THE EFFICACY OF INFORMATION TECHNOLOGY AND COMMUNICATION [ICT] ON ORGANISATIONAL PERFORMANCE (A Case Study of First Bank Nigeria Plc.)
Today, Information Communication (ITC) has become a key element in economic development and a backbone of knowledge-based economies in terms of operations, quality delivery of services and productivity of services. Therefore, taking advantage of information technologies (IT) is an increasing challenge for developing countries. There is now growing evidence that Knowledge-driven innovation is a decisive factor in the competitiveness of nations, industries, organizations and firms. Organizations like the banking sector have benefited substantially from e-banking, which is one among the ITC applications for strengthening the competitiveness.
This project work examine the Efficacy of Information Technology and Communication [ICT] On Organisational Performance with special reference to First Bank Nigeria Plc. The research work presents the current trend in the application of ITC in the banking industries in Nigeria and gives an insight into how quality banking has been enhanced via ICT. The paper further reveals that the deployment of IT facilities in the Nigerian Banking industry has brought about fundamental changes in the content and quality of banking business in the country.
This analysis and clarification of how Nigerian Banks have used IT to reengineer their operations is detailed through literature review and observation. Three categories of variables that relate to the use and implementation of information technology devices were considered in this project work. These include; The degree at which ICT influence efficiency and effectiveness of First Bank Plc’s Banking System; the relationship between ICT and organisational performance; and the level at which ICT assist organization in decision making. These hypotheses where analysed with the use of Chi-Square and at the end of the analyses the three null hypotheses where rejected and the alternate accepted.
Conclusions were made based on the result of the analysis and suggested recommendations where made.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.0 Background of the Study
1.1 Historical Background of First Bank Nigeria Plc.
1.2 Aim and Objectives of the Study
1.3 Statement of the Problems
1.4 Research Questions
1.5 Research Hypotheses
1.6 Statement of Hypotheses
1.7 Scope and Limitations of the
1.8 Significance of the Study
1.9 Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.2 The Nigerian Banking Industry
2.2.1 Developing Business Models
2.2.2 Customer Sophistication
2.2.4 Regulation and Supervision
2.3 Electronic Banking and its Revolution in Nigeria
2.4 The Major Areas of Information System
2.4.1 The Personnel Information
2.4.2 Financial Information
2.4.3 Production/Operation Information
2.4.4 Marketing Information
2.5 The Need for Information Flow in an Organization
2.6 Impact of it in Nigeria’s Banking Industry
2.6.1 GSM Banking
2.6.2 Automated Teller Machines (ATMs)
2.6.3 Adoption of the ICT Integrated Project
2.6.4 Funds Transfer
2.6.5 On-Line Banking
2.6.6 Electronic Mail
2.6.7 Bankers Automated Clearing Services
CHAPTER THREE: RESEARCH METHDOLOGY
3.1 Research Design
3.2 Methods of Data Collection
3.3 Population of Study
3.4 Sample Size and Sampling Techniques
3.5 Restatement of Research Hypotheses
3.6 Method Of Data Analysis
3.7 Limitations of the Research Instrument
CHAPTER FOUR: DATA PRESENTATION AND ANALYSES
4.1 Personal Characteristics of the Respondent
4.2 Response of Respondents to the Problem Areas
4.3 Testing and Interpretation of the Hypotheses
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of Findings
1.0 BACKGROUND OF THE STUDY
Today’s business environment is very dynamic and undergoes rapid changes as a
result of technological innovation, increased awareness and demands from customers. Business organisations, especially the banking industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate. Information and Communication Technology (ICT) is at the centre of this global change curve. Laudon and Laudon, (1991) contend that managers cannot ignore Information Systems because they play a critical role in contemporary organisation. They point out that the entire cash flow of most fortune 500 companies is linked to Information System.
The application of information and communication technology concepts, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global competitiveness. ICT directly affects how managers decide, how they plan and what products and services are offered in the banking industry. It has continued to change the way banks and their corporate relationships are organized worldwide and the variety of innovative devices available to enhance the speed and quality of service delivery.
