EFFECT OF THE BUSINESS PROCESS REENGINEERING

FACTORSAND INFORMATION TECHNOLOGY CAPABILITYON

ORGANIZATION PERFORMANCE

By

KABIRU JINJIRI RINGIM

Thesis Submitted to
Othman Yeop Abdullah Graduate School of Business,
Universiti Utara Malaysia,
in Fulfillment of the Requirement for the Degree of Doctor of Philosophy
June 2012
 PERMISSION TO USE

In presenting this thesis in partial fulfillment of the requirements for a postgraduate

degree from Universiti Utara Malaysia (UUM), I agree that the Library of this
university may make it freely available for inspection. I further agree that
permission for copying of this thesis in any manner, in whole or in part, for
scholarly purpose may be granted by my supervisor(s) or, in their absence, by the
Dean of Othman Yeop Abdullah Graduate School of Business where I did my
[Link] is understood that any copying or publication or use of this thesis or parts
of it for financial gain shall not be allowed without my written permission. It is also
understood that due recognition shall be given to me and to the Universiti Utara
Malaysia (UUM) in any scholarly use which may be made of any material in my
thesis.

Request for permission to copy or make other use of materials in this thesis in
whole or in part should be addressed to:

Dean of Othman Yeop Abdullah Graduate School of Business

Universiti Utara Malaysia
06010 UUM Sintok
Kedah Darul Aman

ii
 ABSTRACT

The main objective of this study is to examine the effects of the business process
reengineering (BPR) factors on the Nigerian banks organisational performance.
Additionally, this study also investigates the moderating effect of information
technology (IT) capability in the relationship of BPR factors and the organisational
performance. BPR factors are operationalised by change management, BPR
strategy alignment, customer focus, management commitment, IT investment, and
adequate financial resource. The IT capability dimensions include IT knowledge, IT
operations and IT objects. Data was sent and collected through a hand-delivery
method. A proportionate stratified random sampling was used for sample selection.
560 questionnaires were sent to banks’ managers but 417 of them were returned;
giving a response rate of 74%. The findings were as follows: first, the findings
show that fully supported relationships were found between IT capability and
organisation performance. Second, the results showed that BPR factors such as
adequate financial resources and management commitment were significantly
related to overall organisational performance. Specifically, adequate financial
resource's dimension was significantly related to cost reduction, customer service
management and operations efficiency. Next, management commitment was found
to be significantly related to customer service management and operation
efficiency. Meanwhile, IT investment was significantly associated with customer
service management. Other dimensions of BPR factors such as change
management, customer focus, and BPR strategy alignment were found insignificant
to the banks’ performance. Third, upon investigating the moderating effects of IT
capability on the relationship between BPR factors and organisational performance,
the results revealed mixed supports for the interaction effects of IT capability
attributes. The outcome of this study provides important insights to both managers
and researchers for further understanding on the effects of BPR factors and IT
capability on organisational performance. The necessary suggestions on new area
of research were recommended for future researchers.
.

Keywords: Business process reengineering factors, Information technology

capabilities, Organisational performance, Banks, Nigeria.

iii
 ABSTRAK

Objektif utama kajian ini ialah untuk mengkaji kesan faktor-faktor perekayasaan
proses perniagaan (BPR) terhadap prestasi organisasi bank-bank Nigeria. Selain itu,
kajian ini juga menyiasat kesan moderator keupayaan teknologi maklumat (IT) di
dalam hubungan antara faktor-faktor BPR dengan prestasi [Link]-faktor
BPR dioperasikan melalui pengurusan perubahan, strategi penjajaran BPR,
berfokuskan pelanggan, pengurusan komitmen, pelaburan IT dan sumber kewangan
yang [Link] keupayaan IT termasuk pengetahuan IT, operasi IT dan
objek [Link] telah dihantar dan dikumpulkan melalui pendekatan penghantaran
secara serahan [Link] rawak strata berkadaran telah digunakan dalam
pemilihan sampel. Sebanyak 560 soal selidik telah dihantar kepada pengurus-
pengurus bank, tetapi hanya 417 yang telah dipulangkan, yang menjadikan kadar
respons sebanyak 74%. Hasil kajian adalah seperti berikut: pertama, keputusan-
keputusan menunjukkan sokongan penuh terhadap hubungan di antara keupayaan
IT dan prestasi organisasi. Kedua, keputusan menunjukkan faktor-faktor BPR
seperti sumber kewangan yang mencukupi dan komitmen pengurusan mempunyai
hubungan yang signifikan kepada prestasi organisasi secara menyeluruh. Secara
terperinci, dimensi sumber kewangan yang mencukupi mempunyai hubungan yang
signifikan terhadap pengurangan kos, pengurusan perkhidmatan pelanggan, dan
kecekapan operasi. Seterusnya, komitmen pengurusan didapati mempunyai
hubungan yang signifikan kepada pengurusan perkhidmatan pelanggan dan
kecekapan [Link] pelaburan IT didapati mempunyai hubungan yang
signifikan dengan pengurusan perkhidmatan pelanggan. Dimensi-dimensi lain
kepada faktor-faktor BPR seperti pengurusan perubahan, berfokuskan pelanggan,
dan strategi penjajaran BPR adalah tidak signifikan kepada prestasi bank. Ketiga,
setelah meneliti kesan moderator dalam hubungan di antara faktor-faktor BPR
dengan prestasi organisasi, keputusan menunjukkan sokongan yang bercampur
dalam kesan interaksi terhadap sifat-sifat keupayaan [Link] kajian ini dapat
memberikan pandangan penting kepada pengurus dan penyelidik untuk pemahaman
lanjut tentang kesan faktor-faktor BPR dan keupayaan IT terhadap prestasi
[Link]-cadangan yang diperlukan untuk penyelidikan lanjutan telah
diusulkan untuk penyelidik-penyelidik yang di masa akan datang.

Katakunci: Faktor-faktor perekayasaan proses perniagaan, Keupayaan teknologi

maklumat, Prestasi organisasi, Bank-bank, Nigeria

iv
 ACKNOWLEDGEMENTS

In the name of Allah, Most Gracious, Most Merciful. Praise and peace be upon His
beloved our Prophet Muhammad (SAW), his family and his companions from
whom, and by the will of [Link] escape darkness into enlightenment. It was in
this spirit that I set out to undertake the current study, and the quest for self-
actualization provided the additional push that kept me going and finally sees this
thesis come to its expected conclusion, Alhamdulillah.

I am greatly indebted to so many wonderful people for their contributions and

assistance in so many ways. Specifically, I would like to thank my supervisors Dr.
Mohd Rizal Razalli and Dr. Norlena Hasnan, who had assisted, guided and renders
their best supervisory know how throughout the entire process of completing my
thesis.

I would also like to acknowledge the support and contribution of others who have
contributed directly or indirectly in one way or another, to the completion of this
thesis. I am sorry for not being able to detail them here, butsame, I seek the
magnanimity of Allah to bestow on all of them with His blessing and bountiful -
jazakumullahukhairan kathira.

A special dedication to my wife, Binta Bala and lovely children Ayman

Muhammad, Nana-Aisha and Ummita-Suwaiba and to my brothers and sisters in
Islam for their love, cares, constant assurances, patience and understanding. Last
but not least, I am presenting this thesis as present to my parents' spirits in their
graves. Amin!

v
 TABLE OF CONTENTS

Page
PERMISSION TO USE ii
ABSTRACT iii
ABSTRAK iv
ACKNOWLEDGEMENTS v
TABLE OF CONTENTS vi
LIST OF TABLES xiii
LIST OF FIGURES xvi
LIST OF ABBREVIATIONS xvii

CHAPTER 1 INTRODUCTION 1
1.1 Background of the study 1
1.2 Problem statement 5
1.3 Research questions 8
1.4 Research objectives 8
1.5 Significance of the study 9
1.5.1 Theoretical contributions 9
1.5.2 Practical contributions 10
1.6 Scope of the study 11
1.6.1 Definition of variables 12
1.6.2 Banks and financial institutions 14
[Link] Commercial bank 14
[Link] Microfinance bank 15
[Link] Mortgage bank 15
1.7 Outline of the study 16

CHAPTER 2 LITERATURE REVIEW 19

2.1 Introduction 19
2.2 Organizational performance 19
2.3 Bank performance 20
2.3.1 Overall performance of Nigerian banks 21
2.3.2 Operating cost performance of Nigerian banks 22
2.3.3 Customer service management performance of Nigerian banks 24
2.3.4 Previous studies on bank performance 24

vi
 2.3.5 Bank process performance improvement method 30
2.3.6 Suitability of reengineering as radical performance improvement
method 32
2.3.7 Organizational performance measurement 33
2.4 BPR factors 39
2.4.1 Change management 44
[Link] Reward and motivation 46
[Link] Effective communication 46
[Link] Creating effective organizational culture 47
[Link] Stimulating receptivity to change 48
[Link] Employee’s empowerment 48
[Link] Human involvement 48
[Link] Training and education 49
2.4.2 BPR Project management 49
2.4.3 Top management commitment 50
2.4.4 Customer focus 52
2.4.5 IT infrastructure 52
2.4.6 Process redesigns 53
2.4.7 Financial resources 55
2.4.8 Less bureaucratic (flatter) structure 56
2.5 BPR failure factors 57
2.5.1 Lack of proper strategy 58
2.5.2 Unrealistic objectives 58
2.5.3 No clear concept of a process 59
2.5.4 Wrong scope of process objectives 59
2.5.5 Non recognition of BPR benefit 59
2.5.6 Over dependence on IT systems 60
2.5.7 Opposition and lack of commitment from top management 60
2.5.8 Previous studies on BPR factors and performance in banks 60
2.5.9 Different between this study and previous study on BPR factors
and performance in banking industry settings 70
2.6 IT capabilities 73

vii
 2.6.1 Definition and concept of IT capability 73
2.6.2 The role of IT capability in improving performance 75
2.6.3 The contradictory role of IT as an enabler in BPR 77
2.6.4 IT capability measurement 79
[Link] IT knowledge 79
[Link] IT operations 80
2.6.5 IT service capability maturity model 85
2.6.6 The key process areas on the IT service capability maturity model
(IT services CMM) 87
[Link] Initial level 88
[Link] Repeatable level 88
[Link] Defined level 91
[Link] Managed level 96
[Link] Optimizing level 97
2.6.7 IT capability as the moderating variable 98
2.7 Underlying theories 102
2.7.1 Resource-based view (RBV) theory 103
2.7.2 How the RBV relates to this study 109
2.7.3 IT capability as dynamic capability 110
2.7.4 Complementarity theory 112
2.8 Chapter Summary 112

CHAPTER 3 CONCEPTUAL FRAMEWORK 115

3.1 Introduction 115
3.2 Conceptual framework 115
3.3 BPR factors, IT capability and organizational performance 119
3.4 Statement of hypothesis's development 120
3.5 Chapter Summary 124

CHAPTER 4 METHODOLOGY 125

4.1 Introduction 125
4.2 Research design 125
4.2.1 Types of research design 126
4.2.2 Sampling design 127

viii
 4.2.3 Sampling techniques 129
4.2.4 Proportionate stratified random sampling 130
4.2.5 Estimating expected response rate 131
4.3 Data collection strategy 131
4.4 Measurement instruments and operationalization of variables 133
4.4.1 BPR factors 135
[Link] Change management 136
[Link] BPR project management 137
[Link] Top management commitment 137
[Link] Customer focus 138
[Link] IT infrastructure 139
[Link] Effective process redesigns. 140
[Link] Adequate financial resources 140
[Link] Less bureaucratic (flatter) structure 141
4.4.2 IT capability 142
[Link] IT knowledge 142
[Link] IT operations 143
4.4.3 Organizational performance 144
[Link] Non-financial performance measures 144
[Link] Financial performance measures 145
4.5 Preliminary investigation on BPR implementation in Nigerian banks 148
4.6 Validity test of instrument measures 149
4.7 Reliability test analysis of construct 151
4.8 Data analysis method 152
4.8.1 Cleaning and screening the data 153
4.8.2 Descriptive analysis 153
4.8.3 Goodness of measure 153
4.8.4 Principal component analysis (PCA) 154
4.8.5 Correlation analysis 154
4.8.6 Multiple regression analysis 154
4.8.7 Hierarchical regression analysis 155
4.9 Chapter Summary 156

ix
CHAPTER 5 DATA PRESENTATION AND ANALYSIS 157
5.1 Introduction 157
5.2 Response rate 157
5.3 Respondent and organizational background 159
5.4 Goodness of measures: factor analysis of the research instrument 161
5.4.1 Dependent variable – organization performance (OP) 164
5.4.2 Moderating Variable: IT capability (IT Cap) 166
5.4.3 Independent variables: BPR factors 169
5.4.4 Common method variance (CMV) test 175
5.5 Measuring the reliability of the research instrument 176
5.6 Construct Reliability and Validity 178
5.6.1 Convergent Validity 181
5.6.2 Discriminant Validity 182
5.6.3 Face Validity 182
5.6.4 Nomological Validity 183
5.7 Modified framework and restatement of hypotheses 184
5.8 Preliminary analysis 188
5.8.1 Missing data 189
5.8.2 Assessment of outliers 189
5.8.3 Presentation of descriptive statistics for independent variables 190
5.8.4 Bivariate relationship between BPR factors, IT Capability and
Organizational Performance 192
5.8.5 Multivariate relationship between IT capability and organizational
performance 193
5.8.6 Multivariate relationship between BPR factors and organizational
performance 193
5.9 Multiple regression'sanalysis tests for assumptions 194
5.9.1 Normality 194
5.9.2 Linearity 195
5.9.3 Multicollinearity 196
5.9.4 Homoscedasticity 198
5.10 Results of multiple regression (Hypotheses testing) 199

x
 5.10.1 Multiple regression analysis results and hypotheses test between
BPR factors and overall performance. 200
5.10.2 Multiple regression analysis results and hypotheses test between
BPR factors and operations cost reduction performance 201
5.10.3 Multiple regression analysis results and hypotheses test between
BPR factors and customer service management performance 203
5.10.4 Multiple regression analysis results and hypotheses test between
BPR factors and business operations efficiency performance 205
5.10.5 Multiple regression analysis results between IT capability and
overall performance 209
5.10.6 Multiple regression analysis results between IT capability and
cost reduction performance 210
5.10.7 Multiple regression analysis results between IT capability and
customer service management performance 212
5.10.8 Multiple regression analysis results between IT capability and
business operations efficiency performance 213
5.10.9 Moderating effect of IT capability on relationship between BPR
factors and organizational performance 215
5.10.10 Interacting effects of IT capability attributes with BPR factors on
overall performance of banks 220
5.10.11 Interacting effects of IT capability attributes with BPR factors on
operations cost reduction performance of banks 221
5.10.12 Interacting effects of IT capability attributes with BPR factors on
customer service management performance of banks 223
5.10.13 Interacting effects of IT capability attributes with BPR factors on
business operations efficiency performance of banks 224
5.11 Chapter Summary 227

CHAPTER 6 DISCUSSION AND CONCLUSION 229

6.1 Introduction 229
6.2 Recapitulation of study 229
6.3 Overall discussion of findings 231

xi
 6.3.1 Relationship between BPR factors and organizational
performance 231
[Link] BPR factors and overall performance 235
[Link] BPR factors and operation's cost reduction 241
[Link] BPR factors and customer service management 242
[Link] BPR factors and business operation's efficiency 245
6.3.2 Relationship between IT capability and organizational
performance 246
6.3.3 Moderating effects of IT capability 248
6.3.4 BPR factors - IT capability- overall performance 250
6.3.5 BPR factors - IT capability-operations cost reduction
performance. 256
6.3.6 BPR factors - IT capability-customer service management
performance 256
6.3.7 BPR factors - IT capability-business operations efficiency
performance 258
6.4 Implications of the study 260
6.4.1 Managerial implications 260
6.4.2 Theoretical implications 265
6.5 Limitations of the study 270
6.6 Directions for future research 271
6.7 Conclusion 273

REFERENCES 276
APPENDIX 1 QUESTIONNAIRE 299
APPENDIX 2 DEMOGRAPHIC DATA FREQUENCIES 309
APPENDIX 3 RESULTS OF FACTOR ANALYSIS 314
APPENDIX 4 RELIABILITY TEST 330
APPENDIX 5 ASSUMPTION OF NORMALITY 339
APPENDIX 6 BIVARIATE CORRELATION 344
APPENDIX 7 MULTIPLE REGRESSION ANALYSIS 346
APPENDIX 8 HIERARCHICAL REGRESSION IT CAPABILITY –
BPR FACTORS & OVERALL PERFORMANCE 358
APPENDIX 9 POPULATION FRAME OF NIGERIAN BANKS AND
RANDOM SAMPLE SELECTION 367
APPENDIX 10 RESEARCH PROCESS 410
APPENDIX 11 LIST OF PUBLICATION FROM THE WORK 412

xii
 LIST OF TABLES

Page

Table 1.1 Definition of Major Variables 13

Table 2.1 Summary of Selected Previous Studies on Bank Financial and Non-
financial Performance 26
Table 2.2 Summary of Selected Studies on Organizational Performance
Dimension 38
Table 2.3 Summary of the BPR Success Factors and Causes of Failure 57
Table 2.4 Summary of Studies on BPR Factors and Performance in Banks and
Financial Services Setting 61
Table 2.5 Summary of Some Selected Previous Studies on BPR in
Organizations from Another Sector 65
Table 2.6 Summary of Some Selected Previous Studies on IT and
performance 82
Table 2.7 Five Levels of the IT Service Capability Maturity Model 87
Table 2.8 Summary of Various Relevant Theories of the Firm Performance
and their Implication 104
Table 3.1 Summary of Statement of Direct Relationship Hypotheses
Development 121
Table 3.2 Summary of Statement of Indirect Relationship Hypotheses
Development 122
Table 4.1 Proportionate stratified random sampling 130
Table 4.2 Summary of Measurement Instrument Variables, Sources, and
Number of Items 146
Table 4.3 Summary of the pilot test reliability analysis of constructs 152
Table 4.4 Summary of data analysis against each research objective 155
Table 5.1 Response Rate of the Questionnaires 158
Table 5.2 Results of the Factor Analysis for Organization Performance 165
Table 5.3 Results of the Factor Analysis for IT Capability 168

xiii
Table 5.4 Results of the Factor Analysis for Business Process Re-engineering
Factors (BPR) 171
Table 5.5 Summary of Reliability Analysis of Major Variables 177
Table 5.6 Constructs Validity and Reliability 179
Table 5.7 Discriminant Validity 183
Table 5.8 Summary of Revised Hypotheses 186
Table 5.9 Descriptive Statistics for Major Variables 191
Table 5.10 Pearson's Correlation between the Constructs 192
Table 5.11 Tolerance and VIF Values 198
Table 5.12 Multiple Regression Result between BPR Factors and Overall
Organizational Performance 201
Table 5.13 Multiple Regression Result between BPR Factors and Operations
Cost Reduction Performance 203
Table 5.14 Multiple Regression Result between BPR Factors and Customer
Service Management Performance 205
Table 5.15 Multiple Regression Result between BPR Factors and Business
Operation Efficiency Performance 207
Table 5.16 Summary of hypothesis testing on the direct effect of BPR factors
on organisational performance 207
Table 5.17 Summary of Hypotheses Testing for the Direct Relationship
between BPR Factors, IT Capability and Organisational
Performance 208
Table 5.18 Multiple Regression Result between IT Capability and Overall
Organizational Performance 210
Table 5.19 Multiple Regression Result between IT Capability Dimensions
and Operation Cost Reduction 211
Table 5.20 Multiple Regression Result between IT Capability Dimensions
and Customer Service Management 213
Table 5.21 Multiple Regression Result between IT Capability Dimensions
and Business Operations Efficiency 214
Table 5.22 Summary of hypothesis testing on the direct effect of IT capability
on organisational performance 215

xiv
Table 5.23 Hierarchical Regression Results: the Moderating Effect of IT
Capability on the Relationship between BPR Factors and Overall
Performance 221
Table 5.24 Hierarchical Regression Results: the Moderating Effect of IT
Capability on the Relationship between BPR Factors and Cost
Reduction 222
Table 5.25 Hierarchical Regression Results: the Moderating effect of IT
Capability on the Relationship between BPR Factors and
Customer Service Management 224
Table 5.26 Hierarchical Regression Results: the Moderating Effect of IT
Capability on the Relationship between BPR Factors and Business
Operations Efficiency 225
Table 5.27 Summary of hypothesis testing on the in- direct effect of BPR
factors, IT capability and organisational performance 226
Table 5.28 Summary of Hypotheses Testing for the Interaction between BPR
Factors, IT Capability and Organisational Performance 228

xv
 LIST OF FIGURES

Page

Figure 2.1 Model Framework of Khong & Richardson (2003) 72

Figure 2.2 Model Framework of Cheng & Chiu (2008) 72
Figure 2.3 Graphical Presentation of a Moderated model 101
Figure 2.4 Graphical Presentation of a Mediated model 102
Figure 2.5 Conceptual Framework 113
Figure 3.1 Research Model 118
Figure 5.1 The modified research model to the study 185
Figure 5.2 Residual plot – BPR Factors and Organizational Performance 196
Figure 5.3 Framework for identifying Moderator variables (Adopted from
Sharma, Durand & Gur-Arie, 1981) 217
Figure 5.4 The moderators identified for the study based on typology of
specification variables by Sharma et al. (1981) 218
Figure 6.1 The moderating effect of IT capability on the relationship between
management commitment and overall performance 252
Figure 6.2 The moderating effect of IT capability on the relationship between
customer focus and overall performance 254
Figure 6.3 The moderating effect of IT capability on the relationship between
change management and overall performance 255
Figure 6.4 The moderating effect of IT capability on the relationship between
change management and operation's cost reduction Performance 256
Figure 6.5 The moderating effect of IT capability on the relationship between
IT investment and customer service management performance 257
Figure 6.6 The moderating effect of IT capability on the relationship between
management commitment and customer service management
performance 258
Figure 6.7 The moderating effect of IT capability on the relationship between
management commitment and business operations efficiency
performance 259

xvi
 LIST OF ABBREVIATIONS

24/7 Online –Real Time (24 Hours in a day, 7 days in a week)

AFR Adequate Financial Resources
ATM Automatic Teller Machine
BPI Business Process Improvement
BPR Business Process Reengineering
BSC Balance Scorecard
CBN Central Bank of Nigeria
CIMA Chartered Institute of Management Accountant
CIO Chief Information Officer
CM Change Management
CSF Critical Success Factor
CSM Customer Service Management
EAGLE Efficiency, Accountability, Goal orientations, Leadership,
Effectiveness and staff motivation
EPR Effective Process Redesign
EPS Earnings per Share
FOREX Federal Mortgage Bank of Nigeria
GDP Gross Domestic Product
ICT Information and Communication Technology
IS Information System
IT Information Technology
ITC Information Technology Capability
ITSCMM Information Technology Service Capability Maturity Model
KBV Knowledge Based View
KPI Kay Performance Indicator
LAN Local Area Network
LBS Less Bureaucratic Structure
MFB Microfinance Bank
MMPF Multi-Model Performance Framework
NDIC Nigerian Deposit Insurance Corporation
ONFP Organisational Non-Financial Performance
OFR Organisational Financial Performance
OP Organisational Performance
OPS Operations
PMI Primary Mortgage Institution
POS Point of Sale
RBV Resource-based View
ROE Return on Equity
ROI Return on Investment
SLA Service Level Agreement
SMS Short Message Services
SPSS Statistical Package of Social Science
SWIFT Society for Worldwide Interbank Financial Telecommunication
WAN Wide Area Network

xvii
 CHAPTER 1 INTRODUCTION
CHAPTER 1
INTRODUCTION

1.1 Background of the study

The progressive globalization of financial markets requires market participants to

make changes to their operational processes beyond local to global

competitiveness. This trend has led many banks in developing countries to improve

customer service quality, speed, reduce operating costs, and enhance profitability

performance(Randle, 1995). Innovative banking services and personalized portfolio

management are evolving as the market consolidates due to mergers and

acquisitions of up-to-date strategy. As a result, the focus is no longer on cutting

costs alone, but rather on simultaneously improving services to customers. In other

words, the processes must not only be more efficient, but also more customer-

friendly as well. Central Bank of Nigeria (CBN) initiated business process

reengineering (BPR) project tagged EAGLES (Efficiency, Accountability, Goal

orientations, Leadership, Effectiveness and Staff motivation). The objective is to

enhance the operations and quality of banks, which include: industry remedial

programmes to fix the key causes of the crisis; risk-based supervision; reforming

the regulatory framework; enhanced customer protection as well as internal

transformation of the bank (CBN, 2009).

On the internal transformation aspect, the CBN in partnership with

PricewaterhouseCoopers conducted a comprehensive assessment of the bank's core

and non-core operations that required fundamental restructuring. The identified

areas were customer service delivery, regulatory function of the CBN, performance

management & benchmarking, information technology (IT), customer satisfaction,

human resources and administration and communication effectiveness at all

stakeholder levels (CBN, 2009). In doing so, attempts are being made to adopt

approaches in the financial sector that have proven effective in other industries,

particularly those in manufacturing. One of these approaches is known as BPR.

BPR is a major management approach that focuses on doing things in a better way

that is clearer and easier to achieve a radical improvement on quality, speed,

customer service, and reduction in cost (Goll & Cordovano, 1993). Allen (1994)

argued that, the focus of reengineering is on the process of redesign, which relates

to doing things better and clearer. One of the primary goals of the financial service

industry is to enhance processes and customer service performance through the

management approach of cost reduction, improving quality, speed, and customer

service for profit maximization. Therefore, management scholars argue that

organizations can become proactive in operation by adopting the BPR to achieve a

remarkable improvement in organizational performance (Davenport & Short, 1990;

Hammer, 1990).

BPR is a popular management tool for dealing with rapid technological and

business changes (Ranganathan & Dhaliwal, 2001). It was introduced by Hammer,

as radical redesigns of processes in order to gain significant improvements in cost,

quality, and services(Ozcelik, 2010).BPR creates changes in people (behaviour and

culture), processes and technology (Al-Mashari & Zairi, 2000).It does not seek to

alter or fix existing processes, but forces companies to ask whether or not a process

is necessary, and then seeks to find a better way to do it(Siha & Saad, 2008).BPR

2
integrates all departments into a complete process that has been designed to fulfil a

specific business goal (Cheng, Tsai & Xiano, 2006).Successful implementation of

BPR enables organizations to achieve dramatic gains in business performance(Shin

& Jemella, 2002).

BPR helps banks to deal with new economic challenges and change the traditional

processes to improve their customers' satisfaction. BPR(Herzog, Polajnar &

Tonchia, 2007) is a management discipline for analyzing and redesigning current

business processes and their components in terms of efficiency, effectiveness and

added value to the objectives of the business. The conduct of the BPR steps is

planned to gather and process business requirements in support of a modernization

effort for a defined area. The BPR starts with planning activities that include the

creation of a BPR team, the development of a BPR scope document and an

examination of the proposal that relates to a given area, examines the existing and

future business process and improves it accordingly. The successful implementation

of BPR depends on how the project fits to the organization cultural norms, and IT

(Ahmad, Francis, & Zairi, 2007; Al-Mashari & Zairi, 1999, Attaran, 2004, Bhatt,

2000; Davenport & Short, 1990; Hammer & Champy, 1993; Khong & Richardson,

2003; Murray & Lynn, 1997).

Reengineering of operational processes undertaken in the bank should be handled

by the project management expertise within the IT department. The IT capability

includes both the technical and managerial expertise required to provide reliable

physical services and extensive electronic connectivity within and outside the firm.

IT increases the market share of the bank through offering a product or service that

3
is not offered by others, e.g., those customers who prefer private/personalized

services or use of debit cards have become the focus of retail and investment in

banking (Dos-Santos, 1995). Therefore, this study uses the resource-based view

(RBV) of the firm, dynamic capability's theory and complementarity theory to

explain the relationship between BPR factors and organizational performance under

the influence of IT capability. The application of IT capability is to enhance the

service-delivery process, produce new products, processes, strategy, and work

faster, eliminate all communication barriers within the organization, and empower

workers to link up with customers and suppliers to achieve the competitive

advantage (Davenport & Short, 1990; Hammer, 1990; Teng, Grover & Fielder,

1994). In Nigeria, liberalization of the banking sector and high-technology

capability has brought revolutionary changes in customer relationship's

management(Aregbeyen, 2011).

IT in banking sector is an important tool that helped to streamline the back-office

operations by improving both efficiency and cost reduction (David-West, 2005).

Advances in technology also influence the way banks’ services are delivered with

the aim of making them more convenient for customers. For example, many banks

in Nigeria have their branches connected online real time (24/7). Some banks have

ATMs to make cash available to their customers 24/7. Nigerian bank's practice e-

banking, telephone, and mobileservices, Money transfer services through

MoneyGramme, and Western Union Money transfer. These enabled the Nigerian in

Diaspora to send money to their families (CBN, 2008). Moreover, the IT capability

(IT operations and IT knowledge) makes Nigerian banks participate more

effectively in the financial service arena. For instance, some organization can

4
access international banking networks for efficient fund transfers, open, amend, and

negotiate letters of credit, and retrieve up to date status of customer transactions

between the banks that joined the Society for Worldwide Inter-bank Financial

Telecommunication (SWIFT).

1.2 Problem statement

As the world becomes technologically advanced with increased in global

competition in financial service industry, banks are left with no choice but to look

beyond local competition (Randle, 1995).In Nigeria, liberalization of the banking

sector has changed the form of competitive advantage for the industry. New

generation banks emerged. The old generation banks consolidate operations either

by merger, acquisition, raised up capitalization based and reengineer their

operations in order to be able to improve their performance and compete

effectively. The consequences of merger and consolidation of operational process

and an intensified foreign competition in the financial service industry through

liberalization and globalization faced by the organizations led to radical changes in

operations, and services that resulted in conflicting performance Wei & Nair,

2006). Customer focus became a key factor in determining the success as an

organization (Idris, 2011). The bank that has the largest customer base and the

highest customer retention rate is the market leader in the industry. Hence, the

quality of customer service becomes a driving force in ascertaining business

survival in the banking industry (Tang &Zairi, 1998). To survive and excel in this

type of business environment, organisational performances become the main

5
concern for the banks in Nigerian. Implementation of the BPR alone cannot fully

result to sustainable performance of bank’s operating in turbulent business

environment.

Previous studies that examined the BPR factor performance relationships such as

those conducted by Cheng and Chiu, (2008); Khong and Richardson, (2003) have

ignored the specific nature of IT capability, and, also, have not fully considered

important environmental conditions that influence the relationships. The literature

in BPR implementation is widespread with lack of thorough empirical evidence of

BPR impact on performance. Hence, there is a need to relate factors that may

contribute to organizational performance within the context of other variables that

also affect performance (Devaraj & Kohli, 2000).

Using resources based view (RBV) of firm performance; the theory explains the

relationship between organization resources and sustaining competitive advantage

for superior performance relative to competitors (Barney, 1991; Fahy, 2000). The

dynamic capability in form of IT capability was introduced to address the

theoretical limitation of RBV on issues of having sustainable performance in

turbulent business environment (Paulous, 2004). The complementarity theory is

also mentioned to address the inadequacy of RBV for isolation of resources in

creating or sustaining competitive advantage (Dedrick, Gurbaxani, & Kraemer,

2003; Kohli & Devaraj, 2003; Melville et al., 2004). This research is aimed to study

the moderating effect of IT capability attributes to the relationship between BPR

factors and organizational performance of Nigerian banks using survey

questionnaires. When examining the relationship between the reengineering factors

6
such as resources and performance, it was posited that some key moderating

variables that are important issues for the research may exist (Wade & Hulland,

2004). The moderating variable of great interest is the organizations’ IT capability

and its influence on the resources (BPR factors) such as performance, BPR &IT

relationships(Liu, Liu & Hu, 2008).

IT capability is more that of a moderator than a mediator, since definition of IT

capability is the ability to mobilise and deploy IT based resources in combination

with other resources and capabilities (Bharadwaj, 2000). Therefore, a moderator

variable is introduced to see whether the relationship changes strengthen/weaken

with the presence of the moderator. Previous studies such as Yongmei, Hongjian,

and Junhua, (2008); Said, Hui, Taylor and Othman, (2009); Shao, Feng, Choudrie,

and Liu, (2010) used IT capability as a moderating [Link], the

relationship and influence have not been explicitly been explained. The financial

service industry is one of the early adopters of new information technologies

thatmean the effect of IT capability on firm performance is inconclusive in the

sector in general unlike in the manufacturing sector (Brynjolfsson, 1993).Hence,

there is a need to understand the effect of the IT capability attributes to the

relationship between BPR factors and performance, particularlyof Nigerian

[Link] view of the research problem that are presented above, specifically in the

Nigerian context as none of the existing studies to the knowledge of the researcher

provide integration between BPR factors and IT capability, this study seeks to

address the following research questions.

7
1.3 Research questions

Based on above discussions on the research problem, the following questions are

going to be addressed accordingly by the research:

1. To what extent does the BPR factors relate to the organizational performance

of Nigerian banks?

2. To what extent does IT capability affect the organizational performance of

Nigerian banks?

3. To what extent does the level of IT capability moderates the relationship

between the BPR factors and the organizational performance of Nigerian

banks?

1.4 Research objectives

The purpose of the research is to study the effect of BPR factors on the

organizational performance of Nigerian banks with IT capability as the moderating

factor. Thus, the objectives of this study are derived from the above research

questions that this study seeks to answer as follows:

1. To examine the relationship between the BPR factors and the organizational

performance of Nigerian banks.

2. To determine the effect of IT capability attributes on the organizational

performance of Nigerian banks.

8
3. To examine the moderating effect of IT capability on the relationship between

BPR factors and the organizational performance of Nigerian banks.

1.5 Significance of the study

1.5.1 Theoretical contributions

First, the study contributes to the existing body of knowledge by integrating IT

capability and BPR factors in the banking performance relationship in one study.

These two concepts (BPR factors and IT capability) represent the two main

independent research streams. Previous studies independently investigated the link

between BPR and performance (Cheng& Chiu, 2008; Sidikat & Ayanda 2008;

Khong &Richardson, 2003; Terziovski et al., 2003). IT capability and performance

studies (Armstrong & Sambamurthy, 1999; Bharadwaj, Bharadwaj & Konsynski,

1999; Bou-Wen, 2007; Brynjolfsson, 1993; Chan, 2000; Chun & Mooney, 2009;

Gatian, Brown & Hicks, 1995; Gottschalk, 2002; Huang et al., 2009; Lin, 2007; Liu

et al., 2008; Mata, Fuerst & Barney, 1995; Ross & Feeny, 1999; Santhanam &

Hartono, 2003; Sinan & Peter, 2007; Szanto, 2005; Wu, Chen & Sambamurthy,

2008; Yongmei et al., 2008). Thus, this study adds to the existing knowledge of

Management studies of the combined effect of BPR factors and IT capability and

its impact on organizational performance. This research adds value to the

Operations and Management field in that BPR factors to relate directly to business

performance and indirectly through the moderating effects of IT capability

attributes.

9
Second, this study has examined the specific linkages between IT capability

attributes and dimensions of organizational performance. In other words, BPR

factors were examined with regard to the moderating effect of IT capability in

relation to cost reduction, customer service management and business operations

efficiency. Previous research only studied the linkages between BPR and

performance; or, IT capability and performance in general without examining the

specific issues of cost reduction, customer service management and business

operation efficiency performances. Therefore, this study contributes further to the

current body of knowledge by investigating the effects of IT capability on BPR

factors with regard to the dimensions of organizational performance.

Third, this study extends the existing body of knowledge by improving the

understanding of BPR factors and IT capability issues of banking and financial

organizations in Nigeria. Studies on BPR and IT capability are scanty in developing

countries as most research has been conducted in the developed countries such as

the United States and European countries (Al-Mashari, Irani & Zairi, 2001;

Brandon, Bransford, Guimaraes & Tor, 1999; Currie & Willcocks, 1996; Shin &

Jemella, 2002). Thus, this study further extends the current knowledge of the

Operations Management in financial and banking organizations of developing

countries, generally, and Nigeria, specifically.

1.5.2 Practical contributions

This study provides empirical evidence on the relationship between the BPR factors

in the banking business in Nigeria and the moderating effect of IT capability on

10
organizational performance. Thus, the present study will benefit managers, business

practitioners, the Nigerian government and academics by enhancing their

knowledge and understanding concerning the influence of IT capability on the BPR

performance of banking and financial organizations in Nigeria. Both BPR factors

and IT capability are regarded as sources of competitive advantage. The outcome

from this study justifies further investigation and investment on IT.

1.6 Scope of the study

The study focuses on the BPR factors, IT capability and organizational performance

of banks and financial institutions in Nigeria. The adapted BPR factors in banking

are: 1) Change management; 2) Management commitment; 3) Project management;

4) Less bureaucratic structure; 5) Customer focus; 6) Effective process redesign; 7)

Adequate financial resource; 8) IT infrastructure (Salimifard, et al., 2010). The

moderating variable IT capability attribute in this study was adapted from study

conducted by Tippins & Sohi, (2003).

In respect of the organizational performance, this study considers multiple

measurement of performance (Financial performance,non-financialperformance).

The financial performance indicators consist of profit, profit growth performance

target and sales growth. The non-financial performance indicators include: response

to competition, future outlook, and success rate in new-product launch,

organizational performance, customer service management, market research,

customer relationship management, customer satisfaction, operational performance,

11
speed, quality service and process improvement indicators (Sidikat & Ayanda,

2008; Tennat& Wu, 2005; Terziovski et al., 2003; Wei, 2006).

The scope of the organizations surveyed includes commercial banks,

microfinancebanks and mortgage finance institutions in Nigeria. The study focuses

on the organisational level from the management perception of BPR factors, IT

capability and organisational performance. Thus, the sample was limited to the

managers or senior executives within the organization. The study could not identify

the view in the organization from the customer’s perspectives as the management

are in a better position concerning the operations, services, planning and decision-

making process of the organizations. Nigeria was selected, first, because it is a

developing economy that is striving to catch up with other developing nations like

Malaysia, Singapore, and South Africa. In Nigeria, the banking sector’s

contribution to GDP from 2004 to 2009 ranged from 8.0% to 10.5% (CBN, 2009).

The financial service industry is competitive in the Nigerian environment, with

each bank requiring IT and the strategic management approach to improve its

organizational performance (Idowu, Alu & Adagunodo, 2002).

1.6.1 Definition of variables

Three major variables are involved in the study: BPR factors in banking, IT

capability and organizational performance. The operational definitions of these

variables are briefly discussed at Table 1.1.

12
Table 1.1
Definition of Major Variables
Variable Operational Definition
A. BPR factors in This study defines BPR factors as the extent of the few reengineering
banking factors that lead to successful outcomes for reengineering projects.

1. Change This study defines change management as the extent of all human,
Management social related changes and cultural adjustment technique needed by
management to facilitate the introduction of newly designed
processes and structures of the systems, working and to deal
effectively without resistance.

2. Top This study defines management commitment as the extent of top

Management management commitment to ensure that employees contribute
Commitment towards the successful achievement and remarkable improvement in
the organizational performance of the bank.

3. Project This study defines project management as the extent of alignment of

Management strategy with corporate strategy, effective use of consultant, planning
and project management techniques and adequate identification of
project values and bank performance measurement.

4. Effective Process This study defines the process redesign as the extent of the
Redesign organization to create or redesign processes that have a direct impact
on customer value and cost on the operational system of a bank.

5. Customer Focus This study defines customer focus as the extent of research conducted
on customer related to their requirements, value, satisfaction,
competitive analysis and benchmarking for improvement of
performance of organization.

6. Adequate This study defines adequate financial resources as the extent of

Financial monetary resources available to meet the budgetary allocation for
Resources successful implementation of projects for improvement over the
performance of a bank.

7. Less This study defines a flatter structure as the extent of organizational

Bureaucratic structure that encourages creativity and innovativeness. The less
Structure (Flatter bureaucratic and more participative organization the better, which
Structure) would avoid failure of BPR implementation.

8. IT infrastructure This study defines IT infrastructure as the extent of the organization’s

expenditure incurred on IT infrastructure, IT personnel training, IT
consulting, IS maintenance, computers and software, effective
alignment of IT infrastructure and building an IT infrastructure,
proper IS integration, reengineering of legacy IS, increasing IT
function as competency, and use of software tools.

B. IT Capability This study defines IT capability attributesasthe extent to which

cumulatively the IT knowledge, IT operations and IT object's
dimensions of IT competency represent co-specializedresources that
provide an indication of the organization’s ability to understand and
utilize IT tools and processes that are needed to manage market and
customer information.

13
Table 1.1 (Continued)
Variable Operational Definition
1. IT knowledge IT knowledge is referred as the extent to which a firm possesses a
body of technical knowledge about objects such as computer-based
systems.
2. IT operations IT operations refer to the extent to which a firm utilises IT to
manage market and customer information.

3. IT objects IT objects refer to computer-based hardware, software and support

personnel.

C. Organizational This study defines organizational performance asthe level of bank

Performance performance (increase/decrease) in terms of both financial and non-
financial performance indicators."
Organisational performance refers to the organisational
effectiveness and represents the results of the organization’s
activities or focuses on the achievement of objectives (Hammer &
Champy, 1993; Henri, 2004).

1.6.2 Banks and financial institutions

A bank is a financial institution that acts as a financial intermediary for collecting

deposits and channels those deposits into lending activities. Banks mediate between

those customers with surplus capital and those with a deficit. Banks play a critical

role in the financial system and economy by allocating funds from savers to

borrowers, which enables the overall economy to function in an effective and

efficient manner. Brief discussions on the types of the bank focused upon in the

research are outlined below.

[Link] Commercial bank

A commercial bank is a financial institution that facilitates daily business

transactions and serves as an intermediary channels surplus fund to the

entrepreneurs who need the funds for productive purposes in the economy. Banks

accept deposits from the public, lend money to those who are in need at a premium

14
called interest, and allow depositors to withdraw using cheques, counter tellers and

electronic cards. Banks help in the remittance of funds from one place to another.

Other functions as a bank include issuing credit instruments, such as letters of

credit, traveller’s cheques to customers, underwriting capital issues, safe custody of

valuables, advice and information, ATM and credit cards.

[Link] Microfinance bank

Microfinance banks in Nigeria can be described as the financial services institution

for poor and household low-income earners. It is a unit banking system that acts as

linkage between the informal forms of rural savings, called ASUSU, commonly

practiced by rural and some urban petty traders, as well as small and medium

businesses. Abdulkadir (1989) stated that microfinance banks were formed in order

to improve the banking habit of the rural populist. Microfinance banks extend credit

facilities to rural farmers, artisans and craftsmen within the locality based on their

self-recognition, credit worthiness and guarantees from their social clubs,

cooperatives and societies. This method of lending, practices placing emphasis on

adequate collateral security before such loans are given.

[Link] Mortgage bank

Primary mortgage institutions (PMIs) were considered as retail mortgage banks

operating under the operational and supervisory regulations of the Federal

Mortgage Bank of Nigeria (FMBN). PMIs were motivated to encourage individuals

to open accounts with them and deposit regularly to save towards home purchase

15
and the mortgage of property. However, some Nigerian PMIs were engaged in

direct construction and the sale of houses in order to enhance their profit margin.

Many PMIs were further involved in the consummation of larger transactions

meant for the commercial and investment banking. This, coupled with other

challenges, exposed the PMI’s to severe risk, which led to the non-performance of

the institutions. Nubi (2006) confirmed this in his study findings in that over 80%

of PMIs were engaged in direct construction and outright sales to buyers, 70% of

the risk asset portfolio was short-term facility granted to commercial traders and

local purchase order financing (LPO) to contractors of government agencies. The

high default rate of risky financing, tight liquidity position in the financial service

sector contributed to the dismal performance of the PMIs in the country.

Generally, the primary functions as a bank (commercial, microfinanceor mortgage)

are collecting deposits from surplus customers and lending out to deficit clients.

The products/services for the bank include cheque and savings accounts, debit and

credit cards. The secondary functions as a bank include receiving payment for bills,

money transfer (local and foreign), FOREX, financial advisory services, issuance of

letter of credit, custodianship services, hire purchase and leasing, underwriting,

demand drafts, payment orders, customer’s bank reference letters, instrument

clearing and settlement.

1.7 Outline of the study

This thesis is presented in six chapters. Chapter one generally introduces the whole

work. The chapter is made up of the background of the study; problem statement;

16
research objectives and research questions about the study; significance to the

study; scope in the study; finally, the outline on the study.

Chapter two basically discusses the literature review relating to the concepts of the

three (3) major constructs: organisational performance, BPR factors and IT

capability. The chapter discusses the organisational performance of bank and

review of performance trend in Nigerian banking industry. This section highlighted

the summary of the previous studies on organisational performance banks and bank

process performance improvement methods. Furthermore, the organisational

performance measurements of financial and nonfinancial were discussed. On the

BPR factors, the concept of BPR as strategic management initiative, success and

failure factors were explained. In addition, previous studies of BPR and

organisational performance of banks and financial settings were discussed.

