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1、Skills that improve profitability: The relationship between project management, IT skills, and small to medium enterprise profitabilityJulien Pollack ?, Daniel AdlerUniversity of Technology Sydney, PO Box 123, Broadway,
2、NSW 2007, AustraliaReceived 8 June 2015; received in revised form 11 March 2016; accepted 21 March 2016 Available online 10 April 2016AbstractIt is commonly assumed that using project management and IT skills are good fo
3、r business performance. This research explored this assumption by testing whether the use of project management and IT skills have a positive affect on business' total sales and profitability. The research data was d
4、rawn from two longitudinal Government surveys of small to medium enterprises in Australia. Models were created to describe the relationship between project management, IT skills, profitability and total sales using multi
5、ple linear regression and binary logistic regression. The results show that when controlling for the influence of other business skills, project management and IT skills have a significant positive influence on sales and
6、 profitability. © 2016 Elsevier Ltd. APM and IPMA. All rights reserved.Keywords: Project management; Information technology; Small to medium enterprise; Profitability; Sales; Business skills1. IntroductionIt is a ba
7、sic and fundamental assumption that developing business skills in your employees improves the profitability of your business. Although it may be difficult to test each step in the long and diffuse causal chain from an im
8、proved employee skill set to a better bottom line, the link between developing employee capability and improved company performance is typically taken as so obvious that it is rarely questioned. This assumption is held f
9、or skills such as the ability to manage projects, where it is taken for granted that using project management to reach strategic and operational objectives improves performance. Similarly, we tend to assume that increase
10、d information technology (IT) staff capability helps businesses not only survive, but excel in our currently changing technological climate. Were these assump- tions false, there would be little justification to support
11、the significant investments that organisations and individuals make on personnel development in these disciplines.Many researchers have commented that project management improves the likelihood of an organisation being s
12、uccessful. The benefits of project management to organisations have been expressed as an improvement in productivity (McHugh and Hogan, 2011; Cleland, 1984), effectiveness (Shenhar et al., 2001), efficiency (Stimpson, 20
13、08), and performance (Abbasi and Al-Mharmah, 2000), while the benefits of IT investment are commonly cited as providing strategic value (Carr, 2003), improved productivity (Hwang et al., 2015), and improved levels of org
14、anisational internal entrepreneurship (Benitez-Amando et al., 2010). This body of research appears to provide strong justification for sustaining the assumption that project manage- ment and IT skills support financial p
15、erformance. However, this assumption remains largely unexamined. In the project management literature, the debate more commonly focuses on developing idealised, or contingent, models of project management, ways of implem
16、enting these, and the examination of criteria that contribute to the success and failure of projects. In this regard, the IT literature is not that different, with an added emphasis on the impacts and opportunities assoc
17、iated with specific technological developments. In 2012, Hällgren (2012) ? Corresponding author.www.elsevier.com/locate/ijpromanhttp://dx.doi.org/10.1016/j.ijproman.2016.03.004 0263-7863/00/© 2016 Elsevier Ltd.
