A Survey of Internet Usage in The Malaysian Construction Industry

This survey was cited from Lim Yoke Mui,Abdul Rashid Abdul Aziz,Ang Cheng Ni,Wong Chee Yee and Wong Shiau Lay published in November 2002 at http://www.itcon.org/2002/17/ based from their research in 2002. I think this give us the current issue regarding on Internet usage among the construction parties in Malaysia.

EDITOR: Bo-Christer Björk

In recent years, the construction industry in Malaysia seems to be using the Internet as much as other industries. However, what is the actual level of Internet usage in the construction industry and what are the perceived benefits and disadvantages experienced by the users? A survey was conducted to find the answers to the questions. Based on the survey, it was found that the respondents have accessibility to the Internet; comparable to countries such as the United States. However, the main use of the Internet is only for emails and information search. The use of the Internet for online bidding and e-meetings is almost negligible. Internet users experienced time and cost savings as well as increased efficiency. On the other hand, the survey found that the main disadvantages experienced are slowness in downloading, virus problem and frequency of being cut-off from Internet connection. As such, it is recommended that the relevant parties in the industry should look into provision of sufficient infrastructure and IT skills training to enable the workers in this industry to fully utilize the potential of the Internet instead of just implementing basic automation.

THE SURVEY

The objective of the survey was to obtain the current levels of Internet usage in the Malaysian construction industry and the benefits and disadvantages experienced by the users in the said industry. The survey follows loosely surveys that were conducted in other countries on the impact of information technology in their construction industry.

The survey population consisted of contracting companies, development companies and professional firms, i.e. Architectural, Engineering, Quantity Surveying and Valuation firms. The sampling frame was compiled from the register of CIDB, housing association, the board of architects, the board of engineers, board of quantity surveyors and the board of valuers.

Firms/companies involved in the survey were randomly selected from both West and East Malaysia. Postal survey and emails were used in this research. Out of the 200 questionnaires that were sent, 70 firms responded, thus giving a response rate of 35%. The researchers believe the scenarios obtained from this survey are sufficiently accurate in describing the levels of Internet usage by the respondent. However due to the low sampling size, the results can only be used as an indicative guide for the industry in general.

RESPONDENT PROFILE

Respondent were mainly from the professional firms (73%) followed by contracting companies (17%) and development companies (10%). It is commonly agreed that this type of survey attracts those using information technology to response and rebuffs those who are not. As such, this gives an indication that the professionals firms make the most use of information technology in their work as compared to the contracting and development companies.

The geographical location of the respondents concentrated mainly in the Klang Valley (40%) and the northern region (30%). Meanwhile, 19% of the respondents are from the rest of West Malaysia and 11% from East Malaysia. The geographical coverage of the survey correlates with the main location of construction activities, which are in the Klang Valley and northern region of Malaysia. In addition, Klang Valley is the IT hub of Malaysia with a 50% share of the Internet business (Eighth Malaysia Plan, 2001).

THE FINDINGS

1. Connection to the Internet

94% of the respondent firms have access to the Internet. In comparison with the construction industry in the US, UK and Sweden, they have achieved above 90% accessibility to the Internet about two years earlier than Malaysia. The comparison made was based on data from the following surveys: 96% in United States (Construction Industry Manufacturers Association, 1999), 97% in UK (Dixon, 1998) and Sweden 90% (Howard et al., 1998).

They realise that due to the low sampling size, it is unreliable to generalize the result to the whole industry. However, this indicates that currently the level of Internet access is at a satisfactorily level even though Malaysia is slightly behind in catching up with the rest of the world.

2. Importance of Internet to the Firms

The respondents were asked to rank the importance of Internet to their firms in the survey. Figure 2 shows that 84% of the respondents indicate that Internet ranges from important to very important to their firms. Only 14% of the firms surveyed responded that Internet is not important to their firms.

Even though majority of the firms (70%) only started accessing the Internet between 1 - 4 years ago, in the short span of time, the respondents indicated that Internet has become important to their firms.

3. Usage of Internet

Researchers were also interested to know the reasons for using the Internet. Is it just for e-mail or more than that? From the response they received, they found that the main purpose of connecting to the Internet is accessing emails in which information and documents are shared and/or exchanged. Their survey shows that 96% of the respondents selected this as the main reason as shown in Figure 3. This gives an indication that businesses in the construction industry have now utilises information and communication technology in this business communication.

Research and/or obtaining business information is the second most popular activity using the Internet at 59% while 33% of the firms surveyed use the Internet for marketing purposes. Compared to Canada where 38% of the firms surveyed use the Internet as a mean of communication for advertisement, the researchers anticipate that the usage of the Internet as a marketing tool may gain popularity in the coming years even though the percentage is still low at the moment.

The survey shows that bidding of projects through Internet is still not widely used here. Having said that, it is encouraging to note that 16% of the respondents were involved in bidding of projects through Internet. The researchers suspect that the online bidding is for overseas projects and not local projects since there are hardly any or very few online bidding done locally. However, further research is needed to confirm this. The same is also true for designing and/or estimating through the Internet (11%). Using the Internet for designing and/or estimating is usually applicable only to firms that are working in collaboration with other firms from foreign countries. In addition, on-line seminar and virtual meetings are still not commonly conducted in this industry (7% and 1% respectively).