Moreover, the IT capability concept, measurement, model and moderating role of

IT capability were discussed. The relevance ofRBV, dynamic capability and

complementarity perspectives that supports theorganisation performance in

turbulent environment was explained.

Chapter three discusses the conceptual framework to the study, which arises from a

review from the literature, the direct and indirect relationship between the key

constructs and proposed hypotheses of the research.

Chapter four discusses the research methodology employed for the study. It

explains the research settings, sampling technique, strategy and method of data

17
collection, instrument measures, validity and reliability of the data analysis of the

study.

Chapter five presentedthe empirical result, testedhypotheses of the

studyanddescribekey findings of the study. Finally, chapter six provides discussion,

conclusion, limitations to the study and suggestions for future research.

18
 CHAPTER 2 LITERATURE REVIEW
CHAPTER 2
LITERATURE REVIEW

2.1 Introduction

The purpose of this chapter is to provide an extensive review from the literature

relevant to the key construct of the study. The first section within the chapter

focuses on the organisational performance which provides an outline of bank

performance, and review of previous studies on bank performance. The different

performance measurement, performance improvement methods and organisational

performance dimensions were reviewed. In addition, the BPR concept and factors

were examined. The chapter next considers IT capability, definition, moderating

role, model, the relationship between IT capability and organizational performance

based on the theory of the RBV. Finally, the chapter provides the reasons for

choosing RBV, dynamic capability and complementarity perspectives as the

underlying theory for the study.

2.2 Organizational performance

The challenges for globalization of financial markets required changes on the part

of the market participants to move beyond local-level to achieve international

competitiveness. The entire banking industry is focusing on major process

performance enhancements and gains in the domestic market share as a catalyst for

successful diversification. Banks are concentrating their efforts on market segments

offering the potential for growth and enhancing performance, resulting in a

19
redirection within the overall financial services' [Link] performance

comprises the actual output of an organization as measured against its inputs.

Performance measures allow companies to focus attention on areas that need

improvement by assessing how well work is done.

2.3 Bank performance

Organization is a structured entity that consists of physical, human, and financial

resources formed to achieve specific goals. Business organization is formed to offer

a variety of products and services for profit motive. Banks like every other

organizationtry to enhance its overall performance by assessing and comparing its

efficiency and effectiveness over a period of time. There are various criteria to

evaluate the performance of banks for successful survival in the period of

globalization and competition. Key indicators to measure organizational

performance includes: profitability, liquidity, management performance, leverage,

market share, productivity, innovation, quality of goods and services, human

resources (Dess & Robinson, 1984). Banks are concentrating their efforts on market

segments offering the potential for growth and enhancing performance, resulting in

a redirection within the overall financial services' sector. Innovative banking

services and processes were evolved as the market consolidates due to mergers and

acquisitions. This dual trend towards specialization and consolidation is forging

banks that will be able to compete in international and global markets. Performance

enhancement efforts are aimed at a complete realignment of internal processes. In

addition to cost containment strategies, focus is now on improving customer service

20
delivery. Organization processes must be efficient, and be more customer-friendly.

Attempts are being made to transfer approaches like process reengineering

initiatives that have proven effective in other industries, particularly manufacturing,

to the financial sector.

2.3.1 Overall performance of Nigerian banks

The history of the Nigeria banking system is complete with growth and burst cycles

in the number of operating banks and their branches. The total asset of all the banks

operating in Nigeria increased within a year after consolidation. An assessment of

the level of capitalization, intermediation activities improved significantly and the

leverage ratio decline (CBN, 2008; Somoye, 2008). However, the profit

efficiency/asset utilization has not been impressive, the industry return on equity

(ROE), and asset utilization ratios declined. Thus, the consolidation has improved

the structure of banks in terms of asset size, deposit base and capital adequacy.

Conversely, the profit efficiency performance has not been impressive. The banks

will need to be more efficient in terms of their ability to generate enough return to

justify the increase in equity base as well as investment in other resources.

The decline in the performance efficiency of Nigerian banks in terms of return on

assets, equity and operating cost requires urgent attention of the banks to re-

strategies for process performance improvement (CBN/BSD, 2008). Sanusi (2010)

argued that the poor performance indices of Nigerian financial institutions were due

to inadequate and inflexible operational processes. This was part of the revelations

of the special audit for all the Nigerian banks conducted jointly by the Central Bank

21
of Nigeria (CBN) and the Nigeria deposit insurance corporation (NDIC) in July

2009, for Commercial banks and in February 2010, for Microfinance banks. Vetiva

Research (2010) reported a quarterly performance of stocks on the Nigerian Stock

Exchange Market for the quarter ended September 2010, which indicated a negative

performance of (-2.49%) for the banking industry stocks compared to another

sector. The weak operational processes of banking services are responsible for the

decimal performance of the sector in Nigeria (Ibenta, 2010; Okpara, 2009).

2.3.2 Operating costperformance ofNigerian banks

The Chartered Institute of Management Accountants CIMA (1982) defines a cost as

the amount of expenditure (actual or notional) incurred on, or attributable to, a

specified activity. The implication of this definition is that when cost is incurred,

the intention is to derive a benefit. If the benefit is immediate, the cost translates

into expenditure, if, however, the benefit is for future, the cost translates into an

asset. This explains the difference between cost control and expenditure control in

Management. Banks in Nigeria incur two broad types of costs: interest expense and

operating cost (Madubueze, 2007). This is as a result of the financial intermediation

nature of business in banking. Interest expense represents the amount banks paid

for borrowing money from various customers, especially depositors. Many factors

determine the quantum of interest expense. These include the quantity of money in

supply, the demand for money, regulatory policy, competition for deposits and even

the length of time a bank is going to keep or utilize the money it is borrowing. It is

the rate of interest in the economy that determines the interest expense of the bank.

22
Operating cost is made up of other costs that exclude finance charges or interest

costs: expenses, such as staff or personnel salaries, depreciation, fees, and

administrative costs, such as repairs and maintenance, rent and rates, traveling and

insurance [Link] operating cost for Nigerian banks is driven by a

combination of factors, such as the state of infrastructure in the economy; the level

of inflation into the economy, insufficient skilled and competent human capital,

adoption of new modern technologies for banking operations and insecurity across

the country. The effect of the increasing cost of doing business in Nigerian banks is

high (Ogubunka, 2010). Ogubunka (2010) reported that a cost trend in the Nigerian

banking industry isa reflection of the cost pressure on the economy. He argued that

it is evident bank costswere essentially on a growth path signifying banks must

have operated under cost pressure. The bank’s operating cost rose by an average of

37.6% between 2004 and 2008. Noteworthy, under operating cost, is the quantum

rise of 142% in 2007, as against a decline of 9% in 2006.

The average income growth of 43.8% compared with the total cost growth of 37%

evidenced that bank’s income, like their costs showed a pattern with an increase.

While the average growth rate in interest income of 46.4% compared with an

interest cost average of 58.2% indicated that the costs incurred by Nigerian banks

was more bullish than the income (Okpara, 2009).Therefore, for Nigerian banks to

operate efficiently, costs must be minimal. It is necessary to manage the costs to the

economy to reduce its obvious pressure in the cost trend. Reduced cost pressure in

the banking industry will moderate lending rates and operating cost to produce

salutary effects on the economy as a whole (Ogubunka, 2010).

23
2.3.3 Customer service management performance of Nigerian banks

Customer service entails proper and adequate treatment of customers in such a way

that they feel satisfied and fulfilled (Kotler, 2003; Knock, 1992). Before the

commencement of ebanking services by the Nigerian bank, customersspent hours in

long queues to make a transaction of either cash withdraw or deposit into their

account, as the transactions were manually processed (Ojeka& Ikpefan, 2011). The

old generation banks that are the market leaders dictated the pace of product and

services. However, the emergence of Internate and ebanking services as a result of

globalization and deregulation of the Nigerian banking sector by the Central bank

of Nigeria. New generation banks emerged with technological capabilities that

revolutionized the Nigerian banking sector (Agboola, 2008). Different ebanking

channels of services such as Internate banking, mobile banking, and ATM card

transactions were introduced (Agboola, 2008). The development of online banking

services offers opportunities for the banks to reduce the operational costs, retained

and expanded customer base, enjoy customer’s loyalty for convenient shopping,

enhanced competitive advantage, reduce the number of branches and right size the

operational staff (Agboola, 2007).

2.3.4 Previous studies on bank performance

Assessment of bank performance is essential for bank managers, regulators and

customer (depositors and investors). In a turbulent financial environment, bank

performance provides information for the investors and depositors to either retain

or withdraw their investment from the bank. Managers are constantly challenged to

24
improve their deposit or loan activities in order to enhance the profitability

performance of their organization. Tvorik and McGivern (1997) investigated

performance by comparing economic and organizational factors. They concluded

that organisational factors influenced the profitability more than that of the

economic factors. The performance of organizations could be assessed by RBV, as

explored by a number of researchers (Wernerfelt, 1984; Barney, 1986; Prahalad &

Hamel, 1990). Organizational performance could be linked with market orientation,

organization learning, human-resource productivity, quality improvement or any

other component (Day, 1994; Banker & Sinkula, 1999; Santos-Vijande et al.,

2005).

Generally, organizational performance is assessed by the application of financial or

both financial and non-financial measures. There are a number of studies on the

literature that used non-financial measures to evaluate the effectiveness and

performance of organization (Quinn & Rohrbaugh, 1983; Venkatraman &

Ramanujam, 1986). It is suggested that four models, i.e. human relations; internal

process; open system and rationale goal model could represent the organizational

performance (Quinn & Rohrbaugh, 1983). Wheelen and Hunger (1998) argued that

appropriate performance measures depend on the organizations and their objectives,

i.e. profitability, market share and cost reduction.

Financial indicators, such as return on investment (ROI), earnings per share (EPS)

and ROE are used by the number of organizations to measure their progress. ROI is

used to reflect the profitability while corporate performance was measured by

operating cash flows and ROI capital (Hasnan, 2006; Sorenson, 2002). Rashid et

25
al., (2003) measured firm's financial performance using the financial indicators,

such as return on assets, ROI and current ratios. Financial ratios reflect the financial

performance of the organization by an examination of financial statements, as

indicated by profitability, liquidity, leverage, asset utilization and growth ratios (Ho

& Wu, 2006). In today's global, dynamic and competitive environment, banks

should improve and diversify their products and services to meet changing

customers' demands to enhance their performance for successful survival. Table

2.1provides a summary of recent selected studies on bank's performance.

Table 2.1
Summary of Selected Previous Studies on Bank Financial and Non-financial
Performance
Type of Research &
Authors Measurement (DV) Findings
BPR Factors (IV)
Kim, Cha, Empirical survey of The results showed that board
Cichy, Kim data collected in a web- members involvement in strategy
& Tkach, based survey of COOs and the size of the board of
(2011) and GMs directors have a positive
influence on a private club’s
financial performance.
(Khong & Empirical Survey Perceived measure Market research, customer
Nair, (2006) Customer service of business satisfaction, and handling as the
management performance by important key drivers towards
Bontis (1998) successful implementation of
customer service management
Durkin & Literature review and The study indicates the worrying
Bennett, empirical research findings that employees show
(1999) unexpectedly low levels of
internalized commitment.
Farooq Review various studies The measurement The result indicates the absence
(2003) that analyse the indicators of of a competitive environment
structure and inequality include: among the banks, because, all the
performance of Lorenz's curve, variables (deposit, asset, equity,
commercial bank's Gini coefficient, advances, employment
frame work of and Herfindahl distribution) are highly skewed.
organization. index and The profitability performance of
concentration ratio. the banks deteriorated.

26
Table 2.1 (continued)
Type of Research &
Authors Measurement (DV) Findings
BPR Factors (IV)
Smith & Empirical survey The product The study found no significant
Chang, carried out in Taiwan quality, customer difference on the implementation
(2010) public companies. The service, advert, of CRM system among
CRM implementation awareness Taiwanese industries.
impact on: generation, service
Customer satisfaction quality,
Customer loyalty responsiveness
Degree of customer reliability, empathy
focus and technology
Customer-related items measure the
strategies DV.

Akinlolu & Empirical Survey Assessing the level Investment in IT in the bank is
Oyesola, Banking operations of activities, ATM, important for the effective and
(2008) processes Cash's transactions, efficient service delivery,
efficiency of ICT, payment system and other
intensity of appropriate transactions that
customer's traffic in enhance the organizational
a banking hall, etc. performance.

Agboola, Empirical survey on Measurement of The study found that fundamental

(2007) Nigerian bank's DV based on changes in quality of banking
adoption of ICT innovative operation services occurred from
Implementation of IT: technologies, 1990 to 2005. Since then, other
degree of utilization electronic card products,
and impact of IT on transfers, telephone banking,
bank's operation. continued to increase.
Technology became the driving
force for competition and that
greatly improved customer
service management, operation's
efficiency and overall
performance.
Akhtar Using data Measurement of The study found an improvement
(2010) envelopment analysis change in total in the average productivity of
(DEA) efficiency and factors of banks as a result of technological
productivity indices of productivity to changes relative to efficiency.
banks in Saudi Arabia reflect performance
over time

Idris (2011) Total quality Measure The results showed that the
management (TQM) performance using relationship between the element
and sustainable self-reported of leadership, best practices,
company performance: manager’s productivity, customer, employee
Examining the perceptions in terms and community focus and
relationship in of profitability, company performances is
Malaysian firms financial, significantly supported.
productivity and
level of market
share.

27
Table 2.1(continued)
Type of Research &
Authors Measurement (DV) Findings
BPR Factors (IV)
Nura & A toolkit on effective Measurement of The study revealed that majority
Osman decision making effective decision in of decision made from 18th to 19th
(2012) measurement in organization using century were not measured.
organizations qualitative and While the period between 20th
quantitative and 21st century organization
perspectives decisions were measured based
on qualitative or quantitative
measurement strategy.
Nura & A toolkit on effective Measurement of The study revealed that majority
Osman decision making effective decision in of decision made from 18th to 19th
(2012) measurement in organization using century were not measured.
organizations qualitative and While the period between 20th
quantitative and 21st century organization
perspectives decisions were measured based
on qualitative or quantitative
measurement strategy.

Dick (2006) examined the service quality and bank performance in the United

States. Deregulation increased the branch network of banks to attract more and

more customers who resulted into more profits with increased risks due to changing

demographics. Findings showed that improved service quality resulted in increased

service fee, and risk could be reduced by geographical diversification and hedging.

It is reported that two principal paths can improve financial performance of banks,

i.e., by improving operational efficiency base on time, quality, customer or

improvement in customer services (Duncan &Elliott, 2004; Hasnan, 2006). Dick

(2006) reported that market concentration was not affected by its size. Dominant

banks have almost similar influence on markets of different size. The study found

that service quality is enhanced and focused by dominant banks.

Performance evaluation provides sufficient information to take better and informed

business decisions. Better decisions result in greater profitability and improved

performance in the institution and its shareholders (Crider, 2007). Farooq(2003)

reported that the performance of privately owned banks is better than that of state-

28
owned banks. Hence, more customers were attracted by the high-quality service,

adequate capital base and sound management of private banks.

Furthermore, Chowdhury and Kashfia (2009) reported that analysis on the growth

and development achieved of selected private banks in terms of stable growth of

branches, employees, deposit, loans and advances, net income, earnings per shareis

better compared to the state-owned banks. In addition, Calomiris (1999) argued that

the merger and consolidation of bank operation's results for the improvement of

efficiency that is associated with operating cost reduction and enlargement of bank

customer relationships. Adolphus (2007) examined the financial indicators in

Nigerian banks. He found that the capital adequacy ratio significantly correlates

negatively with bank solvency. The cash reserve ratio correlates negatively and

significantly with the proportion of non-performing loans. The total loans to

deposits correlate negatively significant with bank solvency. The productivities of

commercial banks in Saudi Arabia were found be enhanced as a result of

technological changes that improved their operational efficiency (Akhtar, 2010).

In a similar vein, technology became the driving force for competition that greatly

improved customer service management, operation's efficiency and overall

performance of Nigerian banks (Agboola, 2007).Investment in IT in the bank is

important for the effective and efficient service delivery, payment system and other

appropriate transactions that enhance performance (Akinlolu & Oyesola, 2008).

Similarly, Organizational performance in other service sectors such as a hotel

reflects an organization's understanding and knowledge regarding customer needs

29
and expectations (Slater & Narver, 1995). Razalli (2008) found that performance of

a company operating in the service industry could be improved through good

leadership practice and provision of customized service design for select clientele

in the service sector. Kim et al. (2011) argued that size of the board of director and

involvement in company’s strategy and size of directors of its directors have

positive influence on the private club financial performance.

Furthermore, Idris (2011) showed that the relationship between the element of

leadership best practices, productivity, customer, employee, community focus and

performance are significantly related. However, empirical survey of public

companies in Taiwan regarding customer relationship management implementation

impact on customer satisfaction, customer loyalty, degree of customer focus and

related strategies found no significant difference among Taiwanese industries.

Therefore, organization should strive to maximize their customer satisfaction for

better profitability, increased sales volume,which ultimately improves overall

performance for the long-term benefit (Baker & Sinkula, 1999).

2.3.5 Bank process performance improvement method

Business process improvement is an approach to keep pace with the changing

business environment, persistent technological, political and organizational changes

to increase the effectiveness and efficiency of business processes that provide

output to internal and external customers (Harrington, 1991). Since the BPR has

become a part of the mainstream of business improvement (Baines, 1996), many

different terms in the literature are related to the improvement of business processes

(Siha & Saad, 2008; Zairi & Sinclair, 1995).

30
Examples are: business process improvement (BPI) (Yavas & Yasin, 2001;

Harrington, 1991); business process redesigns (Davenport & Short, 1990; Carr,

1993); business (process) reengineering (BPR) (Hammer, 1990; Al-Mashari &

Zairi, 2000); core process redesigns (Heygate, 1993; Hagel, 1993); business

restructuring (Tanswell, 1993; Talwar, 1993); continuous improvement process or

Kaizen (Imai, 1986; Juran, 1991; Juran &Gryna, 1993; Deming, 1986; Deming,

2000). Six-sigmais a quality improvement methodology for organisation

performance (Pande et al., 2000; Breyfogle, 2003; Harry & Schroeder, 2006).

Depending on the degree of improvement (radical or incremental), the two areas

BPR and BPI can be distinguished, whereas reengineering (BPR) is synonymous

with radical improvement (Hammer, 1990; Hammer & Champy, 1993) and process

improvement (BPI) to incremental improvement (see Harrington, 1991; Coskun et

al., 2008). Both areas can be seen as a subset of redesign (Valiris & Glykas, 1999).

Shin and Jemella (2002) added another degree of improvement called quick hits,

which focuses on the immediate payback through process improvement within a

few months, whereas BPR and BPI focus, on the long run. Even though the

philosophy and procedure of the above-mentioned approaches are different they all

have been one-goal – the redesign (radical or incremental) and improvement of

business processes.

Hammer (1990) defines performance improvement as a structured approach to

performance improvement that caters for the disciplined design and careful

execution of a company's end-to-end business process. However, not all

31
performance improvement efforts are successful. As reported on the literature, 50-

70 percent of the BPR as performance improvement initiatives fail to achieve their

objectives (Hammer&Champy, 1993). Thereasons behind the failure of

performance improvement efforts include: a focus on the tactical issues not on the

issues that affect the entire business, and the lack of knowledge transferability of

BPR projects. Lapre and Wassenhove (2002), performed an extensive study of

European manufacturers and found that both operational and conceptual learning

are important for knowledge transferability, and, consequently, for both

productivity and profit improvement.

2.3.6 Suitability of reengineering as radical performance improvement

method

The suitability of the reengineering method for process improvement to the

organizational context is of great significance. Although the process reengineering

could benefit manufacturing and service firms, there is a distinction in its

implementation to suit the unique situation of the firm (Shin & Jemella, 2002). The

main causes of failure in reengineering practice are: Negligence of the work

environment aspects to the design process; the rigidity to the infrastructure system;

and consideration of human factors, such as costs that need to be reduced, rather

than a resource to be developed. As to the reengineering success factors, it is

noticed that reengineering efforts are behind many positive outcomes, such as:

reduce a cost, increase productivity, reduce time, improve quality, reduce business

cycle, increase profit, and decrease response time. Therefore, based on the above

empirical evidence, clearly the key drivers for reengineering success comprise:

32
questioning the fundamental assumptions of a process, drastic improvement of this

process, alignment with corporate strategy, and effective use of information and

communication technologies.

2.3.7 Organizational performance measurement

The organisational performance measurement has become increasingly necessary

for the continued survival of organizations. There are various literatures on

performance measurement, and issues concerning organizational performance. In

the past, performance measurement was based on quantitative financial measures,

while less emphasis has been placed on the qualitative components of performance

measurement. Measurement systems consist of multiple measures that can either be

objective or subjective, financial or non-financial (Nura & Osman,2012). Hence,

Maskell (1992) suggested that in addition to financial measures, a non-financial

performance measurement technique should also be used by organizations, as,

overtime, the company needs changing. It is also important to involve qualitative

indicators, such as customer service and satisfaction, product quality, learning and

innovation (Kaplan & Norton, 1996; Neely, 2002; Neely et al., 2002).

According to Waggoner et al. (1999), performance measures within an organization

can be designed based on six different approaches:

a. The engineering approach, which measures the input/output ratio;

b. The system approach which sets objectives for each work unit and measures

the achievement of these objectives;

33
c. The management accounting approach measuring the achievement of financial

results;

d. The statistical approach, which extends the engineering approach by providing

empirical tested information about input/output processes;

e. The consumer marketing approach, which measures consumer satisfaction,

conformity with product attributes and service delivery system.

In order to achieve business excellence, it is necessary to an organization to develop

a system for performance measurement. To address this issue, an interdisciplinary

review of organisational performance measurement frameworks is adopted in both

the academic literature and business press (Waggoner et al., 1999; Kuwaiti & Kay,

2000; Lin & Chen, 2007). One cannot evaluate organisational performance without

taking organizational goals into consideration. The modern business environment

demands a multi-goal orientation.

Today’s business environment is characterized by the increasing importance and

strength of various stakeholder groups. It has become quite obvious that all

stakeholders need to be taken into account when assessing the performance of

modern companies. This is the main idea of Freeman’s stakeholder theory

(Freeman, 1984). The stakeholder view maintains that firms are accountable for

stakeholders and not just shareholders. The view that the corporation has

obligations only to its stockholders is replaced by the notion that there are other

groups to whom the firm is also responsible. Groups with a stake in the firm include

shareholders, employees, customers, suppliers, lenders, the government, and society

34
(Berman et al., 1999; Harrison & Freeman, 1999; Hillman & Keim, 2001; Riahi-

Belkaoui, 2003).One important notion revealed in many studies is that building

better relations with primary stakeholders like employees, customers and suppliers

could lead to increased shareholder’s wealth. A sustainable organizational

advantage may be built with implicit assets that derive from developing

relationships with key stakeholders (Hillman & Keim, 2001). When studying the

relationship between stakeholder management and a firm’s financial performance,

Berman et al. (1999) found that fostering positive connections with key

stakeholders (customers and employees) can help a firm’s profitability.

Therefore, due to the significance of various stakeholders, organisational

performance should not be solely assessed by financial indicators. There are several

approaches to organisational performance measurement that encompass different

stakeholder’s perspectives (Tangem, 2004; Hasnan, 2006). The balanced scorecard

(BSC) (Kaplan & Norton, 1992, 1993, 1996) is the most established and commonly

used (Neely, 2005; Razalli, 2008), but certainly not the only one. The multi-model

performance framework (MMPF) model by Weerakoon (1996) is also very

interesting and has been four-dimensions, including employee motivation, market

performance, productivity performance, and societal impact, and covers the

satisfaction of various stakeholders, such as customers, investors, employees,

suppliers, and society. Prism conceptual performance framework suggests that a

performance measurement system should be organized around five distinct

dimensions such as stakeholders, customer, productivity, motivation and efficiency

linked to perspectives of performance (Hasnan, 2006; Tangem, 2004).

35
Organisational performance in this study refers to the level of bank performance

(increase/decrease) in terms of both financial and non-financial performance

indicators. Organisational effectiveness represents the outcome of organisational

activities (Henri, 2004). Empirically,organisational effectiveness is the ultimate

dependent variable in research on organizations(Cameron, 1986). The perception of

organizational performance is linked to the continued success and achievement of

an organization. Although there is wide-ranging literature on performance, there is

still no consensus definition of the term performance (Johannessen, Olaisen, &

Olsen, 1999). Murphy, Trailer and Hill (1996) found the use of the term

performance to include 71 different measures of performance categorized into eight

(8) dimensions of both financial and non-financial measures.

The majority of the previous studies used financial and non-financial indicators to

measure performance (Johannessen et al., 1999; Murphy et al., 1996). The debate

on what performance measurement to use continues, as not all the criteria apply to

all settings (Cameron, 1986).A review from the literature for the evaluation of

performance in the organisational context by Gomes, Yasin and Lisboa (2004),

reveals the different emphasis on the performance measurement depending on the

objective of the organization in that particular situation. There are many possible

benefits from reengineering that translate into improved organisationalperformance.

However, because of the wide possibility of benefit from company innovativeness

on performance, a multiple dimensional scale of performance measurement offers

more comprehensive operationalization of organizational performance than the uni-

dimensional approach. Table 2.2 provides a summary of previous performance

measures on financial and non-financial performance from various studies.

36
Examples on some financial performance indicators employed in previous studies

are: profitability, the success rate of new service (product) introduction, after-tax

ROI, sales growth, and after-tax return on assets. Examples of non-financial

performance indicators include: customer satisfaction, customer focus, market

research, and customer relationship management, quality and process improvement.

Therefore, based on the previous studies, this study considers multiple

measurements of performance (Financial performance and Customer service

management performance). The financial and non-financial performance indicators

consist of: profit, profit growth performance target, sales growth, response to

competition, future outlook, and success rate in new-product launch, overall

business performance, customer service management, market research, customer

relationship management, customer satisfaction, operational performance, speed,

quality service and process [Link] this study, the perceived measures of

the financial and non-financial performance within the organization are used

because subjective measures were found to be correlated with the objective

measure of performance (Dess & Robinson, 1984). In addition, the previous studies

(Lyles & Salk, 1998; Hansen & Wernerfelt, 1989; Bart et al., 2001) confirmed that

the reliability and correlation between objective measures and perceived measures

are strong. Similarly, previous studies conducted by Bontis (1998), Bontis et al.

(2000), Idris (2011) and Nura and Osman (2012) revealed that the subjective

measure of performance (financial and non-financial) is feasible.

37
Table 2.2
Summary of Selected Studies on Organizational Performance Dimension
Indicators Studies
1. Speed/delivery Hammer & Champy (1993); Ascari, Rock,
a. Time reduction & Dutta (1995); MacDonald (1995); Kamal
b. Cycle time & Agrawal (1997); Newman (1997);
2. Lower costs Sohmen (1998).
3. Quality
a. Few mistakes
b. Reduced error
4. Service
a. Customer service
b. Customer satisfaction
5. Process improvement Childe et al. (1994); Kamal & Agrawal
a. Reduce the number of activities (1997); Sohmen (1998).
6. Productivity Childe et al. (1994); Ascari, Rock, & Dutta
a. Improved financial strength (1995); MacDonald (1995); Riddle (1995);
b. Decrease in staff turnover Stainton (1995); Jelinek et al.
(1999);Ascari, Rock, & Dutta (1995);
MacDonald (1995).
7. Customer satisfaction Sun (2000)
8. Financial profitability
9. Competitive advantage
10. Employee's satisfaction
11. Environmental protection
12. Financial performance Bontis (1998); Bontis (2000); Bontis &
a. Industry leadership, Future outlook Fitz-enz (2002); Bontis, Chua & Richardson
b. Profit, Profit growth, sales growth (2000)
c. After-tax return on assets
d. After-tax return on sales
e. Overall response to competition
f. Success rate in a new-product launch
g. Overall business performance
13. Customer service performance Khong and Richardson (2003); Hammer &
a. Market research, Customer focus Stanton (1995); Cateora & Graham (1999);
b. Customer relationship management Hammer & Champy (1993)

The above performance measurement indicators were similar to those of Hammer

& Champy (1993) who suggested cost, quality, service and speed as performance

measurement. Therefore, based on previous studies, this study considers multiple

measurements of performance (Financial performance and Customer service

management performance). The financial and non-financial performance indicators

consist of profit, profit growth performance target, sales growth, response to

competition, future outlook, and success rate in new-product launch, overall

38
business performance, customer service management, market research, customer

relationship management, customer satisfaction, operational performance, speed,

quality service and process improvement.

2.4 BPR factors

The globalization and deregulation of the Nigerian banking sectorhas necessitated

small and medium banks to enhance their professional capability by engaging in-

process change and reengineering to bring about efficiency and accuracy to meet

the needs of the customer. In addition to these challenges, banks in Nigeria operate

in a turbulent environment, as there were over 1,023 registered banks (Commercial

banks, Microfinance and Primary mortgage finance) as in December 2009 (CBN,

2009). To survive and excel in this type of business environment is a major concern

for the Nigerian banking industry. BPR is a management concept that seeks to split

away from the old-fashioned and traditional processes to new ways of organizing

people, processes and the use of IT to achieve better resultsthat are of help to the

banks. Reengineering is the fundamental rethinking and radical redesign of

business processes to achieve dramatic improvements in a critical quantum leap

ofcontemporary measures of performance, such as cost, quality, service, and speed

(Hammer & Champy, 1993).Thisdefinition comprises four keywords: fundamental,

radical, and dramatic and processes.

BPR seeks to split away from the old and current processes to come up with new

ways of doing things/tasks, organizing people and making use of IT systems so that

the resulting processes would better support the goals of the organization. The basic

39
operation in a business is the first and important priority to reengineering. The

essential question of how an organization should be run should be asked by the

business owners, the answers to these questions always lead to an understanding of

the fundamental operations of the company and rationale behind any existing

assumption. Re-engineering starts with no assumption and companies that

implement reengineering must guard against such assumptions, take nothing for

granted and must determine what a company needs and how effectively it can be

[Link] redesigning is the second keyword to reengineering, which means

abandoning all existing arrangement and methods and creating a completely new

contemporary system of achieving a task. This means that reengineering is all about

beginning with a new process with no assumption or modification. Therefore,

business processes are [Link] third keyword in the BPR concept is

dramatic improvement, reengineering, which involves achieving greater

performance unlike making incremental improvement. Marginal improvement

requires re-adjustment while dramatic improvement demands doing away with an

existing process and replacing it with something new and contemporary. The fourth

keyword in defining BPR is processes. This is the paramount concept in

reengineering. The division of labour approach, which is wholly applied in classic

business structure, should be transformed to the process-based approach to ensure

the effectiveness and efficiency of processes.

The advocates of BPR claim that if the concept is correctly implemented,

organizations would achieve a quantum leap of improvement in cost reduction,

speed, productivity and profitability (Hammer & Champy, 1993). BPR is a method

for improving the performance of an organization with the objective of finding a

40
new way to organize people, and redesign processes with the aid of IT to achieve

organisational goals. When restructuring the business process, the content of jobs

and organisational structure changes for all employees to bring about radical

changes in values and beliefs. As a result, reengineering is not complete until all

elements of the business system, i.e., business processes, jobs and structures,

changes because people, jobs, managers and values are linked together (Hammer &

Champy, 1993).

There is considerable literature on CSFs of BPR implementation with evidence

concerning the performance effect; hence, there is a need to examine the success

factors in relation to performance (Devaraj & Kohli, 2000). The importance of BPR

implementation in the Nigerian financial service industry was understood by the

bank manager as a tool to achieve competitive advantage, and many do not fully

understand the success factors that drive the implementation (Ringim, Razalli, &

Hasnan, 2011). No doubt reengineering in the present-day globalize economy is not

only a necessity but important as the prerequisite for success of any financial

institution. BPR factors are strongly related to the mission and strategic goals of the

business or project. Whereas the mission and goals focus on the aims and what is to

be achieved, BPR factors focus on the most important factors and get to the very

heart of what is to be achieved and how to achieve it.

The BPR factors are those important factors for success. They were originally

developed to align planning with the strategic direction of an organization. It is only

when the most important factors have been identified that practitioners have a

chance of organizational success. Various BPR factors were developed and

41
validated by authors from studies in organizations operating in different industries

such as manufacturing, education, and services. The BPR factor is aptly chosen to

represent the factors that are important for the achievement of the desired outcome

of organizational performance. BPR factors are of importance in that these key

areas of activity should receive constant and careful attention from management.

BPR factorscertainly differ according to the industry and environment as the

company’s position within the industry changes. It is important to understand what

factors of BPR in the implementation and related to organizational performance

improvement.

The literature review on BPR studies shows that the opinion of scholars on the

subject matter can be classified into two (Herzog, Polajnar, & Tonchia, 2007). The

first group includes the scholars who agree that BPR is a panacea to turbulent

market changes, customer demand and competition (Davenport & Short, 1990;

Hammer, 1990, Terziovski, Fitzpatrick, & O’Neill, 2003), while the second group

holds the opposing view claiming that BPR has failed to meet its expectations

(Mumford, 1995; Biazzo, 2002). According to Al-Mashari, Irani and Zairi (2001),

the average success rate achievement of implementing BPR in developed countries,

Multi National Corporation was 55 percent, being 61 percent achieved in the USA

and 49 percent in Europe. The majority of studies on BPR have focused on the

importance of the various factors for successful implementation in the

manufacturing industry, while relatively few studies have been conducted in the

banking industry. Therefore, it is risky to generalize the BPR success rate, because

the evaluation is subjective as cross national differences (such as cultural belief,

norms and values) may exist. Reengineering is a painful process because the whole

42
set of values and beliefs in the organization are being challenged (Hammer &

Champy, 1993).

The lack of empirical study on BPR covering a wide range of issues with rigorous

methodology has been confirmed by various authors (Motwani et al., 1998; Al-

Mashari et al., 2001; Tenant & Wu, 2005). From the available survey, we can

briefly discuss the following previous studies of BPR [Link] and Bond

(1996) identified six organisational BPR factors for implementation. These include:

process change, goals and objective's accomplishment, implementation problems,

derived benefits and organisational performance. The study further indicated the

success factors for implementation to include external, employee empowerment,

operational, communication, method and tools and leadership. Terziovski et al.

(2003) reported six predictors for BPR: strategy, management commitment, IT,

customer focus, continues improvement and performance outcomes. Maull et al.

(2003) presented ten dimensions in which BPR can be measured in five themes:

strategic approach, performance measurement, creating business process

architecture, human and organizational factors, and role of IT. Herzog et al. (2007)

suggested seven factors based on a synthesis of the literature and previously

performed surveys. The seven success factors are top management commitment,

education and training, teamwork, project of BPR, employee cooperation, IT

support, levers and results. Ahmad et al. (2007) found seven success factors to be

essential to BPR implementation in higher educational organizations. These

include: teamwork, quality culture, quality management system, rewards, change

management, less bureaucratic and participatory management, and adequate

financial resources.

43
The BPR studies that examined lessons learned from BPR approaches were case

studies (Broadbent, Weill, & Clair, 1999; Caron, Jarvenpaa, & Stoddard, 1994;

Clemons, Thatcher, & Row, 1995; Davenport & Beers, 1995; Earl, Sampler, &

Short, 1995; Sarker, Sarker, & Sidorobo, 2006; Stoddard & Jarvenpaa, 1995;

Ahmad et al., 2007; Salimifard, et al., 2010). AL-Mashari and Zairi (1999)

classified the CSFs of BPR implementation into five dimensions, with each

construct having items that measured it. The five latent constructs are

changemanagement, management competence, organizational structure, BPR

project management and IT infrastructure.

Therefore, BPR factors in the present study have been adapted based on the scope

of study and fit to the banking industry, which isin line with the previous studies

(Al-Mashari & Zairi, 1999; Ahmad et al., 2007; Salimifard, et al., 2010). BPR

factors are the independent variables, which include 1) Change Management, 2)

Management Commitment, 3) Less bureaucratic and flatter organizational structure,

4) Project Management, 5) Customer Focus; sixeffective process redesign, 7)

Adequate financial resources, and 8) IT infrastructure. These eight BPR factors are

essential elements to the successful transformation process. Each of these factors is

discussed in detail below:

2.4.1 Change management

One of the most overlooked obstacles to successful project implementation is

resistance from those whom implementers believe will benefit. Most projects

underestimate the cultural impact of the major process and structural change, and,

44
as a result, do not achieve the full potential of their change effort. Change is not an

event, despite the many attempts to call people together and have a meeting to

make a change happen. Change management is the discipline of managing change

as a process, with due consideration that we are people, not programmable

machines. It is about leadership with open, honest and frequent communication. It

must be okay to show resistance, to voice issues, and to be afraid of change.

Organizations do not change. People change, one at a time. The better one manages

the change, the less pain one will have during the transition, and the impact on

work productivity will be minimized. Reengineering is not downsizing,

restructuring or automation. Reengineering eliminates works, not jobs or people. It

is concerned with how work is done not how organizationsare re-structured.

Reengineering enables process design, rather than providing a new mechanism for

performing old ones, and it is revolutionary.

Change Management can be referred to as a process for restructuring and

redesigning the organizational activities in order to keep abreast of challenges and

for meeting the needs ofcustomers (Moran & Brightman, 2000). Changes in

organization are being managed by the leader or manager for the organization by

incorporating the employees into the process to achieve a positive [Link]

changes in organizations are being achieved through effective communication,

involvement of employees, reward and motivation, socio-cultural adjustment need

to overcome resistance and facilitate the acceptance of the desired procedures or

policy (Tower, 1996; Zairi & Sinclair, 1995). The factors that relate to change

management in organizations include:

45
[Link] Reward and motivation

Organizations motivate employees through various [Link] method of

motivation can be in a form of addressing the hygienic or motivating factors. The

hygienic factors include inducement by increasing salary, and bonuses. The

motivating factors encompass job enlargement, job enrichment, job rotation,

promotion, offering higher responsibility, and acknowledgement of higher-

performance achievement of employees. The organization reward system should be

revised as part of the motivation process for the BPR effort (Jackson, 1997). An

effective motivation package for an organization has to be wide spread and give

equal chances and opportunities for all employees (Towers, 1994). Job's

enlargement through the introduction of new job titles can be considered as an

example of motivation and encouragement of people to endorse the reengineering

programmewithout fear.

[Link] Effective communication

Communication is another important change management tool perceived as very

critical in facilitating BPR (Hammer & Stanton, 1995). However, it is also

considered by some organizations to be the most difficult part of BPR. Davenport,

(1993) emphasizes the need for communication throughout the change process for

all levels and for all individuals, and stresses that, it should occur regularly between

the top management and the subordinate. The communication should discuss issues

related to sensitive issues such as employee’s right sizing, downsizing openly and

honestly, business strategies, vision, mission, customers and competitors. Effective

46
communication in organizationkeeps employees up-to-date with related changes in

policies and procedures. Communication in organizationsavoids rumourmongering

and filters [Link] should be open, honest and clear, especially when

discussing sensitive issues relating to change, such as personnel reductions

(Davenport, 1993; Janson, 1992).

[Link] Creating effective organizational culture

An effective organizational culture exhibits the professionalism of its employees to

work as a team for achievement of the desired objectives. BPR encourages

integration; teamwork; cooperation; coordination; empowerment of employees in

the reengineered work environment; createeffective organization’sculture norms

and valueacceptable to the employees. However, trust and honesty among team

members are also needed, as well as within the organization as a whole (Dixon,

Arnold, Heineken, Kim, Mulligan, 1994; Jackson 1997). Organisational culture is

an important factor in successful BPR implementation. Cooperation, coordination,

and empowerment of employees are the standard characteristics of an innovative

organisational environment. Aclassless culture supports these attitudes (Ahadi,

2004). An egalitarian culture should be developed within the organization to enable

the successful implementation of any organizational change. It also avoids stress

and resistance to change among employees, which is acknowledged as being a

fundamental barrier to change (Abdolvand et al., 2008).

47
[Link] Stimulating receptivity to change

Stimulating Receptivity to Changemeasures the extent of the organizations

influence on its employees to accept the new changes introduced for overall

organisational improvement. The organisational influence requires top management

interaction with subordinate and various teams within the organization to achieve

positive results (Hall, Rosenthal, & Wade, 1993; Guha, Kettinger & Teng, 1993).

[Link] Employee’s empowerment

Employee’s empowerment is an effective factor leading to the success of BPR

implantation. Empowerment gives a chance to its employees to contribute

positively to the organization by making decisions without reference to their

supervisor, at the same time, deciding on how work should be tackled or the right

technology/tools to be used in achieving the organizational objectives. As BPR

results in a top-down approach, decisions are being pushed down to lower levels,

and empowerment of both individuals and teams become a critical factor for

successful BPR efforts (Thomas, 1994; Cooper & Markus, 1995; Hinterhuber,

1995; Dawe, 1996). It establishes a culture in which staff from all levels feels more

responsibly accountable (Rohm, 1993) and promotes a self-management and

collaborative teamwork culture (Mumford, 1995).

[Link] Human involvement

Human involvement in an organisationalproject decision process facilitates

achievement of its objectives (Jackson, 1997). Human involvement is a powerful

48
instrument for organisational culture that encourages employee’s motivation and

loyalty to the organization. The culture of experimentation is an essential part of a

successfully reengineered organization. Therefore, people involved or affected by

BPR must be prepared to endure errors while reengineering is taking place.

[Link] Training and education

Training and Education refers to the extent of the organization’s activities that

increase job involvement and facilitate updating the skills of employees in

implementing BPR. Many researchers consider training and education to be an

important component of successful BPR implementation (Zairi & Sinclair, 1995).

Business managers, line managers,Information system managers and other staff in

the front-line are the people who benefit most from education and training activities

of BPR (Tower, 1994). New processes may require training, technology and data

availability. The change to the business and job environment, and the availability of

a supportive infrastructure should be considered.

2.4.2 BPR Project management

As effective Project management is considered as the critical factor of change

management. A pilot project indicates failures and risks that provide the

opportunity to make appropriate changes to the efforts, thus promoting success and

preventing possible disasters. BPR project management refers to the extent of the

alignment of project strategy with the corporate strategy, effective use of

consultants, effective planning and project management techniques and adequate

49
identification of values and performance measures of the project (Hammer, 1990).

Successful project implementation is highly dependent on effective project

management. New processes would be created to define jobs and responsibilities

across the existing organisational functions (Davenport & Short, 1990). There is a

clear need to create a new organisational structure that determines how project

teams are going to work, how human resources is integrated, and how the new jobs

and responsibilities are going to be formalized. Project management is important in

order to plan and manage the BPR to be correctly implemented (Al-Mashari &

Zairi, 2000). Ahmad et al. (2007) posited that employees should be adequately

trained to get the required skills in doing tasks assigned to them. The reengineering

strategy should be closely aligned with, and tied to the corporate strategy and core

competencies that are critical to the organization's success.

2.4.3 Top management commitment

It is the most evident managerial practice that directly affects the success of the

organization (Hammer & Stanton, 1995; Holland & Kumar, 1995; Guimaraes &

Bond, 1996). Top management commitment ensures that employees contribute

towards the successful achievement in remarkable organizational performance as a

result of the implementation of projects in the organization. A lack of commitment

in organizations mayresult in a lack of resources and funding that terminates

redesigning of the processes. Top management: the real involvement of top

management in the organizational performance. It should be effective, real, active

and clear to involve all employees. Top management leaders should have a clear

50
knowledge about the company’s [Link] addition, they should have enough

knowledge of the project and a realisticexpectation of the results. Top management

is responsible for each activity on all levels within the organization (Singh & Kant,

2008). They should provide a clear direction or vision in order to help BPR team

members to be directed towards the desired results (Sung & Gibson, 1998).

Major business process change typically affects processes, technology, job roles

and culture in the workplace. Significant changes to even one of these areas require

resources, money, and leadership. Changing them simultaneously is an

extraordinary task. If top management does not provide strong and consistent

support, most likely, one of these three elements (money, resources, or leadership)

will not be present over the life of the project and severely cripple the chances for

success. It may be true that consultants and reengineering managers give this topic

a lot of attention, as most current models of re-designing business processes use

staff functions and consultants as change agents, and often the targeted

organizations are not inviting the change. Without top management sponsorship,

implementation efforts can be strongly resisted and ineffective.

Top management support for large companies with corporate staff organizations

has another dimension. If the top management within the line organization and staff

organization do not partner and become equal stakeholders in the change, and only

have staff management support, the organization is most likely ill-prepared for a

successful reengineering project (line management in this context includes the top

managers of the operation who are ultimately accountable for business performance

P&L, and customer service, etc.). Projects that result in a major change in an

51
organization rarely succeed without management support for the line organization.