18、 APM and IPMA. All rights reserved.Available online at www.sciencedirect.comScienceDirectInternational Journal of Project Management 34 (2016) 831–8382014), and the frequency with which IT professional skills and project
19、 management skills are used in SMEs, there is surprisingly little research which examines how these skills are used by SMEs, and how they affect business profitability.3. MethodologyData for this research was sourced fro
20、m the ABS Business Longitudinal Database (BLD). The BLD includes data relevant to understanding the performance of Australian businesses. It is compiled from a number of sources, including Australian Government tax recor
21、ds and questionnaire responses. The ABS uses a data quality framework based on the Statistics Canada Quality Assurance Framework (Statistics Canada, 2002) and the European Statistics Code of Practice (Eurostat, 2011). In
22、 the case of the survey data used in this research, a quality declaration was issued indicating a response rate of over 95%, and a relative sampling error of less than 10%. In the 2004–2005 financial year, the ABS select
23、ed a panel of SMEs based on them being representative of their industry or population group. Business details were sourced from the Australian Business Register (ABR), a database that contains the names and addresses of
24、all businesses that have a registered Australian Business Number (ABN) with the Australian Taxation Office (ATO). Panel members were asked to respond to a survey for five consecutive years. The surveys were addressed to
25、the owner/manager of the business, as listed in the ABR, asking them to complete and return the survey. Panel size was determined based on the expected dropout rate, and designed to ensure that a sufficiently large numbe
26、r of businesses remained in each industry sector and size classification for statistical analysis at the end of the five year period. New members were not introduced to the panel after the first year. This research makes
27、 reference to two panels. Panel 1 includes data from the 2004–2005 financial year to 2009–2010, and Panel 2 includes data from the 2006–2007 to the 2010–2011 financial year. The BLD uses a variety of selection criteria f
28、or panel inclusion, including the requirements that businesses have less than 200 employees, that the business has a simple structure, and has only a single ABN (ABS, 2013b). The Oslo Manual survey development guidelines
29、 for measuring business innovation (OECD/Eurostat, 2005) were referenced in the development of the survey, and the BLD integrates with limited data from the ATO. These panels are of interest because they included questio
30、ns regarding the core business skills that respondents used in conducting their business (ABS, 2012a,b). The selection of skills included as options in the survey is listed in the following section. These skills were sel
31、ected to meet internal Government policy concern about the Government's ability to meet skill shortages in science, engineering and technology related occupations. Interest- ed readers should refer to Shah and Burke
32、(2003) for discussion of relevant policy imperatives at that time. Given the constraints of the data, this research has used the definition of an SME to be a trading business with less than 200 employees. BLD data has al
33、so been used in a variety of other research (ABS, 2014). This includes research into entrepre- neurship behaviours (Fitzsimmons and Douglas, 2006),outsourcing (Bakhtiari and Breunig, 2013), performance (Steffens et al.,
34、2009), productivity (Pollack and Adler, 2014), industrial relations (Farmakis-Gamboni and Prentice, 2011), family business operations (Dharmadasa, 2009), and innova- tion (Gronum et al., 2012; Bhattacharya and Bloch, 200
35、4; Huang and Rice, 2009).4. Data analysisThe data analysis presented in this paper focuses on three questions, which have been paraphrased to account for the differences in the ways the questions were written in the surv
36、ey instruments:1. During the previous year, were any of the following types of skills used by the business in undertaking its core activities: engineering (ENG); scientific and research (SCI); IT profes- sionals (ITP); I
37、T support technicians (ITS); trades (TRA); transport; plant and machinery operation (MAC); marketing (MAR); project management (PM); business management (BUS); and financial (FIN). 2. Total sales, as reported in Australi
38、an Tax Office Business Activity Statements. 3. Compared with the previous year, did profitability decrease, stay the same, or increase?4.1. The relationship between profitability and project managementThe first step in t
39、he analysis involved a review of any possible correlation between whether respondents reported an increase in their profitability compared to the previous year, use of project management in their businesses, and their sa
40、les figures. Correlations (p b 0.01) were found in both Panels 1 and 2 between use of project management and change in profitability, and use of project management and total sales. The data are represented in Table 1 and
41、 Fig. 1. In Fig. 1 it can be seen that more than 10% more of the populations of both panels who used project management also reported an increase in their profitability, when this is compared to respondents who did not u
42、se project management. Further- more, in both panels, there were more than 5% less of the population who used project management to undertake their core business that also reported decreasing profitability, compared to s
43、mall business owners who did not use project management. A similar result can be seen in Table 1. SMEs that used project management reported an average of three timesTable 1 The relationship between project management (P
44、M) and sales.Panel Use of PM n Min. Max. Mean Std. dev.1 No PM 4091 $0 $396,232,144 $4,113,277 $14,033,412 Used PM 539 $0 $1,323,740,295 $13,494,409 $73,434,2062 No PM 5540 $0 $241,030,222 $3,109,694 $10,045,252 Used PM
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