This shows that even though accessibility to the Internet is encouraging the usage of Internet in this industry is still limited to basic typical business processes such as e-mails and obtaining information. The users of Internet in this industry have yet to strategically exploit the potential of the Internet. The initial cost required for hardware and software to participate in activities such as virtual meetings may act as a deterrent factor to employers investing in IT for their firms. Another reason for this may be due to lack of knowledge on the part of the users. However, these reasons could not be verified in this survey and further research is required to confirm this.

4. Benefits obtained from the usage of Internet

The firms surveyed were asked what were the benefits they received from using the Internet and they were allowed to choose more than one answer that is relevant to them. Figure 4 shows the result. 60% replied that the usage of Internet contributed to time saving in their work. This could be attributed to quick data and information retrieval from the Internet while 51% agreed that the Internet improved the efficiency of their service. This finding correlates well with research done in the UK where the perceived benefits of IT systems could be summed up as ‘greater efficiency’, in Scandinavian countries where they experienced increase in productivity and in Canada where quality of document and speed of work have increased.

47% of the respondents noted that they had gained cost savings after using the Internet in their business dealings. Cost savings due to the usage of Internet could be attributed to the reduction in postal, fax and courier services as documents could now be sent through the Internet, especially for big corporations that has intranets where time and costs are reduced due to shared information among its employees and office branches. Data from Sweden also shows that 60% of firms make some savings in administration.

However, this needs to be investigated further as it contradicts with findings from Canada where costs of doing business increased upon adopting information technology.

In addition, the lack of online discussion/meeting means that the firms were not required to be connected all the time and this again may provide some savings on Internet bills. However, the researchers are unable to determine how significant the cost saving is.

Other than the above, 9% of the respondents experienced business expansion and obtained new projects from the usage of Internet. Meanwhile, 5% of the firms surveyed included reduction of employees as one of the benefits from using the Internet. Reduction of employees may also add to the cost saving benefits that some respondents experienced.

5. Disadvantages of using the Internet

The respondents were asked to indicate the disadvantages that they experienced while using the Internet. Again, they were allowed to give more than one answer. The survey data for this is shown in Figure 5.

Slowness in downloading and transmission of virus is two of the major shortcomings highlighted by the respondent (59% and 50% respectively). As the researchers did not ask the respondents to indicate their hardware capacities, they would assume that speed of connection and downloading could be improved with better infrastructure and the problem of virus transmission can be arrested by a reliable anti-virus programme most of the time.

The other 47% of the respondents faced connection problems where the major complaint is the difficulty in connection and the frequency of disconnection. This problem could be attributed to the inadequate infrastructure of the Internet Service Provider (ISP). The number of Internet subscribers in Malaysia has increased from 13,000 in 1995 to 1.2 million in 2000, contributing to ‘traffic congestion’ in connecting with the Internet. Six ISPs were granted licences by year 2000 but only three had started to provide Internet access to their subscribers (Eighth Malaysia Plan, 2001) and the latest ISP only started operation in 2001.

Other shortcomings highlighted are: difficulty to sieve information (27%), error in sending and receiving mails (21%) and security problems (21%).

6. Website

Out of 70 firms surveyed, currently only 24% have their own website. However, the survey shows that more firms will have their own website in the future as 21% of the respondent indicated that they are planning to have their own website.

7. Reasons for having a website

49% of the respondent did not give any reason for having a website. Given the high percentage, it seems that having one’s own website could be due to the ‘me too’ syndrome. However, further research is required to verify this.

From the survey, the researchers found that popular reasons for establishing a website are for advertising (12%), company status (11%) and information for employees (10%). Most firms aim to reach out to more customers through the Internet, as well as to improve the image of the company. Figure 6 shows all the reasons selected in establishing a website by the respondents.

From the survey it is noted that firms also use the Internet as a means to receive feedback from their customers and to share information. However, the percentages of firms using this method is very small, i.e. 7% and 5% respectively. Feedback from customers is important to the firms as part of their effort to improve performance and service. In terms of e-commerce and online contracting/procurement, the construction industry is still slow in picking up this trend.

8. Problems in setting up website

In the same survey, the researchers also wanted to know what the problems are that the firms faced in setting up their website. One of the major factors holding the firms back is that maintaining a website required too much time.

For a website to be useful it has to be updated periodically and this naturally requires manpower and man-hours.

As the benefits of a bsite are still not very clear to the firms, we believe the firms would be reluctant to invest in setting up a website. This reasoning is also indicated in the survey data where 29% of the respondent comments that high cost is a deterrent factor.

In addition to the above, 11% of the respondent also mentioned security as a problem in having a website. More than 15% of the respondent did not mention a specific problem. We assume that this 15% could be due to a lack of existing info-structure and infrastructure in the firms.