Information Technology Communication (ICT) is the automation of processes, controls, and information production using computers, telecommunications, software and ancillary equipment such as automated teller machine and debit cards (Khalifa 2000). It is a term that generally covers the harnessing of electronic technology for the information needs of a business at all levels. Irechukwu (2000) lists some banking services that have been revolutionized through the use of ICT as including account opening, customer account mandate, and transaction processing and recording.
Communication Technology deals with the Physical devices and software that link
various computer hardware components and transfer data from one physical location to another (Laudon and Laudon; 2001). ICT products in use in the banking industry include Automated Teller Machine, Smart Cards, Telephone Banking, MICR, Electronic Funds Transfer, Electronic Data Interchange, Electronic Home and Office Banking.
Several authors have conducted investigation on the impact of ICT on the banking sector of the Nigeria economy. Agboola et al (2002) discussed the dimensions in which automation in the banking industry manifest in Nigeria. They include:
- Bankers Automated Clearing Services: This involves the use of Magnetic Ink Character Reader (MICR) for cheque processing. It is capable of encoding, reading and sorting cheques.
- Automated Payment Systems: Devices used here include Automatic Teller Machine (ATM), Plastic Cards and Electronic Funds Transfer.
- Automated Delivery Channels: These include interactive television and the Internet.
Agboola (2001) studied the impact of computer automation on the banking services in Lagos and discovered that Electronic Banking has tremendously improved the services of some banks to their customers in Lagos.
Woherem (1997) discovered that Nigeria banks since 1980s have performed better in their investment profile and use of ICT systems, than the rest of industrial sector of the economy. An analysis of the study carried out by African Development Consulting Group Ltd. (ADCG) on IT diffusion in Nigeria shows that banks have invested more on IT. The study, however pointed out that whilst most of the banks in the west and other parts of the world have at least one PC per staff, Nigerian banks are lagging seriously behind, with only a PC per capital ratio of 0.18 (Woherem, 2000).
Harold and Jeff (1995) contend that financial service providers should modify their traditional operating practices to remain viable in the 1990s and the decades that follow. They claim that the most significant shortcoming in the banking industry today is a wide spread failure on the part of senior management in banks to grasp the importance of Information Technology Communication (ICT) and incorporate it into their strategic plans accordingly.
Woherem (2000) claimed that only banks that overhaul the whole of their payment and delivery systems and apply ICT 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. The banking industry in Nigeria has witnessed tremendous changes linked with the developments in ICT over the years.
The quest for survival, global relevance, maintenance of existing market share and
sustainable development has made exploitation of the many advantages of ICT through the use of automated devices imperative in the industry. This study tends to evaluates the efficacy of Information Technology and Communication (ICT) on Organisational Performance.
1.1 HISTORICAL BACKGROUND OF FIRST BANK OF NIGERIA PLC
First Bank of Nigeria Plc, for over a century, has distinguished itself as a leading banking institution and a major contributor to economic advancement and development of Nigeria. Founded in 1894 by a shipping magnate from Liverpool, Sir, Alfred Jones, the Bank commercial ' as a small operation in the office of Elder Dempster Company in Lagos.
The Bank was incorporated as a limited liability company on March 31, 1894 with Head office in Liverpool. It started business under the corporate name of the Bank of British West Africa (BBWA) with a paid up capital of 12000 pounds sterling, after absorbing its predecessor, the African banking Corporation, which was established earlier in 1892, this signaled the preeminent position which the bank was to establish in the banking industry in West Africa. In the early years of operations, the Bank recorded on impressive growth and worked closely with the colonial government in performing the traditional function of central Bank, such as issue of specie in the West Africa Sub region.
To justify its West Africa coverage, a branch was opened in Accra, Gold Coast (now Ghana) in 1896 and another in Freetown, Sierra Leone in 1898, they marked the genesis of the bank's international banking operations. The second branch of the bank in Nigeria was in the old Calabar in 1900 and two years later, service were extended to northern Nigeria. Currently with 358 branches spread throughout the federation, the bank maintain, the largest branch network in the industry.