Top management commitment is the highest level of management where the top

officials determine the strategic direction of the organization. In order to have

successful BPR, top management should communicate with employees in order to

motivate the movement, and control the BPR users (Abdolvand et al., 2008).

2.4.4 Customer focus

Customer focuses on the external orientation are based on customer research,

competitive analysis, analysis of customer requirements on products/services, and

firms that are able to meet customer demand to achieve a competitive advantage

over their competitors (Chen & Chiu, 2008). Customer requirements and

expectations should be defined and measured, and processes should be defined

broadly in terms of customer values. Benchmarking allows learning from the

experience of other organizations as well as from one reengineering process to

another in the same organization. Electronic banking (e-Banking) is an innovative

way of doing business in an information environment. An innovative organizational

requires customer involvement during BPR (Zirger & Maidique, 1990).

Organizations should gather information from their customers to drive the BPR

projects. This helps them to recognize their customers' needs (Ahadi, 2004).

2.4.5 IT infrastructure

This study defines IT infrastructure as the extent of the organization’s expenditure

on IT infrastructure, IT personnel training, IT consulting, IS maintenance,

52
computers and software, effective alignment of IT infrastructure and building an

effective IT infrastructure, proper IS integration, effective reengineering of legacy

IS, increase IT competency, and effective use of software tools, which are the most

important factors that contribute to the improvement of operational performance of

a bank. IT is the automation of processes, controls, and information production

using computers, telecommunications, software and ancillary equipment, such as

automated teller machines 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. Information and Communication

Technology have provided self-service facilities (Automated customer service

machines) from where prospective customers can complete their account opening

documents direct online. It assists customers to validate their account numbers and

receive instruction on when and how to receive their chequebooks, credit and debit

cards. 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 & Laudon, 2001).

2.4.6 Process redesigns

Sheehy (1997) viewed the effective process redesign as the ability of finding a new

way of adding value to customers. Similarly, Hall et al. (1993) argued that for BPR

53
to be successful, the redesign effort must be concentrated on areas that have the

most direct impact on customer value and cost. Firms that are able to meet

customer demands for new products and services can achieve a competitive

advantage over their [Link] key processes of the organization should be

effectively redesigned so that the resulting performance enhancement would extend

throughout the entire business organization. The effect of the new improved process

on the employees should not be neglected. They need to know how it is going to

affect their future job and what is in it for them. Moreover, ensure the use of the

right people in the right project.

Process redesigns of the organization process orientation includes: appropriate level

of process knowledge, documentation of existing processes, appropriate selection

of core processes and use of prototypes are critical to process redesign. The

redesign processes should have a direct impact on customer value and cost. The

redesign processes perform a work activity in a radically new way of adding value

to customers. It starts with a relatively clean slate with creativity to produce a

specified output for a customer or particular market. Adequate identification of

process gaps and the evaluation of effectiveness of the current processes by making

use of appropriate software tools to visualize and analyses them (El-Sawy &

Bowles, 1997; Tower, 1994). Identifying process owners is also important for

project implementation (Boyle, 1995). The redesign process must have a direct

impact on customer value and cost.

54
2.4.7 Financial resources

The recapitalization of Nigerian banks was aimed at ensuring adequate financial

resources for the banks to conduct their business effectively. The weak capital base

cannot adequately provide a cushion for the risk of lending to entrepreneurs without

collateral. BPR is normally an expensive project and requires a huge amount of

money (Ahmad et al., 2007). In order for BPR to happen successfully, the

organization needs to have an adequate amount of funding, sufficient to implement

change and to back up unpredictable circumstances.

Madubueze (2007) reported that Nigerian banks were directed by the Central Bank

to have a minimum capitalization of N25 billion (or about $200 million) from Naira

2 billion formeeting the international standard, become players on an international

scale, and help to make Nigeria a financial capital of Africa. The recapitalization

and consolidation will improve the profitability and operational efficiency of banks;

expand the shareholding base of Nigerian banks. Thus, eliminating the phenomenon

of family banks and the tendency for poor corporate governance, the Nigeria

economy will be stronger and better capitalized to finance the long-term

development projects in different spheres of the economy and businesses and banks

will also invest in infrastructure development, good business enterprises, and,

moreover, support entrepreneurship (Osubo, 2005). The average capital base of

Nigeria's banks is US$10 million, which is very low compared to that of banks in

other developing countries like Malaysia where the capital base of the smallest

bank is US$526million. Similarly, the aggregate capitalizationof the Nigerian

banking system at 311million naira (US$2.4million) is extremely low in relation to

55
the size of the Nigerian economy and in relation to the capital base of

US$688billion for a single banking group in France and US$541billion for a bank

in Germany (CBN, 2005).

2.4.8 Less bureaucratic (flatter) structure

The organizational structure should be flatter to enable BPR in terms of it

encouraging creativity and innovativeness in the organization, as well as the need

for less bureaucracy, and more participation and empowerment in the organization.

The general view is that BPR means a flatter, cross-functional and less bureaucratic

structure. However, since innovativeness is essential for BPR to happen

successfully, McAdam (2003) suggested that organizations could implement less

bureaucracy to encourage innovativeness. Therefore, organizational structure

should be flexible in order to avoid the failure of BPR implementation, as discussed

in Aggarwal (1998), and Ranganathan and Dhaliwal (2001). Additionally, several

authors that worked on BPR research, such as Davenport and Short (1990), stressed

the importance of process integration in organisation structure in order to achieve

desirable business outcomes. Hall et al. (1993), and Peppard and Fitzgerald (1997)

suggested ways to achieve successful results in BPR implementation by

significantly changing the organization’s structure, with emphasis on cross-

functional work teams. This suggests that the top management should re-evaluate

their organizational structure to determine whether it is appropriate for the situation,

with the rapid changing environment and tight competition in the market. Bank

branches, units and departments should be empowered to operate within their

56
budget allocation. This kind of organisational structure eliminates a delay in

decision-making and enables the bank to be more responsive to its customers.

Thomas (1994) and Peppard and Fitzgerald (1997) argued that employee’s

empowerment would make organizations respond faster to customer needs, and,

hence, improve the organisational performance. Having discussed the BPR factors,

the summary of the success and failure factors of BPR are listed inTable 2.3.

Table 2.3
Summary of the BPR Success Factors and Causes of Failure
Method BPR success factors Failure factors

Business 1. Questioning the fundamental 1) Negligence of the work

Process assumptions of the process of environment aspects of the
Reengineering integration of BPR with the corporate design process
strategy 2) The importance of BPR
2. Total commitment of the leadership projects
3. Strong communication among the 3) The rigidity of the
participating team infrastructure system
4. The ambitious goals of the 4) Consideration of human
reengineering process factors as costs that need to
5. Deployment of the most talented, be reduced, rather than a
competent and creative people in the resource to be developed.
project
6. The process chosen for reengineering
should be in
the center of the organization for the
improvement to be felt
7. The effective use of information and
communication technology

2.5 BPR failure factors

The detailed explanations on the summary of critical success and failure factors of

BPR in Table 2.3 had been discussed in literature extensively by Al-Mashari and

Zairi, (1999). Chan and Choi (1997) reported some of the reasons for BPR failure

as lack of understanding and inability to perform BPR. An estimate of 70% of the

57
companies that involved in BPR failed to achieve any benefit from implementation

efforts (Hammer & Champy, 1993). The subsequent sections discuss the summary

of the different reasons attributed to the high failure rate of BPR effort.

2.5.1 Lack of proper strategy

One of the reasons given for the high failure rates of BPR efforts is that most of the

BPR project has not been connected to the goals (Wu, 2002). Tomasko (1993) said

that reengineering was about operations and that only strategy can show what

operations matter. Therefore, understanding the existing process should be the

focus of reengineering. Gateway Management Consulting Incorporated conducted a

survey on understanding of BPR initiatives among the company's senior executive

management. The study found that 54% of the respondent had incorrect

understanding of reengineering (Manganelli, 1993).

2.5.2 Unrealistic objectives

Many managers have a great expectation on BPR performance outcome (Millman,

1994). They target unachievable goals for the BPR projects (Manganelli, 1993).

Unfortunately, at the end, when the results do not meet the unrealistic goals, they

concluded that the BPR project has failed. The unrealistic expectation reduces the

commitment and confidence of management to BPR. BPR aims at dramatic

improvement, the gain should be conditioned upon realistic situations (Klein,

1994).

58
2.5.3 No clear concept of a process

Reengineering calls for multi-perspective and creative thinking. People with

inadequate exposure and a misunderstanding of the operational processes may not

be able to adequately handle the reengineering techniques. This is true, particularly

with the capability to value evolving information technologies in an organization

(Rai & Paper, 1994).

2.5.4 Wrong scope of process objectives

Some managers may target restructuring rather than the reengineering process,

which is not a problem to operations, since the downsizing process adds value or

results in a better situation after [Link] incorrectly defined business

objective result in reengineering process failure as the contribution of BPR is

reduced to negative (Mathews, 1995).

2.5.5 Non recognition of BPR benefit

The inability of an organization to recognize the benefits of BPR or realizethe

positive performancemay be as a result of inadequate vision for dramatic

improvement of customer satisfaction and effective process operations (Rai &

Paper, 1994).

59
2.5.6 Over dependence on IT systems

Many managers over-rely on IT solutions. They forget to investigate the business

process and attempt instead to simply automate an ineffective process (Anonymous,

1994).

2.5.7 Opposition and lack of commitment from top management

To achieve satisfactory results of BPR, it requires top management commitment

(Bashein, 1994). Membersof top management need commitment in order to endorse

the change and direct the changes of operations and culture (Klein, 1994).

BPR failure factors related to change management and culture include problems in

communication as a result of hiding uncertainties in communication, a poor

communication link between BPR team and personnel, lack of motivation and

reward. The organizationalresistance to change may result from a fear of job

security, job loss, and lack of adequate planning for resistance to change, and lack

of optimism about the BPR result. Therefore, BPR is a strategy that organizations

implement to deliver value to [Link] is one of the topics for practitioners and

academicians, as the process constitutes the core of how to advance.

2.5.8 Previous studies on BPR factors and performance in banks

Table 2.4summarise the previous empirical and case studies that were conducted in

the financial services industry regarding BPR and performance improvement in

60
organizations. The empirical study’s independent variable is the BPR factors while

the dependent variable is organizational performance. BPR is the performance

improvement indicator for financial and non-financial, as shown by some authors in

the table. Terziovski, Fitzpatrick & O'Neill (2003) argued that the key challenges

for successful implementation of reengineering projects are changing attitudes and

culture, ensuring extensive communication and dealing with resistance to change

from middle management. Brandon et al. (1999) argued that the extent to which

benefits are derived is related to the company performance and that the level of the

potential problems encountered during reengineering is inversely related to the

extent to which project goals/objectives were accomplished to derive benefit and

favourable impact on company performance.

Table 2.4
Summary of Studies on BPR Factors and Performance in Banks and Financial
Services Setting
Type of Research & BPR
Authors Measurement (DV) Findings
Factors (I.V)
Cheng & Empirical Survey Perceived measure Customer focus is the only
Chiu, Strategic alignment of overall quality; factor that is significantly
(2008) Management commitment Value for money; related to performance. Other
Change management Customer BPR factors such as change
Customer focus satisfaction; management, IT is not
BPR Project management Customer retention; significant with performance.
Use of IT Market share; Sales
growth and
Profitability
Khong & Empirical Survey Perceived measure Change management system
Richardson, Change management and of financial and culture, management of
(2003) culture performance and risk and BPR Project
Management competence customer service management are found to be
Organizational structure management significantly correlated to
BPR project management performance customer service management
IT infrastructure performance of Malaysian
banks and finance houses.

61
Table 2.4(Continued)
Type of Research &
Authors Measurement (DV) Findings
BPR Factors (I.V)
Terziovski, Empirical Survey Performance The study identified:
Fitzpatrick BPR strategy factors measurement indicators BPR strategy and customer
& O'Neill, Top management includes: ROE, Cost, focus as the most significant
(2003) commitment and income ratios. predictors, while other is not.
Use of IT
Process redesigns
Customer focus
BPR as part of
continuous
improvement culture
Shin & Qualitative - Case e-fund, ATM debit The organization achieved
Jemella, study approach card, disbursement and successful reengineering
(2002) service charge efforts that led to business
transformation, improvement
in new product, services and
customer service's
management.
Sidikat & Longitudinal Case Assesses the impact of The study revealed that the
Ayanda, study approach BPR implementation of First bank of Nigeria
(2008) the business reengineering project had a
organization significant effect on
performance of First organizational performance
bank Plc. improvement and use of ATM
facilitated cash withdrawal
and improved customer
service management.
Siyanbola Empirical Survey Profitability The study revealed that UBA
(2011) Use of IT Increase market share & UBN adopted a mixture of
Change management Operational efficiency management strategies (BPR
and advanced use of IT). Use
of IT was found to be at the
advanced level unlike other
banks. Furthermore, the
change management tools by
the bank were employed.

Anayo, Case Assess the overall The study revealed that

(2005) study/Longitudinal impact of reengineering adoption of BPR improved the
approach in terms of financial performance of STB
profitability, customer limited, now United Bank for
service delivery and Africa Plc.
sustained customer The study concluded that
banker'srelationship. implementation of BPR would
result in the achievement of
remarkable success whereas
adoption of other management
tools does not yield in
dramatic outcomes.
Bob, Case Assessing the impact of The banks operational
(2004) study/Longitudinal BPR on performance of performance greatly was
approach banks in Nigeria. Case improved in terms of
study of UBA, First profitability, efficiency and
bank, Zenith bank, and effectiveness.
Standard Trust bank.

62
Therefore, reengineering has become the weapon for corporate organizations that

are seeking for improvement in their performance and intent on achieving cost

leadership strategy in its operating industry and environment. Moreover, the

suitability of the reengineering method to the organizational context is of great

significance. While the process reengineering could benefit manufacturing and

service firms, there should be a distinction in its implementation to suit the unique

situation of the firm (Shin & Jemella, 2002). They argued that organizations

achieved successful reengineering efforts that led to business transformation,

improvement in new products, services and customer services and flow of

information as a result of the process reengineering efforts. Sidikat and Ayanda

(2008) argued that the reengineering process remains an effective performance

improvement method for organizations striving to operate as effectively and

efficiently as possible in the short run, while achieving the strategy for

organizational growth and performance in the long run. Bob (2004); Anayo (2005)

found that banks operational performance has greatly improved in terms of cost

reduction, profitability, efficiency and effectiveness of service delivery. Khong and

Nair (2006) argued that the driving factors for customer service management,

which are significantly related to perceived business performance, are market

research, customer satisfaction, customer survey, service delivery and handling.

This shows that customers in the advanced countries are more enlightened about

their rights and sophistication (consumerism), hence, for the banks and financial

institutions to be competitive, attention should be given to the customer's service

research, management, operations and marketing (Chen, 1999).

63
Khong and Richardson (2003) argued that CSFs of BPR in terms of change

management and culture, management of risk and BPR project have a positive

effect on customer service's management and business performance. IT

infrastructure has a positive effect on customer service but no effect on business

performance. The change management system and culture have no effect on

customer service but customer service management has a positive effect on

business performance. A change management and culture can provide a good

setting for fundamental change as a result of BPR implementation through the

active involvement of people in redesigning the process for change (Dawe, 1996;

Jarrar & Aspinwall, 1999). In addition, the management of risk asset and BPR

project management have positive effect on customer service management. Banks

and Financial service firms in USA have reported that reengineering had led to an

improvement in customer service (Wood, 1996).

Cheng and Chiu, (2008) argued customer focus has a relationship with performance

of commercial banks in Hong Kong. However, they observed that project

management and IT usage appeared to be less important in banking than the

manufacturing industry. This may be because the service industry requires heavy

investment in people and technology. Project management skills and adequate IT

infrastructures are the basic requirement in the smooth operation of banks. Unlike

in the manufacturing field, project management is a core skill for workers in the

service industry to handle their work. In a service-driven industry, customer focus

is the only factor that is significantly related to firm performance.

64
In a similar situation, Terziovski et al., (2003) advocated customer focus to be the

focal point in process innovations in banks. Process innovation in terms of

redesigning of redesigning core customer focused business processes and using

customer feedback is significantly related to the organization'sability to satisfy

customers. Organizations were also more likely being able to satisfy customers if

BPR had been implemented in a proactive manner. There was, however, a

statistically significant relationship between cycle time reduction and focusing to

redesign efforts on core-customer focused on business processes. This indicated

that IT in BPR acts as an enabler (Attaran, 2004; Terziovski, et al., 2003; Bhatt,

2000).

In addition, previous studies on BPR factors and performance in another setting

have been reviewed and summary of the previous studies on BPR factors and

performance in organization of other sectors is presented inTable 2.5.

Table 2.5
Summary of Some Selected Previous Studies on BPR in Organizations from another
Sector
Type of Research
Authors & BPR Factors Measurement (DV) Findings
(I.V)
Wang, Empirical Study: The supply-chain The outcome can assist in
Chan & Combining BPR operation’s reference implementation of
Pauleen, and SCM (SCOR) model is the multinational supply chain
(2010) disciplines. framework developed projects by identifying the
by experts and gaps and linking them to the
explains the SCM channel of entities.
practice and BPR.

Zellner Review of Overview of business The study found that BPI

(2011) literature on process improvement approaches usually do not
Business Process approaches and their actually state the level of
Improvement actual improvement improvement, and some do
contribution not have a methodological
structure for re-application.

65
Table 2.5(Continued)
Type of Research &
Authors Measurement (DV) Findings
BPR Factors (I.V)
Willmott Review of BPR The study highlighted BPR
(1994) literature cursory treatment of the
human dimension in radical
organization change and
reviewed issues that are not
clearly linked with
reengineering of work
processes.

Chamberlin A case study of BPR The study found that the

(2009) implementation in organizations are not ready
Local Government for a radical change. The
organization in UK senior managers do not
understand the BPR concept
and its implications.

Currie & Qualitative Case Process redesigns Reengineer core processes to

Willcocks, study and innovation by be heavily dependent on IT
(1996) using IT as an to deliver the anticipated
enabler large-scale improvement in
financial performance.

Ozcelik, Longitudinal ROA; ROE, firm Firm size, IT budget, advert

(2009) approach: BPR size, market share expenditure, and market
Project management share are positively
associated with all four
performance measures.

Abdolvand, Empirical Survey Positive and Leadership, collaborative

Albadvi & Leadership, Negative BPR working environment, top
Ferdowsi, Collaborative readiness indicators management commitment,
(2008) working were assessed. supportive management and
Top management use of IT have positive
commitment relationship with readiness
Change management while, resistance to change
Use of IT as a negative factor
decreases the readiness.

Brandon, Longitudinal Impact of BPR in Business process changes to

Brans ford, Approach terms of ROE, the greatest extent; customer
Guimaraes Sales growth profit, cost satisfaction, time reduction,
& Tor, Market share reduction improve employee morale,
(1999) Profit and service quality.
Personnel
development
Political/Public
affairs
Product development

66
Table 2.5(Continued)
Type of Research
Authors & BPR Factors Measurement (DV) Findings
(IV)
Ahmad, A case study The study found seven
Francis & research on BPR factors to be critical to BPR
Zairi, critical success implementation success. The
(2007) factors in higher factors are team work and
education. quality culture, quality
management system, reward,
change management, less
bureaucratic and
participative, IT/IS, effective
project management and
adequate financial resources

Tennant & Case study To achieve a Strategic approach, company

Wu, (2005) research focused maximum benefit of target, continuous
on Warwick BPR for long-term improvement, motivation
Manufacturing and short-term
Group. benefits, all elements
such as organization
structure,
empowerment
training, and IT
system should be
considered.

Devaraj & A mixed method A Triangulation The study posited that

Kohli, of qualitative and analysis using three drivers of IT impact are not
(2003) quantitative study measures of IT usage on IT investment, but the
longitudinal IT usage is actual usage of IT. This is
approach in health significantly related to attested in a longitudinal
care revenue and quality in setting of a healthcare
health, but the effect system.
occurs after time lags.

Chen & A case study to To address the theoretical

Tsai, demonstrate the gaps between BPR and OR
(2008) effectiveness of in organisational change,
the Process process re-engineering-
oriented organisational
change exploratory
simulation System’ (process)
was proposed.

67
Table 2.5(Continued)
Type of Research & BPR Measurement
Authors Findings
Factors (IV) (DV)
Philipp, Literature review: The study provides over 300
Susanne Analysing the degree of techniques from various
&Gregory, BPI techniques. improvement methods.
(1991). Furthermore, an evaluation
scheme was developed to
analyse the usability of BPI
techniques and gives
suggestions on how to select
a suitable technique for
certain improvement over
the situation.

Tsai, Chen, Review of literature on The study found that some

Hwang & BPI supported by BPI approaches do not have
Hsu, qualitative content a methodological structure to
(2010) analysis. describe the act of
improvement.

Neghab, This paper is an attempt to The study provided a

Sharif & study an organisational quantitative model to
Imani, condition for BPR and evaluate the organizational
(2009) analyses the collected capability for BPR with
information by presenting respect to organisational
a model on the culture.
relationship between
organisational culture and
BPR.

Devaraj & A longitudinal study The study outlines future

Kohli, conducted on IT in research direction on BPR
(2000) healthcare organisations. and commented: The
literature in BPR
implementation is rife
with anecdotal evidence
and short on rigorous
empirical evidence of
performance impact of
BPR. There is a definite
need to better measure
BPR implementations
through objective
measures, and to relate
BPR to organizational
performance in the context
of other variables that also
affect performance

68
Currie and Willcocks (1996) observed that globalization led to intense competition

that became a threat from new entrants into the financial service market. He added

that the existing financial institutions became pushy for superior performance.

Tennant and Wu (2005) argued that the main reasons for organizations to apply for

the reengineering technique were external competitive pressure, internal cost

reduction, and productivity improvement. They further highlighted the potential

problem area during reengineering implementation to include the people issues and

over-reliance on IT based technology hence, Neghab et al., (2009) provided a

quantitative model to evaluate the organizational capability for BPR with respect to

organizational culture.

Brandon, Bransford, Guimaraes and Tor (1999), asserted that absence of

established BPR theory capable of producing a result significant for business

practice has led to a model based on developed constructs. They added that

organizations were not emphasizing some of the most important goals and

objectives recommended in reengineering literature. They argued that the lack of

organizational emphasis to achieve the desired objectives is the major reason for

many reengineering projects not having been fully accomplished.

Therefore, reengineering has become the weapon for corporate organizations that

are seeking for improvement in their performance and intent on achieving cost

leadership strategy in its operating industry and environment. Ozcelik (2009) found

69
that functionally focused reengineering projects, onaverage; contribute more to

performance than those with broader cross-functional scope.

2.5.9 Different between this study and previous study on BPR factors and
performance in banking industry settings

The present study differs from previous studies in financial setting based on the

following:

1. The focus of the study is on the organizational performance, unlike the

above,which gives much attention to implementation of BPR and the

effectiveness of the technique.

2. The independent variables of the proposed study totalled eight (8) as against

five (5) and six (6) for the previous studies, respectively.

3. The eight (8) independent variables BPR factors are: 1) Change management,

2) Project Management, 3) Management commitment, 4) Customer focus, 5) IT

infrastructure, 6) Effective process redesign, 7) Adequate financial resources,

and 8) Less bureaucratic structure. This shows that three (3) variables (Effective

process redesigns, adequate financial adequacy and less bureaucratic structure)

in this study are different from the previous research. The additional variables

were adapted from Salimifard et al., (2010), Ahmad et al. (2007).

4. This study considers IT capability (IT knowledge and Operations) as the

moderating variable between the predictor and outcome. Empirical studies have

shown that IT capabilities enhance performance through the elimination of

70
 inefficiency, reduction of long-term cost, improving service reliability and

reduced transaction errors (Tippins & Sohi, 2003). In addition, Yongmei,

Hongjian and Junhua, (2008) argued that IT investment affects firm

performance indirectly through IT infrastructure. Huang et al. (2009) argued

that empirical evidence of Italian banks suggests that the development of IT

capability, such as creating an intranet to serve as a repository and

communication tool, can support the redefinition of the overall strategy of the

bank. Furthermore, cultural integration of the branch network and a life-long

training process has been conducted to sustain the banks' large-scale network

(Canato & Corrocher 2004). Although the financial service industry is one of

the early adopters of new IT, the effect of IT capability on firm performance is

inconclusive in the service sector in general, which is contrary to its

manufacturing counterpart (Brynjolfsson, 1993). The data analysis of Huang et

al. (2009) confirmed the reliability and validity of the construct of IT capability.

Hence, the proposed study examines the impact of IT capability in moderating

the BPRfactors performance relationships.

5. The study’srespondents compriseof organisations, i.e., the commercial banks,

microfinancebanks and primary mortgage finance.

6. The study research model is an advancement of the previous model that limits

the establishment of a direct relationship between the independent variable with

the dependent variable as shown inFigure 2.1 and Figure 2.2.

71
 Change Management
construct

Management Competence
construct Customer Service
Management
Organizational Structure
construct
Business
BPR Project Management Performance

IT infrastructure construct

Figure 2.1
Model Framework of Khong & Richardson (2003)

Strategic Alignment

Management
Commitment

Performance:
Change Management
1. Customer
Satisfaction
Customer Focus
2. Profitability

BPR Project
Management

Use of IT

Figure 2.2
Model Framework of Cheng & Chiu (2008)

72
2.6 IT capabilities

This part provides a review of IT capability literature starting with the IT capability

concept and measurement; role of IT capability in business process operations of

banks, IT capability as moderating variable, dynamic capability, RBV perspectives

and relationship in this study. Among the IT dimensions of IT capabilityare IT

knowledge and IT operation (Bhatt & Grover, 2005; Tippins & Sohi, 2003).

2.6.1 Definition and concept of IT capability

The concept of IT capability was introduced by Ross, Beath and Goodhue (1996),

who defined IT capability as the firm’s ability to assemble, integrate and deploy IT

based resources. Heijden (2000) pointed out that the measurement of IT capability

covers relationships in theIT department with the rest from the business. Bharadwaj

(2000) broadened the explanation of the accepted views of organizationalIT

capabilities to an organization’s IT function. Bharadwaj (2000) defined IT

capability as the ability of a firm to mobilize and deploy IT based resources in

combination with other resources and capabilities. Those IT-based resources is IT

enabled resources (consist of technical and managerial IT skills); intangible IT-

enabled resources (such as knowledge, assets, customer orientation) and synergy –

the sharing of resources and capabilities across organizational divisions. Therefore,

capabilities reflect the ability of the firms to combine resources to promote superior

performance (Amit & Schoemaker, 1993).

73
Tippins and Sohi (2003) defined IT capabilities as the extent to which an

organization is equipped with IT objects, IT knowledge as well as effective IT

operations. A high level of IT knowledge enables the smooth implementation of the

organization’s strategy, develops reliable and cost effective systems within the

organization, and anticipates customer needs (Bhatt & Grover, 2005). Clark (1997)

noted that IT experienced in combination with other IT elements directly

determines an organization’s ability to rapidly develop and deploy more innovative

techniques to enhance performance.

Researchers and practitioners have addressed a variety of IT-related variables. For

example, Li et al. (2006), and Tippins and Sohi (2003) classified IT capability into

three dimensions: IT knowledge, IT operations and IT objects. A highly skilled

project team should be much better equipped to manage the project of knowledge

management. Human IT resources include technical IT knowledge. IT knowledge

concerns the extent to which a firm possesses a body of technical knowledge about

objects, such as computer-based systems (Tippins & Sohi, 2003). IT knowledge

encompasses professional qualification, expertise and skills, such as programming,

systems analysis and design, and competencies in emerging technologies. IT

operations include IT functions, coordination and interaction with user community.

Hence, IT operations were conceptualized as the extent to which an organization

utilizes IT to manage market and customer information. The computer-based

hardware, software and support staff is referred to as the objects.

74
2.6.2 The role of IT capability in improving performance

The role of IT capabilities in enhancing organizational performance is well

established in the literature. Various IT studies suggested thatIT capabilities

provide a basis of gaining competitive advantage and enhancing organizational

performance (e.g., Santhanam & Hartono, 2003; Bhatt & Grover, 2005). An

extensive body of IT capability's literature agrees that IT capabilities are resources

to facilitate an effective collection and utilization of information (e.g., Bharadwaj,

2000). Floyd et al., (1990) contend that IT capabilities enhance service reliability,

reduce transaction errors and increase consistency in performance. Further

contentions are that capabilities can contribute to enhancing service quality through

better customized or individualized services, and in creating knowledge links for

identifying and sharing organizational expertise (Quinn et al., 1994).

Tippins and Sohi (2003) argued that an IT capability, which isin a form of

ITcompetency, enhances performance through an elimination of inefficiency,

reduction of long-term cost, improve service reliability and reduce transaction

errors. Bharadwaj (2000); Ross, Beath and Goodhue (1996); Li, Chen and Huang

(2006) focus on the importance of IT capability as well as the relationship between

IT spending (IT investment) and productivity/performance with the moderating

effect of IT capability. IT capabilities by themselves are ineffective at providing a

basis for sustainable competitive advantage because the capabilities can be

duplicated. Thus, the impact of IT on firm’s performance cannot be measured

directly, but can only be quantified by examining the indirect effect.

75
In this study, the term IT capability is adapted from the study conducted by Tippins

and Sohi (2003). The study used IT knowledge, ITobjects andIT operations among

the dimensions of measuring IT capability. The BPR factors encompass both

tangible and intangible elements of resources. Therefore, this study usesIT

knowledge and IT operation as the main components of measuring IT capability.

The third component ITobject was taken care in IT infrastructure is part of BPR

factors as an intangible resource. These dimensions demonstrate co-specialized

resources in that firms cannot utilize the IT architecture effectively without

sufficient knowledge and operations.

Therefore,IT capability can provide the ability to understand the existing

operations. It is also one of the most considered in bringing changes into the

business process. Michael Hammer recommends companies to redefine their

process first and then automate. IT can play a critical role in the development of

BPR efforts, as follows:

1. IT makes it possible to use new ideas and higher standards of technology in

order to develop a strategic vision and help to make the business process better

before it is designed.

2. The communication technology through IT capabilities helps in breaking down

geographical and organizational barriers that make the acceptance of process

change and provide a useful understanding of a company’s strengths,

weaknesses, opportunities and threats. IT also helps to track information.

76
3. For a firm to manage a process that can be adapted from other company's

practices outside its industry. The company should combine its team members

experience to set a standard that other companies can be compared with.

4. IT staff needs to broaden their knowledge in non-technical areas to

achieveeffective teamwork in an organization.

5. In order to have a flexible organisational design the firms existing difficult

structures must be changed to ensure the operation of BPR cross-functional

teams against departmental activities.

6. To gain market share and achieve a competitive advantage, the agreement

between companies and collaboration between suppliers and distributors takes

place at the initial stage of BPR before process design.

2.6.3 The contradictory role of IT as an enabler in BPR

One of the most straightforward assertions about BPR is that IT is a key enabler of

the process redesign. It is IT that permits companies to re-engineer business

processes; a company that cannot change the way it thinks about IT cannot re-

engineer (Hammer & Champy, 1993). Most other BPR proponents also adopt an

essentially technical model of organizational change in which IT basically drives

the re-engineering effort (Grey & Mitev, 1995; Jones, 1994). These arguments

acknowledge the technological determinism inherent to BPR; technology

determines not only the work structure, but also the organizational structure,

culture, management styles, and beliefs (Grey & Mitev, 1995).Thus, out of

fashion,organizational designs can be changed through the use of advanced,

77
enabling technologies that support new business processes that respond to changing

market needs.

However reasonable and straightforward this argument seems; it has also become a

source of controversy. Rather than being a simple enabler of new organizational

processes. IT canalso disable an organization’s ability to change. When an

organization revises its basic business processes using IT, it introduces a new

structure that may become even more difficult to change in the future. Since the

technical backbone of automated processes exists as software routines, a later

change in the process will require a reconstruction of the software application and

its various links to other systems. While all changes require reprogramming of

some sort, either to human or machine components, software programs are often

virtually inaccessible to the persons nearest to the application.

Given the inevitability of business change, hard-wired business processes that are

built today may seriously constrain later efforts to redesign [Link] may have

already produced the organizational structures and processes that will be considered

old-fashioned tomorrow, and those processes may be more difficult to change

because today’s software conventions will probably also be considered out of

fashion tomorrow. Lucas and Olson (1994) provided a clear analysis of this in-

consistency in their examination of IT’s effects on organizational flexibility. They

argued that technology provides the capability for more flexible organizational

structures by allowing a greater variety at the time and place of work while

increasing the speed of response.

78
However, they note that IT also constrains flexibility by embedding routines into

software programs that are not easy to change. Resolving the contradiction of IT as

an enabler or not in BPR is not easy. Gill (1995) argued that managers should not

over program their organizations in search of dramatic productivity gains but to

ensure greater flexibility. Lucas (1996) recommends a commitment to continuous

investment in new technology, thereby keeping any programmed routines from

becoming hardened in the organization.

2.6.4 IT capability measurement

The measurement of the IT capability in this study is based on IT knowledge

(skills) and IT operations (Tippins & Sohi, 2003). The measurement concepts are

defined as follows:

[Link] ITknowledge

Knowledge is information combined with experience, context, interpretation, and

reflection that an organisation possesses that is difficult to be measured (Davenport,

De Long, & Beers, 1998). IT Knowledge is defined as a set of principles and

techniques useful to bring about change towards desired goals. In this study, IT

knowledge is referred as the extent to which organisation acquires a body of

technical knowledge about infrastructure or objects such as a computer-based

system. Technical knowledge could be expressed as contextually based know how.

IT knowledge is distinguishable as a subset of the more general conception of

knowledge.

79
Additionally, employees can be encouraged to adapt to the new IT, assimilate IT

knowledge and apply it in their daily routine, which is beneficial to the

improvement of organizational performance (Shao et al., 2008). According to the

knowledge-based view (KBV), systems of knowing refer to structures of interaction

among team members for sharing their perspectives, pooling of knowledge, and

development of shared understanding. It is suggested that systems of knowing

provide forums for top management team memberswho exchange their strategic IT

and business knowledge, and blend themtogether to foster higher levels of IT

diffusion within the organization. In this study, IT knowledge was measured based

on: 1) IT knowledge among the operation's staff, 2) the staff of IT department are

qualified for the job, 3) professional qualification of the IT network engineers, 4)

the calibre of computer expertise hired as an organization consultant, 5) the

proactiveness of the IT staff for innovation and product development, 6) the IT staff

attends training courses regularly.

[Link] IToperations

Technical operations, or techniques, made of activities that are undertaken in order

to achieve a particular goal. Technical operations are a manifestation of technical

knowledge that results in technical operations or skills. For this study,IT Operations

are the extent of activities within the organization that utilizes IT to manage market

and customer information required to meet goals. These activities are underpinned

by skills that encapsulate the knowledge within the firm. When IT operations are

able to monitor and manage IT resources and services from a real-time business

80
outcome perspective, it can align IT operations with business priorities. As a result,

IT operations can streamline business processes and optimize resources to help

manage costs, increase efficiency to manage productivity and increase revenue, and

help ensure service availability to enhance customer satisfaction, rather than simply

focus on technology.

IT operations can translate raw IT monitoring data into a useful business impact

analysis. IT operations should be able to: 1) link branch's operation through WAN

to the central office; 2) the organisation technology based links via LAN is efficient

24/7; 3) Measure the effectiveness of service's providers for availability network

connection link and minimal down time on the system such as payment processing

response time); 4) the organization has computerise all operational processes 5) the

IT policy is in line with regulatory guideline and 6) The organization IT operations

monitor customer [Link] 2.6 provides a summary of some selected

previous studies of the relationship between IT and organisational performance.

IT has been studied for its role in creating both initial competitive advantage and

long-term sustained competitive advantage (e.g. Barney, 1991; Feeny & Ives,

1990). Powell and Dent-Micallef (1997) found that IT alone cannot produce

sustained competitive advantage, but to leverage on other intangible,

complementary human and business resource to gain sustained competitive

advantage. From RBV perspective, IT-related advantages may result from

development of capabilities that other competitors find difficult to copy.

81
Table 2.6
Summary of Some Selected Previous Studies on IT and performance
Authors Input Output Findings
Aral & Weill IT investment Market valuation, IT investments only lead to
(2007) allocation Profitability, cost performance if IT investments are
innovation consistent with the firm's strategy.
Furthermore, firm's IT capabilities
enhance the effect of IT assets and
broaden the impact.

Bartel, IT investment Productivity growth Service Assurance in a valve

Ichniowski, & (operational efficiency in manufacturing plant, IT investment
Shaw (2007) Manufacturing plant), leads to increase in performance of
number of customized. the great number of products.
products Furthermore, the IT related new
machines required labor with
higher skill levels of specialization.

Barua et al. IT capital Measures of operational IT investments affect intermediate

(1995) Performance (Capacity measures such as inventory
utilization, inventory turnover but there is no evidence as
turnover, inferior quality, to the benefits for the firm
relative price, ROA and performance as measured by ROA.
market share

Bharadwaj IT capital ROA, ROE, Increasing IT capability increases a

(2000) COGS/Sales, firm's competitive advantage. High
SG&A/Sales, IT capable firms have higher
OPEXP/Sales profitability ratios and lower
OPEXP/Sales in all four years that
the study covered. COGS/Sales
were found to be lower in two out
of four years.

Bharadwaj et Market The ratio of the market The coefficient on IT spending

al. (1999) valuation of IT value of a firm's assets to ranges between 1.7 to10.3 in five,
investment the replacement cost of single year regressions.
those assets.
Market value of a firm's

Bresnahan, Labor, IT Sales-material billed The combination of three related

Brynjolfsson, Capital, Non- innovations- 1) information
& IT capital technology (IT), 2) complementary
Hitt, (2002 workplace reorganization,
and 3) new products and services-
constitute a significant
Skill-based technical change
affecting labor demand in the
United States.

82
Table 2.6(Continued)
Authors Input Output Findings
Brynjolfsson IT investment Labor productivity, IT investment increases both labour
and Hitt, MFP growth productivity and MFP growth.
(2000) Specifically, the impact of IT
investment on MFP growth is
maximized after a lag of 4 to seven
years.

Brynjolfsson& Market value Market capitalization One dollar of computer capital is

Yang, (1999) of computer valued at ten times one dollar of
capital conventional capital.

Brynjolfsson IT investment Market capitalization Spending on IT brings about the

et al. (2000) increase in the market value of the
firm. Market valuation effects are
greatest for firms that have high
levels of investment in both IT and
organizational capital.

Brynjolfsson& IT Stock MFP and output In short-run, the returns on

Hitt, (2003) contribution in short- computer investment are
term and long-term years comparable to the cost, while in
long-run the return is not only the
output but also the MFP.

Chari, IT investment Performance IT investment enhances the firm's

Devaraj, (Tobin's q) performance related to
& David, international diversification.
(2007
Chatterjee, IT investments Stock returns and. Investments in IT infrastructure are
Pacini, & in IT investment more likely to capture a
Sambamurthy, infrastructure announcement competitive advantage over the
(2001) IT firm compared to the investments
applications in IT applications.

Chatterjee, IT investment Share price reaction There are significant abnormal

Pacini, & announcement returns on stock value and trading
Sambamurthy volume associated with IT
(2002) investment announcement.
Devaraj & IT investment Firm performance IT investment coupled with the
Kohli (2002) BPR positively and significantly
impacts performance.
Letwongsatien The effect of Firm performance The effect of capabilities on the
(2001) IT higher level of firm competencies
management which are directs responsible for
firm performance.
Santhanam & IT capability The study confirms Bharadwaj
Hartono, on firm (2000). Furthermore, found that
(2003) Performance firm with superior IT capability
shows superior firm performance.
Wade & The resource- IT capability and Literature review on application of
Hulland based view organizational RBV in information system
(2004) and performance research
information
systems
research

83
Table 2.6(Continued)
Authors Input Output Findings
Nakata & Zhu IT customer IT capabilities and The study found that IT capability
(2006) orientation customer orientation can help firm to be more
customersfocused.

Song, Capabilities IT capability and The study found that IT capability

Benedetto & and financial financial performance increase financial performance.
Nason (2007) performance:
the
moderating
effect of
strategic type

Table 2.6shows the recent studies on IT capabilities performed on the basis of RBV

both direct (e.g., Bhatt & Grover, 2005; Powell & Dent-Micallef, 1977). In a valve

manufacturing plant, IT investment leads to increased productivity of products.

Furthermore, the IT related new machines required labor with higher skill levels

and specialization (Bartel, Ichniowski, & Shaw 2007). IT investments only lead to

performance if IT investments are consistent with the firm's strategy. Firm's IT

capabilities enhance the effect of IT assets and broaden the impact (Aral & Weill,

2007). IT investments affect intermediate measures such as inventory turnover but

there is no evidence as to the benefits for the firm performance as measured by

ROA (Barua et al. (1995). IT investment increases both labour productivity and

MFP growth. Specifically, the impact of IT investment on MFP growth is

maximized after a lag of four to seven years (Brynjolfsson and Hitt, 2000). IT

investment enhances the firm's performance related to diversification (Chari, et al.,

2007). Investments in IT infrastructure are more likely to capture a competitive

advantage to the firm compared to the investments in IT applications Chatterjee, et

al., 2001). There are significant abnormal returns on stock value and trading

volume associated with the IT investment announcement Chatterjee, et al., 2002).

84
On the indirect relationship between IT capability and firm performance Pavlou &

El-Sawy, (2006); Tippins & Sohi, (2003) views the linkage between IT capabilities

and firm performance increasing. IT capability increases as a firm's competitive

advantage improved. High IT capable firms have higher profitability ratios and

lower operational cost (Bharadwaj, 2000). The effects of capabilities on the higher

level of firm competencies are directs,responsible for firm performance

(Letwongsatien (2001). The study confirms Bharadwaj (2000). Also, found that

firm with superior IT capability shows superior firm performance (Santhanam &

Hartono, (2003). IT capability can help firm to be more customers focused (Nakata

& Zhu 2006) and increase financial performance Song et al., 2007).

2.6.5 IT service capability maturity model

According to Niessink, Clerc and Vliet (2004), the IT Service capability maturity

model consists of five (5) maturity levels, which contain key process areas. For an

organization to reside on a certain maturity level, it needs to implement all the key

processes for that level and lower levels. The main focus is the maturity of the

service organization, not the maturity of individual services, projects or

organizational units. The model covers the service-delivery process with primary

objectives:

1. To enable IT service providers to assess their capabilities with respect to the

delivery of IT services.

2. To provide IT service providers with direction and steps and further

improvement of their service delivery.

85
The IT Service CMM fulfills the above objectives by measuring the capability of

the IT service processes of organizations on a five level ordinal scale. Each level

prescribes certain key processes that have to be in place before an organization

resides on that level. Key processes implement a set of related activities that, when

performed collectively, achieve a set of goals considered important for enhancing

service process capability. Hence, organizations can improve their service

capability by implementing these key processes. More formally, we define the IT

service process capabilityas the range of expected results that can be achieved by

following a service process. IT service process performance represents the actual

results achieved by following an IT service process. The IT service process

maturityis the extent to which a specific process is explicitly defined, managed,

measured, controlled and effective. The IT Service CMM focuses on measuring and

improving the IT service process maturity of IT service organizations. An

organization that scores high IT Service CMM scale will be able to:

1. Deliver quality IT services, tailored for the needs of its customers.

2. Do so in a predictable, cost-effective way

3. Combine and integrate different services, possibly by different service

providers, into a consistent service package.

4. Continually improve service quality in a customer-focused way.

In order to understandIT S-CMM, it is necessary to see the definitions of the

various levels and to understand the structured nature of these definitions. The five

levels of the IT Service CMM are shown inTable 2.7.

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Table 2.7
Five Levels of the IT Service Capability Maturity Model
Level Management Enabling Delivery
Optimizing Process Change Technology Change Problem
Management Management Prevention
Managed Quantitative Process Service
Management Quality
Management
Financial Service
Management

Defined Integrated Service Organization Process Focus Service

Management Organization Service Definition Delivery
Organization Process Definition
Training Programme
Intergroup Coordination
Resource Management
Problem Management

Repeatable Service Commitment Configuration Management

Management
Service Delivery Planning Service Request and Incident
Management
Service Tracking and Service Quality Assurance
Oversight
Subcontract Management
Initial Ad-hoc processes

The key process areas are grouped under three process categories:

1. The first group concerns the management of services.

2. The second category deals with enabling the delivery process by support

processes and standardization of processes.

3. The third category consists of the processes that result in the consistent,

efficient delivery of services according to the appropriate quality levels.

2.6.6 The key process areas on the IT service capability maturity model (IT
services CMM)

For an organization to reside on a certain maturity level, it needs to implement all

key processes for that maturity level – and those for lower levels. The term key

87
process merely means that these processes are seen as the key to reach a certain

maturity level. There might be more – non-key – processes, but these are not

strictly necessary to reach the next maturity level. Below we present the key

process areas for each of the maturity levels of the IT Service CMM:

[Link] Initial level

The IT service delivery process is characterized as ad-hoc and occasionally even

chaotic. Few processes are defined, and success depends on individual efforts or

heroics.

