ABSTRACT
It is of utmost importance to all be
it policy makers, bankers, researchers and scholars to assess the
impact of investment in information technology on the financial and
operating performance of the banks. In this project, the researcher
studied the impact of information technology on operational efficiency
of banks in Nigeria. The purposive sampling was used for the
study. Questionnaire is the main instrument for data collection for this
study. The sample consisted of 150 respondents and from the statistical
perspective, the choice of Chi-Square was considered. The findings
revealed that the adoption of Information Technology affects the
operations of commercial banks in terms of effectiveness, efficiency,
competitiveness, customer base and globalization of the bank. The study
concludes that for a bank to continue to remain financially viable and
managerially performing, it must give high priority to information
technology management, especially in terms of financial analysis. The
study, therefore, recommends that there should be in place policies for
managing the information life cycle for integrating the information
flows into the business plan of Nigerian banks. Adopting new computer
technology only raises potential information processing capacity while
having adequate infrastructure improves access to needed data. Banks
should ensure that mechanisms exist to identify the costs of information
technology as an intangible asset to the banks and its contribution to
the value added of the banks should be appreciated.
table of contents
CHAPTER ONE:
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypotheses
1.6 Significance of the Study
1.7 Scope and Limitation of the Study
1.8 Definition of Terms
References
CHAPTER TWO:
LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual Framework
2.3 Empirical Evidence
References
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research design
3.3 Population of the study
3.4 Sampling procedure
3.5 Sample size
3.6 Data collection instrument and validation
3.7 Method of data analysis
References
CHAPTER FOUR:
DATA PRESENTATION AND ANALYSIS
4.0 Preamble
4.1 Demographic Data of Respondents
4.2 Analysis of the Main Research Question
4.3 Test of Hypotheses
CHAPTER FIVE:
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary of the Study
5.2 Conclusion
5.3 Recommendations
5.4 Suggestions for Further Studies
Bibliography
Appendix
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Due to the rapid change going on in the
business environment, there has been a need for organizations to employ a
faster, more efficient and more effective way of carrying out their
activities in order to get better results and performance from
operations. Thus, there is no better method that could be employed in
achieving better performance by organizations than the use of
information technology.
Information technology has become global
tool for banking industry to reach global markets. The use of
Information technology in banks has become a global phenomenon and every
bank must be Information technology compliant in order to survive in
global competitive environment. The introduction of Information
technology has changed manual and traditional forms of doing business
and is being replaced by the sophisticated technology that is based on
automation and interconnection of computers and other electronic
devices. For instance, ledger books, paper invoice, printed materials
and business trips are being replaced with online billing and payments,
elaborate website with product information and real-time
teleconferencing across continents and time zones (Ojokuku and
Sajuyigbe, 2012).
According to Ovia (2001), the banking
industry has moved into an era of menu-driven ultra- robust specialized
software programmes called banking applications and these applications
can carry out virtually all banking functions relying heavily on
information collection, storage, transfer and processing.
Woherem and Adeogri (2000) claimed that
only banks that overhaul the whole of their payment and delivery systems
and apply Information technology to their operations are likely to
survive and prosper in the new millennium. He advices banks to
re-examine their service and delivery systems in order to properly
position them within the framework of the dictates of the dynamism of
information and communication technology. Due to the rapid change
undergoing in the business environment, there has been a need for
organizations to employ a faster, more efficient and more effective way
of carrying out their activities in order to get better results and
performance from operations. Thus, there is no better method that could
be employed in achieving better performance by organizations than the
use of information technology. The role of information technology in
this modern age cannot be overemphasized especially in the banking
industry which operates in a complex and competitive environment. Due to
the tight competition, there are a lot of changing conditions and
highly unpredictable economic climate.
Laudon and Laudon (2010) contend that
managers cannot ignore information systems because they play a critical
role in contemporary organization. Also, Adetayo et al (2009) and Boyett
and Boyett (2009) emphasized the effect of business on information.
Oyebisi et al (2010) also claimed that only banks that overhaul the
whole of their payment and delivery system, operations and apply
information technology devices are likely to survive and prosper in the
new millennium.
However, some scholars have argued that
additional investments on information technology contributed negatively
to productivity. Marrison and Bernard (2009), Baily (2008) argued that
the estimated marginal benefits of investments in information technology
are less than the estimated marginal costs. Litchenberg (2009) also
argued that although information technology investments have increased
productivity, it has not resulted in supernormal business profitability
rather there were some evidences of small or negative impact on
profitability. However, the main purpose of this study is to conduct a
survey on the impact of the implementation of information technology in
an organization that is if it has actually impacted on organization
positively or negatively.
Information is vital and necessary for
the survival of any society, establishment, industry and system
irrespective of the level of its development. In a typical establishment
or system, information is required to design or modify its general and
specific organizational structure, determine the hierarchical levels of
leadership, duration of labour amongst the workers, rules and
regulations governing its operations and interrelationship with other
establishments or systems within and outside its environment (Zakari,
2013).
