Final Meskerm Feleke
Final Meskerm Feleke
Final Meskerm Feleke
MARY’SUNIVERSITY
SCHOOL OFGRADUATE STUDIES
DEPARTMENT OF PROJECT MANAGEMENT
BY
MESEKERM FELEKE
FEBRUARY, 2023
BY
MESEKERM FELEKE
ADVISOR
MARU SHETE(Ph.D.)
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.
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:
External Examiner:
Internal Examiner:
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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. 3THE CRONBACH'S ALPHA VALUES OF ALL INDEPENDENTS AND DEPENDENT VARIABLES/
TABLE 4. 4. PRELIMINARY SCREENING USED BEFORE MAKING DETAIL EVALUATION OF PROPOSAL ................ 41
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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.
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?
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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.
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).
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
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).
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.
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).
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.
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Chapter Three
Research design and Methods
3.1.Background of the organization
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.
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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.
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.
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
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also collected through a secondary source, which are a Literature survey, journal, report, government
publication, sector documentary, the internet, and other texts.
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3.7. Operational definition of study variables
IT Information Technology
SD Standard Deviation
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table3. 2 Factor Definitions
S.No Factor Factor Definition
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
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):
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
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.
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.
34
table 4. 1Demographic characteristics of the respondents
Item Category Frequency Per cent
Age 18-34 23 32.8
35-60 37 52.85
Total 70 100.0
Postgraduates 11 15.71
above 0 0
Total 70 100.0
11-15years 27 38.57
Total 70 100.0
Specialist 20 28.57
Administrator 35 50
Total 70 100
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
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
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
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.
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).
42
table 4. 6 Descriptive statistics of independent variables
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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&
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
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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
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
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
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
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
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2 Market research is conducted.
Financial stability
Technical requirement
Past experience
70
12 The companies monitor and control that
suppliers‘ performance meets project
procurement requirements according to
terms of the contract.
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.
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-
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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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