[Link] Repeatable level

The basic service management processes are established. The necessary discipline

is in place to repeat earlier successes on a similar service with similar service

levels. The seven key process areas of the S-CMM at the Repeatable level are:

1. Service commitment management

The main purpose of Service Commitment Management is to ensure that the

service commitments between the service provider and customer, and, hence,

the actual services delivered, are baseduponthe IT service needs of the

customer. The service commitments specify (among other things) the results

from the services to be delivered. These results should contribute to fulfill (parts

of) the IT service needs of the customer. The activities within this key process

area are targeted at ensuring that the service commitments are based on the IT

service needs, and stay in line with possibly changing IT service needs. This is

88
 enforced by periodic and event-driven evaluations of the service commitments

with respect for the IT service needs, and by periodic and event-driven

evaluations of the actual services delivered.

2. Service delivery planning

The key process area Service Delivery Planning has as its main purpose to plan

the delivery of services specified in the service commitments. The service-

delivery planning includes the planning of service delivery activities and other

service-related activities, estimation of resources needed, expected workload,

effort and costs; the service-delivery schedule; identification of risks, and plans

for service facilities and support tools. In addition, planning data needs to be

recorded so that it can be used in the planning of future services.

3. Service tracking and oversight

The main purpose of the Service Tracking and Oversight key process area is to

provide information about the actual service delivery. This information is to be

used to report actual service levels to the customer and to monitor the actual

service delivery and take corrective actions as soon as possible.

4. Subcontract management

The key process area Subcontract Management describes the activities that a

service provider – the prime contractor– should implement when (part of) a

service, to be delivered to a customer of the prime contractor, is subcontracted

to a third party – the service subcontractor. The prime contractor and the

service subcontractor negotiate service commitments between each other. The

89
 prime contractor remains responsible for the service to be delivered to the

customer.

5. Configuration management

The main purpose of the Configuration Management key process area is to

establish control over all IT components that are needed to deliver the services.

6. Service request and incident management

The main purpose of the key process area Service Request and Incident

Management is to identify record, track, analyses, and resolve service requests

and incidents that occur during service delivery. Both service requests and

incidents are events that – if not resolved – eventually will cause the IT service

provider to break its service commitments. Service requests are requests by the

customer for certain service activities to be performed. Note that these activities

should fall within the bounds of the service commitments.

For example, the customer asks for an extra workplace to be installed. Incidents

are events that need to be resolved in order to meet the service commitments.

For example, if a system goes down it has to be restarted before the maximum

downtime is exceeded. Service requests and incidents are always concerned

with one or more IT components.

7. Service quality assurance

The main purpose of the key process area Service Quality Assurance is to

provide management with the appropriate visibility into the processes being

used, and the services delivered. The independent service quality assurance

90
 group reviews and audits working procedures, standards, and service delivery

activities to see that they comply with the applicable procedures and standards.

The results of these reviews and audits are reported to the involved groups and

individuals and to senior management. Senior management is responsible for

acting upon the results from the service quality assurance activities.

[Link] Defined level

The IT service processes are documented, standardized, and integrated into

standard service processes. All services are delivered using approved, tailored

versions of the organization’s standard service processes. At level three, an

organization standardizes its processes and uses tailored versions of these standard

processes to deliver the IT services. This results in more predictable performance of

the processes, and, hence, it increases the ability of the organization to draw up

realistic service level agreements. Each of the levels three key process areas fall

into one of the three process categories: management, enabling or delivery.

The first category – service management – is concerned with the tailoring of the

standard service processes to the customer and the service level agreement at hand.

Furthermore, the actual service processes need to be integrated with each other and

with the third party service processes (Integrated Service Management).

The second category – enabling – deals with making standard processes available

and usable. The organization develops a set of standard services and describes these

services in the service catalogue (Organization Service Definition). The

91
organization develops and maintains standard processes for each of these standard

services. Usually, organizations will provide several services to one customer at the

same time. Hence, not only the service processes them, but also the integration of

these processes has to be standardized as much as is feasible (Organization Process

Definition). To coordinate process efforts across services and organizational units

and over time, organizational support is institutionalized (Organization Process

Focus).

In addition, to teach people how to perform their roles and how to work with the

standards, a training program needs to be put in place (Training Programme).

Furthermore, means are established for the different groups involved in the service

delivery to communicate efficiently and effectively (Intergroup Coordination). The

underlying problems of events occurring during different service deliveries are

analysed (Problem Management) and resources are negotiated before making

service commitments, and monitored during the service-delivery resources

management. The third category – service delivery – concerns the actual delivery of

the services from the customer using the tailored service processes (Service

Delivery). The level three key process areas are described as follows:

1. Organization service definition

Purpose: Develop and maintain a set of standard services in the organization

and collect information related to the delivery of these standard services. The

description of the standard services is called a service catalogue. This service

catalogue contains a specification of the services in terms of benefits for the

customer. The service catalogue also includes the service levels that the

92
 provider can guarantee and the price of the services. The decision as to what

service to include in the catalogue is based on issues external to the IT Service

CMM, such as marketing research or contractual obligations (in case of in-

house IT service providers). The service catalogue is continuously updated with

experience from the actual delivery of services.

2. Organization process definition

Purpose: Develop and maintain a usable set of service process assets that

improve the process performance across services, and provide a basis for

cumulative, long-term benefits to the organization. This key process area

covers the actual development and maintenance of the standard process used to

deliver the services defined in the service catalogue.

3. Organization process focus

Purpose: Establish organizational responsibility for service process activities

that improve the organization’s overall service process capability. This key

process area covers the activities needed to assess, develop, maintain and

improve the organization’s service processes, which are resources and

coordinated across current and future services. A process improvement group is

established to coordinate the service process activities.

4. Integrated service management

Purpose: Integrate the service and management activities into a coherent,

defined service process that is derived from the organization’s standard service

process. The service planning is based on this tailored service process and

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 describes how its activities will be implemented and managed. The service

planning takes the organization-wide capacity and availability of resources into

account. Cooperation is planned with third parties that also deliver IT services

or products to the customer. Note that these third parties can be external

providers or organizational units of the customer [Link] example of this

could be the customer having their own helpdesk, which relays reports of

hardware failure to the service provider. Procedures need to be put in place

concerning how these reports will be delivered to the service provider and

whether the helpdesk or the service provider will inform the user of the status

of the report. An example that involves coordination with third parties that

deliver products to the customer is software development. Suppose a third party

is developing software to the customer who is to be managed and maintained

by the service provider. Involvement of the service provider in the development

process can ensure that maintenance and management of the software is being

sufficiently taken into account during development.

5. Service delivery

Purpose: Consistently perform a well-defined service delivery process that

integrates all service-delivery activities to deliver correct, consistent IT services

effectively and efficiently. Service Delivery involves the performing of service

delivery activities using a tailored version of the services defined service

processes (which is the output of the Integrated Service Management key

process area). Because the service activities depend on the particular services

being provided, there is no fixed list of activities to be performed.

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 However, all services should perform the activities as defined as the level two

key process areas. The list of activities will be filled in depending on the

services at hand. For example, in the case of software maintenance, the general

service activities will be extended with the software engineering tasks

mentioned in the key process area Software Product Engineering of the

Software CMM.

6. Inter group coordination

Purpose: Establish means for communication between the different groups

involved in delivering the service to the customer.

7. Training program

Purpose: Develop the skills and knowledge of individuals, so they can perform

their roles effectively and efficiently. Because a level three organizations use

standard processes, it is necessary to train employees to perform their roles.

This is impossible at level two, since standard organization-wide processes are

not yet in place.

8. Resource management

Purpose: Control of the resources (hardware and software) needed to deliver

the services is maintained. Before commitments are made to customers,

resources are checked. If not enough resources are available, either the

commitments are adapted or extra resources are installed.

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9. Problem management

Purpose: Remove problems from the IT that is managed, maintained or

operated by the service provider. This key process area implements the

organization-wide investigation of events and weak spots that occur during

service delivery. Practices like root-cause analysis are used to determine

underlying problems. Problems are solved by changing the infrastructure, the

processes or the training.

[Link] Managed level

Detailed measurements on the IT service delivery process and service quality are

collected. Both the service processes and the delivered services are quantitatively

understood and controlled. At a level four, organizations gain a quantitative

understanding of their standard processes by taking detailed measures of service

performance and service quality (Quantitative Process Management) and by using

these quantitative data to control the quality of the delivered services (Service

Quality Management). There are two levels and four key process areas:

1. Quantitative Process Management

Purpose: Control the process performance and costs of the service delivery

quantitatively.

2. Service Quality Management

Purpose: Develop a quantitative understanding of the quality of the services

delivered and achieve specific quality goals.

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[Link] Optimizing level

Continuous process improvement is enabled by quantitative feedback from the

processes and from piloting ideas and technologies. At level five, service providers

learn to change their processes to increase service quality and service process

performance (Process Change Management). Changes in the processes are triggered

by improvement goals, new technologies or problems that need to be resolved.

New technologies are evaluated and introduced into the organization when feasible

(Technology Change Management). Problems that occur are prevented from

recurring by changing the processes (Problem Prevention). The level five key

process areas are:

1. Process Change Management

Purpose: Continually improve the service processes used throughout the

organization with the intent of improving service quality and increasing

productivity.

2. Technology Change Management

Purpose: Identify new technologies and inject them into the organization in an

orderly manner.

3. Problem Prevention

Purpose: Identify the cause of problems and prevent them from recurring by

making the necessary changes to the processes.

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2.6.7 IT capability as the moderating variable

A moderator is a subjective (e.g., level of reward) or objective (e.g., sex, race,

class) variable that affects the direction and/or strengthens the relationship between

an independent or predictor variable and a dependent or criterion variable (Baron &

Kenny, 1986). Understanding the moderating effect of the relationship between

CSFs of BPR and organisational performance is critical. In

organisationalperformance-related studies, several moderating variables were

examined such as time period, industry type, and firm size (Lim, Richardson, &

Robert, 2004). Various studies, such as Bharadwaj, (2000); Bhatt and Grover,

(2005); Santhanam and Hartono, (2003) argued that IT capabilities enhance

organizational performance by providing a basis of gaining competitive advantage.

Furthermore, the study of Lim et al. (2004) viewed IT capability as the ability to

mobilize and deploy IT based resources that are not directly affected by the

investment.

Similarly, Yongmei, Hongjian and Junhua, (2008) argued that, to some extent, the

influence of IT investment on tangible and intangible IT resources that affect firm

performance is moderated by ITcapability. This means no matter amount spent by a

firm on IT. Remarkable performance can only be achieved by evolving IT

capability. IT capability serves to moderate the relationship between IT resources

(human and IT enabled intangible's resources) independent variables and

performance. Lin, (2007) argued that IT capability forms the basis of competition

for firms in information-intensive industries like retailing, banking and high-tech

manufacturing. These results confirm the RBV that firms compete based on

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distinctive core competencies and resources that are valuable, rare, difficult to

imitate, and non-substitutable by other resources.

The review ofprevious studies that focus on a direct relationship between IT, and

organizational performance fail to consider those intervening firm capabilities that

are improved by IT and, which are true facilitators of performance improvement

(Tippins & Sohi, 2003). Other studies have relied on the erroneous assumption that

adoption of IT would improve performance (Dewett & Jones, 2001). While IT can

improve efficiency, it may not provide the competitive advantages, because the

same technology could be adopted by competing organizations. Therefore, Tippins

and Sohi (2003) proposed that IT-related benefit can only be realized when the

organization develops IT competency and then uses it as a set of co-specialized

resources to leverage other complementary resources. Empirical studies include

Yongmei, Hongjian and Junhua (2008) who suggested that IT capability was an

important moderating variable linking IT investments to firm performance. The

model and hypotheses are verified by sample data from leading IT firms in China.

Similarly, said, et al., (2009) found that IT capability moderates the relationship

between customer-focused strategies and organizational performance by providing

a justification for LGAs to invest in terms of resources and commitment, in

adopting CF-strategies and IT.

In addition, Shao, Feng, Choudrie and Liu (2010) examined the moderating effect

of chief information officers’ (CIO’s) competence on IT investment and

organization performance. The study re-conceptualized CIO’s competence into six

sub-dimensions (includes interpersonal communicative ability, political skills,

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dynamic leadership, strategic IT knowledge, business knowledge and IT

management experience) based on RBV and KBV to explain the phenomenon of

the IT productivity paradox. Moreover, Huang et al. (2009) argued that the

empirical evidence of Italian banks suggests that the development of IT capability,

such as creating an Intranet to serve as a repository and communication tool, can

support the redefinition of the overall strategy of the bank. Furthermore, cultural

integration of the branch network and a life-long training process can be conducted

to sustain the banks' large-scale network (Canato & Corrocher, 2004). Although

the financial service industry is one of the early adopters of new information

technologies, the effect of IT capability on firm performance is inconclusive in the

service sector in general, which is contrary to its manufacturing counterpart

(Brynjolfsson, 1993).

Previous studies that examined the relationship between resources (tangible and

intangible) and performance includes: e.g., Weber & Pliskin, (1996); Bharadwaj,

Bharadwaj, Konsynski, (1999); Terziovski et al., (2003); Szanto, (2005), while,

competitive advantage of IT capability was examined by authors like Banker &

Kauffman(1991); Bharadwaj, (2000); Floyd & Woolridge, (1990); Mahmood,

(1993); Mahmood & Mann, (1993); Brynjolfsson, (1993); Chan, (2000) who

reviewed some literature for the study of the effect of IT capability on productivity.

They posited that little evidence was available regarding the payoff from IT

capability in terms of performance or other related outcomes and produced some

inconsistent results. Such inconsistent findings could be further understood with the

introduction of a moderator variable. In the same vain, Li et al., (2004) argued that

IT capability is a moderator than mediator based on RBV theory of firm

100
performance, since the definition of IT capability means the ability to mobilise and

deploy IT based resources which is not directly affected by IT investment. The

effect of IT capability on firm performance has been verified in many studies

(Bharadwaj, 2000; Bharadwaj et al., 1999; Santhanam & Hartono, 2003).

According to Baron and Kenny (1986), moderators are often introduced when the

relationship between the predictor and outcome is unexpectedly weak or

inconsistent. The relationship can be demonstrated as shown in Figure 2.3.

IV DV

Moderator
Variable

Figure 2.3
Graphical Presentation of a Moderated model

In this study, IT capability is introduced as a moderating variable in order to

examine the form and/or magnitude of the relationship between BPR factors and

organizational performance of Nigerian banks. Hence, this gives way to validate the

model in the banking sector.

However, a mediator specifies how a given effect occurs. Sekaran (2003) stated that

an intervening variable is one that surface between the time the independent

variables operate to influence the dependent variable and their impact on the

dependent variable. The relationship can be presented as shown in Figure 2.4.

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 Mediator
IV DV
Variable

Figure 2.4
Graphical Presentation of a Mediated model

Baron and Kenny (1986) and Judd and Kenny (1981) have discussed four steps in

establishing mediation:

Step 1: Regressing the mediator on the independent variable (the independent

variable must affect the mediator.

Step 2: Regressing the dependent variable on the independent variable (the

independent variable must be shown to affect the dependent variable.

Step 3: Regressing the dependent variable on both the independent variable and on

the mediator (the mediator must affect the dependent variable.

Step 4: To establish that the mediator completely mediates the independent (X) –

dependent (Y) relationship, the effect of the independent variables on the dependent

variable controlling for the mediator should be zero (full mediation) or become

significantly smaller (partial mediation). The effects in both steps 3 and 4 are

estimated in the same regression equation.

2.7 Underlying theories

There are numbered of theoretical approaches for examining firm resources and

business values (performances). The principal theories are transaction cost

economics (Williamson 1971, 1981, 1986), the RBV (Wernerfelt 1984; Barney

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1986, 1991; Deirickx and Cool 1989) and the relational view (Dyer and Singh

1998) of the firm. In addition, the concepts of dynamic capabilities (Teece and

Pisano 1994; Teece et al. 1997), absorptive capacity (Cohen and Levinthal 1990),

complementary (Teece 1986) and strategic assets (Amit and Schoemaker 1993),

and value chain analysis (Porter 1985) as well as Teece’s (1986) analyses of the

appropriability regime are all helpful.

2.7.1 Resource-based view (RBV) theory

RBV asserts that organizations can outperform their competitors through

developing resources that are unique and diversely distributed (Barney, 1991).

These differences lead to variations in firm performance among firms in similar

industries (Peteraf, 1993). However, the RBV is void of a single definition of the

term resource (Wade &Hulland, 2004). Many researchers use the term's resources

and capabilities interchangeably (Christensen & Overdorf, 2000; Gold et al., 2001).

RBV defines resources as assets, processes, and capabilities. Barney (1991)

asserted that firms achieve sustained performance advantages by securing rare

resources of economic value that competitors cannot easily copy, imitate, or

substitute. As such, firms with these rare resources should be able to leverage them

for their own unique firm benefit. A more complete definition of resources is

offered by Amit and Schoemaker (1993), who suggested that resources were assets

that are possessed by a firm through ownership or control, while capabilities refer

to an organization's capability to combine resources and adequately exploit them,

such as leverage skilled staff and organizational practices to create a uniquely

innovative work culture where employees outperform their competitors.

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Table 2.8summaries, the relevant theories and their implications for the innovative

firm with respect to each of the functions as the model defined by Chesbrough and

Rosenbloom. There is no single one for one mapping of the theories about the

model functions. Rather, there is a good deal of overlap between the key theories

and the functions.

Table 2.8
Summary of Various Relevant Theories of the Firm Performance and their
Implication
Model Relevant Theories Implications
Value proposition RBV Offering based on value derived from
strategic assets/ core competences.
Relational view/appropriability Value proposition designed to avoid
regime appropriability problems.
Market segment RBV Market segment chosen follows the
and revenue model value proposition to gain maximum
value from strategic assets.
Relational view Revenue model designed to gain
economic share of relational rents.
Value chain Transaction cost economics Optimise level of vertical integration
RBV Identify a need for complementary assets
Comparative efficiency of individual
Value chain analysis activities
Cost structure and Relational view Profit dependents on share of value
profit potential
Value chain analysis Comparative efficiency of individual
activities
Value network Transaction cost economics Cost and risk reasons for alliance
formation
RBV Access complementary assets
Dynamic capability Adjust (build/acquire) internal and
external competences to dynamic
environments.
Absorptive capacity Increase's capacity withinthe firm to gain
from alliances
Competitive RBV Development of strategic assets
strategy
Appropriability regime Decision to access or acquire
complementary assets.
Relational view Preserve adequate share of relational
rents

Transaction cost economics Considerations of transaction integration

versus contract or alliance

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The RBV suggests that the value proposition would be based on the most costly

offering that the firm can make in accordance with its crucial assets. The relational

view suggests that the offering will not be the product of a single firm but be a joint

product developed by the alliance or value network. Any relational rents generated

will need to be shared between the participants of the alliance or network. The

market segment is substantially decided by the value proposition which targets the

firm’s offering to a particular group of consumers.

On the other hand, transaction cost economics would be concerned with

opportunism and asset specificity in predicting whether such assets would be

accessed through alliances or integrated. Value chain analysis would suggest that

the efficiency of activities in the value chain would deliver competitive advantage

through lower cost structure and therefore, higher profit potential.

The empirical test of RBV theory started in the field of strategic management (e.g.,

Mahoney & Pandian, 1992) and was followed by studies in other management

disciplines (e.g., Barney, 2001; Fahy & Smith, 1999; Foss, 1998; Priem & Bulter,

2001) including information systems (e.g., Bharadwaj et al., 1998; Ray et al., 2004;

Ravichandran & Lertwongstien, 2002; Santhanam & Hartono, 2003). Bhatt and

Grover, (2005); Tippins and Sohi, (2003) started to include IT capabilities in their

IT studies and explored the link between various dimensions of IT, such as IT

capability, IT infrastructure and IT business experience on organizational

performance. The findings from their study showed that IT capabilities enhance

organizational performance (e.g., Bhatt & Grover, 2005; Powell & Dent-Micallef,

1997; Santhanam & Hartono, 2003). In addition, findings from IT study conducted

105
by researchers, such as (Adam, 1993; Bharadwaj, 2000; Floyd & Wooldridge,

1990; Quinn et al., 1994; Santhanam & Hartono, 2003) revealed that IT capabilities

provided a basis of gaining competitive advantage and enhance organizational

performance.

The RBV literature points out that firms could obtain a sustainable competitive

advantage as the basis of unique corporate resources that are valuable, rare, difficult

to imitate, and non-substitutable by other resources (Barney, 1991; Conner, 1991).

RBV also recognizes that while some resources may lead to performance

enhancements, others do not, and that the combination may differ across industries

and firms. As such, a key challenge for firms is to identify and leverage those

resources that directly impact on organizational performance (Wade & Hulland,

2004; Zack et al., 2009). Researchers and practitioners have addressed a variety of

IT-related variables. For example, (Li et al., 2006; Tippins & Sohi, 2003) classified

IT capability into three dimensions: IT knowledge, IT operations and IT

infrastructure. Wixom and Watson (2001) incorporate human IT resources for the

following reasons: 1) People are important when implementing a system and can

directly affect its success or failure; 2) The skills of the knowledge management

development team have a major influence over the outcomes from the project; and

3) Only a competent team can identify the requirements of complex projects.

Therefore, a highly skilled project team should be much better equipped to manage

the project of knowledge management (Wixom & Watson, 2001). Human IT

resources include technical IT skills as well as managerial IT skills. IT skills

concern the skills, such as programming, systems analysis and design, and

competencies in emerging technologies. The managerial IT skills include abilities

106
such as the effective management of IT functions, coordination and interaction with

the user community, and project management and leadership skills (Bharadwaj,

2000).

According to RBV, firms with strong human IT resources are able to integrate the

IT and business planning processes more effectively, develop reliable and cost

effective applications that support the business needs of the firm, communicate with

business units efficiently, anticipate the future business needs of the firm and

innovates valuable new-product features before competitors (Bharadwaj, 2000).

Previous studies and researchers have developed many theories concerning the

competitive advantage of firms. However, the RBV emerged as the perspective that

facilitated the explanation for the existence of firm specific assets and capabilities

that are important in the preparation of firm strategy (Abu Bakar, Hashim, Ahmad,

Isa, Dzakaria, 2009).

The RBV is the underlying theory for this study, which explains the relationship

between organizational resources and sustaining a competitive advantage for

superior organizational performance relative to competitors (Barney, 1991; Fahy,

2000). The RBV perspective views organizations as rent seeking units that develop

and deploy resources (assets and capabilities) to realize a competitive advantage

(Greenaway & Chan, 2005). Resources have been identified and categorized by

various researchers to pursue competitive advantage. For example, Mills, Platts and

Bourne (2003) argued that resources are classified as follows: 1) tangible resource,

such as financial, organizational, physical and technological resources; 2)

knowledge resources, such as skill and experience; 3) system and procedural

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resources; 4) cultural values and resources; 5) network resources and resources with

potential dynamic capability; 6) intangible resources such as innovation, human,

and reputation resources. Furthermore, Fahy (2000) classified resources into three

categories: tangible, intangible and capabilities. RBV focuses on the organization's

ability to develop and deploy its internal resources (Hitt et al., 2001). Resources are

input into a firm’s production processes to improve competitiveness and

performance.

Similarly, Meyer and Utterback (1992) highlighted the role of technology, R&D,

production, manufacturing capacity and marketing capability. Leonard-Barton

(1992) pointed out the importance of knowledge and considers organizational

capabilities to include employees’ skill, learning, technology system, managerial

system and the value system within the firm. Capabilities are the firm’s ability to

develop and deploy integrated resources for the objective of achieving a targeted

goal. Examples of capabilities include: teamwork, organizational culture, trust

between management and workers, and IT. Fowler, Wilcox, Marsh and Victor

(2000) argued that three types of capabilities exist: information technological

capabilities, market driven and integration capabilities. IT capability relates to the

operational aspects of firm business processes. Mills et al. (2003) noted that

research still found that resources are interrelated and sticky bundles even though

an effort was made to identify, classify and categorize them accordingly. In a

turbulent business environment, it was suggested that firms could establish resource

competence rather than focus on the product market (Menor et al., 2001).

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2.7.2 How the RBV relates to this study

An organization’s resources are identified, classified and categorized by various

researchers, such as Fahy (2000) into: tangible, intangible and capability. The study

focuses’ on intangible resources (BPR factors) and technological capabilities (IT

capability) to realize superior organizational performance and the competitive

advantage position on the bank. BPR factors are placed in the context of the RBV

of the firm by examining how banks can apply IT capability and resources to

pursue better performance. As the RBV is an appropriate theoretical framework for

addressing performance shortcomings, this study suggests that BPR factors –

change management, management commitment, adequate financial resources,

customer focus, project management, process redesigns, less bureaucratic structure,

and IT infrastructures – are intangible resources, while the organisational

technological competence is considered as IT capability measured by IT

knowledge, IT operations and IT objects (Tippins & Sohi, 2003).

The RBV perspective has the advantage to facilitate classification of resources,

enable comparison and provide strategic measurement of resources. Banks superior

performance depends on the resources within the organization, such as BPR factors.

In relation to that, this study seeks to identify the specific BPR factors that would

lead to superior performance. In spite of the importance of RBV in relation to this

study, the theory suffers from two major theoretical deficiencies. One is that the

RBV, like the industrial economics view, implicitly assumes static equilibrium,

without addressing the requirements for continued success in a volatileenvironment

(Mahoney, 1995; Teece et al., 1997). Second, the RBV focuses only on the

109
difficulties and barriers in competing firms imitating, substituting or taking away

resources rather than on the complementarities of resources (Amit & Schoemaker,

1993; Mueller, 1996; Powell, 1995).

To address these theoretical gaps, several researchers (Grant, 1996; Teece, 1998;

Teece et al., 1997) have suggested that sustainability of competitive advantage by

organisation can be tackled by: First, in coping with changing business

environment, there is a need to renew, reallocate, continuously identify, upgrade,

rejuvenate, reinvent and redefine [Link],the presence of dynamic

capability theory is to support RBV. Second, the need to have the ability to create

an environment in which they can be self-reinforcing and enhancing in value and

strength, thus causing sustained major cost disadvantages to imitating firms.

2.7.3 ITcapability as dynamic capability

Teece, Pisano and Shuen (1997); Eisenhardt and Martin (2000); and Pavlou (2004)

is the originating authors of the dynamic capabilities (DC) theory concept,which

arose from a key shortcoming of the RBV of the firm. DC’s theory further

emphasizes the importance of resources, competence configuration, coordination,

integration and transformation in generating value for the business, especially when

the path to achieving success is not yet clear. The RBV has been criticized for

ignoring factors surrounding resources, instead of assuming that they simply exist.

Considerations such as how resources are developed, how they are integrated

within the firm and how they are released have been under-explored in the

literature. The RBV of the firm has been used for many research studies to explore

110
the relationship between capabilities and performance. Investment in IT is very

important because it is a source of competitive advantage in the short-term, and

then turned to a source of sustained competitive advantage over time (Barney,

1991).

The concept of dynamic capabilities is derived from the RBV, and focuses on

resource's reconfiguration and renewal, while RBV focuses on the selection of

resources. This study adopts the dynamic capability's theory and conceptualizes IT

capability to address the sustainability issues of performance in a turbulent

environment. IT capability would help to bridge these gaps by adopting a process

approach and act as a buffer between firm resources and the changing business

environment. The dynamic resources help a firm adjust its resource mix and

thereby maintain the sustainability of the firm’s competitive advantage, which

otherwise might be quickly eroded. Therefore, while the RBV emphasizes the

resource choice or the selection of appropriate resources, dynamic capabilities

emphasize resource development and renewal. Wade and Hulland, (2004) argued

that IT resources can acquire several characteristics of dynamic capabilities that are

helpful to organizations operating in a turbulent environment. Consequently, IT

resources would directly lead to the achievement of the remarkable competitive

advantage position within an organization. Peppard and Ward, (2004) argued that

interrelated attribute of IT capabilities is a union of business knowledge with IT

knowledge that is an open IT platform for the effective use of process, technology

and working with information.

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2.7.4 Complementarity theory

Barua, Lee and Whinston (1996) proposed the theory of business value based on

the complementarity theory originally from economics literature. The

complementarity theory focuses on factors or resources that are mutually

complementary to each other, and the impact of any of the factors or resources

would result in a greater increase in the desired outcome. Milgrom and Roberts

(1995) proposed that some organizational activities and practices are mutually

complementary and so tend to be adopted together, with each enhancing the

contribution of the other. Therefore, the impact on a system of complementary

practices will be greater than the sum of its parts because of the synergistic effects

of bundling practices together. For example, in the context of reengineering, IT

allows for the innovative business process for competitive advantage (Brynjolfsson

& Hitt, 2003). Adopting the complementarity theory for this study may address the

first shortcoming of RBV – isolation of resources. RBV fails to adequately consider

the fact that resources hardly act alone in creating or sustaining competitive

advantage (Chan et al., 2004; Wade & Hulland, 2004). Drawing on the above

theories, a research model is proposed to examine the relationship between

Dynamic IT Capability, BPR factors and organizational performance as shown in

Figure 2.5.

2.8 Chapter Summary

This chapter provide an extensive review of the literature on BPR factors, IT

capabilities and organisational performance. This chapter also discusses the RBV to

112
govern the proposed theoretical framework. BPR factors are more of an intangible

resource within the organization that would be used with the influence of IT

capability to achieve a remarkable performance. IT capabilities enhance

performance through the elimination of inefficiency, reduction of long-term cost,

improving service reliability and reduced transaction errors (Tippins & Sohi, 2003).

H1
H1

Organizational
Organization
2 BPR Factors
BPR Factors H2
H3 Performance
Performance

2.I.T
[Link]
Capability

Figure 2.5
Conceptual Framework

The chapter also discusses the adoption ofdynamic capabilitiestheory and

complementarity theory to address the deficiency of [Link] addition, findings

from previousstudy indicated that organisation survival in turbulent business

environment became a concern. These and many other reasons have made authors

to called for an empirical study that can thoroughly relate BPR factors to

organisational performance in the context of other variables that also affect

performance. This study investigates the relationship between BPR factors and

113
organisation performance dimensions such as operations cost reduction, customer

service management, business operations efficiency and overall performance. The

review of the literature in this chapter provides a foundation for theoretical

framework of the study, which is discussed in the next chapter.

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 CHAPTER 3 CONCEPTUAL FRAMEWORK
CHAPTER 3
CONCEPTUAL FRAMEWORK

3.1 Introduction

This chapter provides the framework for the study based upon the background for

the research discussion in the literature review chapter. The main purpose of this

research is to investigate the relationship among three variables: BPR factors, IT

capability, and organizational performance. Thus, the aim of the chapter is to

propose a conceptual framework model of study and to suggest hypotheses based

upon the foundation of the related theory discussed throughout the literature review

chapter. The chapter is divided into three (3) sections as follows: first, the research

proposed conceptual framework; second, the overall relationships between

variables – BPR factors, IT capability and organizational performance; third, the

research proposition (hypotheses development) for the study.

3.2 Conceptual framework

Following the discussions throughout the literature review chapter, a framework

was developed to examine the BPR factors and the moderating effect of IT

capability on organizational reengineering performance of banks and financial

institutions. Research framework is the basic foundation upon which other research

structures extend the frontier of knowledge (Sekaran, 2003). Therefore, this

115
framework is derived from a review of the model, concepts and the BPR factors, IT

capability and organizational reengineering performance.

The dependent variable in this study is the organizational performance. This refers

to the bank's effectiveness of activity's outcomes in terms of financial and non-

financial. This study considers multi-dimensional performance measures as they

offer more complete measurement than the uni-dimensional approach. Examples on

some performance indicators used in previous studies are: profitability, success rate

of new service (product) introduction, after-tax ROI, sales growth, after-tax return

on assets, customer satisfaction, customer focus, market research, customer

relationship management, quality and process improvement. The measures of

performance were adapted from previous studies by various scholars (e.g., Hammer

& Champy, 1993; Sun, 2000; Bontis, Chua, & Richardson, 2000).

The independent variables of this study comprise the BPR factors (change

management, management commitment, less bureaucratic (flatter) structure, project

management, customer focus. Effective process redesigns, and adequate financial

resources and IT infrastructure). In reengineering the main area of concern is to

identify the factors that correlate with performance. It is only when the most

important factors have been identified that practitioners have a chance of success

when implementing reengineering projects. The measure of BPR factors was

adapted from previous studies (Al-Mashari & Zairi, 1999; Cheng & Chiu, 2008).

The moderating variable is IT capability. Ross, Beath and Goodhue (1996) defined

IT capability as a firm’s ability to assemble, integrate and deploy IT based

116
resources. Heijden (2000) pointed out that the measurement of IT capability covers

the relationships in the IT department with the rest from the business. Bharadwaj

(2000) defined IT capability as the ability of a firm to mobilize and deploy IT based

resources in combination with other resources and capabilities. Those IT-based

resources are IT enabled resources (consisting of technical and managerial IT

skills); intangible IT-enabled resources (such as knowledge, assets, customer

orientation and synergy – the sharing of resources and capabilities across the

organizational divisions. The measure of IT capability was adapted from previous

studies (Tippins & Sohi, 2003). The study proposes two dimensions of IT capability

– IT knowledge and IT operations. Having defined the conceptual variables, the

conceptual framework in the study is shown in Figure 3.1.

The model shows the framework for the analysis of the relationship between BPR

factors, IT capability and organizational performance. The independent variable in

the framework is BPR factors. The dependent variable is organizational

performance. IT capability attribute was considered to moderate the variable

between the BPR factors and organizational performance. The BPR factors consist

of eight variables: 1) Change management, 2) Management commitment, 3) Less

bureaucratic, 4) Project management, 5) Customer focus, 6) Effective process

redesign, 7) Adequate financial resources, and 8) IT infrastructure while IT

capability consists of two dimensions: a) IT knowledge; b) IT operations; and

Organizational performance is the financial and non-financial dimension. The

relationship is based on the RBV that suggests the performance of a firm is

influenced by internal resources. A firm obtains better performance by making

more effective use of its internal resources than its competitors. IT capability is a

117
dynamic capability, and this capability would eventually influence the

organizational performance.

ChangeManagement
policy CM)

BPR
ProjectManagement
(PM)
Top
ManagementCommitme
nt (MC)

Customer focus (CF) Organizational

performance

IT Infrastructure (IT
Infra)

Process Redesign
(EPR)

Financial Resource
(FR)

Bureaucratic Structure
(BS)
Information
Technology
Capability: (ITC)

Figure 3.1
Research Model

The discussionson the relationships between BPR factors, IT capability and

organizational performance are provided in the next sections.

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3.3 BPR factors, IT capability and organizational performance

Following the review of previous studies in chapter two, BPR factors in this study

were adopted as the basis of fit with the environment, according to the proposition

suggested by Al-Mashari and Zairi, (1999) and Salimifard, et al. (2010). The study

of Khong and Richardson (2003) on BPR in Malaysian banks and finance

companies found that the change management system and culture had a positive

effect on customer service management. A change in management and culture can

provide a good setting for fundamental change as a result of BPR through people

involvement in redesigning the process for change (Dawe, 1996; Jarrar &

Aspinwall, 1999). In addition, the management of risk and BPR project

management have a positive effect on customer service management. Banks and

financial service firms in the USA reported that reengineering improves customer

service (Wood, 1996). This agreed with many other researchers who found

improved customer services as a result of BPR initiatives (Hoffman, 1993; Ryan,

1995; Verespej, 1995; Gianni & Grupe, 1997; Gritzuk, 2000).

Cheng and Chiu (2008) asserted that customer focus has a relationship with

performance. This finding is in line with previous studies by Scherr (1993) and

Terziovski et al. (2003) who asserted that the customer must be the focal point in

the process innovations of BPR initiatives. Hall and Wade (1993) argued that for

BPR to be successful, redesigning efforts must be pointed to the area that had the

most direct impact on customer value and cost.

119
Similarly, Terziovski et al. (2003) agreed that process innovation in terms of

redesigning core-customer focused business processes and using customer feedback

is significantly related to an organization’s ability to satisfy customers.

Organizations were also more likely to be able to satisfy customers if BPR had been

implemented in a proactive manner. There was, however, a statistically significant

relationship between cycle time reduction and focusing to redesign efforts on core-

customer focused business processes. This is in line with the literature on

successful reengineering put forward by Hall et al. (1993). However, there is no

apparent relationship between increased use of IT and cycle time reduction of

reengineered processes (Terziovski et al. 2003; Bhatt, 2000; Attaran, 2004)

3.4 Statement of hypothesis's development

This part provides the research propositions based on the relationships between

BPR factors, IT capability and organizational performance. Table 3.1 shows the

hypotheses of this study:

H1: The extent of BPR factors are significantly related to the organizational

performance.

H2: The extent of the IT capability attributes related to the organizational

performance of Nigerian banks.

H3: The level of IT capability attribute moderates the relationship between BPR

factors and the organizational performance of banks in Nigeria.

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Table 3.1
Summary of Statement of Direct Relationship Hypotheses Development
Hypotheses Statement
H1 The extent of BPR factors aresignificantly related to the
organizational performance of Nigerian banks.
H1a The extent of change management (CM) is significantly related to overall
performance of organization (OP).
H1b The extent of change management (CM) is significantlyrelated to non-
financial performance of organization (ONFP).
H1c The extent of change management (CM) significantlyrelated to financial
performance of organization (OFP).
H1d The extent of Project management (PM) is significantly related to overall
performance of organization (OP).
H1e The extent of Project management (PM) is significantlyrelated to non-
financial performance of organization (ONFP).
H1f The extent of Project management (PM) is significantlyrelated to financial
performance of organization (OFP).
H1g The extent of management commitment (MC) is significantlyrelated to
overall performance of organization (OP).
H1h The extent of management commitment (MC) issignificantly related to non-
financial performance of organization (ONFP).
H1i The extent of management commitment (MC) is significantlyrelated to
financial performance of organization (OFP).
H1j The extent of customer focus (CF) is significantlyrelated to overall
performance of organization (OP).
H1k The extent of customer focus (CF) issignificantly related to non-financial
performance of organization (ONFP).
H1l The extent of customer focus (CF) is significantlyrelated to financial
performance of organization (OFP).
H1m The extent of information technology infrastructure (IT infra) is
significantlyrelated to overall performance of organization (ONFP).
H1n The extent of information technology infrastructure (IT infra)
issignificantlyrelatedto non-financial performance of organization (ONFP).
H1o The extent of information technology infrastructure (IT infra) issignificantly
relatedto financial performance of organization (OFP).
H1p The extent of the effective process redesigns (EPR) is significantlyrelated to
overall performance of organization (OP).
H1q The extent of the effective process redesigns (EPR) is significantlyrelated to
non-financial performance of organization (ONFP).
H1r The extent of the effective process redesigns (EPR) is significantlyrelated to
financial performance of organization (OFP).
H1s The extent of adequate financial resources (AFR) is significantlyrelated to
overall performance of organization (OP).
H1t The extent of adequate financial resources (AFR) issignificantly related to
non-financial performance of organization (ONFP).
H1u The extent of adequate financial resource (AFR) is significantlyrelated to
financial performance of organization (OFP).
H1v The extent of less bureaucratic structure (LBS) is significantlyrelated to
overall performance of organization (OP).
H1w The extent of less bureaucratic structure (LBS) is significantlyrelated to non-
financial performance of organization (ONFP).
H1x The extent of less bureaucratic structure (LBS) is significantlyrelated to
financial performance of organization (OFP).

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Table 3.1(Continued)
Hypotheses Statement
H2: The extent of the IT capability attributes related to the
organizational performance of Nigerian banks
H2a. To what extent is the IT capability (ITC) attributes related to the overall
performance of Nigerian banks?
H2b. To what extent is the IT capability (ITC) attributes related to the non-
financial performance of Nigerian banks?
H2c. To what extent is the IT capability (ITC) attributes related to the financial
performance of Nigerian banks?

The hypotheses state the relationships between each independent variable of BPR

factors and organizational performance. The organizational performance is

enhanced when BPR factors are implemented. Table 3.2shows the hypotheses that

postulate the moderating effect of IT capability indicators of the relationship

between BPR factors in the banking process performance relationship.

Table 3.2
Summary of Statement of Indirect Relationship Hypotheses Development
Hypotheses Statement
H3 The level of Information Technology (IT) capability attribute
moderates the relationship between BPR factors and the
organizational performance of Nigerian banks.
H3a The level of IT capability attribute moderates the relationship between
change management (CM) and overall organizational performance (OP).
H3b The level of Information Technology (IT) capability attribute moderates
the relationship between change management (CM) and non-financial
performance of organization (ONFP).
H3c The level of Information Technology (IT) capability attribute moderates
the relationship between change management (CM) and financial
performance of organization (OFP).
H3d The level of Information Technology (IT) capability attribute moderates
the relationship between Project management (PM) and overall
performance of organization (OP).
H3e The level of Information Technology (IT) capability attribute moderates
the relationship between Project management (PM) and non-financial
performance of organization (ONFP).
H3f The level of Information Technology (IT) capability attribute moderates
the relationship between Project management (PM) and financial
performance of organization (OFP).

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Table 3.2(Continued)
Hypotheses Statement
H3g The level of Information Technology (IT) capability attribute moderates
the relationship between management commitment (MC) and overall
performance of organization (OP).
H3h The level of Information Technology (IT) capability attribute moderates
the relationship between management commitment (MC) and non-
financial non-performance of organization (ONFP).
H3i The level of Information Technology (IT) capability attribute moderates
the relationship between management commitment (MC) and financial
performance of organization (OFP).
H3j The level of Information Technology (IT) capability attribute moderates
the relationship between customer focus and overall performance of
organization (OP).
H3k The level of Information Technology (IT) capability attribute moderates
the relationship between customer focus and non-financial performance of
organization (ONFP).
H3l The level of Information Technology (IT) capability attribute moderates
the relationship between customer focus and financial performance of
organization (OFP).
H3m The level of Information Technology (IT) capability attribute moderates
the relationship between information technology infrastructure and overall
performance of organization (OP).
H3n The level of Information Technology (IT) capability attribute moderates
the relationship between information technology infrastructure and non-
financial performance of organization (ONFP).
H3o The level of Information Technology (IT) capability attribute moderates
the relationship between information technology infrastructure and
financial performance of organization (OFP).
H3p The level of Information Technology (IT) capability attribute moderates
the relationship between effective process redesign and overall
performance of organization (OP).
H3q The level of Information Technology (IT) capability attribute moderates
the relationship between effective process redesign and non-financial
performance of organization (ONFP).
H3r The level of Information Technology (IT) capability attribute moderates
the relationship between effective process redesign and financial
performance of organization (OFP).
H3s The level of Information Technology (IT) capability attribute moderates
the relationship between adequate financial resources and overall
performance of organization (OP).
H3t The level of Information Technology (IT) capability attribute moderates
the relationship between adequate financial resources and non-financial
performance of organization (ONFP)
H3u The level of Information Technology (IT) capability attribute moderates
the relationship between adequate resource and financial performance of
organization (OFP).
H3v The level of Information Technology (IT) capability attribute moderates
the relationship between of less bureaucratic structure and overall
performance of organization (OP)

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Table 3.2(Continued)
Hypotheses Statement
H3w The level of Information Technology (IT) capability attribute moderates
the relationship between less bureaucratic structure and non-financial
performance of organization (ONFP).
H3x The level of Information Technology (IT) capability attribute moderates
the relationship between less bureaucratic structure and non-financial
performance of organization (OFP).

Therefore, based on the literature review of the related theories (RBV, DC and

complementarity) and model discussed in the previous chapter, this study proposes

an overall conceptual framework. The main purpose to the study is to examine the

relationship of the three variables: BPR factors, IT capability, and organizational

performance.

3.5 Chapter Summary

This chapter extensively described the hypothesised research model that was

empirically investigated in this study. The chapter argued for the need to determine

the effect of BPR factors and organisational performance. Each of the six

components in the research framework was discussed to ascertain their relation

upon which 24 direct and indirect relationships each were hypotheses. This study

has primarily examines the relationship between BPR factors and organisational

performance constructs. In addition, the study has investigated the moderating

effect of IT capability on the relationship between BPR Factor and performance

dimensions such as operations cost reduction, customer service management and

business operation efficiency [Link] to this chapter is chapter 4 which

extensively discussed the methodology that was adopted to answer the research

questions.

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 CHAPTER 4 METHODOLOGY
CHAPTER 4
METHODOLOGY

4.1 Introduction

This chapter discusses the research methodology in achieving the objective. The

chapter is divided into six sections, namely, the research design, sample and

sampling procedure, data collection, instrument, data analysis, and summary.

4.2 Research design

Zikmund, (2000) described the research design as a master plan specifying the

methods and procedures for collecting and analyzing the needed information.

