coefficient of each independent variables including the constant were known the
equation is written as follows:

Based on this analysis, the impact of each explanatory (independent variable) on response variable
(dependent variable) will be explained in detail as follows

4.3.1.1.1. The Effect of Performance Management on Successful procurement

Perusal table indicates that personal attitude towards Performance Management has unstandardized
coefficient B of 0.349 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
Performance Management would lead to a 0.349 -unit variation in successful procurement on
average, when all the other variables in the model remaining constant. Therefore, the variable
Performance Management has a statistically significant and a positive effect (β=0.349, p<0.01) on
successful procurement. Scholars like Mehmood (2019),Kejuo (2012) also agreed on the above
finding.

4.3.1.1.2. The Effect of Technology Standardon Technological capability

Perusal table indicates that personal attitude towards Technology Standard has un standardized
coefficient B of 0.223 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
Technology Standard would lead to a 0.223 -unit variation in successful procurement on average,
when all the other variables in the model remaining constant. Therefore, the variable Technology
Standard has a statistically significant and a positive effect (β=0.223, p<0.01) on successful
54
procurement. Previous study Mehmood (2019), Kejuo (2012) and Khanapuri At El (2011) also
agreed on this findings.

4.3.1.1.3. The Effect of Price on successful procurement

Perusal table indicates that personal attitude towards Price has un standardized coefficient B of 0.472
with Sig. value (0.000) which means that the probability of this results occurring by chance is less
than 0.01. In other words, the regression coefficients for the variables is positive and statistically
significant at the p <0.01 level. To elaborate more, a one-unit change in Price would lead to a 0.472 -
unit variation in successful procurement on average, when all the other variables in the model
remaining constant. Therefore, the variable Price has a statistically significant and a positive
effect(β=0.472, p<0.01) on successful procurement. Mehmood (2019), Kejuo (2012) and Khanapuri
At El (2011) are scholars who agree on this finding.

4.3.1.1.4. The Effect of System Integration on successful procurement


Perusal table indicates that personal attitude towards System Integration has unstandardized
coefficient B of 0.226 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
System Integration would lead to a 0.226 -unit variation in successful procurement on average, when
all the other variables in the model remaining constant. Therefore, the variable System Integration
has a statistically significant and a positive effect (β=0.226 , p<0.01) on successful
procurement.Scholares like DOF (2001), Birks et. al (2001), S&A (2003), Subramanian and Shaw
(2002) Mehmood (2019), Kejuo (2012)also agreed on the issue.
4.3.1.1.5. The Effect of Top Management Support on successful procurement

Perusal table indicates that personal attitude towards Top Management Support has un standardized
coefficient B of 0.174 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in Top
Management Support would lead to a 0.174 -unit variation in successful procurement on average,
when all the other variables in the model remaining constant. Therefore, the variable Top
Management Support has a statistically significant and a positive effect (β=0.174, p<0.01) on

55
successful procurement. According to S&A (2003), AGV (2003), OGC (2002), CGEC (2002), AOT
(2003) Kejuo (2012), Mehmood (2019) the finding is correct.

4.3.1.1.6. The Effect of Security on Successful Procurement

Perusal table indicates that personal attitude towards Security has un standardized coefficient B of
0.161 with Sig. value (0.000) which means that the probability of this results occurring by chance is
less than 0.01. In other words, the regression coefficients for the variables is positive and
statistically significant at the p <0.01 level. To elaborate more, a one-unit change in Security would
lead to a 0.161 -unit variation in successful procurement on average, when all the other variables in
the model remaining constant. Therefore, the variable Security has a statistically significant and a
positive effect (β=0.161, p<0.01) on successful procurement.Kejuo (2012) and Mehmood (2019)
also agreed.