To satisfy the needs of its customers, First Bank has diversified into a wide range of banking activities and services. These include corporate, retail and mortgage banking, registrar ship. In addition, as part of its strategy of progressive internationalization, in November 2002, the Bank became the First Financial Institution in Nigeria to establish a subsidiary bank in the United Kingdom.
Over the years, the Bank has expected phenomenal growth with a share capital of N55.6 million in 1980, the bank's share capital grew to N I,751 billion as at March 200'1. The bank's total asset was N312.5 billion while its deposit base stood at N207.18 billion as at march 2004. Also, the Bank's market capitalization stood at N98.41 billion i.e N28.10 per share as at 31s, March 2004.
To reposition and to take advantage of opportunities in the changing environment, the Bank embarked on several restructuring initiatives. In 1957, it changed its name from Bank of British West Africa to Bank of West Africa. 1969 the Bank was incorporated locally as the Standard bank of Nigeria Limited in line with the company Decree of 1968.
Changes in the name of the Bank also occurred in 1979 and 1991, to First Bank of Nigeria and First Bank of Nigeria Plc, respectively. In 1985, the Bank. introduced a decentralized structure with five regional administrations. To further enhance the Bank's operational efficiency. This was reconfigured into sixteen-area office in 2003; in 1996 the bank introduced the FBN century. "Project and revalidated it in 2001 under the name century", the new frontier, to revolutionize its operations in line with the dynamics of the environment. In view of foregoing, it was therefore, a natural progression when in 2001; the bank began the process of transforming its corporate identity to reflect its rejuvenated focus, the brand transformation process which began in earnest in 2001 gained momentum in 2003 and was launched on Tuesday, April 27, 2004 with the introduction of a new corporate identity.
The bank has continued to be a leader in financial long-term development of the economy, which was demonstrated in 1947 when the first long term loan was advanced to the turn colonial government. To demonstrate its commitment to its customer and the development of the Nigerian economy. The bank has since broadened its loan and credit portfolios to various sectors of the economy.
The bank has improved tremendously judging from a number of parameters including number of branches, growth in deposit base, asset size and size of loans and advances, and the adoption of Information Technology Communication system.
1.2 AIM AND OBJECTIVES OF THE STUDY
The aim of this research work is to examine the efficacy of information Technology and Communication (ICT) on organisational Performance with special reference to First Bank Nigeria Plc. The objectives of the study include:
- Evaluate if relation between ICT and organisational performance exists
- Determine what extent IT facilitates information in First Bank Nigeria Plc.
- Investigate the attainment of more effective information with the use of IT.
1.3 STATEMENT OF PROBLEM
Modern banks that wants to remain actively involved in international banking transactions would have to adopt technology employed for such deals. On the domestic front, competitive pressure and regulatory inducements prompted the banks to slowly but steadily embrace the computerisation of both front and back office banking operations. With time it was no longer enough to merely computerise bank operations, networking of systems (local area network (LAN) or wide area network (WAN) and even internet linkage became imperative and strategic. Many banks now have their branches online and real-time. However, because most banks used network architecture and solution with little attention paid to their compatibility, interfacing these applications for overall system synergy was difficult (CBN, 2001).
In Nigeria, customers of banks today are no longer about safety of their funds and increase returns on their investments only. Customers demand efficient, fast and convenient services. Customers want a Bank that will offer them services that will meet their particular needs (personalized Banking) and support their Business goals. They want to be able to check their balance online, find out if a cheque is cleared, transfer funds among accounts and even want to download transaction records into their own computer at work or home. Banks that adopt this advance banking system still face challenges of compatibility, interfacing these applications for overall system which causes problems such as crediting an account without withdrawing from ATM, inavailability of network on makind withdrawal both in the banking hall and at ATM point.