Furthermore, Zikmund, (2000), and Sekaran, (2003) identified three (3) types of

business research documented from the literature: 1) Exploratory, 2) Descriptive,

and 3) Causal/Hypothesis testing. The decision to select the type to be used depends

on the understanding and clearness of the research problem. Exploratory research is

carried out to shed more light on the problem but does not provide conclusive

evidence. In this case, the research is required to understand the problem before

developing any model (Zikmund, 2000; Sekaran 2003). Descriptive research is

conducted when there is some understanding of the nature of the problem; such

research study is used to provide a more specific description of the problem

(Zikmund, 2000; Sekaran, 2003). Causal research or hypothesis testing further

describes the nature of the relationships among the variables being investigated

(Zikmund, 2000; Sekaran, 2003).

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This study focuses on descriptive and causal research (hypothesis testing), since the

objective of the study is to examine the relationships between the BPR factors, IT

capability and organizational performance. Descriptive research is undertaken for

this study to identify the characteristics as the population, such as respondents

(commercial bank, microfinancebank and mortgage finance) variability and

organizational characteristics. The causal research or hypothesis testing and the

correlation approach are conducted in the study to explain the relationship between

the variables and the variance of the dependent variables.

The research setting was a cross-sectional study design. It involves gathering the

data only once or at one point in time to meet the research objectives (Cavana,

Dalahaye, & Sekaran, 2001). The advantage of using a cross-sectional study is that

it is economical and does not take time like a longitudinal study. The majority of

the previous studies on BPR used case study descriptive research design (O’Neil &

Sohal, 1999).

4.2.1 Types of research design

Zikmund, (2000) classified research design into three (3) categories: 1) survey or

non-experimental design consisting of interviews and questionnaires, 2)

experimental design conducted at the laboratory and field study, and 3) historical

design, which explores the usage of secondary data and observation study. This

study uses non-experimental design, where the researcher does not have control

over the independent variables that determine their effect on the dependent variable.

The researcher can only control the measurement for the study but does not

126
interfere with the research settings. The researcher is only interested in gathering

the information from the banks and financial institution's performance outcome of

implementation of the BPR factors, and, specifically, to examine the relationship of

BPR factors, IT capability and organizational performance within the banking and

financial service settings. Therefore, non-experimental design or survey using the

quantitative method of administering the questionnaire is employed in this research.

4.2.2 Sampling design

The study uses the organization as the unit of analysis. The population of the study

is 1,023 financial organizations (consisting of 24 commercial banks, 901

microfinance bank and 98 primary mortgage finance). A total of one thousand and

twenty three (1, 023) banks and financial institutions are registered with the Central

Bank of Nigeria (CBN). The list of the Nigerian bank's population frames is in

appendix 9. Furthermore, the list can be accessed through the CBN Internet

website: [Link]

Given the population size of 1,023, the sample size is computed using the formula

suggested by Dillman (2000) and Weaver (2006). The formula for computing

sample size is as shown below:

(N)(p)(1 − p)
n= B
(N − 1)( )2 + (p)(1 − p)
C

Where, n = the computed sample size needed for the desired level of precision.

N = the population size.

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p = the proportion of population expected to choose. In this study before collecting

data, the proportion of respondents who answer “yes” or “no” is unknown, so the

proportion of 0.5 was used instead of 0.80 for a more homogenous sample

(Dillman, 2000). However, using 0.50 will lead to a greater sample size than using

0.80 (Weaver 2006); But,it always provides an adequate sample size for a smaller

or greater population (Biemer & Lyberg, 2003).

B=acceptable amount of sampling error or precision. It can be set at 0.1, 0.05, or

0.03, which are + 10, 5, or 3% of the true population value, respectively. In this

study, the acceptable amount of sampling error or precision is set at 0.05 or 5%.

C = Z statistic associated with the confidence level; 1.96 corresponds to the 95%

level.

Where, N = 1.023, p = 0.05, B = 0.05, C = 1.96

(1.023)(0.5)(1 − 0.5)
n= = 279.481
0.05 2
(1.023 − 1) ( ) + (0.5)(1 − 0.5)
1.96

Krejcie and Morgan (1970) greatly simplified size decision by providing the sample

size table that ensures a good decision model. The sample size for a given

population of 1,000 = 278 and sample size for 1,100 population = 285. Hence,

everything (assumption) being equal, we can deduce that, the sample size from a

given population of 1,023 would be = 279.61 approximately 280 (Krejcie &

Morgan, 1970)

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Based on the computation of sample size, this study needed 280 banks to complete

the survey using the questionnaire. It was also within the sample frame of +5%

margin error based on the formulae. The sample size of 280 is within Roscoe’s rule

of thumb for sample size; that is, larger than 30 and smaller than 500 are

appropriate for most research (Roscoe, 1975). In multivariate research, the sample

size should be ten (10) times the number of variables in the study (Hair, et al.,

2010).

4.2.3 Sampling techniques

Probability sampling techniques are used in this research instead of non-probability

sampling. The probability sampling gives each respondent an equal chance of being

selected as the sample object (Sekaran, 2003). Furthermore, a representative sample

in the probability sampling design guarantees the equal and independent

representation of data being chosen. The advantage of this sampling method is that

there is no bias of the researcher against the choice of another (Salkind,2003). It is

also regarded for its high generalizability (Cavana et al., 2001). Furthermore, the

aim of this study is to have samples drawn from various banking institutions. Thus,

stratified random sampling is appropriate to the study, as shown by Sekaran,

(2003); Biemer and Lyberg (2003). Stratified random sampling as its name implies,

involves a process of categorization, followed by selection of subjects from each

stratum using simple random sampling procedure. The subjects drawn from each

stratum are proportionate to the total number of elements in the respective strata.

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4.2.4 Proportionate stratified random sampling

The banks were categories into strata: 1) Commercial bank = 24 banks with 5,799

branches and minimum bank capitalization of N25billion about $200 million; 2)

Microfinance = 901 branches and minimum capitalization of N2 billion about

$15million; 3) Primary mortgage finance = 98 with 102 branches and minimum

capitalization of N5 billion about $40 million. The selection of the sample size of

each category of banks was made based on proportionate stratified random

sampling technique. 27.4% of the population elementsfrom each stratum were

selected. The breakdown of the stratified sample size and number of questionnaire

distributed to each category of the bank is as shown in Table 4.1.

Table 4.1
Proportionate stratified random sampling
Calculation. Questionnaire
Proportionate
Bank Population (27.4% of the distribution & new
Sample size
element) sample size
Commercial bank 24 24x.274 7 21
Primary Mortgage 98 98x.274 27 90
Microfinance 901 901x.274 246 449
Total 1023 1023x.274 280 560

Furthermore, a representative sample in the probability sampling design is

important for wider generalization purposes (Sekaran, 2003). In this study, simple

random sampling is used, which guarantees equal and independent representation

of the data chosen. The advantage of this sampling method is that there is no bias

that one person would be chosen over another and the choice of one person does

not bias the researcher against the choice of another (Salkind, 2003). It is also

regarded for its high generalizability (Cavana et al., 2001).

130
However, the disadvantage to this method is that it is time consuming, expensive

and tedious (Cavana et al., 2001; Salkind, 2003). Furthermore, the objective of this

study is to have a sample drawn from various banks. Thus, simple random sampling

is appropriate to the study. Random numbers were generated using a Microsoft

excels program for application of the mathematical formula {= rand ( )}to enable us

select individual samples from the sample size of 560 banks. The details of random

numbers generated and selection of individual samples from the three categories of

banks is reported in appendix 9.

4.2.5 Estimating expected response rate

For thisstudy, a total of 560 questionnaires were distributed among the banksstated

inTable 4.1. The aim was to achieve at least 50% response rate of the respondents

whoare 280. The response rate was set in order to ensure that the non-response bias

and non-response rate did not affect the results. Moreover, this percentage was

established in accordance with a response rate of previous studies such as Sindhu

and Pookboonmee, (2008) and Phokhwang, (2008) that employs stratified random

sampling received response rate of 47 % and a response rate of 77.7%. Going by

the computation, this study is expected to sample 560 banks with an expected rate

of at least 50% for reliable and valid results.

4.3 Data collection strategy

In an attempt to get the completed questionnaire returned as quickly as possible, the

hand delivery and collection method was chosen; which is expected to give a high

131
response rate. Hand delivery and collection are an efficient method in an

environment where a research culture is not sufficiently developed, such as Nigeria.

For instance, research has shown that the rate of return of mailed questionnaires is

between 3 per cent and 4 per cent (Asika, 1991).

The primary data was collected through the survey method, and the questionnaire is

adapted for such a purpose. The survey was conducted through self-administered

questionnaires. Although this method is expensive compared to a mail survey,

nevertheless, the researcher favours this method due to its advantages. The biggest

advantage is that the researcher can collect all the completed responses within a

short period of time. The second advantage is that the researcher can explain on the

spot the terms or parts of the questions that the respondents cannot understand.

Third, the researcher can motivate the respondents to take part in the survey and

give their honest opinions (Sekaran, 2003).

The survey method strategy was adopted to collect the data with regard to BPR

factors, IT capability and manager’s perception of the organization's performance.

Babbie (1990) highlighted the three (3) objectives linked with survey research: 1)

Description: It involves descriptive statement about population to identify the

characteristics and attributes of the respondent; 2) Explanation objectives to

enlighten the population through examining the relationship of the variable; and 3)

Exploratory objectives, which involve the search for a new study on a particular

area. This study’s objectives are descriptive and explanatory. It involves identifying

the characteristics and attributes of the respondents as well as providing an

132
explanation through the examination of the relationships among the variables to the

study.

4.4 Measurement instruments and operationalization of variables

Questionnaires are considered one of the most appropriate data collection

instruments for survey research (Asika, 1999). Hence, a structured questionnaire,

which consists of closed-ended questions, was used. However, in order to ensure

the adaptation of the questionnaire was done properly, the researcher conducted

face validity before a pilot test of the instrument. The adapted questionnaire

measures the influence on the research independent variables: BPR factors –

change management; management commitment; IT infrastructure; less bureaucratic

structure; project management; customer focus; effective processes redesign, and

adequate financial resources, with a moderating factor of IT capability (IT

knowledge and IT operations) and dependent variable – organizational performance

(financial and non-financial). The six-point type rating scale was used in measuring

responses for the questions. A six-point rating scale assists the researcher to

compute means and standard deviation responses on variables as well as the

midpoint in the scale (Sekaran, 2003). Certain literature has found that a scale

between 5 to 7 points is more reliable and valid than shorter or longer scales

(Krosnick & Fabrigar, 1997). To prevent the respondents from answering a neutral

point for easy choice, the measurement of this study uses a six-point rating scale as

justified by Krosnick (1991), who argued that respondents demonstrate behaviour

133
of either survey optimizing or satisfying. In addition, including a neutral point

could lead to a decrease in measurement quality.

However, Dawis (1987); Garland (1991); and Hughes (1969) suggested that the

decision lay largely on the preference of the researcher and that there can be no

single best method in scale construction; one may be better for one research

problem but not good for another. In this study, the use of a 6-point scale was

deemed appropriate because it was found to increase the reliability of the measure

and reduce social desirability bias among respondents, as respondents are

knowledgeable enough to understand the questions and issues being examined by

the research.

The questionnaire designed for this study consists of four (4) main sections

(Appendix1). Section A consists of questions regarding the degree of BPR factor's

implementation (independent variables) and consists of statements about the BPR

factors, adapted and modified mainly from the findings of Al-Mashari and Zairi,

(1999); Ahmad, Francis, and Zairi, (2007); Salimifard, et al. (2010). Section B

includes questions related to the degree of IT capability as the moderating factor

consists of statements about the IT capabilities (IT knowledge and IT operations)

that were associated with superior operational performance, adapted with

modification from previous studies (Tippins & Sohi, 2003). Section C of the

questionnaire was the dependent variable (Organizational performance). The

respondents were asked about the degree of perceived current organisational

performance over the past three years. The instrument to measure

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organisationalperformance was adapted and modified from the findings of Hammer

and Champy, (1993); Bontis, Chua, and Richardson, (2000); Terziovski,

Fitzpatrick, and O’Neil, (2003). Section D: Demographic data asked about the

personal and organization background of the respondents. The independent variable

consists of BPR factors; the moderating factor variable was IT capability, and the

organizational performance as the dependent variable. Specifically, the

measurement of each variable for the study is discussed as follows:

4.4.1 BPR factors

The BPR factors (Change management; management commitment; less

bureaucratic structure; project management; customer focus; effective process

redesigns, adequate resources and IT infrastructure) were adapted from the study

suggested by (Al-Mashari & Zairi, 1999; Ahmad et al., 2007; Salimifard et al.,

2010). The measurements of these dimensions were adapted from (Al-Mashari &

Zairi, 1999; Herzog et al., 2007; Cheng & Chiu, 2008). BPR factors variables were

assessed using a six-point rating scale of instrument with five factors containing 44

measurable items. The respondents are required to answer the questions of their

current organization potential BPR factors on a scale of 1=Strongly Disagree to

6=Strongly Agree. The specific dimensions of the BPR factors are discussed in the

following paragraph.

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[Link] Change management

The change management measure focuses on the degree of continually renewing an

organization’s direction, structure and capability to serve the ever-changing needs

of external and internal customers. Managers or leaders manage the potential

impact of change to make people accept it in order to implement change. Change

management includes all human and social related changes and the organization’s

cultural adjustment technique, employee’s motivation, empowerment, effective

communication, people’s involvement, training and education of employees,

needed by management to facilitate the insertion of newly designed processes and

structures into working practice and to deal effectively with resistance. This

dimension is measured by nine items. The list below briefly presents all the items

for the change management construct:

1. Employee’s motivation to hard work through an effective reward system to

encourage improvement of staff productivity.

2. The organization recognizes human involvement in implementation of a BPR.

3. The organisation trains and educates employees in the newly introduced

operational processes.

4. There is openness by the management for employees within the organisation

to accept changes for improvement.

5. The organisation has the effective communication system of updating

employees on reengineering implementation.

6. The employees have clearly understood the norms, values and organizational

culture.

136
7. The organisation has a flexible structure that empowers core process owners

for effective service delivery.

8. The employee accepts positive changes easily for organisational goal

achievement.

9. The employee empowerment initiatives encourage improvement of staff

productivity in the organisation.

[Link] BPR project management

The project management measures the extent of the alignment of the BPR project

strategy with the corporate strategy, effective use of consultant, effective planning

and project management techniques as well as adequate identification of BPR value

and performance. This factor is measured by four items. The list of activities below

briefly presents the items of measurement for the BPR project management:

1. The organization has aligned the BPR strategy with corporate policy.

2. The organization BPR project is clear to all staff.

3. The organizations reengineering effort is towards the key business process.

4. The organization establishes the performance improvement goals for

process's key performance indicators (KPI).

[Link] Top management commitment

The management commitment measures the extent to which top managements are

committed to ensuring that employees contribute in achieving dramatic

137
organizational improvement to the business process within the organization. This

dimension is measured by eight items. The list of activities below briefly presents

the items of the measurement for the degree of top management commitment:

1. The top management set strategic plans and activity for customer satisfaction

through the process reengineering projects.

2. The top management was committed to ensuring employee contribution

towards the organization achievement of the remarkable improvement

through the business process redesign.

3. The top management normally initiatesthe BPR in the organization.

4. The top management encourages changes to maintain a competitive

advantage in the organization.

5. The top management accepts consultant positive recommendations on

restructuring for implementation throughout the organization.

6. The top management considers the BPR as a method to improve operational

process performance for the organization.

7. The key personnel within the organization are capable of carrying out related

changes.

8. The top management considers the business process re-engineering (BPR)

approaches to improve competitiveness of the organization.

[Link] Customer focus

The customer focus measures the focus on the external orientation based on

customer research, competitive analysis, analysis of customer requirements on

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products/services, and firms that are able to meet customer demand to achieve a

competitive advantage over their competitors. This dimension is assessed by four

items. The list of activities below briefly presents the items of measurement for the

customer focus construct:

1. External orientation based on customer research, competitive analysis and

benchmarking.

2. Learning from customers and competitors

3. Measurement of customer's requirement and expectation

4. Define the process in terms of customer value

[Link] IT infrastructure

IT infrastructure: this dimension is measured by the organization’s extent of

expenditure on IT infrastructure, personnel, IS integration, maintenance, computers

and software. Effective reengineering of legacy information systems,the effective

use of software tools that contributes to the success of BPR project. This dimension

is assessed by five items. The list of activities below briefly presents the items of

measurement for the IT infrastructure construct:

1. The organization aligns I.T infrastructure and BPR strategy.

2. The organization builds an effective I.T infrastructure.

3. The organization has a sufficient budget for a purchase of an updated

hardware and software for operational processes.

4. The organization achieved proper integration of I.T.

5. The organization makes effective use of software tools.

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[Link] Effective process redesigns.

The effective process redesigns measure focuses on the degree of the appropriate

level of process knowledge, documentation of existing processes, selection of core

processes, identification of process gaps and evaluation of effectiveness of current

processes by making use of software tools to visualize and analyses them. This

dimension was assessed by five items. The list of activities below briefly presents

the items of measurement for the effective process redesign to construct:

1. The organization documentation process is clear to all employees.

2. The organization core processes were redesigned for efficient service

delivery.

3. The organization has periodically evaluated the process gaps of operational

processes.

4. The organization uses appropriate IT software for operational processes.

5. The organization processes were identified for appropriate redesign.

[Link] Adequate financial resources

The adequate financial resource's measure focuses on the availability of sufficient

financial resources or adequate capital base funding to the organization. The

recapitalization of the bank's share capital, adequate shareholder fund for the banks

to conduct their business effectively, strong capital base to provide a cushion

lending, level of customer deposits, savings, short-term and tenured fund. This

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dimension is assessed by six items. The list of activities below briefly presents the

items of measurement for the adequate financial resources construct:

1. The organization is financially sound to conduct its transactions.

2. The organization’s strong capital base provides a cushion for its risk assets.

3. The organization’s reserve is sufficient for growth.

4. The organization has a high volume of demand deposit as a cheap fund.

5. The organization’s volume of deposit is in a tenured fund.

6. The organization has attractive financing productsto its customers.

[Link] Less bureaucratic (flatter) structure

Less bureaucratic (flatter) structure: It measures the extent on the organization

structure that encourages creativity and innovativeness. The less bureaucratic and

more participative style of management to an organization is better and the more

likely to avoid failure of BPR implementation. Therefore, the need for a less

bureaucratic and more participative organization is obvious (Ahmad et al., 2007).

McAdam (2003) suggested that organizations could implement less bureaucracy to

avoid failure of BPR implementation. This dimension is assessed by five items. The

list of activities below briefly presents the items of measurement for a less

bureaucratic structure (flatter structure) construct:

1. The organization's structure encourages creativity for a new way of adding

value to customers.

2. The organization structure is less bureaucratic for innovation of customer

service.

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3. The organization’s structure is flexible for enhancement of performance.

4. The organization employees actively participate to meet customer demands.

5. The flattened organization structure offers equal involvement of employee’s

representation in the decision-making processes.

4.4.2 IT capability

The measurement of this dimension was adapted from Tippins and Sohi (2003). IT

capability variables are assessed using a six-point rating scale of instrument with

two dimensions containing 12 measurable items. The respondents are required to

assess their organization on the perceived performance of IT capabilities on a scale

of 1=Strongly Disagree to 6=Strongly Agree. The specific dimensions of the IT

Capabilities are discussed in the following section.

[Link] IT knowledge

IT knowledge is referred as the extent to which organisation acquires a body of

technical knowledge about infrastructure or objects such as the computer-based

system. Technical knowledge could be expressed as contextually based know how.

In this study, IT knowledge was measured by six items. The list of the activities

below briefly presents the items of measurement through the use of IT knowledge

constructs:

1. The organization operation's staffs are knowledgeable on I.T operations.

2. The organization staffs of I.T department are qualified for the job.

3. The organization I.T networking engineers are professionally qualified.

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4. The organization has an excellent of computer expertise as consultants.

5. The organization I.T staffs are proactive in e-banking innovation.

6. The organization I.T staffs attend training courses regularly.

[Link] IT operations

For this study IT, Operations are the extent of activities within the organization that

utilizes IT to manage market and customer information required to meet goals.

These activities are underpinned by skills that encapsulate the knowledge within the

firm. When IT operations are able to monitor and manage IT resources and

services from a real-time business outcome perspective, it can align IT operations

with business priorities. As a result, IT operations can streamline business

processes and optimize resources to help manage costs, increase efficiency to

manage productivity and increase revenue, and help ensure service availability to

enhance customer satisfaction, rather than simply focus on technology. This

dimension is measured by six items. The list of the activities below briefly presents

the items of measurement through the use of IT operation's constructs:

1. The organization operations are linked to branches through WAN.

2. The organization technology based links via LAN is efficient 24/7.

3. The organization computer link system down time is minimal.

4. The organization has computerized all its banking operational service.

5. The organization I.T policy is in line with regulatory guidelines.

6. The organization I.T operations monitor customer activities.

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4.4.3 Organizational performance

Organizational performance measures the extent of the managers’ perception on the

organizational performance (increase/decrease) measured by subjective and

objective indicators (financial and non-financial). The non-financial (subjective)

indicators range from customer services, effective operations and service delivery,

while the financial (objective) indicators included the financial growth and ratios.

The performance measurement was adopted from various sources. The respondents

were required to rate their organization over the last three years indicating the

extent of perceived performance based on a scale: 1=Decreased Significantly (DS);

2=Decreased (D); 3=Slightly Decreased (SLD); 4=Slightly Increased (SLI);

5=Increased (I) and 6 = Increased Significantly (IS). This dimension was

measured by 10 items based on the perception of managers on the performance

within the organization as explained in the subsequent sections.

[Link] Non-financial performance measures

The non-financial performance indicators used in this study are:

1. The level of our customer satisfaction with our services

2. The reactivation of inactive account records

3. The customer service delivery in our branches

4. The customer relationship management in our branches

5. The brand name of our organization in the business environment

6. The transaction cycle time measure through SLAs in our branches

7. The operating cost of doing business in branches

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 8. The zero error of operational processes

9. The market share in retail, consumer corporate banking services

10. The market share in public sector business

[Link] Financial performance measures

The financial performance indicators used for this study are:

1. The number of our performing loan

2. The yearly profit before tax performance

3. The number of non-performing loans

4. The organization deposit liability growth

5. The number of recovered bad loan

6. The fee-based income on transaction services

7. The volume of current and saving account customers

8. The volumes of a tenured fund/fixed deposit.

9. The financial performance targets achievement by branches.

10. The level of operating cost

The measurements of financial and non-financial performance in this study were

the perceived subjective measures of financial and non-financial performance

within the organization. Financial performance indicators were: profitability,

success rate of new service (product) introduction, after-tax ROI, sales growth, and

after-tax return on assets (Sun, 2000; Bontis, 1998; Bontis, Chua & Richardson,

2000; Khong & Richardson, 2003). The non-financial performance indicators used

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for this study include: customer satisfaction (Khong & Richardson, 2003), cost and

cycle time reduction, quality service and process speed (Hammer and Champy,

1993; Market research), and customer relationship (Bontis, 1998; Bontis, Chua &

Richardson, 2000; Khong & Richardson, 2003). Table 4.2 summarizes the

measurement instrument's dimensions of the independent, moderating and

dependent variables.

Table 4.2
Summary of Measurement Instrument Variables, Sources, and Number of Items
No. of
Construct Dimensions Definition Sources
item
BPR factor Change This study defines change management Al-Mashari and 9
Management asthe extent of all human, social related Zairi (1999);
changes and cultural adjustment technique Ahmad, Francis
needed by management to facilitate the and Zairi (2007);
introduction of newly designed processes Cheng and Chiu
and structures of the systems, working and (2008);
to deal effectively with resistance. Terziovski,
Fitzpatrick and
O’Neil (2003)

BPR Project This study defines project management as Same as above 4

management the extent of alignment of strategy with
corporate strategy, effective use of
consultant, effective planning and project
management techniques and adequate
identification of project values and bank
performance measurement.

Top This study defines management Same as above 8

management commitment as the extent of top
commitment management commitment to ensure that
employees contribute towards the
successful achievement and remarkable
improvement in the organizational
performance of the bank.

Customer This study defines customer focus as the Same as above

focus extent of research conducted on customer 4
related to their requirements, value,
satisfaction, competitive analysis and
benchmarking for improvement of
performance of organization.

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Table 4.2 (Continued)
No. of
Construct Dimensions Definition Sources
item
IT This study defines IT infrastructure as Same as above 5
Infrastructure the extent of the organization’s
expenditure incurred on IT
infrastructure, IT personnel training, IT
consulting, IS maintenance, computers
and software, effective alignment of IT
infrastructure and building an effective
IT infrastructure, proper IS integration,
effective reengineering of legacy IS,
increasing IT function as competency,
and effective use of software tools.
Process This study defines the process redesign Same as above 5
redesigns as the extent of the organization to
create or redesign processes that have a
direct impact on customer value and
cost on the operational system of a
bank.
Same as above
Adequate This study defines adequate financial 6
Financial resources as the extent of monetary
resources resources available to meet the
budgetary allocation for successful
implementation of projects for
improvement of the performance of a
bank.

Less This study defines a flatter structure as Same as above 5

Bureaucratic the extent of organizational structure
Structure that encourages creativity and
(Flatter innovativeness. The less bureaucratic
Structure) and more participative organization the
better, which would avoid failure of
BPR implementation.

IT This study defines IT capability Tippins and

Capability attributes as the extent to which Sohi (2003)
cumulatively the IT knowledge, IT
operations and IT objects' dimensions
of IT competency represent co-
specialized resources that provide an
indication of the organization’s ability
to understand and utilise IT tools and
processes that are needed to manage
market and customer information.

IT knowledge IT knowledge is referred as the extent Tippins and 6

to which a firm possesses a body of Sohi (2003)
technical knowledge about objects such
as computer-based systems.

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Table 4.2 (Continued)
No. of
Construct Dimensions Definition Sources
item
IT operations IT operations refer to the extent to Tippins and 6
which a firm utilises IT to manage Sohi (2003)
market and customer information.

IT objects IT objects refer to computer-based Tippins and

hardware, software and support Sohi (2003)
personnel.

Organisation This study defines organizational Sun (2000); 20

Performance performance as the level of bank Bontis (1998);
performance (increase/decrease) in Khong &
terms of both financial and non- Richardson
financial performance indicators. (2003); Bontis,
Chua &
Organisational performance refers to Richardson,
the organisational effectiveness and (2000); Hammer
represents the results of the & Champy,
organization’s activities or focuses on (1993).
the achievement of objectives
(Hammer & Champy, 1993; Henri,
2004).
Total items 78

4.5 Preliminary investigation on BPR implementation in Nigerian banks

Prior to commencement of the research (main study) on the BPR factors and

organizational performance of Nigerian banks, a preliminary investigation was

conducted to ascertain the level of BPR implementation. The result indicated that

various operational processes were reengineered by Nigerian banks in the post

consolidation period. The operationalization of BPR factors by change

management, process innovation and use of IT as well as IT capability

operationalized by IT partnership, IT external link, IT business strategy integration,

IT management, and IT infrastructure were also found to be reliable and valid

measurement (Ringim, Razalli & Hasnan, 2011).

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4.6 Validity test of instrument measures

Exploratory factor analysis (EFA) is generally used to discover the factor structure

of a measure and to examine its internal reliability. EFA is often recommended

when researchers have no hypotheses about the nature of the underlying factor

structure of their measure. Exploratory factor analysis has three basic decision

points: (1) decide the number of factors, (2) choosing an extraction method, (3)

choosing a rotation method. Exploratory factor analysis (EFA) was used instead of

CFA because the extensive studies conducted on BPR literature is based primarily

on qualitative case study and there is a lack of rigorous wide ranging empirical

research covering all aspects of BPR (Herzog et al., 2007). Furthermore, EFA and

CFA are similar in the sense that

1. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) are

two statistical approaches used to examine the internal reliability of a measure.

2. Both are used to investigate the theoretical constructs, or factors, that might be

represented by a set of items.

3. Either can assume the factors are uncorrelated, or orthogonal.

4. Both are used to assess the quality of individual items.

5. Both can be used for exploratory or confirmatory purposes

A pilot study was conducted prior to the main research study. The objective was to

get feedback and use it in adjusting and improving data collection, the

questionnaire and the techniques used in analyzing data. The pilot study was

performed to achieve the following specific purposes:

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1. To enable the researcher to establish contact with organizations before

the real data collection process of the main study

2. To determine the validity and reliability of the constructs

3. To foresee any challenges that may arise during the main study data

collection.

A pre-test of the questionnaire was conducted in order to enable testing of the

alternative wordings and question sequences to determine which format best suits

the respondents. The purpose of the pre-test was to alert the researcher to potential

problems that may be caused by the questionnaire. Thus, pre-tests were conducted

to answer questions on the questionnaire, such as the following: 1) Can the

questionnaire format be followed by the researcher/interviewers? 2) Does the

questionnaire flow naturally? 3) Can respondents answer the question easily? 4)

Which alternative form of question's works best? Pre-testing also provides the

means to test the sampling procedure, whether efficient or not. Therefore, the

benefit of conducting a pre-test of the questionnaire is to improve the validity and

reliability of the instrument measures. Zikmund (2000) highlighted that the aim of

conducting validity is to ensure that the instrument measure what it is supposed or

intended to measure.

Discriminant validity can be defined as the degree to which a construct can

beestablished as truly being the difference from other constructs in the model

(Byrne,2010). A detailed review of the extant literatures as shown that there are

twomain methods through which researchers can statistically measure

thediscriminant validity of their data set, i.e. AVE (as suggested by Fornell

150
andLarcker, 1981) and comparing chi-square of a model through its nested

model(Hair et al., 2006).

To assess discriminant validity of the data set, this study madeused of the average

variance extracted (AVE) procedures as described byFornell and Larcker (1981). In

that study, they suggested that the squaredmultiple correlations between any two or

more constructs as calculated for eachitem that measures it should be less than the

calculated average varianceextracted (AVE) that is measuring the item (John and

Reve, 1982).

4.7 Reliability test analysis of construct

There are various types of reliability test; the most common method used in many

study is internal consistency reliability (Litwin, 1995). The Cronbach’s coefficient

alpha test was conducted to measure the internal consistency reliability. A pilot

study was conducted with banks to test the reliability of the instruments. A total of

100 respondents participated in the pilot study, and the result from the study is

summarized inTable 4.3.

The result from the pilot study indicates that Cronbach’s alpha of the variable's

ranges from 0.609 to 0.890. The generally agreed lower limit for Cronbach’s alpha

may decrease to 0.60 in exploratory research (Hair, et al., 2010). Since the results

on the reliability were more than 0.60, none of the items were dropped from this

pilot study. The reliability results have shown that the dimensions of BPR, as listed

in Table 4.3are appropriate for use in further research. Further reliability analysis

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was performed after factor analysis in the actual study based on larger sample size

(refer to chapter 5).

Table 4.3
Summary of the pilot test reliability analysis of constructs
Constructs Number of items Cronbach’s Alpha
Change Management 9 .744
BPR Project Management 4 .609
Top Management Commitment 8 .828
Customer Focus 4 .751
IT Infrastructure 5 .830
Process Redesign 5 .740
Financial Resources 6 .725
Less Bureaucratic Structure 5 .748
IT Capability 12 .824
Organisation Performance 20 .890

4.8 Data analysis method

Preliminary analysis of data checks for normality and outliers was performed

before reliability analysis. The data was analyzed using Statistical Package for the

Social Science (SPSS) software. Six methods of data analysis were used for the

main study using the SPSS software. These analyses included:

1. Cleaning and screening of data

2. Descriptive statistics

3. Factor and Reliability analysis

4. Pearson Correlation analysis

5. Multiple regression analysis

6. Hierarchical regression analysis

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4.8.1 Cleaning and screening the data

The data screening set was conducted through an examination of basic descriptive

statistics and frequency distributions. Values that were found to be out of range or

improperly coded were detected. A frequency test was run for every variable to

identify any missing responses.

4.8.2 Descriptive analysis

Prior to carrying out any statistical analyses, such as correlation, it is important to

ensure that any assumptions make for a test are not violated. Testing of assumptions

usually involves getting descriptive statistics on the variables. These descriptive

statistics include the mean, standard deviation, range of scores, skewness and

kurtosis (Pallant, 2001).

4.8.3 Goodness of measure

As this research uses instruments that were already tested by other researchers,

principal component analysis was performed for determining the set of common

underlying dimensions, known as a factor of the construct (Hair et al., 2010).

Furthermore, the use of factor analysis is also to check whether each constructs

cluster together thus, reducing a vast number of variables to a meaningful,

interpretable and manageable set of factors (Cavana, Dalahaye & Sekaran 2001).

The sample size that is needed to perform factor analysis for this study is

acceptable. The required sample size qualified to conduct factor analysis should be

153
100 or larger, or to have at least five times as many observations as possible for the

variables (Hair et al., 2010; Coakes & Steed, 2003). Since the computed sample,

size is 560, and the study samples met the requirement, the researcher decided to

perform factor analysis.

4.8.4 Principal component analysis (PCA)

Factor analysis was used to identify the latent structure (dimensions) of a set of

variables. It reduces attribute space from a larger number of variables to a smaller

number of factors. For factor analysis purposes, the items on the questionnaire were

grouped into components consisting of items to represent all antecedent variables to

the study. Factor analysis was based on the principal component method with

varimax rotation for all components.

4.8.5 Correlation analysis

The analysis was conducted to determine the link between the variables under

study. It identified the power and direction of the linear relationship between two

variables. The analysis results reveal the variables that correlate with the dependent

variable as well as the presence of multicollinearity before using multiple

regression analysis.

4.8.6 Multiple regression analysis

This method analyses the link between several independent (predictor) variables

with a single dependent (criterion) variable. Multiple regression analysis was

154
conducted for this study to verify the relationship between the independent

variables (BPR factors) and the dependent variable (organizational performance),

and, at the same time, to identify the contributory variables.

4.8.7 Hierarchical regression analysis

This analysis was conducted to test the interaction effect of the moderating

variables on the relationship between the independent and dependent variables.

Hierarchical regression or moderator regression analysis was considered to be an

appropriate technique in identifying the moderating variables (Baron & Kenny,

1986; Frazier, Barron, & Tix, 2004). The summary of the data analysis against each

objective of the study is shown inTable 4.4.

Table 4.4
Summary of data analysis against each research objective
No. Research Objectives Data Analysis
1 To examine the relationship between Multiple regression analysis
BPR factors, IT capability in banking and was conducted to determine the
organizational performance of Nigerian relationship between BPR
banks. factors, IT capability with a
single organization
Multivariate relationship between BPR
performance variable (financial
factors and organization performance as
and non-financial).
well as between IT capability and
organisational performance would Simultaneously, regression
provide answers to researchobjectives- analysis identified the BPR
1& 2. Before conducting the multiple factors and IT capability
regression analysis, a correlation analysis variable that best predicts
was conducted to determine the direction organization performance in
and power within the relationship terms of financial and non-
between the independent variable and the financial performance).
dependent variable.
2 To examine the level of IT capability that Hierarchical regression
moderates the relationship between BPR analysis
factors and the organizational
performance of Nigerian banks. This
would provide answers to research
objective – 3.

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4.9 Chapter Summary

This chapter discussed the research methodology and rationale behind the research

design. It outlined the sampling design, methods and strategy of data collection.

The chapter also discussed on the measurement instrument used for this study and

validity and reliability of the instrument measures. Finally, this chapter described

the methods of data analysis used for this study. The analysis and findings of the

study are presented in the next chapter.

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 CHAPTER 5 DATA PRESENTATION AND ANALYSIS
CHAPTER 5
DATA PRESENTATION AND ANALYSIS

5.1 Introduction

The main objective of this chapter is to provide the results of the research, which

include data presentation, analysis and discussion of the outcomes of the study. The

chapter presents the research findings of the study based on the data collected from

respondent banks. The data were analysed in the following sections: first, response

rate; description of the study profile of the respondents and study variables;

goodness of measures through validity, reliability analysis of measures being used,

and analyses hypothesis testing; general descriptive statistics of the respondents and

main variables involved in the study; Second, reports on the assumptions in

multiple regression analysis; Third, reports on the multivariate and multiple

regression analysis results between BPR factors and organizational performance;

and the hierarchal regressions results regarding the moderating effect of IT

capability attributes to the relationship between BPR factors and organisational

performance.

5.2 Response rate

The data for this study was collected from senior management, executives,

managers and heads of department that represent the respective banks in Nigeria. In

this study, attempts were made to increase the response rate by reminding the

157
respondents through telephone calls, SMS and self-visit (Sekaran, 2003). As a

result of these efforts, 460 questionnaires were returned out of the 560

questionnaires distributed by hand delivery to the respondent banks (commercial,

microfinance and mortgage) in Nigeria. This makes a response rate of 82.14%

based on the definition of response rate (Jobber, 1989). Out of these 460 responses

collected, 417 questionnaires were useable for further analysis making a valid

response rate of 74.0 per cent. A response rate of 30 per cent is acceptable for

surveys (Sekaran, 2003; Hair et al., 2010). Similarly, Pallant (2001) suggested that

for regression type of analysis to be conducted, the sample size could fall between

five and ten times, the number of independent variables. Given the number of

variables in this study, which are eight (8), it suggests that a sample size of 80

respondents. Hence, 417 useable responses (74 per cent) satisfied the required

sample size requirement for conducting the multiple regression analysis. Table 5.1

shows the distribution of the required sample and the total number of responses by

each category of the bank.

Table 5.1
Response Rate of the Questionnaires
Response Commercial Microfinance Mortgage Freq/Rate
No. of distributed questionnaires 21 449 90 560
Returned questionnaires 21 349 90 460
Returned and usable questionnaires. 18 312 87 417
Returned and excluded questionnaires. 3 37 3 43
Questionnaires not returned 0 100 0 100
Response rate 100% 77.72% 100% 82.14%
Usable response rate 86% 69% 97% 74%

The data collection period took about three months. The follow up messages were

made through text messages, phone calls and e-mails during the period. The data

was keyed into SPSS (version 16.0) for further analysis. Forty-three (43)

158
questionnaires were excluded in the process of screening and cleaning the data.

Errors were checked by analysing the mean, standard deviation, minimum and

maximum scores for all 417 cases on all variables.

5.3 Respondent and organizational background

The statistical frequency distribution of key variables in the questionnaires was

objectively classified and presented in logical categories to reflect the originality of

the study. Subsequently, the desired analytical tables were extracted for the proper

data analysis and hypothesis testing. The presentation of the original data sets in the

form of frequency tables, as well as the analytical tables, is in the appendix 2.

The majority of the respondents in the organization were male (68%). In terms of

job title of the respondents, 35% were holding the responsibility of the head of

department, 30% senior manager, and 20% Deputy General Manager/Assistant

General Manager. Hence, these represent the majority of the targeted respondents

for the study. Others include top management (ED/GM), which represents 16%.

The respondents represented their organizations that were categorized into three

different types of the bank – Commercial bank 4.3% of population sample

(representing 75% of registered commercial banks with the Central Bank of

Nigeria); Microfinance bank represents 74.8% of 417 useable response

(representing 35% of registered Microfinance banks with the Central Bank of

Nigeria; Primary mortgage banks, representing 21% of 417 useable response, which

accounted for 88.75% of the registered primary mortgage banks to the apex bank.

159
As for the number of employees in these organizations, 60% of employees were

outsourced personnel’s to banks. Out of 417, responses received from the banks,

75% of them fall under a category of organization (Microfinance bank and Primary

Mortgage bank) without ATM machines, POS, etc. Only 14% of banks have a

network of 99 branches with ATM Machines, 5.0% of the participating banks have

a network of 300 to 499 branches with ATM machines, and 4% of banks involved

in the survey have a network of 100 to 299 branches that have ATM machines

installed onsite. As for the location of branches, 47% of the respondents indicated

that most of their bank branches are located in the commercial and state capital,

21% were sited in-state capitals and a few in cities, and 13% were located in urban

and rural areas with a few branches in cities.

In terms of BPR implementation, the Nigerian banks have implemented BPR

initiative in their operational processes. Specifically, we found that 57% of the

banks have implemented electronic banking services, such as operational

transactions of cash/cheques received and payment through ATM, POS, mobile,

telephone, card's transaction, loan processing, credit transactions and others; 67%

of the banks have restructured and improved their operational processes; 61% of the

banks reengineered their credit risk operational processes of loan appraisal and

administration, as well as the rendition of periodic returns to the regulatory

authority using IT software for credit risk reporting; 51% of the banks confirmed to

have redesigned their domestic and international operational processes.

Concerning the objective of adopting BPR initiatives by the organization, 25% of

the banks indicated that their organization’s objective was to enhance their

160
profitability performance by increasing revenue; 23% of the banks indicated that

their motive was to improve the quality of customer service of the organization;

21% of the banks implemented BPR in order to be proactive for future challenges

while 12% expressed their goals to reduce operating cost and be reactive to

competitive pressure from foreign banks. Another 13% of the banks implemented

BPR as a reactive approach as a quick fix, while 20% of the respondents indicated

their objectives as proactive for challenges in the business environment. The overall

objective of BPR implementation by Nigerian banks was to improve profitability

through cost containment strategy, and improve customer service delivery by

providing an effective and efficient service with error free operational processes.

Therefore, the reengineering processes in banks involved redesigning of core

processes and restructuring of the domestic and foreign operational processes that

involved some kind of innovation and value added service to the various processes,

such as cheque clearing and settlement, interbank transfers, remittances for

payment of bills, fund transferred both local and international payment through

MoneyGram, Western Union Money transfer, Wire transfer through SWIFT and

opening of letters of credit.

5.4 Goodness of measures: factor analysis of the research instrument

The instrument used in this study was evaluated for its content, criterion,

convergent and discriminant validity. Convergent validity refers to the degree to

which the scale correlates positively or in the same direction with other measures of

the same construct. Discriminant validity refers to the degree to which the

161
measurement scale does not correlate with or is distinct from other measures

(Malhotra, 1999). Content validity refers to the extent to which the instrument

covers the meaning included in the concepts (Babbie, 1990). The present study

assesses the content validity subjectively by using the extensive literature review

and practitioners in the banking industry (Chow& Lui, 2001). In addition, the PCA

method is used to help the investigator represent a large number of relationships

among interval-level variables in a simpler way. The method allows the computer

to determine which, of a fairly large set of items, "hang together" as a group, or are

answered most similar by the participants.

PCA was carried out for the items of the variables of this research work. The

central idea of principal component's analysis is to reduce the dimensionality of a

data set in which there are a large number of interrelated variables, while retaining

as much as possible of the variation present in the data set. This reduction is

achieved by transforming to a new set of variables, the principal components,

which are uncorrelated, and, which are ordered so that the first few retain most of

the variation present in all the original variables.

Computation of the principal components reduces to the solution of an eigenvalue

problem for a positive semi-definite symmetric matrix. The sample size guideline

by Coakes and Steed, (2003); Hair et al., (2010) indicates that a minimum of five

subjects per variable is needed for factor analysis. In this study, with eight

variables, a sample size of 417 is higher than the minimum requirement of the

desired cases for factor analysis. A sample size of more than 350 requires a factor

162
loading of 0.30 to assess statistical significance (Hair et al., 2010). Hence, the

minimum requirement for factor analysis was fulfilled.

Other criteria for factor analysis suggested by Hair et al. (2010) employed by this

study are as follows:

1. Sample size should be 150 plus and should be a ratio of five cases for each of

the variables.

2. Bartlett’s test of Sphericity (test of presence of correlation among variables)

need to be significant at p<0.05 or smaller.

3. Kaiser-Meyer-Olkin (KMO)/Overall Measure of Sampling Adequacy (MSA)

should be at least 0.50 or above. These values are presented as part of the

output from the factor analysis.

4. Commonalitiesgive information on how much of the variance in each item is

explained. Low values (e.g., less than 0.50) could be deleted as it indicates that

the item does not fit well with other items in the component. Removing items

with low commonalities values tend to increase the total variance explained.

5. Items for loading and cross loading of 0.50 or greater on one factor and 0.30 or

lower on the other factor have been set to assess the significance for this study;

the items load less than 0.50 is deleted (Igbaria, Livaria, & Maragahh,1995).

6. To determine how many components (factors) to extract, there is a need to

consider information provided by the output. First, using Kaiser’s criterion, this

is based on components that have an eigenvalue of more than one. To

determine how many components meet this criterion, we looked at the total

variance explained the table.

163
7. The naming of the factor is based on the item with higher loading. The

discussion on the results of factor analysis for the dependent, moderator and

independent and variable are as follows:

5.4.1 Dependent variable – organization performance (OP)

Table 5.2 shows the outcome of the factor analysis for the dependent variable

(organization performance). At inception, the dependent variable was measured by

20 items in two dimensions, which was subjected to principal component's analysis

(PCA) using SPSS Version 16. Prior to performing PCA, the suitability of data for

factor analysis was assessed. The factor loading of the items ranged from 0.770 to

0.984 with 10 items being removed for various reasons, such as having low MSA

value, low communalities value, loading less than 0.50, and cross-loading. The ten

(10) deleted items from the initial 20 items measurement of organization

performance construct (1, 2, 6, 10, 11, 12, 14, 16, 17 and 19) were those items that

indicated failure to fit well with other items in their components. Removing these

items increased the total variance explained. Inspection of the correlation matrix

revealed the presence of many coefficients of 0.3 and above.