4.3.1.1.7. The Effect of Supplier Process/Time on Successful Procurement

Perusal table indicates that personal attitude towards Supplier Process/Time has un standardized
coefficient B of 0.138 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
Supplier Process/Time would lead to a 0.138 -unit variation in successful procurement on average,
when all the other variables in the model remaining constant. Therefore, the variable Supplier
Process/Time has a statistically significant and a positive effect (β=0.138, p<0.01) on successful
procurement. Mehmood (2019), Kejuo (2012) and Khanapuri At El (2011) also agreed on this
findings.

4.3.1.8.The Effect of Change Managementon Successful Procurement

Perusal table indicates that personal attitude towards Change Management has un standardized
coefficient B of 0.152 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
Change Management would lead to a 0.152 -unit variation in successful procurement on average,
when all the other variables in the model remaining constant. Therefore, the variable Change
Management has a statistically significant and a positive effect (β=0.152, p<0.01) on successful
procurement. Kejuo (2012) also agreed on this finding.
56
4.3.1.9.The Effect of Relationship with supplier on Successful Procurement

Perusal table indicates that personal attitude towards Relationship with supplier has un standardized
coefficient B of 0.145 with Sig. value (0.000) which means that the probability of this results
occurring by chance is less than 0.01. In other words, the regression coefficients for the variables is
positive and statistically significant at the p <0.01 level. To elaborate more, a one-unit change in
Relationship with supplier would lead to a 0.145 -unit variation in successful procurement on
average, when all the other variables in the model remaining constant. Therefore, the variable
Relationship with supplier has a statistically significant and a positive effect (β=0.145, p<0.01) on
successful procurement. Jefferies et al. (2002) Kopp (1997) ,Gentry and Fernandez (1997) , Arthur
Andersen and Enterprise LSE (2000), Mehmood (2019), Kejuo (2012) mentioned this factor.

4.3.1.10. The Effect of Risk on Successful Procurement

Perusal table indicates that personal attitude towards Risk has un standardized coefficient B of 0.159
with Sig. value (0.000) which means that the probability of this results occurring by chance is less
than 0.01. In other words, the regression coefficients for the variables is positive and statistically
significant at the p <0.01 level. To elaborate more, a one-unit change in Risk would lead to a 0.159 -
unit variation in successful procurement on average, when all the other variables in the model
remaining constant. Therefore, the variable Risk has a statistically significant and a positive effect
(β=0.159, p<0.01) on successful procurement. Scholars Kejuo (2012) and Mehmood (2019) are
agreed on the findings.

4.3.1.11. Comparisons of all Variables in Determining Successful Procurement

Among the given specific objectives, one of the specific objectives is to determine which variable
among Performance Management, Technology Standard, Price, System Integration, Top
Management Support, Security, Supplier Process/Time, Change Management, and Relationship with
supplier and Risk has more effect in determining Successful Procurement of Ethio Telecom.
Therefore, to respond this objective comparison among variables becomes a must. The standardized
coefficients Beta values are important for comparing each independent variables contribution. Thus,
perusal table 12 indicates that the highest beta value were observed in the coefficient table labeled
standardized beta coefficient were for the variable price which is 0.389. This means that this variable
makes the strongest unique contribution to explaining the dependent variable (Successful
Procurement), when the variance explained by all other variables in the model is controlled for.
57
Next to it, the variable performance management has the second largest contribution which is
manifested in the beta value of 0.226. System Integration factor come to the third place with beta
value 0.206 followed by Technology Standard ,Top Management Support, risk, Relationship with
suppliers, change management, Supplier Process/Time and with beta value of 0.168, 0.139, 0.130,
0.123, 0.115, 0.110 and 0.104 respectively.

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Chapter 5

Summary of Findings, Conclusion and Recommendation


Introduction
This chapter deals with summary of the major findings and conclusions of the study. At last
recommendations for respective stakeholders and for further researchers were suggested based on
the findings and conclusions on factors affecting telecommunication network equipment
procurement in Ethio Telecom.

