CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Over the years, many innovations have taken place in the world. The most striking and most celebrated is the aspect of information technology. Organisations today are confronted with rapidly changing market condition indicated by high merger rate and strong competitors. Under these conditions, traditional management approaches that focus on financial figures and on centralised, analytical planning methods are considered to be insufficient for effectively steering the organisation in a dynamic environment, Hoffman (2002). Recent management support approaches like balanced score card is aimed at providing a broader view of organisational performance.
The role of technology in the “information age” is well recognised by banks, businesses, industries, governments and as such has completely woven in to their organisational structure and strategic planning process. Previous research work shows that information technology has become the nervous system of banks today and as such Nigerian banks which do not have the means to deliver banking service online and real-time across all branches within the country and abroad will be termed uncompetitive.
The integration of banks structure, business processes and strategies by the use of specialised information technology is considered a vital part of performance management concept. It has to be ensured that, strategic changes trigger modification on the business process level and the supporting information technology, and that innovation on the information system initiates the adjustment of the company strategy.
Organisations in the financial sector especially banks strive to achieve creation goals for the benefit of their owners or clients. These goals may be expressed in terms of objectives which include among others, increasing revenue, improving services rendered, expanding the customer base, minimising cost of operations.
Nigerian economy yearns for development. Irrespective of the fact that she is blessed with enormous natural resources, she remains one of the poorest countries in the world. Banks today are looked upon as vehicle of change for a much needed economic growth and development as it behoves on banks to develop the most effective means of delivering effective, efficient and quality service that will help drive our awaited economic success. These can be made possible if and only if information technology is properly put to use in the banking sector.
Information technology has been acknowledged as the life wire of banks in the financial sector as it promotes and facilitates the performance of banks in the country. These therefore call for a pre-requisite need to embrace information technology. It is in view of this that this research work attempts to examine the impact of information technology on the performance of banks in Nigeria today. Organisations today are confronted with rapidly changing market conditions indicated by high turnover rates and strong competitions. Under these conditions, traditional management approaches that focus on financial figures and on centralized analytical planning methods are considered to be insufficient for effectively steering the organization in a dynamic environment (Hoffmann, 2002). Recent management support approaches, like intellectual capital, aim at providing a broader view of organizational performance. They combine both financial and non- financial aspects to monitor, plan and influence organisational performance. Companies today are facing a turbulent business environment that is characterised by constant changes. To survive, companies must alter the way they conduct businesses with customers, and must offer superior services in order to retain and satisfy their customers. Customer satisfaction is an absolute requirement for any successful business. Without customer satisfaction there can be no customer loyalty. With no customer loyalty, there will be no business boom.
It is widely believed by firms/organisations that investment in information systems will enable firms cut costs and compete strategically and effectively (Butler and Sellbom, 2002; Palanisamy, 2005). Information System exists to help an organization to accomplish its objectives. An Information System collects data, manipulates it, compiles it and integrates that data into something that has meaning for a manager or operator (Palanisamy, 2005). Information Systems provides guidance to the organizations employees to better assist them in the accomplishment of their objectives. It has a great impact on all levels of organization be it operational, tactical, or strategic aspect. It impacts on all functional areas including finance and accounting, manufacturing and production, sales and marketing, and human resource. An evaluation of the performance of information systems and the role it plays in an organization with focus on commercial banks becomes an indispensable point for managers and employees of banks and customers as it affects profit and returns. However, the study tends to evaluate Information Technology on the banking industry (A case study of First Bank of Nigeria, Plc)
1.2 Statement of the Problem
Businesses need to continuously find better and faster ways to adapt to the competitive marketplace in order to compete in today’s high technology and fast paced environment. Some organizations have not fully embraced information management tools and as a result are confronted with many information management problems and issues. In many ways, the growth of electronic information has only worsened these issues over the last decade or two. In fact, the practice of generating, processing, storing and retrieving of information at maximum security level becomes almost impossible without appropriate information systems. Academic researchers have conducted many research projects in order to stress the importance of such applications, propose models and methodologies to identify such applications. However, few researches have been done on the current situation and the potentials of Information Systems within the financial sectors in Nigeria. The influence of Information Systems in organizational performance was the main thrust of this research work