The KMO measure of sampling adequacy of 0.885 exceeded the benchmark value

of 0.60, showing that the sample size was adequate for factor analysis to be

conducted. That is, the ratio of the sample size to the number of items is sufficient

for factorability. However, the Bartlett's test of Sphericity is statistically significant,

supporting the factorability of the correlation matrix, as the p-value is 0.000. This

implies the adequacy of applying the factor analysis. Principal component's analysis

164
revealed the presence of three components with eigenvalue exceeding 1. The three

components extracted were named 1) operation cost reduction (L10), 2) customer

service relationship management (K4), and 3) business operation's efficiency (zero

error operations process–K8). The percentages of the variance were 50.70%,

19.94%, and 11.26%, respectively.

Table 5.2
Results of the Factor Analysis for Organization Performance
Component
Items
1 2 3
L10 Operating Cost .984
L8 Interest cost of tenured fund .981
K7 Branches operations cost .981
L5 Number of recovered bad loans .978
L3 Number of non-performing loans .977
K4 Customer relationship management in branches .794
K5 Organization brand name/Goodwill .785
K3 Customer service delivery in branches .770
K8 Zero error operational processes .840
K9 Market share in retail, consumer and corporate banking .812
services
Eigenvalue 5.070 1.994 1.126
Percentage of variance (81.90%) 50.69 19.940 11.262
81.90%
KMO .885
Bartlett’s Test of Sphericity 5520.00
Significance .000

The three component solution explained a total of 81.90% of the variance. To aid in

the interpretation of these three components, varimax rotation was performed. The

first component was defined by five items relating to operating cost. This included

interest payment (cost) on tenured fund, branches operational cost, cost of

recovering bad loans, and provisional cost of having numbered of bad loans in the

organization. The higher loadings influence the name of the factor (Hair et al.,

2010). The higher loadings were level of operating cost, interest cost of tenured

165
fund and branch's operating cost. Operating cost and interest cost are part of the

cost of doing business in an organization (Ogubunka, 2010). Hence, this factor was

named as operation cost reduction.

The second component was defined by three items, namely, customer relationship

management, brand name, and customer service delivery. These items were related

to customer service relationship management (Bontis, 1998; Bontis, Chua, &

Richardson, 2000; Kotler, 2003; Khong & Richardson, 2003). Hence, the name

Customer service management was used.

Finally, the third component was represented by two items – zero error of

operational process, and market share in retail, consumer and corporate banking

services. Business operation's efficiency (Zero error process) is a category of

efficient service delivery/speed (Hammer & Champy, 1993). Hence, the factor was

named business operations efficiency performance. Please refer to appendix - 3 for

SPSS output regarding this result of factor analysis from the table, the KMO

measure of sampling adequacy of .[Link] implies that the sample size was

adequately meritorious for factor analysis to be conducted.

5.4.2 Moderating Variable: IT capability (IT Cap)

Table 5.3 shows the results of factor analysis for IT capability. At the beginning,

the moderating variable was measured by 12 items in two dimensions, which were

subjected to PCA using SPSS. Prior to the process of performing PCA, the

suitability of data for factor analysis was assessed. The factor loading of the item

166
ranges from .650to .794. Two items being removed due to various reasons, such as

having low MSA value, low communality value, loading less than .50, and cross-

loading. The deleted items from the initial (1 and 2) are those items that indicated a

sign of non-fit with other items in their components. Removing the non-fit items

that had low communality values increased the total variance explained in this

study. Inspection of the correlation matrix revealed the presence of many

coefficients of .3 and above. The KMO measure of sampling adequacy of .863

exceeded the benchmark value of .60; this implies that the sample size was

adequate for factor analysis to be conducted. Furthermore, the ratio of the sample

size to the number of items was sufficient for factorability. However, the Bartlett's

test of Sphericity was statistically significant, supporting the factorability of the

correlation matrix, as the p-value was .000. This indicated the adequacy of applying

the factor analysis. Principal component's analysis revealed the presence of three

components with eigenvalue exceeding 1. The three components extracted were

named 1) IT knowledge (IT Cap3), 2) IT Operations (IT Cap8), and 3) IT policy

(IT cap11). The percentages of the variance were 39.81%, 11.64%, and 10.55%,

respectively.

FromTable 5.3, the KMO measure of sampling adequacy of .863 implied that the

sample size was adequately meritorious for factor analysis to be conducted. The

three-component solution explained a total of 61.99% of the variance. To aid in the

interpretation of these three components, varimax rotation was performed.

167
Table 5.3
Results of the Factor Analysis for IT Capability
Component
Items
1 2 3
I3 IT staff and network engineers with professional .754
qualification.
I5 Proactive IT staff in e-banking innovation .731
I4 Excellent expertise consultant in computing .730
I6 Regular training of IT staff .700
J2 Technology based link via local area network LAN 24/7 .794
J2 Link to branches through wide area network WAN .735
J3 Minimal down time for connection links to computers .714
J5 Organization IT policy in line with regulatory guidelines .154 .759
J6 Comprehensive procedures, of operational transactions and -.064 .749
requirements
J4 Computerization of operational services .384 .650
Eigenvalue 3.981 1.164 1.055
Percentage of variance (61.99%) 39.810 11.637 10.552
KMO .863
Bartlett’s Test of Sphericity 1162.00
Significance .000

The first component was defined by four items relating to IT knowledge. These

included professional qualification, IT staff proactiveness in e-banking innovation,

and qualified trained expertise/consultant in computing and regular training courses

for IT staff. The higher loadings influence the name of the factor (Hair et al., 2010).

The higher loadings were professional qualification of IT engineers, proactive

innovation in e-banking by IT staff and qualified expertise/consultant. Professional

qualification, expertise consultants and regular training of IT staff can be viewed as

skill knowledge in IT computing (Tippins & Sohi, 2003). Hence, this factor was

named as IT knowledge.

The second component was defined by three items, namely, the technology-based

links via local area network and wide area network online real time (LAN and

WAN 24/7), link to branches through WAN, and minimal computer system down

time. These items were relating to IT operations (Tippins & Sohi, 2003). Hence, the

original name was retained.

168
Finally, the third component was represented by three items – organization IT

policy in line with regulator's guidelines, monitoring of customer’s transaction by

IT operations, and computerization of banking operations. These activities were

related to the function of IT objects. It is a tool; technical object refers to artefacts

that assist in the acquisition, processing, storage, dissemination, and use of

information (Martin, 1988). Hence, the third factor was named IT objects (Tippins

& Sohi, 2003). IT objects represent computer-based hardware, software and support

personnel to ensure compliance with regulatory guidelines, monitor customer

activities by making use of software and hardware installed in the computer system.

Please refer to appendix- 3 for SPSS output regarding the results of factor analysis.

5.4.3 Independent variables: BPR factors

The independent variables of this study are the BPR factors, which include 1)

Change Management – measured as the uni-dimension, 2) BPR Project

Management – uni-dimensional, 3) Top Management Commitment – one

dimension, 4) Customer Focus – one dimension, 5) IT Infrastructure – one

dimension, 6) Process Redesign – one dimension, 7) Financial Resources – one

dimension, and 8) Less bureaucratic structure – one dimension. Initially, the total

items measuring the BPR factors were 56 items. These items and dimensions were

analysed using factor analysis to check for their validity. Using the criteria for

conducting factor analysis discussed in section 5.1, the analysis extracted nine (9)

components. In the process of getting these nine components, 27 items and one

169
construct (Less bureaucratic structure) had to be deleted for various reasons, such

as low communality value, loading less than 0.50, and cross loading. Removing

items with low communality values increased the total variance explained.

Inspection of the correlation matrix revealed the presence of many coefficients of

.30 and above. The KMO value was .750, exceeding the recommended value of .6

(Kaiser, 1970, 1974) and the Bartlett’s test of Sphericity (Bartlett, 1954) reached

statistical significance, supporting the factorability of the correlation matrix. Table

5.4 presents the results of factor analysis for the independent variables of the study,

while the Appendix 3 shows the SPSS output for the analysis. The number of final

factors together with the number of items used to measure the particular variable is

as follows. Note that almost all the original names were retained.

1. IT investment (E3) – fouritems

2. BPR Strategy Alignment (B1) – four items

3. Customer Focus (D4) – three items

4. Management commitment (C7) – three items

5. Communication (A8) – three items

6. Training and education (A3) – three items

7. Volume of financial activities (G5) – four items

8. Reward system (A4) – two items

9. Strong capital base (G2) -2 items

170
Table 5.4
Results of the Factor Analysis for Business Process Re-engineering Factors (BPR)
Components
Item
1 2 3 4 5 6 7 8 9
E3 Sufficient budget to purchase
updated software and .773
hardware.
E4 To achieve proper integration
.755
of IT
F2 Redesign core processes for
.722
efficient service delivery
E2 Build an effective IT
.551
infrastructure
B1 Alignment of BPR strategy
.754
with corporate policy
B4 Establish performance
improvement goal for process
.740
key performance indicator
(KPI)
B3 Organization re-engineering
effort towards key business .718
process
B2 Organization BR project clear
.710
to all staff
D4 Customer feedback was used
.740
to redesigned processes
D3 Ability to meet customer
demand or new products and .735
services
D3 Ability to meet customer
demand or new products and .735
services
D1 BPR project result from
.734
analysis of customers
D2 The organization objective is
to find a new way of adding .728
value to customers.
C7 Personnel commitment to
.792
handle related change
C6 BPR as operational
performance improvement
.772
method considered by
management
C5 Top management accepted .676
consultant positive
recommendation on re-
engineering for
implementation
A8 Employees accept positive
.749
changes easily
A2 Recognition of human .719
involvement in
implementation of BPR

171
Table 5.4 (Continued)
Components
Item
1 2 3 4 5 6 7 8 9
A5 Effective
communication system
to update employees on .705
reengineering
implementation
A3 Training and education
of newly introduced .767
operational processes
A9 Employee
empowerment
.728
initiatives to encourage
productivity
A7 Flexible structure that
empowers process
.638
owners for effective
service delivery
G5 Volume of deposit in
.761
tenured fund
G4 High volume of demand
.713
deposits as cheap fund
F5 Processes identified for
.633
redesigning
F4 Make use of appropriate
technology for .544
operational process
A4 Openness by
management for
.974
employees to accept
changes
A1 Effective reward system
to facilitate BPR .972
implementation
G2 The organization strong .783
capital base
G1 Financially sound to
conduct business .736
profitable transaction
Eigenvalue 4.677 3.311 2.400 1.786 1.732 1.317 1.238 1.118 1.057
Percentage of variance
16.127 .416 8.274 6.158 5.974 4.540 4.270 3.854 3.645
(64.259%)
KMO .750
Bartlett’s Test of Sphericity 4107.0
Significance .000

172
As shown in Table 5.4. Principal Components analysis revealed the presence of

nine (9) components with eigenvalue exceeding 1, explaining 16.127%; 11.416%;

8.274%; 6.158%; 5.974%; 4.540%; 4.270%; 3.854% and 3.645% of the variance,

respectively. An inspection of the scree plot revealed a clear break after the ninth

component. Using Catell’s (1966) scree test, it was decided to retain nine (9)

components for further investigation. To aid in the interpretation of these nine (9)

components, Varimax rotation was performed. The rotated solution revealed the

presence of a simple structure (Thurstone, 1947), with both components showing a

number of strong loadings and all variables loading substantially on components.

The nine factor solution explained a total of 64.259% of the variance, with

component 1 contributing 16.127%; component 2 contributing 11.416%;

component 3 contributing 8.274%; component 4 contributing 6.158%; component 5

contributing 5.974%; component 6 contributing 4.540%; component 7 contributing

4.270%; component 8 contributing 3.854%; and component 9 contributing 3.645%

respectively.

The first factor was defined by four items and reflected the organization’s

investment in IT to achieve proper IT integration, build effective IT infrastructure

and redesign core process for efficient service delivery. Thus, this factor was named

IT investment. The second factor was dominated by items relating to organization

strategic initiative project that aligned with corporate policy. Therefore, this factor

was named BPR strategy alignment driven of reengineering project (Zairi &

Sinclair, 1995). The third factor was dominated by items relating to customer focus,

which are oriented towards finding new ways of adding value to customers (Scherr,

1993). Thus, this factor was named customer focus. The fourth factor consisted of

173
items pertaining to personnel capability and commitment to handle related changes

recommended by consultant and consider process re-engineering as the method to

improve process performance in the organization, thus, this factor was named

management commitment. The fifth factor consists of items related to

communication for an employee to accept positive changes by involving them in

implementation of business process re-engineering. Therefore, the factor was

named effective communication. The sixth factor was dominated by training and

education of employees in newly introduced core processes for effective service

delivery. Thus, this factor was named training and education. The seventh factor

consists of items related to organization volume of financial activities and making

use of appropriate software technology to redesign processes, thus, this factor was

named volume of financial activities to customer. The eighth factor consists of

items related to the effective reward system that encourage employees to accept

changes for improvement. Therefore, this factor was named reward system. The

ninth factor consists of items related to organization adequate capital base to

provide a cushion for risk asset and conduct profitable transaction. Therefore, this

factor was named strong capital base. Please refer to appendix – 3 for SPSS output

regarding this result of factor analysis. From the table, the KMO measure of

sampling adequacy of .750 implies that the sample size is adequately meritorious

for factor analysis to be conducted.

174
5.4.4 Common method variance (CMV) test

As a precaution, the study has adopted measures, such as hiding the information of

the participants, randomizing the order of items, devising the items in a reverse

order and organizing the wording of the items, to prevent the occurrence of

common method variance. Besides, the study also adopts Harman’s single factor

analysis to conduct posterior examination of common method variance (Podsakoff

& Organ, 1986). Traditionally, researchers using this technique load all the items in

their study into an exploratory factor analysis (Aulakh & Gencturk, 2000) and

examine the un-rotated factor solution to determine the number of factors that are

necessary to account for the variance in the variables. The basic assumption of this

technique is that if a substantial amount of common method variance is present,

either (a) a single factor will emerge from the factor analysis or (b) one general

factor will account for the majority of the covariance between the measures. The

use of a single-factor test may provide an indication of whether asingle-factor

accountfor all the covariance between the items, this procedure does nothing to

statistically control for common method variance effects.

In this study, un-rotated factor analysis with forty nine items results in fifteen

factors those together accounts for 68.7% of the total variance, of which factor one

accounts for 17.56%. Common method bias is not likely in the context of this study

since a single factor does not emerge in this analysis and no single-factor account

for the majority of covariance between the variables. Therefore, based on the

multiple factors emerged from the factor analysis using the Harman one factor test

175
was an indication that the measures are free of common method variance. Hence,

common method variance is not a major problem for this study.

5.5 Measuring the reliability of the research instrument

The reliability of any research questionnaire is best measured by the Cronbach’s

alpha statistic. It is designed as a measure of internal consistency of a research

instrument. Reliability measures the extent to which results are consistent with time

and acts as the best representation of the population under study (Joppe, 2000).

Cronbach’s alpha is a consistency test of whether all items within the instrument

measure the same thing. It is simply a measure of reliability of the questionnaire

items. It is measured on the same scale as the Pearson’s product-moment

correlation coefficient and typically varies between 0 and 1. Although a negative

value is possible, such a value indicates a scale in which some items measure the

opposite of what other items measure. The closer the alpha is to 1.00, the greater

the internal consistency of items in the research instrument. At a more conceptual

level, the coefficient of Cronbach’s alpha may be considered as the coefficient

between a sincere response and all other sincere responses of the same item that are

drawn randomly from the same population of interest.

After factor analysis, the nine constructs that emerged, containing twenty nine (29)

items in the questionnaire, will evaluate and assess the effect of BPR factor on the

organizational performance of Nigerian banks: moderating factor of IT capability.

Cronbach’s alpha is the approximate average correlation between all pairs of items.

The formula that determines Cronbach’s alpha is fairly simple and makes use of the

176
number of variables or question items in the instrument (k) and the average

correlation between pairs of items (r):

kr
∝=
1 + (k − 1)r

The reliability test for each dimension emerged after factor analysis was conducted.

Table 5.5 shows the results of the reliability test. Flynn, Schroeder, and Sakakibara

(1994) argued that a Cronbach’s alpha of 0.6 and above was considered an effective

reliability for judging a scale. The generally agreed lower limit for Cronbach’s

alpha may decrease to 0.60 in exploratory research (Hair et al., 2010). A research

instrument can be considered to be reliable if the result of the study can be

replicable under a similar methodology with stability of measurement over time

(Golafshani, 2003). Therefore, the Cronbach’s alpha of the instruments is shown in

Table 5.5. The SPSS output for this analysis is shown in the Appendix - 4.

Table 5.5
Summary of Reliability Analysis of Major Variables
No of items
Variables No. of items Cronbach’s Alpha
deleted
Dependent Variables
Organizational Performance 10 0 0.87
Operations cost reduction 5 0 0.99
Customer Service Management 3 0 0.71
Business operations efficiency 2 0 0.60
Moderating Variables
IT Capability 10 0 0.83

Independent Variables
BPR Factors 29 0 0.80
IT Investment 4 0 0.75
BPR Strategy alignment 4 0 0.73
Customer Focus 4 0 0.74
Management Commitment 3 0 0.71
Change Management 8 0 0.77
Financial Resources 6 0 0.71

177
From Table 5.5, the Cronbach’s alpha ranges from 0.60 to 0.99 for the variables in

the questionnaire used for the study implied that the instrument was reliable. Hence,

the instrument had excellent reliability as far as internal consistency is concerned,

that is, the instrument can give consistent results on the effect of the BPR factors on

the organizational performance of Nigerian banks.

5.6 Construct Reliability and Validity

In this section, an attempt is made to explain the reliability and validity of the

constructs involved in the study. However, construct reliability must be assessed

before examining its validity (Hair et al., 2010). To this end, the reliability of all the

items was examined through the Cronbach’s Alpha, factor loadings and the index

of composite reliability (see Table 5.6). Although, there is a lot of debate

concerning the best method to estimate reliability, coefficient alpha remains the

commonly used method even though it may underestimate reliability (Hair et al.,

2010). The different methods of assessing reliability produced similar results. The

values of Cronbach’s alpha and composite reliability are shown in Table 5.6.

Fornell and Larcker, (1981) argued that composite reliability is more robust than

Cronbach’s alpha. From the table, it is obvious that each of the indexes of construct

reliability (composite reliability) is greater than the threshold of .7 (Fornell &

Larcker, 1981). The composite reliability values range between .7307 and .9803.

This result means that the constructs have internal consistency, and that all the

measures consistently represent the same latent construct.

178
Although, composite reliability is stronger than the Cronbach’s alpha, in this study,

the latter was also assessed in order to complement the former. Flynn, Schroeder,

and Sakakibara (1994) argued that a Cronbach’s alpha of .6 and above was

considered an effective reliability for judging a scale. The generally agreed lower

limit for Cronbach’s alpha may decrease to .60 in exploratory research (Hair et al.,

2010). Again, fromTable 5.6 presents factor loadings for all the items ranging from

.544 to .984, confirming that the indicators are strongly related to their various

[Link], it indicatesgood construct validity (Hair et al., 2010).

(∑𝑛𝑖=1 𝐿𝑖 )2
𝐶𝑅 =
(∑𝑛𝑖=1 𝐿𝑖 )2 + (∑𝑛𝑖=1 𝑒𝑖 )

Where:CR = composite reliability; Li = standardized factor loading; ei = error

variance

Table 5.6
Constructs Validity and Reliability
Average
Factor Factor Composite Cronbach’s
Constructs Items Variance
Loadings LoadingsSquared Reliability Alpha
Extracted
Biz OPS K8 .840 .705 .682 .811 .603
Efficiency K9 .812 .659
Customer K4 .794 .630 .613 .826 .705
Service K5 .785 .616
K3 .770 593
Ops Cost L10 .984 .968 .961 .992 .993
Reduction L8 .981 .962
K7 .981 .962
L5 .978 .956
L3 .977 .955
Performance K8 .840 .706 .875 .924 .870
K9 .812 .659
K4 .794 .630
K5 .785 .616
K3 .770 .593
L10 .984 .968
L8 .981 .962
K7 .981 .962
L5 .978 .956
L3 .977 .955

179
Table 5.6 (Continued)
Factor Average
Factor Composite Cronbach’s
Constructs Items Loadings Variance
Loadings Reliability Alpha
Squared Extracted
.796
IT Invest
E3 .773 .598 .501 .751

E4 .755 .570
F2 .722 .521
E2 .551 .303
BPR Strategy B1 .754 .569 .534 .821 .730
B4 .740 .548
B3 .718 .516
B2 .710 .504
Customer D4 .740 .548 .539 .824 .738
Focus D3 .735 .540
D1 .734 .539
D2 .728 .530
Mgt C7 .792 .627 .560 .792 .712
Commitment C6 .772 .596
C5 .676 .456
Communication A8 .749 .561 .525 .768 .715
A2 .719 .517
A5 .705 .497
Training & A3 .767 .588 .508 .755 .706
Educ. A9 .728 .530
A7 .638 .407
Volume of G5 .761 .579 .546 .760 .683
financial G4 .713 .508
activities. F5 .633 .401
F4 .544 .496
Rewards A4 .974 .948 .947 .973 .976
A1 .972 .945
Strong Capital G2 .783 .613 .577 .732 .600
base G1 .736 .542
Change Mgt. A1 .972 .944 .638 .939 .771
A2 .719 .517
A3 .767 .588
A4 .974 .948
A5 .705 .497
A7 .638 .407
A8 .749 .561
A9 .728 .530
Financial GI .736 .542 .590 .850 .706
Resources G2 .783 .613
G4 .713 .508
G5 .761 .579
F4 .544 .296
F5 .633 .401

180
Table 5.6 (Continued)
Factor Average
Factor Composite Cronbach’s
Constructs Items Loadings Variance
Loadings Reliability Alpha
Squared Extracted
IT Capability I3 .754 .984 .851 .892 .830
I5 .731 .981
I4 .730 .981
I6 .700 .978
J8 .794 .977
J7 .735 .794
J9 .714 .785
J11 .759 .770
J12 .749 .840
J10 .650 .423
IT Knowledge I3 .754 .569 .531 .819 .780
I5 .731 .534
I4 .730 .533
I6 .700 .490
IT OPS J8 .794 .630 .560 .792 .731
J7 .735 .540
J9 .714 .510
IT Objects J11 .759 .576 .520 .764 .631
J12 .749 .561
J10 .650 .422

5.6.1 Convergent Validity

In an attempt to establish construct validity, convergent validity was examined

using Average Variance Extracted (AVE) as recommended by Hair et al. (2010).

The AVE shows how indicators of construct converged and how they share

common variance. In other words, the indicators should converge and share a high

proportion of variance on a common point, the latent construct. AVE is computed

as the mean of variance extracted for the items loading on a construct. This

computation can be done using the formula below with the standardized loadings:

∑𝑛𝑖=1 𝐿𝑖 2
𝐴𝑉𝐸 =
𝑛

Where: AVE =average variance extracted; Li = standardized factor loading; i =

number of items

181
5.6.2 Discriminant Validity

Discriminant validity assesses the extent to which a construct is truly different from

other constructs (Hair et al., 2010). Consequently, a high level of discriminant

validity suggests that a latent construct is unique and captures some phenomena that

other constructs do not. Although, there are several ways to compute discriminant

validity, a more rigorous method is to compare the AVE values for any two

constructs and with the square of the correlation estimate between these two

constructs. The AVE should be greater than the square correlation estimate (Hair et

al., 2010). Another way of doing this test is to compare the square-root of AVE for

a given construct with the absolute correlations of that construct and all other

constructs (Tang, Luo, & Xiao, 2011). For either, however, the AVE must be

greater than the construct correlation in order to establish discriminant validity

(Fornell & Larcker, 1981). Table 5.7 clearly indicates all the square roots of AVE

ranging between 0.731 and 0.981 are greater than the values of the constructs in the

corresponding matrices. This indicates that each constructs shares more variance

with its items than with other constructs, and supports discriminant validity.

5.6.3 Face Validity

Face validity, according to Sekaran and Bougie (2010), provides an indication that

the items that are intended to measure a construct seem to have measured it. With

regards to the measurement scale of this study, six experts - Senior lecturers,

Associate Professor and Professor in UUM - were consulted, and their observations

182
noted and effected. Similarly, for the meaningful and logical understanding of

variables, nomological validity is also required.

Table 5.7
Discriminant Validity
1 2 3 4 5 6 7 8 9 10 11
1. IT Invest. .773
2. BPR Strata Align .067 .731
3. Cust Focus .108 .254 .734
4. Mgt Commit .403 .184 .084 .748
5. Chg Mgt .072 .182 .123 .049 .799
6. Adq. FIN Res. .494 .125 .074 .429 .086 .768
7. IT Cap .556 .158 .042 .490 .119 .535 .922
8. OPS. Cost .131 .032 .050 .122 .017 .210 .233 .981
9. CSM .319 .126 .076 .337 .112 .405 .436 .178 .783
10. Biz Ops Efiecy. .255 .084 .004 .284 -.025 .299 .346 .206 .287 .826
11. Org. Perform .131 .032 .050 .122 .017 .210 .233 .904 .178 .206 .935
Note. The value in the diagonal is square root of AVE

5.6.4 Nomological Validity

In order to assess nomological validity correlation matrix was used based on the

suggestion of Hair et al. (2010). They stress that nomological validity is supported

to the extent that a construct relates to other constructs in a theoretically consistent

manner. This enables us to examine the extent of relationships among the

constructs under investigation based on the established literature. Previous studies

have established some form of relationships among the constructs in this study,

namely, management commitment, IT investment, IT capability, financial resource

and overall performance. Hence, to confirm this relationship, correlation analysis

was run. From Table 5.7, it could be seen that the constructs have significant

positive correlation, and, therefore, nomological validity is supported.

183
5.7 Modified framework and restatement of hypotheses

The results from the analysis indicate that the framework and hypotheses need to be

restated and referred to throughout the study. The framework is as exhibited in

Figure 5.1. Prior to factor analysis, major variables, such as change management,

BPR project management, top management commitment, customer focus, IT

infrastructure, process redesigns, financial resources and less bureaucratic structure,

were measured as uni-dimensional. Hence, a summated scale was used to

categorize the emerged factors after factor analysis for the modified framework

(Hair et al., 2010). The BPR factors were categorized in line with Al-Mashari and

Zairi (1999) who classified various BPR factors into subgroups representing

dimensions relating to be latent construct. Therefore, the nine factors that emerged

after factor analysis was categorized. Independent variables emerged with six

factors:

1. Change management includes: communication; reward system; training and

education

2. BPR Project management: included BPR strategy alignment.

3. Top management commitment: It consists of management commitment.

4. Customer focus

5. IT Infrastructure: It includes: IT investment

6. Adequate financial resources: It includes: volume of financial activities and

strong capital base.

184
 Change Management
(CM)

BPR Strategy Alignment

(PM)
Organizational
Performance:
Management 1. Cost Reduction
Commitment (MC) 2. Customer
Service
Management
3. Business
Customer Focus (CF) operations
efficiency

IT Investment (IT
invest)

Adequate Financial
Resource (AFR)

IT Capability (ITC)

Figure 5.1
The modified research model to the study

The dependent variable (organizational performance) merged into three

dimensions:

1. Operational cost reduction

2. Customer service management

3. Business operation's efficiency

185
The name overall performance dimension refers to organizational performance.

This is to differentiate it with the name given to other dimensions of performance,

i.e. operation's cost reduction, CSM, business operation's efficiency. The overall

performance dimension encompasses the 3 dimensions of performance hitherto

refers to organizational performance.

While the moderating variable (IT Capability) merged into three dimensions, in line

with Tippins & Sohi (2003), in that the dimensions cumulatively are required to be

present in order to achieve IT competency. Thus, the three dimensions representing

IT Capability are: 1) IT Knowledge; 2) IT Operations; 3) IT Objects. The modified

hypotheses are presented in Table 5.8.

Table 5.8
Summary of Revised Hypotheses
Hypothesis Statement
H1A: The extent of BPR factors are significantly related to organization
performance of Nigerian bank.
1 The extent of change managementis significantly related to organization
performance.
2 The extent of BPR Strategy alignment is significantly related to organization
performance.
3 The extent of management commitment is significantlyrelated to organization
performance.
4 Customer focus is significantlyrelated to organization performance.
5 The extent of IT investment is significantlyrelated to organization performance.
6 The extent of adequate financial resources is significantlyrelated to organization
performance.
H1B: The extent of BPR factoris significantlyrelated to cost reduction of bank
(dimension of organization performance).
1 The extent of change management is significantlyrelated to operational cost
reductionperformance.
2 The extent of PR Strategy alignment is significantlyrelated to operational cost
reductionperformance.
3 The extent of management commitmentis significantlyrelated to operational cost
reductionperformance.
4 Customer focus is significantlyrelated to operational cost reduction.
5 The extent of IT investment is significantlyrelated to operational cost
reductionperformance.
6 The extent of adequate financial resources is significantlyrelated to operational
cost reduction performance.

186
Table 5.8 (Continued)
Hypothesis Statement
H1C: The extent of BPR factor is significantly related to customer service
management(dimension of organization performance).
1 The extent of change management is significantly related to customer service
managementPerformance.
2 The extent of BPRStrategy alignment issignificantly related to customer service
management performance.
3 The extent of management commitment is significantly related to customer service
management performance.
4 The extent of Customer focus is significantlyrelated to customer service
management performance.
5 The extent of IT investment is significantlyrelated to customer service
management performance.
6 The extent of adequate financial resources is significantlyrelated to customer
[Link] performance.
H1D: The extent of BPR factor issignificantly related to Business operations
efficiency of bank (dimension of organization performance).
1 The extent of change management is significantlyrelated to operations
efficiencyperformance.
2 The extent of BPR Strategy alignment is significantlyrelated to business
operations efficiencyperformance.
3 The extent of management commitment is significantlyrelated to business
operations efficiencyperformance.
4 The extent of Customer focus is significantlyrelated to business operations
efficiencyperformance.
5 The extent of IT investment is significantly related to business operations
efficiencyperformance.
6 The extent of adequate financial resources is significantlyrelated to business
operations efficiencyperformance.
H2A: The extent of IT capability attributes positively related to the organizational
performance of Nigerian bank.
1 The extent of IT capability attributes positively related to the overall performance
of Nigerian bank.
2 The extent of IT capability attributes positively related to cost reduction.
3 The extent of IT capability attributes positively related to customer service
management of bank.
4 The extent of IT capability attributes positively related to business operations
efficiency of bank.
H3A: The level of IT capability attribute moderates the relationship between BPR
factors and organizational performance.
1 The level of IT capability attribute moderates the relationship between change
management and overall performance.
2 The levels of IT capability attribute moderates the relationship between customers
focus and overall performance.
3 The level of IT capability attributemoderates the relationship between BPR
strategy alignment and overall performance.
4 The level of IT capability attribute moderates the relationship between
management commitment and overall performance.
5 The level of IT capability attribute that moderate the relationship between IT
investment and overall performance.
6 The level of IT capability attribute moderates the relationship between adequate
financial resources and overall performance.

187
Table 5.8 (Continued)
Hypothesis Statement
H3B: The level of IT capability attribute moderates the relationship between BPR
factors and cost reduction of the bank (dimension of organization
performance).
1 The level of IT capability attributemoderates the relationship between change
management and cost reductionperformance.
2 The level of IT capability attributemoderates the relationship between customer
focus and cost reductionperformance.
3 The level of IT capability attribute moderates the relationship between BPR strategy
alignment and cost reductionperformance.
4 The level of IT capability attribute moderates the relationship between management
commitment and cost reductionperformance.
5 The level of IT capability attribute moderates the relationship between IT investment
and cost reductionperformance.
6 The level of IT capability attribute moderates the relationship between adequate
financial resources and cost reductionperformance.
H3C: The level of IT capability attribute moderates the relationship between BPR
factors and customer service management (dimension of organization
performance).
1 The level of IT capability attributemoderates the relationship between change
management and customer service managementperformance.
2 The levels of IT capability attribute moderates the relationship between customers
focus and customer service managementperformance.
3 The level of IT capability attribute moderates the relationship between BPR strategy
alignment and customer service managementperformance.
4 The level of IT capability attribute moderates the relationship between management
commitment and customer service managementperformance.
5 The level of IT capability attribute moderates the relationship between IT investment
and customer service management performance.
6 The level of IT capability attribute moderates the relationship between adequate
financial resources and customer service managementperformance.
H3D: The level of IT capability attribute moderates the relationship between BPR
factors and business operations efficiency of bank (dimension of organization
performance).
1 The level of IT capability attribute moderates the relationship between change
management and business operations efficiencyperformance
2 The levels of IT capability attribute moderates the relationship between customers
focus and business operations efficiency performance.
3 The level of IT capability attribute moderates the relationship between BPR strategy
alignment and business operations efficiency performance.
4 The level of IT capability attribute moderates the relationship between management
commitment and business operations efficiency performance.
5 The level of IT capability attribute moderates the relationship between IT investment
and business operation's efficiencyperformance.
6 The level of IT capability attribute moderates the relationship between adequate
financial resources and business operation's efficiencyperformance.

5.8 Preliminary analysis

Preliminary analysis includes: descriptive statistics for major variables and inter-

correlations.

188
5.8.1 Missing data

On receiving the completed questionnaires, the research assistant checked and

ensured that all questions were answered. Where any exception was discovered, the

attention of the respondents was drawn to answer appropriately. This assisted in

reducing the number of unattended questions in the survey. After the collection

stage, the data were keyed into SPSS software. Preliminary descriptive statistics

were run to confirm whether or not any missing data exists. Hair et al. (2010)

suggested that any case with not more than 15% miss data observed should be

deleted as long as the sample is adequate. This suggestion is in line with

Tabachnick and Fidell (2007) in that a case of missing data should be simply

dropped.

5.8.2 Assessment of outliers

The assessment of outliers is another important stage of data screening. The

extreme case scores that might have a significant effect on the results – either too

high, too low – or a unique combination of values across several variables was

deleted (Hair et al., 2010). Therefore, using multivariate analysis necessitates

identification and treatment of outliers accordingly. There are several approaches to

detect outliers. In this study, the case wise diagnostic subcommand in SPSS was

carried out. Any cases of standardized residuals greater than 3 were eliminated

hence, 43 cases from this study were deleted from further regression.

189
5.8.3 Presentation of descriptive statistics for independent variables

The descriptive statistics presented in Table 5.9 shows the minimum and maximum

scores, mean values and standard deviation of key variables in the questionnaires

using the six-point Likert scale criteria ranging from 1 to 6. The mean scores on all

variables were in the range of 4.74 to 5.08. Overall, the mean for BPR factors were

between the range of 4.78 and 4.96. The highest mean of the BPR factors for the

banks that participated in this study was effective reward system, and the lowest

was training and education. The overall mean for BPR factors was 4.84, standard

deviation of 1.028 with the minimum score of 1.10 and maximum score of 6.00.

The mean for other BPR factors, such as IT investment, were 4.92 with a standard

deviation of .903; BPR Strategy alignment 4.85 with a standard deviation of .990;

Customer focus mean score of 4.82 with a standard deviation of 1.044;

Management commitment mean value of 4.86, standard deviation of 1.003; Change

management mean of 4.83 with a standard deviation of 1.089. The mean value for

adequate financial resources was 4.85 and standard deviation of .985.

Finally, the mean for IT capability attributes was found to range from 4.86 to 5.08.

The IT objects' factor scored the highest mean followed by IT knowledge. Overall,

the mean for IT capability variable was 4.94 with a standard deviation of .982. The

findings showed that all variables and dimensions had mean values of more than

4.00. These generally indicated that the bank managers agreed that their banks were

implementing good BPR practices relating to IT investment, BPR strategy

alignment, customer focus, management commitment, effective communication,

190
training and education, volume of financial activities, strong capital base, and IT

capability factors.

Table 5.9
Descriptive Statistics for Major Variables
Variables Minimum Maximum Mean Std Dev.
IT Investment 1.25 6.00 4.92 0.903
BPR Strategy Alignment 1.00 6.00 4.85 0.990
Customer Focus 1.00 6.00 4.82 1.044
Management Commitment 1.00 6.00 4.86 1.003
Change Management 1.25 6.00 4.83 1.089
Adequate Financial Resources 1.00 6.00 4.85 0.985
Overall BPR Factors 1.10 6.00 4.84 1.028
IT Knowledge 1.25 6.00 4.89 1.012
IT Operations 1.00 6.00 4.86 1.055
IT Objects 1.67 6.00 5.08 0.867
Overall IT Capability 1.30 6.00 4.94 0.982
Operation Cost Reduction 3.00 6.00 4.98 1.106
Customer Service Management 1.00 6.00 4.95 0.903
Operations Efficiency 2.00 6.00 4.74 0.933
Overall Org. Performance 2.20 6.00 4.94 0.982

The dependent variables were assessed using the Likert scale of 1 (decrease

significantly) to 6 (increase significantly) over the past three years. The mean score

values indicated that most of the banks that participated in the study were doing

well in terms of operating cost containment that improved their general

performance as shown by the highest mean value of 4.98 with a standard deviation

of 1.106. This was followed by effective customer relationship management in

service delivery that had a mean score of 4.95 and a standard deviation of .903; and

a business operation's efficiency means value of 4.74 with a standard deviation of

.933.

191
5.8.4 Bivariate relationship between BPR factors, IT Capability and
Organizational Performance

Correlation analysis was conducted during this study to explore the strength and

direction of the linear relationship between two variables. Specifically, this analysis

determined 1) the relationship between BPR factors and organizational

performance, 2) the relationship between IT capability and organizational

performance, and 3) the inter-correlation between variables. In determining the

strength to the relationship, Pallant (2001) noted that a correlation of 0 signifies no

relationship, a correlation of 1.0 signifies a perfect positive correlation and a value

of -1.0 signifies a perfect negative correlation. In interpreting the values between 0

and 1, the following guideline was suggested by Cohen (1998): r=0.10 to 0.29 or

r=-0.10 to be -0.29 small; r= 0.3 to 0.49 or r= -0.30 to -0.49 medium; r=0.50 to 1.0

or r=-0.50 to -1.0 large. The result of the Pearson correlation is presented in Table

5.10.

Table 5.10
Pearson's Correlation between the Constructs
1 2 3 4 5 6 7 8 9 10 11
1. IT Invest. 1
2. BPR Strata
.067 1
Align
3. Cust Focus .108* .254** 1
4. Mgt
.403** .184** .084 1
Commit
5. Chg Mgt .072 .182** .123* .049 1
6. Adq. FIN
.494** .125* .074 .429** .086 1
Res.
7. IT Cap .556** .158** .042 .490** .119* .535** 1
8. OPS. Cost .131** .032 .050 .122* .017 .210** .233** 1
9. CSM .319** .126* .076 .337** .112* .405** .436** .178** 1
10. Biz Ops
.255** .084 .004 .284** -.025 .299** .346** .206** .287** 1
Efiecy.
11. Org.
.131** .032 .050 .122* .017 .210** .233** .904** .178** .206** 1
Perform
Note. **. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

192
5.8.5 Multivariate relationship between IT capability and organizational
performance

The multivariate relationship between IT capability and organizational performance

was identified to provide answers to research objective 2 of the study. Multiple

regression analysis was employed to identify the relationship. However, before

proceeding with multiple regression analysis, a correlation was performed to

determine the direction and strength of the relationship between the two variables.

Table 5.10 shows the results of the inter-correlation between variables. The

correlation analysis of IT capability and organizational performance was subjected

to a one-tailed test of statistical significance at two different levels; significant

(p<0.01) and significant (p<0.05). Overall, the results indicate that all the variables

between IT capability and organizational performance were significant at p<0.01.

The strongest positive correlation was the relationship between IT capability and

customer service management (r=0.436, p<0.01) with a high level of IT capability

associated with a high level of customer service management performance. The

next strongest positive correlation was between IT capability and business

operation's efficiency (r=0.346, p<0.01), followed by IT capability and operations

cost reduction as well as overall performance (r=0.233, p<0.01).

5.8.6 Multivariate relationship between BPR factors and organizational

performance

The procedure was subjected to two-tailed test of statistical significance at two

different levels: significant (p<0.01) and significant (p<0.05). Overall, the results

showed that all the variables between the BPR factors and organizational

193
performance were significant except for the relationship between BPR strategy

alignment and cost reduction (r=0.032); BPR strategy alignment and business

operation's efficiency (r=0.084) and BPR strategy alignment and overall

performance (r=0.032). Also, the relationship between customer focus and

dimensions of performance (cost reduction r=0.050; CSM r=0.076; business

operation's efficiency r=004; overall performance r=0.050) were not significant.

Similarly, change management and cost reduction r=0.017; business operation's

efficiency r=0.025 and overall performance r= 0.017 were not significant. The

strongest positive correlation was the relationship between adequate financial

resources and customer service's management (r=0.405, p<0.01) with a high level

of customer service relationship management, and a high volume of financial

activities would be generated by the organization. Hence, a high level of financial

resources is associated with a high level of organizational customer service

management performance.

5.9 Multiple regression'sanalysis tests for assumptions

To achieve the underlying assumption of the multiple regressions, the variables

were checked for outliers, normality, linearity, multicollinearity, homoscedasticity

and error term as suggested by Hair et al. (2010) and Pallant (2001).

5.9.1 Normality

One of the approaches to assess the normality assumptions is through histogram

residual plots. This refers to the shape of data distribution for an individual

194
continuous variable and its correspondence to normal distribution. To meet the

assumptions, the distribution of the plot needs to appear normally distributed. The

ultimate objective of the research is to make inferences, then, screening for

normality is an important step in almost all multivariate analysis (Tabachnick &

Fidell, 2007). Figure 5.2 of the normal histogram pictorially depicting that the

normality assumption was achieved since all the bars on the histogram were closed

to a normal curve. The plot shows that all the points lie along a 450 diagonal line

from the bottom left to top right, hence demonstrating that normality assumptions

have not been violated. It also appears that the normality assumption for other

variables was not violated (see Appendix 5).

5.9.2 Linearity

To check for linearity, this study used the residual scatter plot. If the assumptions

are satisfied, the residuals should scatter around 0 or most of the scores should

concentrate in the centre at the 0 point (Flury & Riedwyl, 1998). Figure 5.2

displays the scatter plot between the BPR factors and organizational performance.

The plot shows that the residual scores were concentrated at the centre along the

zero (0) point, thus, suggesting that the linearity assumption was met. Similarly, it

appears that the other variables also demonstrate that the linearity assumption was

not violated (Appendix 5).

195
Figure 5.2
Residual plots – BPR Factors and Organizational Performance

5.9.3 Multicollinearity

Multicollinearity is defined as the degree of correlation among independent

variables. The independent variables are highly correlated (above .90) among

themselves (Hair et al., 2010). Verifying the multicollinearity problem can be done

196
through bivariate correlations of all the independent variables. In this study,

multicollinearity has been examined between the independent variables (BPR

factors) using Pearson’s correlation, as shown in Table 5.10. A correlation analysis

was carried out to explain the relationships among all the variables in the study.

Pearson’s correlation was used to determine the correlation coefficient between the

variables.

The correlation analysis was conducted prior to hypothesis testing in order to

determine the extent to which they are related. The correlation analysis was also

used to inspect for multicollinearity. When two or more independent variables are

highly correlated, the determinations of important variables are highly correlated;

the determination of important predictors becomes confused. Multicollinearity

increases the variance of regression coefficients and threatens the validity of the

regression equation. The values of Pearson’s correlation show the relationships

between the independent variables, and are a method for diagnosing

multicollinearity (Allison, 1999; Meyers et al., 2006). As noted by Cooper and

Schindler (2003), there is no definitive criterion for the level of correlation that

constitutes a serious multicollinearity problem.

The general rule of thumb is that it should not exceed .75. Similarly, Allison

(1999), and Cooper and Schindler (2003) indicated that correlations of .8 or higher

are problematic. The results in the table show no multicollinearity between

independent variables because the Pearson’s correlation indicators for all

independent variables are less than .7. Another approach is to look at the variance

inflated factor (VIF) and tolerance value. It is generally believed that any VIF

197
exceeds 10 and that a tolerance value lowers than .10 indicates a potential problem

of multicollinearity (Hair et al., 2010).Table 5.11 shows the Tolerance and VIF

values for the independent variables.