5.1. Summary of Major Findings and conclusions


The main purpose of this study was to examine the factors affecting performance of
Telecommunication Network Equipment Procurement in Ethio Telecom. The research was guided
by the following three basic questions those were stated in chapter one:

 What does the procurement process practice look like in Ethio Telecom?
 What are the main factors that affect the performance of Telecommunication Network
Equipment Procurement in Ethio Telecom?
 How to study the factor and their impact on the performance of Telecommunication
Network Equipment Procurement in Ethio Telecom?
The research approach was quantitative. Descriptive and explanatory type of research design was
used to explain the factors of Telecommunication Network Equipment Procurement that influence
Ethio Telecom procurement process and describe the existing procurement practice of the company.
The research samples were 70 including managements, experts and administrative employees of
Ethiotelecom .The analysis was done using Statistical package for social science (SPSS) to compute
descriptive statistics such as percentage, frequency, correlation and regression.
According to the analysis and discussions, the following summaries of major findings were
presented in accordance with the above three basic questions.
The major findings in relation to assess the processes of procurement in Ethio Telecom is that

Ethio-Tele com fail to provide formal training related to project and project procurement
management. The company considers make-or-buy analysis, expert judgment, and market
research, past project procurement documents, and activity and cost estimation for planning
project procurement. Associated risks and mitigation plan as well as overall procurement need of
the project are identified. The company also follows separate project procurement procedure.
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Make-or-buy analysis is made before deciding to buy from outside vendors. 57.14% agree that there
is consideration make-or-buy analysis before deciding to buy from outside vendors to meet the
project procurement need of the company

Ethio Tele co prepares standardize procurement document to obtain bid/proposal from suppliers.
The prepared documents help the company to get accurate, relevant and complete response. It also
uses appropriate means of communication announce its procurement documents for its prospective
suppliers. It prepares bidders‘ conference and individually approaches its suppliers
toanswerandclarifytheirquestionsanddoubts.Butthecompanyfailstoarrangepre-proposalvisit.The
Company uses pre-defined proposal evaluation criteria and prefers to conduct preliminary
screening before making detail evaluation the received proposals. Cost and estimated
deliverydatesarethemajorfactorsusedforevaluationproposals.Thecompanyalsoconsidersfinancial
stability, technical requirement and past experience of suppliers for evaluation. But it fails to
consider up pliers risk management issue. Contract is signed between Ethio Telecom and its
selected suppliers after reaching an agreement by preparing negotiation panel. The terms and
conditions of the contract are open consider future possible requirement change. The company
monitor and control that suppliers‘ performance meets project procurement requirements
according to terms of the contract using different methods, any project requirement change is
welcomed or rejected by following formal procedure. But the company failed to gather suppliers‘
performance status from main stakeholders such as project managers and project team members.
Besidesthereisweekmonitoringandcontrollingofproductswhicharedirectlyarrivedatprojectsite.Theco
mpanyclearlyidentifiescontractcloseoutactivitiesandpreparelesson learned document for its future
reference.

The respondent‘s perception the presence of standardizes predefined proposal evaluation criteria is
arranged out of the whole respondents 47.14% strongly agree on Respond for questions and doubts
raised by prospective suppliers individually. The researcher has supported the above responses by
referring project management process document of the company.

The second research question and major findings in relation to the factors that affect the performance
of Telecommunication Network Equipment Procurement in Ethio Telecom is that the researcher
adopted ten different variables of interest. These are Performance Management, Technology

60
Standard, Price, System Integration, Top Management Support, Security, Supplier Process/Time,
Change Management, and Relationship with supplier, Risk. The above independent factors are
derived from different literature reviews and the adopted by the researcher as well.

