ABSTRACT
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
2.1 Introduction
2.2 The Nigerian Banking Industry
2.2.1 Developing
Business Models
2.2.2 Customer
Sophistication
2.2.3 Technology
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
2.7 Conclusion
CHAPTER
THREE: RESEARCH METHDOLOGY
3.0 Introduction
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
4.0
Introduction
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
5.2 Conclusion
5.3 Recommendations
References
Appendix
CHAPTER ONE
INTRODUCTION
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:
1.
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.
2.
Automated Payment Systems: Devices used here include
Automatic Teller Machine (ATM), Plastic Cards and Electronic Funds Transfer.
3.
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
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