The identification of these problems that are encountered in Nigeria banking system as an indefinite approach to organisational performance is the area of interest for this research study. It is on the note that this research tends to evaluate the Efficacy of Information Technology and Communication (ICT) on organisational performance.
1.4 RESEARCH QUESTIONS
In order to achieve the purpose of this research study, the study will attempt to provide answers to the following research questions.
- Does ICT have any relationship with organisational performance?
- To what extent does IT require service of highly skilled accounting processes?
- To what extent does IT improve the performance of accounting processes?
- How can organization use IT to bring out efficiency and effectiveness?
- What is the relevance of IT in an organisation?
- Does IT assist the organization in decision making?
- Can any organization achieve its goals without IT?
1.5 RESEARCH HYPOTHESES
To provide answer to the research questions arising from this study, the following
hypotheses are postulated.
1. Ho: ICT does not influence efficiency and effectiveness of First Bank Plc., Banking System
HI: ICT influence efficiency and effectiveness of First Bank Plc’s Banking System
2. Ho: There is no relationship between ICT and organisational performance
HI: There is relationship between ICT and organisational performance
3. Ho:: IT does not assist organization in decision making
HI: IT assist organization in decision making
1.6 RESEARCH METHODOLOGY
For the purpose of collecting necessary data for this research work, primary and secondary data collection method will be used. The primary data collection method will be through the questionnaire, personal interview, and observation. The secondary data will be collected from reports and documents from the company. Also, reports outside the company and from library and desk research literatures will be used.
In this study, descriptive method will be used to present data and also in testing hypotheses, chi-square (X2) will be employed. Findings from this research study will be discussed in the light of the research problem hypothesis, conclusions will be drawn and recommendations and suggestions also will be made.
1.7 SCOPE AND LIMITATION OF THE STUDY
The scope of this research work is to evaluate the Efficacy of Information Communication Technology on Organisational Performance with special reference to First Bank of Nigeria PLc. The scope of this study will be limited to ICT adopted at the head offices of First Bank Niegria Plc. Marina, lagos.
The limitation of study is limited to available information which is constrained by the availability of finance, transportation, time, secretariat barrier as well as relevant information, availability of statistical data by management of study organization (First Bank of Nigeria Plc) and other constraints as projected by researcher.
1.8 SIGNIFICANCE OF THE STUDY
An assessment of the impact of ICT in Nigeria tends to identify not only the increasing importance of IT, but also the vital roles played by ICT in the Nigerian banking institution with particular reference to First Bank Nigeria Plc.
The First Bank is one of the dominant sector of the Nigerian economy. The banking sector has been defined and dedicated the pace of economic, political, social and cultural progress of the nation.
The significance of study tends to examine the efficacy of ICT on organisational performance in Nigeria. The importance of the study is basically on how IT influence performance.
ICT possess a great advantage on the organisations and to the entire world. Hence, the assessment of the relevance of this study is essential for the following reasons:
- To assess the relevance of ICT to organization decision making
- To enhance management appraisal of operation and performance through the use of ICT.
- To appraise level of organization growth through information collated
1.9 DEFINITION OF TERMS
Computer: Is an electronic device which is capable of solving complex problem quickly and accurately
Data Processing: Is the process of collecting, recording, filling, calculating and disseminating of facts related to the physical event occurring in business.
Mainframe: Is the generic name used for the first generation f computers that are known more for the size than for its computing power
Mini Computer: Is the name given to next generation of computers which has the same computing power as mainframe
Micro Computer: Is the name given to computers that were modeled Apple Macintosh and IBM Personal Computer
Software: These are non-hardware components of a computer in particular, the program that help computer perform its operation.
Hardware: These are actual physical components that constitute a computer.
Internet: Is a global heterogeneous network of compute system that share a common protocol.
System: Is an assembly of part where the component or part are connected together in an organized way.
Displacement: Sourcing of Personnel (people) from the environment
Selection: Through written tests, interview, fitness and capability
Technology: Is the study and practice of applied science