Table 5.11
Tolerance and VIF Values
Collinearity Statistics
Independent variables
Tolerance VIF
Change Management .711 1.407
Adequate Financial Resources .489 2.047
IT investment .257 3.898
Management Commitment .265 3.770
Customer Focus .772 1.296
BPR Strategy Alignment .638 1.567

The results in Table 5.11 show that multicollinearity does not exist among the

independent variables because the tolerance values are more than .10, and the VIF

values are less than 10. The results indicate that the study does not have any

multicollinearity problem. The moderator regression was subject to criticism

because the interaction term leads to a multicollinearity problem (Aiken & West,

1991; Cohen & Cohen, 1983; Frazier et al., 2004; West, Aiken & Krull, 1996). As a

result of the centred mean, VIF and tolerance values were within the acceptable

required range. Thus, multicollinearity is not a problem for this study.

5.9.4 Homoscedasticity

Homoscedasticity is assumed when there is no pattern to the data distribution, and

residuals are scattered randomly around the horizontal line through 0 (Norusis,

1999). The assumption of homoscedasticity requires that the variance of the

dependent variable is the same at all values of the independent variable or constant

198
variance of the error term (Hair et al., 2010). It also appears that he

homoscedasticity assumption for other variables was not violated (Appendix 5).

Durbin-Watson can be used to test the independence of error terms (Norusis, 1995).

The general rule of thumb is that if the Durbin-Watson value is between 1.50 and

2.50, the assumption of independence on the error terms is not violated (Norusis,

1999). The Durbin-Watson value of 1.914 in this study met the general rule of

thumb, and ensures that the assumption of independence of error terms is not

violated. Therefore, the evaluation on assumptions of linearity, homoscedasticity,

normality, independence on the error terms, and multicollinearity revealed no

significant violation of assumption. Therefore, multiple regression analysis is

considered suitable in testing the research hypotheses.

5.10 Results of multiple regression (Hypotheses testing)

Multiple regression analysiswas conducted for independent and dependent

variables, (i.e., BPR factors and 1) overall performance, 2) cost reduction, 3)

customer service management, and 4) business operation'sefficiencies). Also, to

understand the relationship between IT capability and performance closely (i.e.,

hypotheses), a multiple regression analysis was conducted. The outcome gave the

answers to the first and second research objectives and the hypotheses of the study.

The multiple correlation (R), squared multiple correlation (R2) and adjusted squared

multiple correlation (R2adj) indicate how well the combination of independent

variables predicts the dependent variable.

199
5.10.1 Multiple regression analysis results and hypotheses test between BPR
factors and overall performance.

Multiple regression analysis was conducted to determine the relationship between

BPR factors with single overall organization performance variable. Simultaneously,

regression analysis identifies the most contributory variables among the set of BPR

factors that best predict the organizational performance variables (operation cost

reduction, customer service management, operation efficiency). The results showed

in Table 5.12 demonstrated that the regression equation with predictors that were

significant, R = .393, R2 = .154, R2 adj = .142, F (6, 410) = 12.462, P<.001. In other

words, the multiple correlation coefficients between the predictor and the

dependent variable were .393; the predictor accounted for 15.4% of the variance in

the overall performance. The generalizability of this model in another population

was .142. The value of R2 dropped to only .012 (about 1.2%) in the adjusted R2adj,

which indicates that the cross validity of this model was fine. The significant F-test

revealed that the relationship between the dependent variable and the independent

variables was linear and the model significantly predicted the dependent variable.

The F-test (6, 410) = 12.462, P<.001) indicates an overall significant prediction in

the independent variables to the dependent variables, but it lacks information about

the importance of each independent variable.

Table 5.12 shows the individual contributor of each predictor with a regression

equation (Green & Salkind, 2008). Among the six predictors, adequate financial

resource (β=.272, t=4.968, p=.000) had the highest standardised beta coefficient,

which indicates that adequate financial resources, was the most important variable

in predicting the overall performance. The other important predictor in descending

200
order was management commitment (β=.115, t=2.198, p=.028) However, change

management (β=.002, t=.046, p=.964); IT investment (β=.080, t=1.474, p=.141);

customer focus (β=.022, t=.460, p=.646) and BPR Strategy alignment (β=.018,

t=.370, p=.712) are not significantly related to overall performance. Two predictor

variables impacted on the dependent variable in the direction hypothesized. Thus,

better overall performance can be obtained when bank has adequate financial

resources, and strong management commitment. Whilst hypotheses HA1A- 2 and 4

are supported, hypotheses H1A- 1, 3, 5, and 6 are rejected.

Table 5.12
Multiple Regression Result between BPR Factors and Overall Organizational
Performance
Un- Std. Std Toleranc
Model t Sig. VIF
[Link] Error Beta e
(Constant) 49.200 .309 158.970 .000
Change Management .003 .059 .002 .046 .964 .956 1.046
Adequate Financial .493 .099 .272 4.968 .000** .689 1.451
Resources
IT Investment .177 .120 .080 1.474 .141 .705 1.418
Management .328 .149 .115 2.198 .028* .750 1.333
Commitment
Customer Focus .047 .103 .022 .460 .646 .922 1.085
BPR Strategy .041 .112 .018 .370 .712 .884 1.131
Alignment
R .393
R2 .154
adjusted R2 .142
Std. Error Est. 6.31992
F 12.462
Sig. .000
Durbin-Watson 1.910
a. Dependent Variable: Overall Performance

5.10.2 Multiple regression analysis results and hypotheses test between BPR
factors and operations cost reduction performance

Multiple regression analysis was conducted to determine the relationship between

BPR factors and operation cost reduction performance as one of the dimensions of

201
organization performance. The results showed in Table 5.13 indicates that the

regression equation with predictors was significant, R = .217, R2 = 0.047, R2 adj =

0.033, F (6, 410) = 3.366, P<0.05. In other words, the multiple correlation

coefficients between the predictor and the dependent variable were .217; the

predictor accounted for 4.7% of the variance in the operations cost reduction

performance. The generalizability of this model in another population was .033.

The value of R2 dropped to only .014 (about 1.4%).In the adjusted R2adj, which

indicates that the cross validity of this model. The significant F-test revealed that

the relationship between the dependent variable, and the independent variables was

linear and the model significantly predicted the dependent variable. The F-test (6,

410) = 3.366, P<.05) indicates an overall significant prediction in the independent

variables to the dependent variables. Table 5.13 indicates the individual contributor

of each predictor with a regression equation (Green & Salkind, 2008). Among the

six predictors, adequate financial resource (β=.183, t=3.144, p=. 002) had the

highest standardised beta coefficient, which indicates that adequate financial

resources, was the most important variable in predicting the operations cost

reduction performance.

However, change management (β=-.005, t=-0.111, p=.911); IT investment (β=.025,

t=.440, p=.660); management commitment (β=.032, t=.574, p=.566); customer

focus (β=.033, t=.666, p=.506) and BPR Strategy alignment (β=-0.006, t=-.124,

p=.902) are not significantly related to operations cost reduction performance. One

predictor variables impacted on the dependent variable in the direction

hypothesized. Thus,better operations cost reduction performance can be obtained

202
when a bank has adequate financial resources. Hypothesis HA1B - 2 supported,

hypotheses HA1B - 1, 3, 4, 5, and 6 do not support.

Table 5.13
Multiple Regression Result between BPR Factors and Operations Cost Reduction
Performance
Un-Std Std
Model Std. Error t Sig. Tolerance VIF
Beta Beta
(Constant) 24.901 .263 94.724 .000
Change -.006 .050 -.005 -.111 .911 .956 1.046
Management
Adequate .265 .084 .183 3.144 .002** .689 1.451
Financial
Resources
IT Investment .045 .102 .025 .440 .660 .705 1.418
Management .073 .127 .032 .574 .566 .750 1.333
Commitment
Customer .058 .088 .033 .666 .506 .922 1.085
Focus
BPR Strategy -.012 .095 -.006 -.124 .902 .884 1.131
Alignment
R .217
R2 .047
adjusted R2 .033
Std. Error 5.368
Est.
F 3.366
Sig. .003
Durbin- 1.894
Watson
a. Dependent Variable: Operations cost reduction Performance

5.10.3 Multiple regression analysis results and hypotheses test between BPR
factors and customer service management performance

Multiple regression analysis was conducted to determine the relationship between

BPR factors and business operations efficiency performance dimension of

organisational performance. The results demonstrated in Table 5.14 demonstrated

that the regression equation with predictors was significant, R = .461, R2 = 0.213,

R2 adj = .201, F (6, 410) = 18.491, P<.001. In other words, the multiple correlation

coefficients between the predictor and the dependent variable were. 461; the

203
predictor accounted for 21.3% of the variance in the customer service management

performance. The generalizability of this model in another population was .201.

The value of R2 dropped to only .012 (about 1.2%) in the adjusted R2adj, which

indicates that the cross validity of this model. The significant F-test revealed that

the relationship between the dependent variable, and the independent variables was

linear and the model significantly predicted the dependent variable. The F-test (6,

410) = 18.491, P<.001) indicates an overall significant prediction in the

independent variables to the dependent variables.

Table 5.14 indicates the individual contributor of each predictor with a regression

equation (Green & Salkind, 2008). Among the six predictors, adequate financial

resource (β=.268, t=5.070, p=. 000) had the highest standardised beta coefficient,

which indicates that adequate financial resources, was the most important variable

in predicting the cost service management performance. The other important

predictor in descending order was management commitment (β=.166, t=3.280,

p=0.001) and IT investment (β=.111, t=2.135, p=.033). However, change

management (β=.064, t=1.435, p=.152); customer focus (β=.012, t=.263, p=.793)

and BPR Strategy alignment (β=.010, t=.850, p=.396) are not significantly related

to customer service management performance. Three predictor variables impacted

on the dependent variable in the direction hypothesized. Thus, better customer

service management performance can be obtained when a bank has adequate

financial resources, strong management commitment and IT infrastructures such as

hardware’s and software’s. Whilst hypotheses HA1C- 2, 3 and 4 are supported,

hypotheses HA1C- 1, 5, and 6 are rejected.

204
Table 5.14
Multiple Regression Result between BPR Factors and Customer Service
Management Performance

Un-Std Std. Std Collinearity Statistics

Model Beta Error Beta t Sig. Tolerance VIF
(Constant) 14.835 .094 157.731 .000
Change .026 .018 .064 1.435 .152 .956 1.046
Management
Adequate .153 .030 .268 5.070 .000** .689 1.451
Financial
Resources
IT .078 .036 .111 2.135 .033* .705 1.418
Investment
Management .149 .045 .166 3.280 .001** .750 1.333
Commitment
Customer .008 .031 .012 .263 .793 .922 1.085
Focus
BPR .029 .034 .040 .850 .396 .884 1.131
Strategy
Alignment
R .461
R2 .213
adjusted R2 .201
Std. Error 1.921
Est.
F 18.491
Sig. .000
Durbin- 1.891
Watson

a. Dependent Variable: Customer service management Performance

5.10.4 Multiple regression analysis results and hypotheses test between BPR
factors and business operations efficiency performance

Multiple regression analysis was conducted to determine the relationship between

BPR factors and business operations efficiency performance dimension of

organisational performance. The results showed in Table 5.15 demonstrated that the

regression equation with predictors was significant, R = .363, R2 = .132, R2 adj =

.119, F (6, 410) = 10.390, P<.001. In other words, the multiple correlation

coefficients between the predictor and the dependent variable were. 363; the

205
predictor accounted for 13.2% of the variance in the business operations efficiency

performance. The generalizability of this model in another population was .119.

The value of R2 dropped to only .013 (about 1.3%) in the adjusted R2adj, which

indicates the cross validity of this model. The significant F-test revealed that the

relationship between the dependent variable, and the independent variables was

linear and the model significantly predicted the dependent variable. The F-test (6,

410) = 10.390, P<.001) indicates an overall significant prediction in the

independent variables to the dependent variables.

Table 5.15 shows the individual contributor of each predictor with a regression

equation (Green & Salkind, 2008). Among the six predictors, adequate financial

resource (β=.180, t=3.239, p=.001) had the highest standardised beta coefficient,

which indicates that adequate financial resources, was the most important variable

in predicting the business operations efficiency performance. The other important

predictor in descending order was management commitment (β=.162, t=3.054,

p=.002). However, change management (β=-.060, t=-1.266, p=.206); IT investment

(β=.106, t=1.935, p=.054); customer focus (β=-.038, t=-.796, p=.427) and BPR

Strategy alignment (β=.045, t=.928, p=.354) are not significantly related to business

operations efficiency performance. Two predictor variables impacted on the

dependent variable in the direction hypothesized. Thus, improved business

operations efficiency performance can be obtained when bank has adequate

financial resources, strong management commitment. Whilst hypotheses HA1D – 2

and 4 are supported, hypotheses HA1D- 1, 3, 5, and 6 are rejected.

206
Table 5.15
Multiple Regression Result between BPR Factors and Business Operation
Efficiency Performance
Un-Std Std
Model Std. Error t Sig. Tolerance VIF
Beta Beta
(Constant) 9.463 .072 130.885 .000
Change Management -.017 .014 -.060 -1.266 .206 .956 1.046
Adequate Financial .075 .023 .180 3.239 .001** .689 1.451
Resources
IT Investment .054 .028 .106 1.935 .054 .705 1.418
Management .106 .035 .162 3.054 .002** .750 1.333
Commitment
Customer Focus -.019 .024 -.038 -.796 .427 .922 1.085
BPR Strategy Alignment .024 .026 .045 .928 .354 .884 1.131
R .363
R2 .132
adjusted R2 .119
Std. Error Est. 1.476
F 10.390
Sig. .000
Durbin-Watson 2.067
a. Dependent Variable: business Operations efficiency Performance

The summary of hypotheses testing for the direct relationship between BPR factors

and organisational performance are shown in Table 5.16 and Table 5.7.

Table 5.16
Summary of hypothesis testing on the direct effect of BPR factors on organisational
performance
Hypothesis Statement of Hypothesis Remarks
HA: 1A BPR factors are related to overall organisational performance of Partially
banks. Supported
HA: 1A – 1 Change management is significantly related to overall performance Not Supported
HA: 1A – 2 Adequate financial resource is significantly related to overall Supported
performance
HA: 1A – 3 IT investment is significantly related to overall performance Not supported
HA: 1A – 4 Management commitment is significantly related to overall Supported
performance
HA: 1A – 5 Customer focus is significantly related to overall performance Not supported
HA: 1A – 6 BPR Strategy alignment is significantly related to overall Not supported
performance
HA: 1B BPR factors are significantly related to operating cost reduction Partially
performance of banks. Supported
HA: 1B – 1 Change management is significantly related to operations cost Not Supported
reduction performance
HA: 1B – 2 Adequate financial resource is significantly related to operations cost Supported
reduction performance

207
Table 5.16 (continued)
Hypothesis Statement of Hypothesis Remarks
HA: 1B – 3 IT investment is significantly related to operations cost reduction Not Supported
performance
HA: 1B – 4 Management commitment is significantly related to operations cost Not Supported
reduction performance
HA: 1B – 5 Customer focus is significantly related to operations cost reduction Not Supported
performance
HA: 1B – 6 BPR Strategy alignment is related to operations cost reduction Not Supported
performance
HA: 1C BPR factors are related to customer service management Partially
performance of banks. Supported
HA: 1C – 1 Change management is related to customer service management Not Supported
performance of bank
HA: 1C – 2 Adequate financial resources are related to customer service Supported
management performance of bank
HA: 1C – 3 IT investment is related to overall performance of banks Supported
HA: 1C – 4 Management commitment is related to customer service Supported
management performance of banks
HA: 1C – 5 Customer focus is related to customer service management Not supported
performance of banks
HA: 1C – 6 BPR Strategy alignment is related to customer service management Not supported
performance of banks
HA: 1D BPR factors are related to business operations efficiency Partially
performance of banks. Supported
HA: 1D – 1 Change management is related to business operations efficiency Not Supported
performance of bank
HA: 1D – 2 Adequate financial resources are related to business operations Supported
efficiency performance of bank
HA: 1D – 3 IT investment is related to business operations efficiency Not Supported
performance of banks
HA: 1D – 4 Management commitment is related to business operations Supported
efficiency performance of banks
HA: 1D – 5 Customer focus is related to business operations efficiency Not Supported
performance of banks
HA: 1D – 6 BPR Strategy alignment is related to business operations efficiency Not Supported
performance of banks.

Table 5.17
Summary of Hypotheses Testing for the Direct Relationship between BPR Factors,
IT Capability and Organisational Performance
Overall Cost CSM B/OPS
Variables Remarks
Performance Performance Performance Efficiency

Change Management β=.002 β=-.005 β=.064 β=-.060 H Not

A
t=.046 t=-.111 t=1.435 t=-1.266
Supported
p= .964 p= .911 p= .152 p= .206

Financial Resources β=.272 β=.183 β=.268 β=.180 H Fully

A
t=4.968 t=3.144 t=5.070 t=3.239
Supported
p= .000** p= .002** p= .000** p= .001**

208
Table 5.17 (Continued)
Overall Cost CSM B/OPS
Variables Remarks
Performance Performance Performance Efficiency
IT Investment β=.080 β=.025 β=.111 β=.106 H
A
t=1.474 t=.440 t=2.135 t=1.935
Partially
p= .141 p= .660 p= .033* p= .054
Supported
Management β=.115 β=.032 β=.166 β=.162 H Fully
A
Commitment t=2.198 t=.574 t=3.280 t=3.054
Supported
p= .028* p= .566 p= .001** p= .002**

Customer Focus β=.022 β=.033 β=.012 β=-.038 H Not

A
t=.460 t=.666 t=.263 t=-.796 Supported
p= .646 p= .506 p= .793 p= .427

Strategic Alignment β=.018 β=-.006 β=.040 β=.045 H Not

A
t=.370 t=-.124 t=.850 t=.928
Supported
p= .712 p= .902 p= .396 p= .354

5.10.5 Multiple regression analysis results between IT capability and overall

performance

The results presented in Table 5.18 showed that the regression equation with

predictor was significant, R = .40, R2 = .163, R2 adj = .161, F (1, 415) = 80,748,

P<.001. In other words, the multiple correlation coefficients between the predictor

and the dependent variable were .40; the predictor accounted for 16.3% of the

variance in the overall performance. The generalizability of this model in another

population was .161. The value of R2 dropped to only 0.02 (about 2%) in the

adjusted R2adj, which indicates that the cross validity of this model was fine. The

significant F-test revealed that the relationship between the dependent variable and

the independent variables was linear and the model significantly predicted the

dependent variable. The F-test (1, 415) = 80.748, P<0.001) indicates an overall

significant prediction in the independent variables which is IT capability (β=.404,

t=8.986, p=.000) as important variable in predicting the overall performance.

209
Research hypothesis test: HA2-1 of 4

It was hypothesised that IT capability attributes are related to organisational

performance. The result indicated the extent of IT capability was found to be

positively and statistically significantly associated with overall performance.

(Standard Beta=.404, p=.000). Hence, we accept alternate hypothesis 2-1a of 4 as

p<.01. This finding means that the variation in the overall performance of the banks

was explained significantly by the extent of IT capability. The R2 was .163,

showing the variation explained was 16.3%. On the whole, the regression result

shows the model was explained by 16.3% of the variance of overall performance.

Table 5.18
Multiple Regression Result between IT Capability and Overall Organizational
Performance
Un-Std Std
Model Std. Error t Sig. Tolerance VIF
Beta Beta
(Constant) 49.199 .306 160.759 000
IT Cap .444 .049 .404 8.986 .000** 1.000 1.000
R .404
R2 .163
adjusted
.161
R2
Std. Error
6.24956
Est.
F 80.748
Sig. .000
Durbin-
1.880
Watson
a. Dependent Variable: Overall Performance

5.10.6 Multiple regression analysis results between IT capability and cost

reduction performance

The results showed in Table 5.19 indicated that the regression equation with

predictor was significant, R = .233, R2 = .054, R2 adj = .052, F (1, 415) = 23,797,

P<.001. In other words, the multiple correlation coefficients between the predictor

210
and the dependent variable were .23; the predictor accounted for 5.4% of the

variance in the operations cost reduction performance. The generalizability of this

model in another population was .052. The value of R2 dropped to only .02 (about

2%) in the adjusted R2adj, which indicates that the cross validity of this model was

fine. The significant F-test revealed that the relationship between the dependent

variable and the independent variables was linear and the model significantly

predicted the dependent variable. The F-test (1, 415) = 23,797, P<.001) indicates an

overall significant prediction in the independent variables which is IT capability

(β=.233, t=4.878, p=.000) as important variable in predicting the cost reduction

performance.

Table 5.19
Multiple Regression Result between IT Capability Dimensions and Operation Cost
Reduction
Un-Std Std
Model Std. Error t Sig. Tolerance VIF
Beta Beta
(Constant) 24.902 .260 95.669 .000
IT Cap .205 .042 .233 4.878 .000** 1.000 1.000
R .233
R2 .054
adjusted R2 .052
Std. Error
5.315
Est.
F 23.797
Sig. .000
Durbin-
1.895
Watson
a. Dependent Variable: Cost Reduction

Research hypothesis test: HA2- 2 of 4:

It was hypothesised that IT capability relates to cost reductions. The extent of IT

capability was found to be positively and statistically significantly associated with

operation cost reduction (Beta=0.233, p=0.000). Hence, we accept alternate

211
hypothesis 2-2b of 4 as p<.05. This finding means that the variation in the cost

reduction performance of the banks was explained significantly by the extent of IT

capability. The R2 was .054, showing the variation explained was 5.4%. On the

whole, the regression result shows the model was explained by 5.4% of the

variance of cost reduction performance.

5.10.7 Multiple regression analysis results between IT capability and

customer service management performance

The results showed in Table 5.20 indicated that the regression equation with

predictor was significant, R = .436, R2 = .190, R2 adj = .188, F (1, 415) = 97,583,

P<.001. In other words, the multiple correlation coefficients between the predictor

and the dependent variable were .43; the predictor accounted for 19.0% of the

variance in the customer service management performance. The generalizability of

this model in another population was .188. The value of R2 dropped to only .02

(about 2%) in the adjusted R2adj, which indicates that the cross validity of this

model was fine. The significant F-test revealed that the relationship between the

dependent variable and the independent variables was linear and the model

significantly predicted the dependent variable. The F-test (1, 415) = 97,583,

P<0.001) indicates an overall significant prediction in the independent variables

which is IT capability (β=.436, t=9.878, p=.000) as important variable in predicting

the customer service management performance.

Alternate Hypothesis test: HA2- 3 of 4

It was hypothesised that the IT capability relates to customer service management.

212
The extent of IT capability was found to be positively and statistically significantly

associated with customer service management. (Beta=.436, p=.000). Hence, we

accept alternate hypothesis 2c-3 of 4 as p< .05. On the whole, the regression result

indicated the model was explained by 19% of the variance of customer service

management performance. This finding means that the variation in customer

service management performance of the bank was explained significantly by the

extent of IT capability. R2 was 19.0%, showing the variance explained was 19% of

the variance of customer service management.

Table 5.20
Multiple Regression Result between IT Capability Dimensions and Customer
Service Management
Un-Std Std
Model Std. Error t Sig. Tolerance VIF
Beta Beta
(Constant) 14.835 .095 156.457 .000
IT Cap .151 .015 .436 9.878 .000** 1.000 1.000
R .436
R2 .190
adjusted R2 .188
Std. Error
1.936
Est.
F 97.583
Sig. .000
Durbin-
1.801
Watson
a. Dependent Variable: Customer Service Management

5.10.8 Multiple regression analysis results between IT capability and

business operations efficiency performance

The results showed in Table 5.21 demonstrated that the regression equation with

predictor was significant, R = .346, R2 = .120, R2 adj = .118, F (1, 415) = 56,445,

P<.001. In other words, the multiple correlation coefficients between the predictor

and the dependent variable were .346; the predictor accounted for 12.0% of the

213
variance in the customer service management performance. The generalizability of

this model in another population was .118. The value of R2 dropped to only .02

(about 2%) in the adjusted R2adj, which indicates that the cross validity of this

model was fine. The significant F-test revealed that the relationship between the

dependent variable and the independent variables was linear and the model

significantly predicted the dependent variable. The F-test (1, 415) = 56.445,

P<.001) indicates an overall significant prediction in the independent variables

which is IT capability (β=.346, t=7.513, p=.000) as important variable in predicting

the business operations efficiency performance.

Table 5.21
Multiple Regression Result between IT Capability Dimensions and Business
Operations Efficiency
Un-Std Std. Std
Model t Sig. Tolerance VIF
Beta Error Beta
(Constant) 9.463 .072 130.754 .000
IT Cap .088 .012 .346 7.513 .000** 1.000 1.000
R .346
R2 .120
adjusted
.118
R2
Std. Error
1.478
Est.
F 56.445
Sig. .000
Durbin-
2.009
Watson
a. Dependent Variable: Operations efficiency

Research hypothesis test: HA2-4 of 4

It was hypothesised that the IT capability relates to business operations efficiency.

The extent of IT capability was found to be positively and statistically significantly

associated with business operations efficiency (Beta=0.346, p=0.000). Hence, we

accept alternate hypothesis 2d-4 of 4 as p< 0.01. This finding means that the

214
variation in the business operations efficiency performance of the banks was

explained significantly by the extent of IT capability. The R2 was .12, showing the

variation explained was 12%. On the whole, the regression result shows the model

jointly explained 12.0% of the variance of business operations efficiency

performance. Table 5.22 summarise the hypothesis testing on direct effect of IT

capability on organisational performance.

Table 5.22
Summary of hypothesis testing on the direct effect of IT capability on
organisational performance
Hypothesis Statement of Hypothesis Remarks
HA: 2A-1 IT capability attributes are positively related to overall Fully Supported HA:
performance of bank Hypothesis
HA: 2A-2 IT capability attribute is positively related to cost reduction Fully Supported HA:
performance of bank Hypothesis
HA: 2A-3 IT capability attribute is positively related to customer Fully Supported HA:
service management performance of bank Hypothesis
HA: 2A-4 IT capability attribute is positively related to business Fully Supported HA:
operations efficiency performance of bank Hypothesis

5.10.9 Moderating effect of IT capability on relationship between BPR

factors and organizational performance

This section investigated the moderating effect of IT capability (IT knowledge, IT

operations and IT objects) collectively on the relationship between BPR variables

and organizational performance. The outcome gave the answers to the second

research objective and hypothesis to the study. Hierarchical regression analysis was

performed to test the moderating effect of IT capability on the relationship between

the BPR factors and performance.

215
Hierarchical regression or moderator regression has been suggested by many

authors as the technique for analysing the moderating effect (Baron & Kenny,

1986; Frazier et al., 2004). Russ and McNeilly (1995) argued that a less stringent

significance level of p<0.25 should be used to resolve the lack of power in

detecting the effect of the moderator. In this study, three levels of significance (1%,

5% and 10%) were used to detect the moderating effect of IT capability on the

relationship between BPR factors and organizational performance. To test the

moderator effect a three (3) step hierarchical was conducted to determine what

proportion to the variance in a particular variable is explained by other variables

when these variables are entered into the regression analysis in a certain order

(Cramer, 2003).

In the first step, the direct effect of the independent variables gauged, in the second

step the moderator variable was entered to gauge whether the moderator (IT

capability) has a significant direct impact on the dependent variable (organization

performance) and in the third step the interaction terms (product of the independent

variable and moderator variable) were entered to see any additional variance

explained. For the moderator effect to be present, step 3 must show a significant R 2

square increase with a significant F-change value. Once step 3 shows a significant

R2 square increase, it can be concluded that there is a moderating effect. To know

whether there is a moderation effect we look at the t-value and p-value under the

coefficient table of model 3(Tabachnick & Fidel, 2007). In addition, a post-hock

test was used to identify whether such variable is a pure moderator or quasi

moderator variable. The steps taken to identify the moderator variables are shown

in Figure 5.3.

216
 NO YES
Does Z
significantly
interact with
predictor
variables?

Is Z
has Is Z
YES relationship NO related to
NO criterion YES
with predictor
or criterion variable?

Do
subgroup
analysis

Z is an Are
antecedent, YES Subgroups NO
intervening, different with
or respect to R2? Z is Pure Z is Quasi
exogenous Moderator Moderator
variable.

Z is a Z is not a
homologiser Moderator
variable

Figure 5.3
Framework for identifying Moderator variables (Adopted from Sharma, Durand &
Gur-Arie, 1981)

A typology of moderator variables can be developed by using two dimensions or

characteristics. First, classification can be based on the relationship with criterion

variable; that is, whether the specification variables that are or are not related to a

criterion variable. The second dimension is whether the specification variable

217
interacts with the predictor variable. Such a topology of specification variables is

depicted inFigure 5.4

NO

1 2
Intervening/ Moderator:
Exogenous variables Homologizer

Inter-
action
with
Pre-
dictors

3 4
Moderator: Moderators:
Quasi Moderator Pure Moderators

YES

Related to criterion and or Not related to criterion

predictors and or predictors

Figure 5.4
The moderators identified for the study based on typology of specification variables
by Sharma et al. (1981)

If the specification variable is related to the criterion and/ or predictor variable but

does not interact with the predictor (quadrant 1), the variable is referred to as an

intervening, exogenous variable. The variables in quadrant 2, 3 and 4 are referred as

moderator variables. Generally, there are two types of moderator variable, which

218
differ with respect to whether they influence the strength or the form for the

relationship in the classic validation model. The moderator variable in quadrant 2

referred as Homologizer operates by modifying the strength to the relationship,

does not interact with the predictor variable and is not significantly related to either

the predictor or criterion variable. Whereas variable in quadrant 3 is called quasi

moderator and variable in quadrant 4 is termed as pure moderator. Both variables in

quadrant 3 and 4 have the form for the relationship between the predictor and

criterion variables.

The variable basically modifies the form to the relationship between the criterion

and predictor. The moderator variable in quadrant 3 is identical to that in quadrant 4

except that quasi moderator not only interacted with the predictor variable but is a

predictor variable itself. Because, it is a predictor, this type of variable is not

considered as a moderator in psychometric literature. Apparently, the reason for

restricting the definition of a moderator variable to the pure form in the

psychometric literature is to obviate the ambiguity about which of the predictor

variables is the moderator.

Therefore, based upon the outcome from the study, we can infer that change

management and customer focus are pure moderators in the relationship between

BPR factors overall performance. Management commitment can be considered as

quasi moderator on the relationship between BPR factors and overall performance.

Similarly, IT investment is a quasi-moderator in the relationship between BPR

factors and customer service management performance. Furthermore, Management

219
commitment is a quasi-moderator in the relationship between BPR factors and

business operation efficiency performance.

5.10.10 Interacting effects of IT capability attributes with BPR factors on

overall performance of banks

This section demonstrates the results of the interacting effects between IT

capability on the relationship between BPR factors and overall performance of

banks. It was hypothesis that IT capability moderates the relationship between BPR

factors and overall performance. Table 5.23 indicates the result of the hierarchical

multiple regression analysis of the moderating effect of IT capability on the

relationship between BPR factors and overall performance (see Appendix – 8).

BPR factors were entered first in step 1, explaining 15.4% of the variance. After the

entry of IT capability at step 2 the total variance explained by the model as a whole

was 19.7%. In step 3, the interaction terms were entered, which resulted in

additional variance explaining up to 22.8%. The Sig. F change from step 1 to 2 at

the .001 significance level and from step 2 to 3 was significant at α=.05 level.

However, inspection of the individual interaction terms between IT capability x

management commitment (β=.225, t=2.646, p=.008); IT capability x customer

focus (β=-.094, t=-1.886, p=.060) and IT capability x change management (β=-

.090, t=-1.735, p=.084) indicates that management commitment was significant

atα=.001level, customer focus and change management were significant at α= 0.1

level respectively. IT capability moderates the relationship between the BPR factor

(customer focus, management commitment and change management) and overall

220
performance. Whilst, hypotheses HA 3A- 1, 3 and 4 are supported, hypotheses H A

3A – 2, 5 and 6 are rejected.

Table 5.23
Hierarchical Regression Results: the Moderating Effect of IT Capability on the
Relationship between BPR Factors and Overall Performance
Independent Variables Std Beta Step 1 Std Beta Step 2 Std Beta Step 3
Change Management .002 -.014 -.019
Adequate Financial .272 .198 .178
Resources
IT Investment .080 -.013 -.009
Management Commitment .115 .049 .066
Customer Focus .022 .037 .045
BPR Strategic Alignment .018 .000 -.003
Moderating Variable .281 .318
IT Capability
Interaction
Chg Mgt x IT cap -.090*
Adequate Fin Res x IT cap -.060
IT Investment x IT cap -.108
Mgt Commit x IT cap .225***
Cust. Focus x IT cap -.094*
BPR StraAlign x IT cap .032
2
R .154 .197 .228
2
R Change .154 .043 .030
F Change 12.462 21.923 2.642
Sig F Change .000 .001 .016
***: significant@ p< ***.001 *.050 * 0.1
Dependent Variable: Overall Performance

5.10.11 Interacting effects of IT capability attributes with BPR factors on

operations cost reduction performance of banks

Table 5.24 indicates the result of the hierarchical multiple regression analysis of the

moderating effect of IT capability on the relationship between BPR factors, and

operations cost reduction performance (details see Appendix – 8).

221
Table 5.24
Hierarchical Regression Results: the Moderating Effect of IT Capability on the
Relationship between BPR Factors and Cost Reduction
Independent Variables Std Beta Step 1 Std Beta Step 2 Std Beta Step 3
Change Management -.005 -.016 -.022
Adequate Financial .183 .132 .117
Resources
IT Investment .025 -.039 -.032
Management Commitment .032 -.013 .000
Customer Focus .033 .044 .049
BPR Strategic Alignment -.006 -.019 -.020
Moderating Variable .193 .232
IT Capability
Interaction
Chg Mgt x IT cap -.098*
Adequate Fin Res x IT cap -.018
IT Investment x IT cap -.042
Mgt Commit x IT cap .135
Cust. Focus x IT cap -.082
BPR StraAlign x IT cap .050
2
R .047 .067 .087
2
R Change .033 .051 .057
F Change 3.366 8.970 1.429
Sig.F Change .003 .003 .202
***: significant@ p< ***.001 *.050 * 0.1
Dependent Variable: Cost Reduction

BPR factors were entered first in step 1, explaining 4.7% of the variance. After the

entry of IT capability at step 2, the total variance explained by the model as a whole

was 6.7%. In step 3, the interaction terms were entered, which resulted in additional

variance explaining up to 8.7%. The F change from step 1 to step 2 was significant

at the 1% level, but the F change was not significant from step 2 to step 3. A

thorough scanning of the individual interaction terms between IT capability x

change management (β=-.098, t=-1.742, p=.082), indicates that change

management was significant at α=.1 level. IT capability moderates the relationship

between the BPR factor (change management) and operation cost reduction

222
performance. Whilst, hypotheses HA 3B - 1 supported, hypotheses HA 3B – 2, 3, 4,

5 and 6 are rejected.

5.10.12 Interacting effects of IT capability attributes with BPR factors on

customer service management performance of banks

Table 5.25 shows the result of the hierarchical multiple regression analysis of the

moderating effect of IT capability on the relationship between BPR factors and

customer service management performance (details see Appendix – 8). BPR factors

were entered first in step 1, explaining 21.3% of the variance. After the entry of IT

capability at step 2, the total variance explained by the model as a whole was

24.7%. In step 3, the interaction terms were entered, which resulted in additional

variance explaining up to 26.5%.

The Sig. F change from step 1 to 2 was significant at the 1% level; however, the F

change was not significant from step 2 to 3. However, upon scanning of the beta

coefficient for individual interaction terms between IT capability x IT Investment

(β=-.168, t=-1.989, p=.047) and IT capability x management commitment (β=.190,

t=2.288, p=.023) both at α=.05significant level. This suggests that IT capability

moderate the relationship between BPR factors (IT investment, Management

commitment) and customer service management performance. Whilst, hypotheses

HA 3C – 3 and 4 supported, hypotheses HA 3C – 1, 2, 5 and 6 are rejected.

223
Table 5.25
Hierarchical Regression Results: the Moderating effect of IT Capability on the
Relationship between BPR Factors and Customer Service Management
Independent Variables Std Beta Step 1 Std Beta Step 2 Std Beta Step 3
Change Management .064 .050 .053
Adequate Financial Resources .268 .202 .201
IT Investment .111 .030 .019
Management Commitment .166 .108 .113
Customer Focus .012 .026 .034
BPR Strategic Alignment .040 .024 .021
Moderating Variable .248 .247
IT Capability
Interaction
Chg Mgt x IT cap -.011
Adequate Fin Res x IT cap -.068
IT Investment x IT cap -.168**
Mgt Commit x IT cap .190**
Cust. Focus x IT cap -.069
BPR StraAlign x IT cap .011
R2 .213 .247 .265
R2 Change .213 .034 .019
F Change 18.491 18.240 1.691
Sig. F Change .000 .000 .122
***: significant@ p< ***.001 *.050 * 0.1
Dependent Variable: Customer Service Management

5.10.13 Interacting effects of IT capability attributes with BPR factors on

business operations efficiency performance of banks

Table 5.26 shows the result of the hierarchical multiple regression analysis of the

moderating effect of IT capability on the relationship between BPR factors and

business operations efficiency performance (details see Appendix – 8). BPR factors

were entered first in step 1, explaining 13.2% of the variance. After the entry of IT

capability at step 2, the total variance explained by the model as a whole was

15.5%. In step 3, the interaction terms were entered, which resulted in additional

variance explaining up to 18.2%. The Sig. F change from step 1 to step 2 was

224
significant at α=.001 level, and from step 2 to step 3 it was significant at

α=.05level. Further inspection of the individual interaction terms between IT

capability x management commitment (β=.247, t=2.820, p=. 005) was significant at

α=.001level, indicating that IT capability moderates the relationship between the

BPR factor (Management Commitment) and business operations efficiency

performance. Whilst, hypotheses HA 3D – 4 supported, hypotheses HA 3D – 1, 2, 3,

5 and 6 are rejected.

Table 5.26
Hierarchical Regression Results: the Moderating Effect of IT Capability on the
Relationship between BPR Factors and Business Operations Efficiency
Independent Variables Std Beta Step 1 Std Beta Step 2 Std Beta Step 3
Change Management -.060 -.071 -.076
Adequate Financial .180 .125 .093
Resources
IT Investment .106 .038 .047
Management Commitment .162 .114 .130
Customer Focus -.038 -.027 -.023
BPR Strategic Alignment .045 .032 .028
Moderating Variable .207 .239
IT Capability
Interaction
Chg Mgt x IT cap -.035
Adequate Fin Res x IT cap -.104
IT Investment x IT cap -.092
Mgt Commit x IT cap .247***
Cust. Focus x IT cap -.027
BPR StraAlign x IT cap -.048
2
R .132 .155 .182
R2 Change .132 .023 .027
F Change 10.390 11.314 2.229
Sig .F Change .000 .001 .040
***: significant@ p< ***.001 *.050 * 0.1
Dependent Variable: Business Operations Efficiency

225
Table 5.27
Summary of hypothesis testing on the in- direct effect of BPR factors, IT capability
and organisational performance
Hypothesis Statement of Hypothesis Remarks
HA: 3A IT capability moderates the relationship between BPR Partially
factors organisational performance of banks. Supported
HA: 3A – 1 IT capability moderates the relationship between Change Supported
management and overall performance of bank
HA: 3A – 2 IT capability moderates the relationship between Adequate Not Supported
financial resources and overall performance of bank
HA: 3A – 3 IT capability moderates the relationship between IT investment Not supported
and overall performance of banks
HA: 3A – 4 IT capability moderates the relationship between Management Supported
commitment and overall performance of banks
HA: 3A – 5 IT capability moderates the relationship between Customer Supported
focus and overall performance of banks
HA: 3A – 6 IT capability moderates the relationship between BPR Strategy Not supported
alignment and overall performance of banks
HA: 3B IT capability moderates the relationship between BPR Partially
factors and operations cost reduction performance of banks. Supported
HA: 3B – 1 IT capability moderates the relationship between Change Supported
management and operations cost reduction performance of bank
HA: 3B – 2 IT capability moderates the relationship between Adequate Not Supported
financial resources and operations cost reduction performance of
bank
HA: 3B – 3 IT capability moderates the relationship between IT investment Not Supported
and operations cost reduction performance of banks
HA: 3B – 4 IT capability moderates the relationship between Management Not Supported
commitment and operations cost reduction performance of banks
HA: 3B – 5 IT capability moderates the relationship between Customer focus Not Supported
and operations cost reduction performance of banks
HA: 3B – 6 IT capability moderates the relationship between BPR Strategy Not Supported
alignment and operations cost reduction performance

HA: 3C IT capability moderates the relationship between BPR Partially

factors and customer service management performance of Supported
banks.
HA: 3C – 1 IT capability moderates the relationship between Change Not Supported
management and customer service management performance of
bank
HA: 3C – 2 IT capability moderates the relationship between Adequate Not Supported
financial resources and customer service management
performance of bank
HA: 3C – 3 IT capability moderates the relationship between IT investment Supported
and customer service management performance of banks
HA: 3C – 4 IT capability moderates the relationship between Management Supported
commitment and customer service management performance of
banks
HA: 3C – 5 IT capability moderates the relationship between Customer focus Not supported
and customer service management performance of banks
HA: 3C – 6 IT capability moderates the relationship between BPR Strategy Not supported
alignment and customer service management performance of
banks

226
Table 5.27 (Continued)
Hypothesis Statement of Hypothesis Remarks
HA: 3D IT capability moderates the relationship between BPR Partially
factors and business operations efficiency performance of Supported
banks.
HA: 3D – 1 IT capability moderates the relationship between Change Not Supported
management and business operations efficiency performance of
bank
(HA: 3D – 2 IT capability moderates the relationship between Adequate Not Supported
financial resources and business operations efficiency
performance of bank
HA: 3D – 3 IT capability moderates the relationship between IT investment Not Supported
and business operations efficiency performance of banks
HA: 3D – 4 IT capability moderates the relationship between Management Supported
commitment and business operations efficiency performance of
banks
HA: 3D – 5 IT capability moderates the relationship between Customer focus Not Supported
and business operations efficiency performance of banks
HA: 3D – 6 IT capability moderates the relationship between BPR Strategy Not Supported
alignment and business operations efficiency performance of
banks.

5.11 Chapter Summary

This chapter presented the analysis and findings of the study. Besides providing the

data regarding the general characteristics of the sample and descriptive statistics of

the main variables involved in the study, this chapter presented the empirical results

and tested the hypotheses of the study. The findings from the data collected by the

hand delivery survey showed support for the hypotheses of the study. In general,

the BPR factors are related to organizational performance (first hypothesis) and IT

capability and organizational performance (second hypothesis); the results of the

multiple regression analysis indicated full support for IT capability and

organisational performance while BPR factors and organisation performance was

partially supported. Finally, hierarchical regression analysis was carried out to

determine the moderating effect of the IT capability on organizational performance

(third hypothesis). The results of the study indicated partial support for these

227
moderating effects. The summary of the hypotheses testing on the relationship

between BPR factors, IT capability and organizational performance is shown in

Table 5.27 and Table 2.28while the overall discussion of findings, conclusion and

recommendations of the study are presented in chapter six.

Table 5.28
Summary of Hypotheses Testing for the Interaction between BPR Factors, IT
Capability and Organisational Performance
Overall Cost CSM B/OPS
Model Performance Performance Performance Efficiency Remarks

Change Management X β=-.090 β=-.098 β=-.011 β=-.035 H Partial

A
IT CAP t=-.1.735 t=-1.742 t=-.213 t=-.649
Support
p= .084* p= .082* p= .831 p= .517

Financial Resources X β=-.060 β=-.018 β=-.068 β=-.104 H Not

A
IT CAP t=-.953 t=-.261 t=-1.112 t=-1.620 Support
p= .341 p= .794 p= .267 p= .106

IT Investment X IT β=-.108 β=-.042 β=-.168 β=-.092 H Partial

A
CAP t=-1.249 t=-.450 t=-1.989 t=-1.039
Support
p= .212 p= .653 p= .047* p= .299

Management β=.225 β=.135 β=.190 β=.247 H Partial

A
Commitment X IT t=2.646 t=1.464 t=2.288 t=2.820
Support
CAP p= .008* p= .144 p= .023* p= .005**

Customer Focus X IT β=-.094 β=-.082 β=-.069 β=-.027 H Partial

A
CAP t=-1.886 t=-1.522 t=-1.417 t=-.536 Support
p= .060* p= .129 p= .157 p= .592

Strategic Alignment X β=.032 β=-.050 β=.011 β=-.048 H Not

A
IT CAP t=.590 t=-.839 t=.208 t=-.858
Supported
p= .555 p= .402 p= .835 p= .391

228
 CHAPTER 6 DISCUSSION AND CONCLUSION
CHAPTER 6
DISCUSSION AND CONCLUSION

6.1 Introduction

This chapter discusses the research findings and offers recommendations from the

study. In addition, the chapter recapitulates the study's implications in terms of

theoretical and practical contributions to the organization, limitations to the study

and suggestions about future research.

