Investigating the impact of using information technology on quality costs

Dissertation for master's degree

Industrial management field

Abstract

In recent years, much attention has been paid to the concepts and meanings of quality. The main focus of the thinking of organizations and companies has been to improve quality in order to survive in a competitive world. But the issue that has not been specifically measured and measured in relation to quality and its amount in organizations, especially in service organizations, is the concept of quality costs, which is not clearly defined in the public mind. The costs of quality are vast. According to the discoveries and findings of the National Economic Development Council during the studies conducted regarding quality and standards, nearly 10% to 20% of the total sales value of an organization is spent on quality costs. On the other hand, the importance of information technology and its effects for companies has increased dramatically and its growth and development can be felt. It is often said that information technology is the most important factor in increasing productivity and reducing costs, but other studies have shown the opposite. According to the stated contents, this research seeks to investigate the impact of using information technology on quality costs in Maskan Bank branches. This research is descriptive-survey and also practical in terms of purpose. The statistical population of this research includes all heads and deputy heads of Maskan Bank branches in Tehran. In this research, 95 branches of Maskan Bank branches in Tehran have been selected by simple random sampling method. A questionnaire was used to collect the data and information needed to check the research hypotheses. In order to analyze the data, Pearson's correlation test was first used, and then, using the structural equation model, the research model was analyzed and research hypotheses were investigated. Finally, all the hypotheses of the research were confirmed and it was determined that the use of information technology reduces quality costs in Maskan Bank branches.

Key words: information technology, quality costs, Bank Maskan

Introduction

In today's era, due to the global developments in the field of technology, rapid changes and changes in the markets and the more competitive field of activity for economic enterprises, the concepts related to quality have gained great importance and scope. Many organizations evaluate quality as an essential pillar to achieve customer satisfaction and a reason for survival and development in competitive conditions. Today, quality has found a concept beyond the reliability of the product, and it means achieving comprehensive quality, in which the performance and people of the organization are also effective (Farsijani, 2016).

Producing a product or providing a service that provides a high degree of customer satisfaction is not enough without examining the costs of achieving it. In fact, the main responsibility of management is to establish a balance between quality and the costs of achieving it. This goal can be met in the best way through the analysis of quality cost elements. Usually, organizations do not specifically calculate quality costs because such costs are not necessary to prepare the company's profit and loss balance sheet, although they can have an important impact on the company's profitability. In the absence of a quality cost evaluation system, such organizations cannot find out the origin of these costs and determine how to control them, and because there is no legal requirement to collect and report quality costs, what is included in these costs is variable and different (Raisi Ardali and Raisi, 2013). Commonly, everyone praises that the product or service is of high quality, but higher quality requires actions and preparations that require costs and significant costs. Anyway, the discussion of the costs that are exactly related to the quality and the effect that each category of cost has on the other category can be enlightening on whether or not the production of products and services is justified. In most cases, cost comparison can convince managers that carrying out some costs that ultimately guarantee quality, reduces possible losses and has an effect on more sales and customer satisfaction and companionship (Dale and Plank, 2011).In other words, this optimal level represents the inclusion of product or service quality in which there is the greatest benefit for the producer. Since an increase in quality is usually associated with an increase in costs, it can be expected that at a level of quality, costs are minimal and benefits are maximal. At lower levels, due to the decrease in quality, benefits will decrease, and at higher levels, due to the increase in costs caused by better quality, the benefits will decrease again (Raden and Dale[1], 2000). 2001).

One of the most important problems in the field of quality costing is that quality costs are not fully recorded in accounting reports and often a significant part of them is neglected. Also, these costs should not be limited only to production and operational activities, but should also pay attention to the costs incurred in the field of service sectors (Dale and Plank, 2011).

On the other hand, the emergence of information technology has caused major changes in the structure, performance and management method at the organizational and national level, so that today organizations have a competitive advantage that can optimally use information technology. Information technology will have a tremendous impact in various economic fields. Therefore, today information technology as one of the new fields is rapidly influencing the economy (Fathiyan and Mahdavi Noor, 2017). It is often said that information technology is the most important factor in increasing productivity and reducing costs, but other studies have shown the opposite. On the other hand, in order to improve quality, reduce costs and increase productivity, various tools are used by companies, such as comprehensive quality management (TQM), comprehensive productive maintenance and repairs (TPM), organizational process reengineering (BPR), manufacturing resource planning (MRP), just-in-time production (JIT), etc. It has information technology. According to research, 10% of banks' income is spent on information technology. Therefore, from the point of view of all banks, information technology and investing in it is a significant investment (Farid Fathi, 2009). The main focus of the thinking of organizations and companies has been to improve quality in order to survive in a competitive world. But the issue that has not been specifically measured and measured in relation to quality and its amount in organizations, especially in service organizations, is the concept of quality costs, which is not clearly defined in the public mind (Kurti[3], 2001).

All organizations incur quality costs, even if they do not officially collect, calculate and report these costs. The costs of quality are vast. According to the discoveries and findings of the National Economic Development Council during the studies conducted on quality and standards, nearly 10% to 20% of the total sales value of an organization is spent on quality costs (Dale and Plank, 2011). One of the most important problems in the field of quality costing is that quality costs are not fully recorded in accounting reports and often a significant part of them is neglected. Also, these costs should not be limited only to production and operational activities, but should also pay attention to the costs incurred in the field of service sectors (Dale and Plank, 2011).

On the other hand, with the development of information technology, all aspects of human life have undergone a fundamental transformation, so that the current world has undergone a complete metamorphosis, and this process continues. New communication technologies have included time and space dimensions and made today's world as a village. So that it is as if the current human has stepped into another world. During the last two decades of the 20th century, three important innovations, fax, mobile phone and the Internet, have shown how the expansion of communication can have an impact on the creation of the market for products and change people's ways of working and living (Alhiari, 2014).