FACTORS AFFECTING EFFECTIVENESS OF INFORMATION SYSTEMS ON FINANCIAL PERFORMANCE OF LOCAL GOVERNMENT AUTHORITIES IN TANZANIA: A CASE STUDY OF TEMEKE MUNICIPAL COUNCIL

Abstract

ABSTRACT This quantitative study aimed to assess the factors influencing the effectiveness of information systems on the financial performance of local government authorities in Tanzania, specifically focusing on Temeke Municipal Council. To achieve this, the research outlined three specific objectives: (1) to assess the user-friendliness of information systems in enhancing financial performance, (2) to evaluate the reliability of information systems and its effect on financial outcomes, and (3) to examine the design of information systems and its impact on financial performance. Employing a descriptive research design with a quantitative approach, the study involved 133 respondents, yielding 116 completed questionnaires that were analyzed using SPSS version 27.0. Data collection was conducted through questionnaires and documentary reviews, with quantitative analysis utilizing descriptive statistics and Pearson correlation analysis. The findings indicated a strong positive correlation between user-friendliness and financial performance, as evidenced by a Pearson correlation coefficient of (r = 0.735, p < 0.001). Additionally, a significant positive correlation was found between the reliability of information systems and financial performance (r = 0.705, p < 0.001). Furthermore, system design and specifications were also positively correlated with financial performance (r = 0.724, p < 0.001). The study concluded that user-friendliness, reliability, and system design were critical determinants of financial performance in local government authorities. Based on these findings, the study recommended prioritizing the development of user-friendly and reliable information systems, as well as enhancing system design through stakeholder engagement. Moreover, it suggested that further research should investigate the effectiveness of training programs aimed at improving staff proficiency in utilizing information systems. This research contributed valuable insights into optimizing information systems for better financial performance within local government contexts in Tanzania.