The following are the main findings regarding on the third research question which is analyzing the
factor and their impact on the performance of Telecommunication Network Equipment Procurement
in Ethio Telecom.all the factors have positive correlation and significant. The multiple regressions
model Summery shows the value of R Square, which is 0.740 expressed as percentage (74%). This
value is large and shows the adequacy of the model. Therefore, this entails that 74%, of the variance
in the dependent variable which means successful procurement is explained by the model the
ANOVA table also indicates that the model reaches statistical significance (Sig = .000, this really
means p<.0005). This implies that the model is adequate (fit) and is worth maintaining. The multiple
regressions result shown that the independent variables were significant. The highest beta value were
observed in the coefficient table labeled standardized beta coefficient were for the variable price
which is 0.0.389. This means that this variable makes the strongest unique contribution to explaining
the dependent variable (Successful Procurement), when the variance explained by all other variables
in the model is controlled for. Next to it, the variable performance management has the second
largest contribution which is manifested in the beta value of 0.226. System Integration factor come
to the third place with beta value 0.206 followed by Technology Standard ,Top Management
Support, risk, Relationship with suppliers, change management, Supplier Process/Time and Security
and with beta value of 0.168, 0.139, 0.130, 0.123, 0.115, 0.110 and 0.104 respectively.

61
5.3. Recommendations
The
practiceofprojectprocurementmanagementinEthioTelecomshowsadeviationwiththatoftheoreticala
spectoftheknowledgearea.Onwhichthecompanyshouldrecognizeandgivegreateremphasis to the
identified gaps and ensure the effective management of its project procurement practice. Thus,
the researcher provides the following recommendations pinpointing focal points that would be
helpful lto the company project procurement management in fruitful directions.

 The company needs to provide adequate training on project and project procurement
management area for project team members since it increases their knowledge and skill.
The training also helps them for better understanding of the three constraints of project
while they make decision.
 The company needs to arrange pre-proposal visit especially for its large procurement
decisions in order to view the capability of the market site, production factory, and
technical and managerial capability of pre-identified potential suppliers.
 The finding of the study reveals the company is financially dependent on its suppliers for
procuring foreign products and services, and more emphasis is given on financial aspect of
suppliers for evaluating and selecting among them. The researcher recommends the
company not to neglect and consider their risk management practice as well as check how
they redistribute in satisfactory manner.
 The company needs to gather performance status report from the concerned stakeholders
about the following information but not limited to; the quality of the received products and
services, on time delivery of resources, and if training is needed. This will help to take
early appropriate measures for the identified gaps before things getting worse.
 The finding of the study reveals Ethio Telecom uses tight monitoring and controlling
system for products arrived at regional and central warehouse but fail for products arrived
directly at project site. Following this, the researcher recommends the company should
develop tight monitoring and controlling system on those products directly arrived at
project site.

62
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Appendix 1: Questionnaire

ST. MARY’S UNIVERSITYGRADUATE STUDIES


Masters of Art in Project Management

Dear Sir/Ma'am,

You are invited to participate in this survey. Therefore, this questionnaire has been developed as part
of my post graduate program research at ST. MARY‘S UNIVERSITY, this is a questionnaire to
collect data for the research entitled as ―Factors affecting the performance of Telecommunication
Network Equipment Procurement‖. The objective of the questionnaire to examine the factors
affecting the performance of Telecommunication Network Equipment Procurement in Ethio
Telecom.Your participation is voluntary and your responses will be confidential. The questionnaire
has two parts. The first part focus on your background and Ethio telecom background as well. The
second part addresses the required information to achieve the research objectives. If you have
questions, you may direct to me.

67
Thank you very much for your support to this research. We further hope you too may find this
exercise useful in thinking through your firm's technological capability strategy.

Regards
Meskerem
0921626660

68
Part I

Demographic Characteristics of respondents (General Background)


1. Age…………..

2. level of Education
o Diploma
o Bachelor degree
o Postgraduates
o Other, please specify……….
3. Respondent position in the firm

o Manager
o Supervisor
o Expert Specialist
o Administrator
o Other please specify…………………………

4. For how many years have you worked on issues related with project procurement? ................

Part 2

Understanding project procurement practice at Ethio Telecom

This section is to find out your opinion about the project procurement practice at Ethio Telecom.
Please circle your answer for multiple choice questions and indicate your opinion by putting (√)
on the appropriate number for the five point scale questions where: Strongly Disagree=1,
Disagree=2, Uncertain=3, Agree=4, and Strongly Agree=5

Q.n Questions 1 2 3 4 5
o

1 Make-or-buy analysis is made before


deciding to buy from outside vendors.