However, due to the rapid change going
on in the business environment, there has been a need for organizations
to employ a faster, more efficient and more effective way of carrying
out their activities in order to get better results and performance from
operations. Thus, there is no better method that could be employed in
achieving better performance by organizations than the use of
information technology. Information technology “is a general term that
describes any technology that helps to produce manipulate, process,
store, communicate and/or disseminate information (William & Sawyer,
2007). In very short time information technology has become the back
bone in modern industrial society and the major contributor to the
progress of both developing and developed countries (Yasudevan, 2013).
The role of information technology in
this modern age cannot be overemphasized especially in the banking
industry which operates in a complex and competitive environment. Due to
the tight competition, there are lot of changing conditions and highly
unpredictable economic climate. Laudon and Laudon (2010) contend that
managers cannot ignore information systems because they play a critical
role in contemporary organizations. Also, Adetayo, Sanni, Ilori (2009)
and Boyett and Boyett (2009) emphasized the effect of IT on business and
the effect of business on IT while Oyelusi, Ilori, Ogwu and Adagunodo
(2010) also claimed that only banks that overhaul the while of their
payment and delivery systems, operations and apply IT devices are likely
to survive and prosper in the new millennium.
However, some scholars have argued that
additional investments on information technology contributed negatively
to productivity. Morisson and Bernact (2009), Baily (2008) posited that
additional investments contributed negatively to productivity, arguing
that ‘estimated marginal benefits of investments in IT are less than the
estimated marginal costs”. Litchenberg (2009) also argued that although
IT investments have increased productivity, it has not resulted in
supernormal business profitability rather there were some evidences of
small or negative impact on profitability. Mulira (2009) also observed
that ad-hoc acquisition of IT has often resulted in under-utilization of
the equipment and the developmental impact on such cases has also been
minimal.
In conclusion, the main purpose of this
study is to conduct a survey on the impact of the implementation of
information technology in an organization that is if it has actually
impacted on organization positively or negatively.
1.2STATEMENT OF THE PROBLEM
In this 21st century,
business organizations need to find new and faster ways to adapt to the
changing business environment. These days, computers and information
processing devices are everywhere; they make work faster and more
efficiently carried out. Computers and information processing influence
decisions made by managers and decision makers and also affect how work
is organized and how employees feel about work. The essential element of
management is information processing and thus information technology
systems are expected to heavily influence management and business
operations.
However, the decision to invest on
information technology by organization is based on fear of being left
behind by competitors rather than on a genuine understanding of the real
benefit that information technology brings to the organization. Thus
the main focus of this research work is to investigate the extent of the
impact of information technology on the performance of business
organizations dealing especially with the banking industry.
1.3 OBJECTIVES OF THE STUDY
The general purpose of this study is to
examine the impact of information technology on operational efficiency
of banks in Nigeria. This study is set out to achieve the following
objectives to:
- i. Assess the effect of information technology on services delivery.
- ii. Assess the impact of information technology on bank’s profit.
- iii. Examine whether or not information technology has any effect on the daily operations of banks in Nigeria.
1.4 RESEARCH QUESTIONS
This study addresses the following questions:
i. To what extent does information technology improve Nigerian banks ‘service delivery?
ii. Does information technology have influence on banks’ profit?
iii. To what extent does information technology affect the daily operations of banks in Nigeria?
1.5 RESEARCH HYPOTHESES
The following hypotheses have been developed:
H01: There is no significant relationship between information technology and Nigerian banks ‘service delivery.
H02: Information technology does not determine banks’ profit.
H03: Information technology does not enhance daily operations of banks in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The study examines the impact of
information technology on organization’s performance. It is hoped that
the research result would enable organizations more especially the
banking industry to know the benefit or effect of IT on their
profitability after investing in information technology. The findings of
this study will assist senior management to have a more realistic
approach in making decisions on organizational investments and the
associated expectation of the likely benefits. Moreover, it is expected
to serve as a blue print for students, managers and employees or
organizations who are interested in conducting a research on the impact
of information technology in organizations.
1.7 SCOPE AND LIMITATION OF THE STUDY
In carrying out this research work, the
focus of the study is on the impact of information technology on
operational efficiency of banks in Nigeria. This study examinees the
electronic banking operation of Diamond Bank Plc in Lagos metropolis.
However, due to the short time given in
carrying out this study, the study is limited to some branchesofthese
three branches of Diamond Bank Plcon the Mainland area of Lagos State.
Also, lot of money that is required to administer questionnaire limits
the researcher to eighty employees and one hundred and twenty customers
of the three banks selected.
1.9 DEFINITION OF TERMS
i. Information:
This can be defined as processed data that has been verified as
accurate and timely, organized for a purpose and presented within a
context that gives it meaning and also relevant to the decision at hand.
ii. Information technology (IT):
This can be defined as both the hardware and software that is used to
store, retrieve and manipulate data in order to process it into
information.
iii. Organization: This can be defined as a group of people who form a business in order to achieve a particular aim.
iv. Performance: This can be defined as a successful execution of a contract, or fulfillment of an obligation.