An Analysis of the Determinants of Implementation of Information Technology Projects by Commercial Banks in Kenya

Abstract

Commercial banks in Kenya have been experiencing rapid technological innovations due to the nature of their business, regulatory dynamics, competition and customer expectations. The adoption process continues to be actualized through vibrant information technology projects. However, when Central Bank of Kenya actively started modernizing and standardizing the national payments system, it became apparent that commercial banks had to install robust information technology systems or upgrade existing systems to be in alignment with the new national payments platform. Often times, inability to follow established critical project implementation determinants resulted in delayed or failed projects hence undermining the realization of seamless implementation of IT projects. The general objective of this study was to analyze the determinants of implementation of information technology projects by commercial banks in Kenya. Specifically, this study examined the influence of executive commitment, user involvement, project team capability and project management approach on implementation of information technology projects by commercial banks in Kenya. The study also sought to establish the moderating effect of project risk on the determinants of implementation of IT projects by commercial banks in Kenya. The study adopted a cross-sectional survey design and primary data was collected using questionnaires from 40 licensed and operational commercial banks as at 31st December 2017 since 3 banks were not operational. The target staff compliment was 29,326 members comprising Management, Supervisory and Clerical cadres, derived from CBK annual report. A sample size of 195 members was computed from the target population using a model by Nasiurma. The study adopted stratified and purposive sampling techniques. Pilot study was carried out to check the reliability and validity of the research instrument. Cronbach’s coefficient alpha was used to test for reliability while consultations from IT project managers assisted in improving the validity of the questionnaire. Out of 195 questionnaires distributed, 138 questionnaires representing 71% were filled and collected. SPSS version 25 was used to facilitate data analysis. Multiple linear regression analysis was used to produce descriptive and inferential statistics. F-tests were employed to test the significance of the overall model while the significance of each specific variable was tested using T-test. The study showed that all the four project implementation determinants namely executive commitment, user involvement, project team capability and project management approach positively influenced implementation of IT projects. However, executive commitment was found not to have a significant influence on implementation of IT projects. From the study findings, project risk was found not to have a significant moderating effect on the determinants of implementation of information technology projects by commercial banks in Kenya. More emphasis should therefore be placed on the individual determinants of implementation of IT projects by commercial banks. This study contributes to project management discourse where instead of project managers simply considering individual generic critical success determinants, it is possible to group the success determinants thematically based on multiple-model relationships and also taking cognizance of the nature of the project at hand since not all determinants bear the same results on different projects. The study recommended increased involvement of upper level management in all projects at all stages from initiation, planning, execution, monitoring and control and closure. Also, bank staff ought to embrace continuous improvement facilitated by upper level management and the latter must ensure that there is equitable distribution of training and capacity building opportunities. The study also recommended that commercial banks should embrace meritocracy in their dealings so that only the best staff work on implementation processes of information technology projects hence allowing sustainable stability in the project teams and by extension the workplace. The study suggested that future studies should be carried out to establish why executive commitment was not a significant predictor on implementation of IT projects model yet available literature suggests otherwise. The study also suggested further research to be done using a longitudinal research design to address the span of time used for data collection and lastly further studies suggested using a wide target population.