69
2 Market research is conducted.

3 There is consideration of past procurement


documents for making future decision

4 The prepared document (RFP&RFI) helps


to get accurate, relevant and complete
information from suppliers.

5 Pre-proposal visits is arranged

6 The company use bidders‘ conference/pre-


bid meeting to give answer for the asked
questions and doubts to all prospective
suppliers.

7 The company respond for questions and


doubts raised by prospective sellers
individually.

8 There is standardizing pre-defined proposal


evaluation criteria.

9 Preliminary screening is used before


making detail evaluation of proposal.

10 The following points are considered for


selecting suppliers proposal;

 Financial stability

 Technical requirement

 Risk management issue

 Past experience

11 The terms and conditions of the contract are


open to consider future requirement change
(the contract is open for amendment).

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12 The companies monitor and control that
suppliers‘ performance meets project
procurement requirements according to
terms of the contract.

13 Suppliers‘ performance status is gathered


from stakeholders such as project managers
and project team members.

14 The company follows formal procedure to


accept/reject project requirement change.

15 Contract closeout activities are clearly


identified.

16 There is lesson learned documentation

Questions 1-10 have organized by the researcher with five response options as: strongly agree,
agree, disagree, strongly disagree and neutral. Please put right () marks on option you agree.

Please rate your company

No Questions Strongl Agree Disagre Strongly Neutr


y agree e disagree al
1 Performance Management
1.1 Ethio telecom measures
performance of an equipment.
1.2 Ethio telecom has a criteria to
measure system performance.
2 Technology Standard
2.1 Ethio telecom purchase equipment is
to current standard and trend, with
acceptable technical standard, as well
as good content
2.2 Ethio telecom relies on new

71
technological innovations in network
equipment that will serve the current
organizational and customers‘
demands.
3 Price
3.3 Ethio telecom pricing techniques
lies in balancing the trade-off as
well as achieving great value for
money
3.2 Ethio telecom uses request for
quotation (RFQ) and other methods
to gain a better price for the
equipment‘s
4 System Integration
4.1 Ethio telecom has the ability of
integrating an equipment with
existing systems in real time.
4.2 Overall procurement need of the
project is identified at the end of
planning.
5 Top Management Support
5.1 Top management of Ethio telecom has
the ability to understand of the
capabilities and limitations of procured
equipment and technical stuff and easy
bureaucracy
5.2 There is a separate procedure to be
followed for managing project
procurement.
6 Security
6.1 Ethio telecom has Good security
controls, technical safety, software and
hardware reliability, and counter-

72
measures techniques
6.2 Activity resource and cost estimation
is considered while planning.
7. Supplier Process/Time
7.1 Delivery time of the procured
equipment‘s managed to fit with
the entire bigger project plan in
ethio telecom
7.2 Cost and estimated delivery date are
the main factors used for evaluating
project procurement proposal
8. relationship with supplier
8.1 Standardize procurement document
is used to obtain bid/proposal from
Suppliers.
8.2 Procurement documents such as
RFP/RFI/IFB are announced for
targeted vendors using appropriate way
of communication.
9. Change Management
9.1 Ethio telecom hasgood feedback
process and help desk that will help
users to effectively switch and
adopt to the new piece of
equipment.
9.2 The company follows formal
procedure to accept/reject project
requirement change.
10. Risk
Ethio telecom has the Ability to
withstand environmental and other
risk factors during the procurement
of an equipment.

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Associated risks and mitigation plan is
identified while planning procurement.

Thank you!!!

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