6.2 Recapitulation of study

The main objective of this study was to investigate the relationship of three main

variables – BPR factors, IT capability and organizational performance. The study

had two broad objectives. First, to determine the extent of BPR factors related to

organisational performance. Second, to investigate the level of IT capability that

moderates the relationship between BPR factors and organisational performance.

By studying this relationship, the organisational performance may be improved.

This framework was supported by the RBV, which states that organisational

performance is influenced by organisational resources, such as intangible resources

and capability. In this case, BPR factors were the intangible resources while IT was

the organisational capability.

229
The study used the survey method to achieve the desired objective of the research

and consider the whole organization as the unit of analysis. The population of this

study included the commercial banks, microfinancebanks and primary mortgage

banks in Nigeria. Data were collected from bank managers, senior managers and

the top executive management within the organization. The survey method strategy

using hand delivery of questionnaire survey approach was used to collect the data

with regard to manager’s perception of the organizational performance. A total of

560 questionnaires were distributed. Only 417 useable questionnaires were

collected representing a response rate of 74.46 per cent of the total questionnaire

distributed and 50 per cent of the sample size required.

Factor analysis was conducted for the three main variables. The results from the

analysis showed that nine (9) factors emerged from BPR variable factors.

Summated scale was used to categories the emerged factors into 6 latent construct

for the modified framework (Hair et al., 2010). The BPR factors were categories

and renamed in line with Al-Mashari and Zairi (1999) classification: 1) change

management, 2) BPR strategy alignment, 3) management commitment, 4) customer

focus, 5) IT investment, and 6) adequate financial resources. On IT capability three

(3), factors emerged after analyses, which were summated as dimensions of IT

capability in line with Tippins & Sohi (2003). The factors/dimensions were

renamed as IT knowledge, IT operations, and IT objects. The three dimensions

cumulatively are required to be present in order to achieve competency of the

organisational IT Capability. The factor analysis of organisational performance

produced three factors, which were named in line with the procedure of naming

factors having the highest loading in factor analysis criterion. The three (3) named

230
factors/variables of performance are 1) cost reduction, 2) customer service

management, and 3) business operation's efficiency. The data was then analysed

using Pearson’s correlation, standard regression and hierarchical regressions in

order to achieve the objectives of the study. The results from this study have

established the important role of adequate financial resources and management

commitment in moving the organizations towards excellence. Adequate financial

resources have been proven in this study, as one of the most important variables

that contributed to higher organizational performance. Stakeholders in the

organization should recognize the important role that personnel and investment in

IT play within the organization. Placing the right person who is committed to

managing the organization by providing a conducive atmosphere and working

environment for excellence. The role of management competence is not only to

coordinate but also to provide effective control by creating a clear vision, mission,

and transparent system in the organization.

6.3 Overall discussion of findings

This section presents the overall discussion on the findings based upon the three (3)

broad objectives of the study.

6.3.1 Relationship between BPR factors and organizational performance

The first objective of the study was to examine the relationship between BPR

factors and organisational performance. Overall, the results of the correlation

analysis show that all the variables between BPR factors and

231
organisationalperformance were significant except for customer focus and change

management. The results of the correlation analysis suggest that BPR factors are

related to organisational performance. Multiple regression analysis was conducted

to examine the most contributory explanatory variables among the BPR factors that

best predict organisational performance variables (cost reduction, customer service

management, business operation's efficiency and overall performance). Four

models of standard regression were developed, and all the models were statistically

significant. The result indicates that IT investment, management commitment,

adequate financial resources, BPR strategy alignment, and change management and

customer focus jointly explained 21.3% of the variance of customer service

management, 13.2% of the variance of business operation's efficiency, 4.7% of the

variance of cost reduction and 15.4% of the variance of overall organization

performance. The models suggest that the impact on the BPR factors on customer

service management performance is the highest followed by overall performance

compared to other performance variables. Three predictor variables, IT investment,

management commitment, adequate financial resources were found to be

statistically related to customer service management. Adequate financial resources

were the strongest contributor predictor that explains the variance of customer

service management followed by management competence. Two of the predictor

variables, financial resources and management competence, were found to have

statistically significant relationships with overall performance and business

operations efficiency performance, respectively. Financial resources were the

strongest contribution predictor that explains the variance of overall performance

and business operation's efficiency, followed by management competence. The

232
adequate financial resources (volume of financial activities) variable was found to

have a statistically significant relationship with cost reduction.

The mixed results between the individual dimensions of the BPR factor and

performance variables of this study suggest that the second hypothesis to the study

was partially supported. The statistically significant results on the relationship of

BPR factors and organizational performance of banks in Nigeria is consistent with

some studies, including (Aregbeyen, 2011; Altinkemer, Ozcelik, & Ozdemir, 2011;

Ozcelik, 2010; Shin & Jemella, 2002; Terziovski, et al., 2003; Sidikat & Ayanda,

2008), who found that the implementation of BPR positively affects firm

performance on average and long-term strategy. Larger BPR projects are associated

with more negative returns for a short period from the project initiation than

functionally focused projects. Terziovski et al. (2003) concluded that BPR practices

have a significant and positive effect on profitability and customer service

management. Although the results of the present study indicate mixed results, the

overall model suggested that BPR factors were significant and jointly explains the

variance of organization performance variables. The evidence from this study

suggests that a high level of BPR factors is related to a high level of organizational

performance. However, the individual dimensions of BPR factors that contribute

strongly to the specific performance variables, such as financial resources with

customer service management need to be taken into consideration by organizations

that wish to implement BPR.

Furthermore, the non-significant results concerning the relationship between BPR

variables and organizational performance in the Nigerian banking industry are in

233
line with some studies (Al-Mashari, 2001; Guimaraes, 1999). It is possible for a

firm to observe a drop in performance and productivity during the initial phase of

BPR project, because of the high cost of purchasing new equipment, hiring

qualified personnel, training existing employees to handle new roles, and

engagement of BPR consultants. This study hypothesized that BPR factors have a

significant relationship with organizational performance (Hypothesis 1). The results

demonstrate that this hypothesis is partially supported. In other words, the

outcomes indicate that the variance in organisational performance is explained by

some of the BPR factors. Hence, the findings imply that organisational performance

could be enhanced through BPR. Specifically, this study found that organisational

performance in terms of: 1) Operations cost reduction may be achieved through

adequate financial resources in terms of generation of high volume of financial

activities in the form of high turnover debit transactions, large balances of deposits

in cheap fund accounts, recovery of non-performing loans, and effective

management of sub-standard and doubtful loans; fee based activities and off

balance sheet transactions; 2) Customer service management may be improved

through effective customer relationship management in branches, the organization's

brand name/goodwill, and efficient customer service delivery; 3) Business

operation's efficiency may be improved by reduction in operational error in

customer transaction, and efficient business operations that would enable the

organization to capture a sizeable market share or create a niche in a target market

for retail, consumer and corporate banking segment of the mass market. The

specific results from the relationship between BPR factors and organisational

performance are discussed in the following sections.

234
[Link] BPR factors and overall performance

Hypotheses 1A (1 to 6) posits a significant relationship between BPR factors and

overall performance. In this study, overall performance reflects the level of bank

performance in terms of operation cost reduction, customer service management

and business operations efficiency performances. This study found that bank

managers in Nigeria perceive that their banks are witnessing a fairly good level of

performance (M=4.94). In relation to overall performance of banks, this study

found that only two BPR factors, adequate financial resources (in terms of volume

of financial activities and strong capital base), and management commitment had

significant relationships with the overall performance of banks. The other four BPR

factors, namely, change management, customer focus, project management, and IT

investment are not significantly related to the overall performance of the banks.

First, in this study, financial resources refer to the extent of availability of sufficient

financial resources or adequate capital base funding to the organization available to

provide a cushion for the risk of lending. Madubueze (2007) reported that Nigerian

banks were directed by the Central Bank of Nigeria to meet the minimum of about

USD$190 million from an average capital base of USD$10 million for the purpose

of meeting the international standard, become players on international scale, and

improve the profitability and operational efficiency of banks. As mentioned earlier,

based on the mean score, bank managers perceive that their organizations have

adequate financial resources (M=4.85). The results indicate that adequate financial

resources are positively related to the overall performance of banks. In other words,

235
the level of achievement in overall performance may depend on the extent of

adequate financial resources. A higher level of financial resources may lead to a

higher level of overall performance of banks.

This finding is consistent with Tarawneh, (2006) who found that financial

performance of Omani commercial banks was strongly and positively influenced by

financial adequacy of the bank. Banks require a strong capital base or a huge

amount of money to adequately provide a cushion for the risk of lending to

entrepreneurs without collateral. This is in line with Salimifard et al., (2010) who

argued that banks required adequate amount of funding for it [Link]

resources of banks in this study are determined by the increase of market share of

total deposit liabilities, both demand and tenured fund generation, through the

improvement of service delivery by making use of technology to redesign

operational processes (Martin, 1988). Demirguc-Kunt & Huizingha, (1999);

Kosmidou, (2008) argued that highly capitalized banks have higher net interest

margin and are more [Link], in non-bankingsector, Ahmad et al.,

(2007); Kotnour, (2001) argued that organization needs adequate financial resource

budget in implementation of BPR.

Second, management commitment has been found to have a positive significant

relationship with overall performance of banks. This finding means that a higher

level of management commitment would result in a higher level of the overall

performance of the bank. Management commitment in this study has proven to be

significant with organizational performance, which is consistent with the findings

from a study conducted by Cheng and Chiu (2008) who reported that employees

236
required management’s wholehearted support for the drive for change. Affective

commitment was posited to have a positive impact on performance, while

continuance commitment will have no effect or a negative impact on performance

(McKenna, 2005; Meyer & Allen, 1997). Employees with high affective

commitment tend to work harder and perform better than those with weak

commitment. Management commitment is the most evident managerial practice

that directly affects the success within the organization (Hammer & Stanton, 1995;

Holland & Kumar, 1995; Guimaraes & Bond, 1996). This indicates the extent of

top management commitment to ensure that employees contribute markedly to

organizational performance.

Another important finding is related to customer focus. In this study, the term

customer focus refers to the external orientation based on customer research,

competitive analysis, analysis of the customer requirements on products/services

and firms that are able to meet customer demand and to achieve a competitive

advantage over competitors (Cheng & Chiu, 2008). Based on previous research on

customer-focused strategy it was hypothesized to have a positive relationship with

organizational performance (Cheng & Chiu, 2008; Tang & Zairi, 1998). This study

found insignificant relationships between customer focus and the overall

performance of banks. Therefore, the hypotheses related to these relationships are

not accepted. These findings are inconsistent with previous studies on customer

focus strategies. The current findings demonstrate that customer focus does not

directly influence the overall performance of banks in Nigerian setting. The finding

is in agreement with studies conducted by Adeyinka, (2011) who found that a

customer service activity in Nigerian banks is pervasive issue. The problems faced

237
by banks in delivering effective services to customers includes: insufficient legal

system, high provision for non-performing loans, high lending rates, poor

management, political instability, high pricing of financial services, higher risks

and low profitability. These negative effects limit the number of prospective

customers who patronize banking services. Similarly, studies conducted by

Anderson et al., (1994); Ittner & Larcker, (1998); Scharitzer & Kollarits, (2000)

have indicated that there is no absolute relationship between customer satisfaction

and profitability. Empirical evidence showed that high level of customer loyalty

does not lead to increase profitability (Reinartz & Kumar, 2002). This result

suggests that long life customers are not necessarily profitable in a contractual

setting, and that short term duration customers might actually be more profitable.

Thus, the current findings indicated that the importance of managing the most

problematic customer who does not generate enough business turnovers on their

account operations as the volume and value of their transactions are too low.

Alternatively, it might suggest that banks should adopt retention strategy designed

to keep their major profitable account relationships. In addition, the insignificant

relationship between customer focus and performance relationship might be as a

result of the weak inter-correlation values between variables. This could cause an

insignificant result in the multiple regressions (Sekaran, 2003). Moreover, possible

explanation could be associated with the global competitive issues faced by the

banking industry. These findings are consistent with a study conducted by Pereira,

Harrison and Poole (1997).

However, Douglasand Judge (2001) suggested the need to examine the moderating

effects of related factors on the strength to the association between customer service

238
strategies in TQM and performance. Said et al. (2009) examined the role of IT in

enhancing the relationship between customer focus and service quality performance

in Local Government Authorities. Hence, the findings from this study for the

moderating effect of IT capability on the relationship between customer focus and

overall performance are significant and in agreement in the findings by Said et al.

(2010). Furthermore, the findings support the TQM studies related to customer-

focused studies (e.g., Hendricks & Singhal, 2001; Kaynak, 2003).

Fourth, the findings on change management indicate an insignificant relationship

with the overall performance of banks. In other words, any improvement in change

management factors, such as reward and motivation, communication,

empowerment, reward, training and education, may not result in a substantial

influence on the overall performance of the banks. Previous research conducted by

Cheng and Chiu (2008), found that change management factor (communication of

change) was not significant with firm performance. This is in agreement with

current study that found insignificant relationships between change management

and the overall performance of the bank. Therefore, the hypotheses related to these

relationships are not accepted. These findings are consistent with previous studies

on change management strategies performance relationship (Cheng & Chiu, 2008).

The non-significant result from the relationship between change management

factors (such as communication, reward system, training and education) and

performance in the present study is in consistent with some literature, such as Al-

Mashari and Zairi (1999), who reported that problems in change management

factors such as communication, as a result of hiding uncertainties, the poor links

between BPR team and personnel, lack of motivation and reward, fear of job

239
security, job loss, and skepticism about BPR, results in BPR failure factors. The

present study found the relationship between change management factors such as

communication and organizational performance not significant. The finding is in

line with, a survey conducted by the Cambridge Small Business Centre (1992) in

the UK, that found the change management factor (training) was not related to

[Link], Storey and Westhead (1994), after examining previous

research on the relationship between change management factor (training) and

small business performance, concluded that the link of the change management

factors such as training and performance was not significant. Finally, Marshal,

Alderman, Wong and Thwaites (1995) suggested that change management factor

such as management training projects have little effect of the performance of small

firms. The weak inter-correlation values between variables could cause an

insignificant result in the multiple regressions (Sekaran, 2000).

Fifth, the project management (strategy alignment) factor, which is important in

BPR implementation in manufacturing and banking industry and widely quoted in

BPR literature, was found to be non-significant with the performance of banks in

Nigeria. This implies that different industrial sectors have different sets of skills

and knowledge. In the manufacturing sector, project management is a core skill and

knowledge. For bankers, who are involved in various projects as part of their daily

routine, unlike those working in manufacturing, project management is not

recognized as a critical success factor of implementing BPR in the banking

industry.

240
Based on previous research, project management strategy was hypothesized to have

a positive relationship with organizational performance. However, this study found

insignificant relationships between project management and the overall

performance of the bank. Therefore, the hypotheses related to these relationships

are not accepted. The current findings demonstrate that project management does

not influence the overall performance of banks. These results indicate that

organization BPR strategy had not been aligned with corporate policies, the project

was not clear to all staff. Organization restructures their processes instead of

redesign to start on clean slate. However, weak inter-correlation values between

variables could cause an insignificant result in the multiple regressions (Sekaran,

2003).

[Link] BPR factors and operation's cost reduction

Hypotheses 1B 1 to 6 posit significant relationships between BPR factors and

operation's cost reduction. Cost reduction reflects the level of expenses/extent of

reduction in cost to provide services on least cost to make a return to the

organization. Operation cost reduction refers to the ability of the bank to reduce the

level of its operating expenses at various cost centres, reduction in payment of

interest expense on tenured fund, provision of non-performing loans as well as

effective cost containment strategy in branches and subsidiaries. The findings

indicate that managers perceive their services, and cost containment strategy is

performing well (M=4.98). Furthermore, the findings show that an adequate

financial resource is significantly related to operation's cost reduction. The

241
organization strong capital base provides a cushion for a loss that may arise from

bank’s risk assets. The bank focus on high-volume demand deposit as cheap funds

(current account and savings) instead of the tenured fund enables the improvement

on financial cost savings. The recapitalization of banks has enabled them to

diversify their portfolio of investment that cushions their operating cost. However,

other variables, such as change management, project management, management

commitment, IT investment and customer focus, have no significant relations with

operations cost reduction performance. This means that investment in IT and

initiating a change management project involve a high capital outlay that may

involve high cost for the organization either inform of capital expenditure or re-

current expenses. IT investment involves heavy capital expenditure to be written off

over a period. Change management project requires sufficient budget for training,

settlement of benefit and entitlement to employees that may be affected by the

change and, etc.

[Link] BPR factors and customer service management

Hypotheses 1C 1 to 6 posit a significant relationship between BPR factors and

customer service management performance. Customer service management refers

to the ability to deliver promises that have been made to customers, reliability of

the original promise to customer and keeping him informed (Khong & Richardson,

2003). This definition implies that customer service management measures the

extent on the relationship management in branches, organizational goodwill or

brand name and the customer service delivery. Generally, the managers perceive

242
their organizations are satisfactory in terms of the customer service management

dimension (M=4.95). This study found that three (3) BPR factors have significant

relationships with customer service management. These variables include financial

resources, management commitment and IT investment.

First, this study has revealed that IT investment is significant with customer service

management performance. In other words, high IT investment enhances customer

relationship, brand name and service delivery. IT investment when combined with

other resources (BPR factors) would improve productivity by reducing costs and

improving quality service as well as operational efficiency performance. This

finding is compatible with studies, such as Devaraj and Kohli (2000), who reported

that IT investment contributes to a higher level of performance. Similarly, this

statistical result supports the findings from several studies that evidenced a positive

relationship between IT investment and organizational performance (Brynjolfsson

& Hitt, 1996; Vandenbosch & Huff, 1997; Mitra & Chaya, 1996).

Moreover, Brown, Gatian and Hicks, (1995) found that the stock market reacts

favourably to announcements about firm investment in IT. Firms with a heavy

investment in IT are found to be more productive and more profitable. Furthermore,

evidence from the banking industry suggests that the level of impact of IT on bank

performance depend on the extent to which firms support their IT investment with

BPR (Hunter, Bernhardt, Hughes, & Skuratowicz, 2001; Murnane, Levy, & Autor,

1999).

243
Second, there is a positive significant relationship between management

commitment and customer service management. In this study, management

commitment reflects the level of management commitment to plan activities for

customer satisfaction through the process reengineering to the remarkable

performance achievement. Top management within the organization encourages

changes to improve the competitive advantage thereby enhancing customer service

management performance (Hammer & Stanton, 1995; Holland & Kumar, 1995;

Guimaraes & Bond, 1996. Top management is responsible for every single activity

on all levels within the organization (Singh & Kant, 2008). Top management

should provide a clear direction or vision in order to help BPR team members to be

directed towards the desired results (Sung & Gibson, 1998).

Finally, this study found a non-significant relationship between change

management, customer focus, BPR strategy alignment and customer service

management [Link] insignificant relationship between customer focus

and customer service management could be the banks did not find a new way of

adding value to customer service. The bank does not conduct a customer survey to

get the feedback on their service. Studies conducted by KPMG on on-line customer

services by Nigerian banks revealed that most banks in Nigeria have a timid

approach to on-line customer services whilst others are not sure of what to do

(KPMG, 2009). Almost all the banks do not allow customers to make on-line

application for bank product and services. Majority of the banks does not have help

desk software within their website where users can submit query and track

progress. This does not give the customer sense of logging a request. Hence, poor

customer relationship management could lead no high number of inactive accounts

244
at the bank that would be translated tonon-customer service management

performance.

Previous studies conducted by Bandara, Indulska, Chong, and Sadiq (2007) argued

that, lack of connectivity between organization corporate policy and BPR strategy

is one of the reasons for failure in organization. Furthermore, studies by Wu (2002)

and Tomasko (2003) reported that the lack of a proper strategy to connect with

organizational goals in terms of operations, would affect the output in quantitative

terms. Terziovski et al. (2003) reported results that show organizations

implemented BPR reactively as a quick fix does not achieve significant

performance outcome. Therefore, the non-significant relationship between BPR

strategy alignment and customer service management performance found during

this study was in agreement with previous studies (KPMG, 2009; Bandara et al.,

2007; Wu, 2002; Tomasko, 2003 and Terziovski et al., 2003).

[Link] BPR factors and business operation's efficiency

Hypotheses 1D 1 to 6 posit significant relationships between BPR factors and

business operation's performance. Business operation's efficiency reflects the

reduction in error for operational processes in customer transaction, and efficient

business operations that enable banks to capture a sizeable market share of the

target market for retail, consumer and corporate banking segment of the mass

market. Managers perceive that their organizations are good (M=4.74). This study

found that two BPR factors such as financial resources, management commitment

and IT investmenthave significant relationships with business operation'sefficiency.

245
However, BPR strategy alignments, change management, customer focuses in this

study werefound to have an insignificant relationship with business operation's

efficiency. Therefore, the hypotheses related to these factors, and business

operation's efficiency was not accepted. The non-significant results could be

attributed to the weak inter-correlation values between the variables and business

operation's efficiency in the multiple regressions (Sekaran, 2000).

6.3.2 Relationship between IT capability and organizational performance

The second objective of the study is to examine the relationship between IT

capability and organizational performance. Overall, the results of the correlation

analysis revealed that all dimensions between IT capability and organizational

performance were significant. The results of the correlation analysis suggest that

high level of IT capability attributes are related to a high level of organizational

performance. This study hypothesized that IT capability has a significant

relationship with organizational performance (Hypothesis 1). The results indicate

that this hypothesis is fully supported. The variance in organizational performance

is explained by IT capability. Specifically, this study found that organizational

performance in terms of 1) operations cost reduction, 2) customer service

management, and 3) business operations efficiency may be enhanced through IT

capability. Multiple regression analysis was conducted to examine the contributory

explanation of IT capability as a construct that best predicts organizational

performance variables (cost reduction, customer service management, operations

efficiency and overall performance).

246
Four models of regression were developed and all the models were statistically

significant. The results demonstrate that IT capability explains 19% of the variance

of customer service management, 12% variance of business operations efficiency,

5.4% variance of cost reduction and 16% variance of overall organizational

performance. The model indicates that the relationship of IT capability on customer

service management is the highest followed by overall performance, then business

operations efficiency and cost reduction performances. IT capability as a predictor

was found to have a statistically significant association with overall performance

and is statistically significant with three other (3) dimensions of performance (cost

reduction, customer service management and business operations efficiency

performance). The evidence from this study suggests that IT capability is important

to organizations. Indeed, high levels of IT capability are related to a high level of

organizational performance.

IT capability in this study refers to the ability to which an organization is equipped

with IT infrastructure, IT skills knowledge and experience, as well as effective IT

operations utilization. A higher level of IT experience enables the smooth

implementation of the organization’s strategy, develops reliable and cost effective

systems for the organization, and anticipates customer needs (Bhatt & Grover,

2005). As stated earlier, based on the mean score, bank managers perceive that their

organizations were implementing good BPR practice (M=4.94). The results indicate

that IT capability is positively related to organizational performance. In other

words, the level of achievement in organizational performance may be dependent

on the extent of IT capability. A higher level of IT capability may lead to a higher

level of organizational performance. To assess organizational IT capability in the

247
form of competency one needs to look beyond specific technology, to three related

components: IT objects, IT knowledge and IT operations.

Therefore, the significant results on the relationship of IT capability and

organizational performance variables in the Nigerian banking industry sample are

consistent with the RBV and confirm previous studies that IT capabilities enhance

organizational performance (e.g., Bhatt & Grover, 2005; Powell & Dent-Micallef,

1997; Santhanam & Hartono, 2003). An extensive body of IT capabilities literature

agrees that IT capabilities are resources to facilitate an effective collection and

utilization of information (e.g., Bharadwaj, 2000). Floyd et al. (1990) contend that

IT capabilities enhance service reliability, reduce transaction errors and increase

consistency in performance. Other researchers argued that capabilities can

contribute to improving service quality through better customized or individualized

services, and in creating knowledge links for identifying and sharing organizational

expertise (Adam, 1993; Quinn et al., 1994).

6.3.3 Moderating effects of IT capability

The final objective of the study is to investigate the moderating effect of IT

capability on the relationship between BPR factors and organisational performance

variables. Specifically, IT capability acts as a moderator, was examined regarding

the impact of the relationship between BPR factors and organisational performance

variables. Generally, there has been mixed results in the interaction effects of these

specific IT capability dimensions. The outcomes suggest that the third main

hypothesis was partially supported.

248
In general, the results of the moderating effects of IT capability on the relationship

between BPR factors and organizational performance variables support the

literature on the RBV that focuses on that it is costly to copy attributes of a firm

which are seen as fundamental drivers of performance (Conner, 1991; Bharadwaj,

2000). Researchers have adopted the perspective of RBV in linking IT to the

success of knowledge management (Goldet al., 2001; Khalifa & Liu, 2003; Lee &

Choi, 2003) and to firm performance (Bharadwaj, 2000; Tippins & Sohi, 2003; Li

et al., 2006).

Empirical evidence predicts that IT needs to interact with other human and business

resources to create IT resources that are valuable, rare and applicable to achieve the

initial, short-term competitive advantage. To achieve a long-term advantage, IT

resources must be difficult to imitate, and hard to substitute (Wade & Hulland,

2004). This study contributes to managerial implications for managers, especially in

a bank setting. Managers are encouraged to invest in terms of time, money,

commitment and other resources to implement the BPR strategies. Evidence from

this study suggests that organizations should develop IT support in order to further

benefit from various strategic activities.

The concept of IT capability was adapted with slight modification from the version

of the instrument developed by Tippins and Sohi (2003). The three dimensions of

IT capability refer to the extent to which a firm is knowledgeable about and

effectively utilizes IT to manage information within the firm. Furthermore, the firm

possesses IT objects. Cumulatively, the three dimensions of IT capability represent

co-specialized resources that provide an indication of the organizational ability to

249
understand and utilize IT tools and processes that are needed to manage customer

information. All three dimensions are required to be present in order to achieve IT

competency. Hence, IT knowledge, IT operations and IT objects have to be present

in order to achieve IT competency in the form of the capability within the

organization.

6.3.4 BPR factors - IT capability- overall performance

IT capability in this study refers to the ability to which an organization is equipped

with IT infrastructure, IT skills knowledge and experience, as well as effective IT

operations utilization. A higher level of IT experience enables the smooth

implementation of the organization’s strategy, develops reliable and cost effective

systems for the organization, and anticipates customer needs (Bhatt & Grover,

2005). As stated earlier, based on the mean score, bank managers perceive that their

organizations were implementing good BPR practice (M=4.94). In other words, the

level of achievement in organizational performance may be dependent to the extent

of IT capability. A higher level of IT capability may lead to a higher level of

organisational performance. To assess organizational IT capability in the form of

competency one needs to look beyond specific technology, to three related

components: IT objects, IT knowledge and IT operations.

IT capabilities are resources to facilitate an effective collection and utilization of

information (e.g., Bharadwaj, 2000). Floyd et al. (1990) contend that IT capabilities

enhance service reliability, reduce transaction errors and increase consistency in

performance. Other researchers argued that capabilities can contribute to improving

service quality through better customized or individualized services, and in creating

250
knowledge links for identifying and sharing organizational expertise (Adam, 1993;

Quinn et al., 1994).

This study adapts with little modification the conceptualized IT competence (IT

knowledge, IT operations and IT objects) from Tippins and Sohi (2003), as the

organizational IT capability that banks should possess to achieve organizational

performance. Hypotheses 2A, 1 to 6 posit that IT capability moderates the

relationship between BPR factors and overall performance. This study found that IT

capability only partially moderates three (3) BPR factors, i.e., 1) change

management, 2) management commitment, and 3) customer focus. This finding

indicates that management commitment has both a direct and indirect significant

effect on the overall performance of banks. The indirect effect is via IT capability.

This finding also entails that banks that have excellent management competence

would also need a strong IT capability that would lead to a higher level of

performance. The prior studies by Shao, Feng, Choudrie, and Liu (2010) have

suggested that the interaction between the chief information officer competence and

top management team moderate the relationship between IT investment and

organizational performance. This also explains the experience of the IT

productivity paradox based on the RBV and knowledge-based view. Empirical

research shows that the CIO’s strategic IT knowledge and business knowledge, as

well as the interaction with top management team members, has a significant

influence on the distribution and integration of IT within the organization

(Armstrong & Sambamurthy, 1999; Smaltz & Sambamurthy, 2006).

251
The moderating effect of IT capability on the relationship between IT investment,

and the customer service management is consistent with previous literature, which

suggested that IT payoff and RBV literature provides a theoretical rationale for how

IT capability moderates the relationship between IT investment and firm

performance (Yongmei, Hongjian, & Junhua, 2008). To some extent, the influence

that IT investment has on human-IT resources and IT-enabled intangibles also

affects firm performance. However, these relationships are moderated by the IT

capability, implying that no matter how much a firm spends on IT, enhanced

performance will not occur without advancing IT capability. The moderating effect

of the relationship between management commitment and overall performance was

demonstrated in Figure 6.1.

55 IT
Capa
54.5
Org. Performance

bility
54 high
53.5
53 med
52.5
52
low
51.5
51
low med high

Management Commitmen

Figure 6.1
The moderating effect of IT capability on the relationship between management
commitment and overall performance

252
The figure shows that generally, the greater the emphasis on IT capability, the

higher the level of overall performance. When the level of management

commitment is low to moderate, the impact of less emphasis on IT capability on the

relationship between management commitment and overall performance is positive

and less than organization that focused on high IT capability. However, the

differential impact is almost the same when the level of management commitment

is moderate to high. The maximum performance is attained if the organization's

emphasis more IT capability with high level of management commitment.

In a similar way, the moderating effect of IT capability on the relationship between

customer focus and overall performance support the literature, which suggested that

IT capability in combination with customer focus strategies enhance an

organization’s ability to rapidly develop and deploy more innovative customer-

focused techniques or processes to enhance performance (Clark, Cavanaugh,

Brown & Sambamurthy, 1997). An empirical study by Said, Hui, Taylor and

Othman (2009) also reported that a high level of IT capability enables organizations

to perform services with greater speed, more accuracy and more convenient ways

for customers. This finding is consistent with the argument put forward by Barney,

Wright, and Ketchen (2001) who suggest that the synergy between two or more

resources will create a sustainable competitive advantage. The impact of IT

capability on the relationship between customer focus and organizational

performance is displayed in Figure 6.2. The figure 6.2 indicates that overall the

greater the IT capability the lower the overall performance. When the level of

customer focus is low to moderate, those organizations with less emphasis on IT

capability appear to have been higher level of overall performance. However, when

253
the level of customer focus is moderate to high, those organizations with less

emphasis on IT capability experience a significant reduction in overall

performance. The lowest overall performance is achieved when there is high level

of customer focus.

51
50.9
IT
Org. Performance

50.8 Capabi
50.7 lity
high
50.6
50.5
med
50.4
50.3
low
50.2
50.1
low med high

Customer Focus

Figure 6.2
The moderating effect of IT capability on the relationship between customer focus
and overall performance

The moderating effect of IT capability on the relationship between change

management and overall performance was in line with study conducted by Hong

and Kim (2002); Ahmed, Zbib,Arokiasamy,Ramayahand Chiun (2006) findings

that reported resistance to change were related to achievement of predetermined

goals and user [Link], a change management initiative was found

to moderate the relationship between resistance and user satisfaction. When Change

management is high, it means that the users are not very happy with the changes

imposed on them. This in turn will lead to lower performance. This indicates that

managing the change effectively by acknowledging resistance as natural and

254
expected, giving importance to employee's concern, having regular and open

communication, get everyone's participation, and promote skills and development

are some of the ways to lower the organizational resistance. Employees are not

really resisting the change, but rather they may be resisting the loss of jobs, loss of

pay, or loss of [Link] impact of IT capability on the relationship between

change management and overall performance is illustrated throughFigure 6.3.

51 IT
Capabi
50.8 lity
Org. Performance

50.6 high
50.4
50.2 med
50
49.8 low
49.6
low med high
Change Management

Figure 6.3
The moderating effect of IT capability on the relationship between change
management and overall performance

As it can be seen from the figure 6.3, there is a relationship between change

management and overall performance regardless of high or low IT capability

attributes. There is a significant differential impact between low and high IT

capability when the level of change management is low to moderate. The highest

overall performance is achieved when the level of change management is high

while adopting greater emphasis on IT capability attributes.

255
6.3.5 BPR factors - IT capability-operations cost reduction performance.

In general, Figure 6.4 shows a positive relationship between change management

and operational cost reduction performance. Those with the high focus on IT

capability perform better than those with less focus on IT capability. The best

performance is attained when the level of change management is high while giving

high focus on IT capability attributes.

26.8
IT
26.6 Capa
bility
26.4
OPS Cost Reduction P

high
26.2
26
med
25.8
25.6 low
25.4
low med high

Change Management

Figure 6.4
The moderating effect of IT capability on the relationship between change
management and operation's cost reduction Performance

6.3.6 BPR factors - IT capability-customer service management

performance

Figure 6.5 shows the results at the level of IT investment are low to moderate; there

is a negligible increase on overall performance and differential impact for those

organizations that give priority to IT capability compared to those with less focus

256
on IT capability. However, when the level of IT investment is moderate to high, the

differential impact is higher. Overall high focus on IT capability is associated with

high overall performance.

55 IT
54.5 Capa
CSM Performance

bility
54
high
53.5
53
med
52.5
52
51.5 low

51
low med high

IT Investment

Figure 6.5
The moderating effect of IT capability on the relationship between IT investment
and customer service management performance

Figure 6.6 depicts the moderating role of IT capability on the relationship between

management commitment and customer service management performance. When

the level of management commitment is low to moderate, the impact of

management commitment on customer management performance is positive for

those organizations that emphasize less IT capability. Similarly, those organizations

with higher IT capability have a positive relationship with customer service

management performance. When the level of management commitment is moderate

to high, the impact of both less and high IT capability are positive. Furthermore, the

highest customer service management performance is achieved when the

257
organization put high priority on IT capability, while adopting high level of

management commitment.

16.8
IT
16.6 Capa
bility
16.4 high

16.2
CSM Performance

med
16

15.8
low
15.6

15.4
low med high

Management Commitmen

Figure 6.6
The moderating effect of IT capability on the relationship between management
commitment and customer service management performance

6.3.7 BPR factors - IT capability-business operations efficiency

performance

Figure 6.7 shows that when the level of management commitment is low to

moderate, the impact of management commitment on business operation efficiency

performance is better good for those organizations operating with IT capability

attribute compare to those organizations operating with less IT capability attributes.

However, when the level of management commitment is moderate to high, the

impact of management commitment on business operation's performance is greater

for those organizations with less emphasis on IT capability compare to those

258
organizations that have the high emphasis on IT capability attributes. The

maximum business operations efficiency performance is achieved when the IT

capability attributes are high, with higher level of management commitment. The

overall findings from the study prove that links between IT capabilities on the

relationship between BPR factors and organizational performance have been

established for the study. This linkage provides a new empirical contribution to

academic knowledge and practitioners.

Biz OPS Efficiency Performance

55
54.5 IT
54 Capability

53.5 high
53
med
52.5
52
low
51.5
51
low med high

Management Commitment

Figure 6.7
The moderating effect of IT capability on the relationship between management
commitment and business operations efficiency performance

The challenge for academia is to carry out more research on multi-disciplines to

establish the links for the benefit for the industry and society as a whole. As for

practitioners, in the search for organizational excellence, organizations should not

be dependent on a particular management technique, but rather, multi management

techniques are essential to organizational survival and success. The following

section discusses the implications from the study.

259
6.4 Implications of the study

The results from this study have provided several implications to practitioners and

academicians. These implications also serve as recommendations to managers and a

contribution to the body of knowledge for academia. The following implications are

categorized into managerial and theoretical implications.

6.4.1 Managerial implications

Several studies have identified IT capability as a strong source that provides a basis

of gaining competitive advantage and enhancing organizational performance

(Adam, 1993; Bharadwaj, 2000; Floyd & Wooldridge, 1990; Quinn et al., 1994;

Santhanam & Hartono, 2003). Furthermore, a large number of studies (e.g., Banker

& Kauffman, 1988, Carroll & Larkin, 1992; Clemons & Row, 1988; Clemons &

Row, 1991 as cited in Wade & Hulland, 2004) found that complimentary resources

must be present to mediate/moderate the relationship. Empirical evidence predicts

that IT needs to interact with other human and business resources to create IT

resources that are valuable, rare and applicable to achieve the initial, short-term

competitive advantage. To achieve a long-term advantage, IT resources must be

difficult to imitate and hard to substitute (Wade & Hulland, 2004). Only a few

studies (e.g., Sager, 1998; Venkatraman & Zaheer, 1990 as cited in Wade &

Hulland, 2004) found that strategic IT has no impact on performance. This study

contributes to managerial implications for managers, especially in the bank setting.

Managers are encouraged to invest in terms of time, money, commitment and other

resources to implement the BPR strategies. Evidence from this study suggests that

260
organizations should develop IT support in order to further benefit from various

strategic activities.

The overall results from this study confirm that BPR factors(adequate financial

resources, management commitment and IT investment) contribute towards

organizational performance. Thus, Nigerian banks should strive to associate the

implementation of BPR with IT capability. Special attention needs to be given to

specific factors of BPR that are associated with a particular organizational

performance variable. To improve service management performance, organizations

need to focus on personnel commitment and customer relationship management.

Customer focus plays a vital role in getting feedback on customer service delivery,

and the value-added services required to meet the demand for new/improved

products and services. BPR is a management approach to improve customer service

by redesigning of processes with a view to enhancing both the efficiency and

effectiveness in customer service (Cheng & Chiu, 2008).

Therefore, establishing long-term customer relations through superior service is

critical for banks to remain competitive. In this study, the moderating effects of IT

capability have a significant positive association between customer focus and

overall performance. Hence, Nigerian banks wishing to improve the overall

performance should consider implementation of IT capability with BPR. However,

management commitment to the organizational activities is crucial for overall

performance achievement. Thus, top management should accept the BPR

consultant’s positive recommendations on restructuring of processes for operational

261
performance improvement, and that key personnel within the organization should

be assigned to handle tasks appropriately.

Similarly, IT investment and change management are important factors for

Nigerian banks to consider in order improve overall performance. Organizations

that focus on IT investment are found to be more productive and profitable (Brown

et al., 1995). Staff motivation through an effective reward system has an important

role in encouraging employees to accept changes like re-engineering approach

without fear (Al-Mashari & Zairi, 1999). In this study, management commitment,

customer focus, IT investment and change managementswere significantly related

with overall performance. Hence, Nigerian banks should consider the investment in

strategic IT and motivate employees appropriately.

In achieving business operations efficiency performance, organizations should

focus on training and education of employees on newly introduced operational

processes, empower core process owners and encourage initiatives for staff

productivity. Training and education are an important component of successful

BPR implementation (Zairi & Sinclair, 1995). Organizations that undertake re-

engineering projects may have to increase the training budget by 30-50 per cent as

both front and back office staff with IT-related skills and expertise would benefit

from education and training (Tower, 1994). It is critical to educate people in IT-

related innovations for competitive advantage, the potential of IT in re-shaping the

business and leadership of empowered organization (Bruss & Roos, 1993).

262
Previous studies have acknowledged that organizations that are IT oriented towards

efficient and effective service delivery for competitive advantage indirectly

enhance organisational performance (Kintana, Alonso, & Olaverri, 2003; Yongmei

et al., 2008; Shao et al., 2010; Said et al., 2009). The overall results of the present

study confirm that IT capability dimensions contribute towards organisational

performance. Nigerian banks should strive to become technologically oriented

banks to achieve competitive advantage and enhance organizational performance.

Organizations should consider IT capability as a competence within the

organization to achieve the competitive advantage. The present study identified IT

capability as a competence that contributes towards customer service management

performance and overall performance. Among the IT skill-knowledge that can

contribute to organizational performance are proactive in e-banking innovation and

regular training courses for IT staff.

Organizations should consider IT capability (IT knowledge, IT operations and IT

object) as a competency that has been found to be positively associated with

customer service management performance and operation's efficiency performance.

Some of the IT operation's activities include communication links to the branch

network online real time 24/7 through wide area network (WAN) and local area

network (LAN) with the minimal system down time. IT Object complements the IT

operation's activities by providing comprehensive procedures and detailed

requirements for operational transactions. The detailed operational procedures

provide an explanation of the computerization of operational services and IT

objects.

263
The findings from this study of the moderator effect of IT capability elements have

a number of important implications on the management of the organizations. A key

managerial implication from the study is the interaction between BPR factors and

IT capability in achieving higher organizational performance. It was found during

this study that there were few significant interactions between BPR factors and IT

capability dimensions. Organizations should take note of these interactions as they

can enhance the performance of the organizations. The findings demonstrated that

IT capability moderates the relationship between management commitment, IT

investment and customer service management performance.

The findings also indicate that IT capability moderates the relationship between

management commitment – customer service management performance; customer

focus – customer service management performance; and management commitment

– overall performance. This suggests that organizations seek to enhance the BPR

factor'sdimension, and performance need to ensure that IT capability play a strong

role in knowledge, operations and object's competence by demonstrating a strong

knowledge on IT-related programmes to all IT staff across the activities within the

organization.

The study has also found that IT capability moderates the relationship of

management commitment – business operation's efficiency. Therefore, this study

provides some evidence that organizations need to focus on IT capability by

demonstrating activities, such as communication network links to branches through

WAN and LAN 24/7 with minimal down time.

264
Finally, IT capability was found to have a moderating effect on the relationship

between customer focus and overall performance. IT capability moderates the

relationship between adequate financial resources and business operations

efficiency performance, Also, between management commitment and customer

service management performance. The study suggests that organizations that seek

to improve business operations efficiency performance should automate their

banking operational services and monitor customer’s transaction activities to be in

line with regulator's procedural guidelines. In general, it seems that IT capability is

necessary for organizations to enhance the relationship between BPR and

organizational performance. This confirms the roles of IT as a capability to turn the

fortunes of organizations as a whole by enhancing their competitive advantage.

Therefore, management of the organizations should seriously consider integrating

BPR factors and IT capability as the study found support for the interaction of these

two activities in contributing towards higher organizational performance.

6.4.2 Theoretical implications

In general, this study found empirical evidence for the theoretical relationships

posited in the research framework. This study has three main hypotheses; one

hypothesis is fully supported, while the other two hypotheses are partially

supported. The theoretical contributions to the study are discussed as follows.

This study found empirical evidence to support the resources-based view. The

resources-based view suggests that the performance of a firm is influenced by its

internal resources. In the context of this study, BPR factors (Change management,

265
BPR strategy alignment, Management commitment, IT investment, Customer

focus, adequate financial resources) were regarded as resources. This study found

that adequate financial resource and management commitment are significantly

related to overall performance while IT investment was significantly related to

customer service management. Particularly, this study found that resources in terms

of IT investment, adequate financial resource and management commitment are the

significant predictors of bank performance in Ngerian banks.

Second, this study adds further to the role of IT capability as a moderator in the

relationship between BPR factors and the organizational performance of banks. In

other words, this study found evidence that banks performance can be explained by

BPR factors and IT capability. Specifically, the BPR factors that have been

moderated by IT capability include: Change management, Management

commitment, Customer focus and IT investment.

Previous studies have made no specific attempt to examine the role of IT capability

in the BPR – organizational performance relationship, especially in the banking

industry. Hence, this study has made an attempt to establish a link in order to assess

the moderating effect of IT capability. Although this study is new in terms of

identifying the role of IT capability, it is still governed by the RBV (Barney, 2001)

and other related research. It is evident that the relationship between change

management and overall performance is moderated by IT capability.

Furthermore,the relationship between management commitment and overall

performance is moderated by IT capability. In addition, the relationship between

customer focus and overall performance is moderated by IT capability.

266
In relation to the second dimension of organizational performance, customer

service management performance, the findings indicate that IT capability moderates

the relationship between IT investment, management commitment and customer

service management. This result is consistent with the findings that the IT

productivity paradox is explained by the revised model with IT investment

affecting firm performance through IT infrastructure with influence of IT

capability. To some extent, the influence that IT investment has on human-IT

resources and IT-enabled intangibles also affects firm performance. However, these

relationships are moderated by the IT capability, implying that no matter how much

a firm spends on IT, enhanced performance will not occur without advancing IT

capability (Yongmei, Hongjian & Junhua, 2008).

The third dimension of organisational performance, cost reduction, shows that IT

capability moderates the relationship between change management and operation's

cost reduction. The fourth dimension of organisational performance is business

operation's efficiency. This study indicates that the relationship between

management commitment and business operation's efficiency is moderated by IT

capability.

In summary, this study provides evidence that IT capability plays a critical role in

moderating the relationship between BPR factors and organisational performance.

This finding provides support for the RBV of the firm, which highlights the

importance of intangible resources (management commitment, customer focus,

change management and IT investment) and capability (IT capability) in explaining

organisational performance. Furthermore, this study not only provides evidence of a

267
significant relationship of BPR factors (adequate financial resources, management

commitment and performance, but it also provides significant relationship with

three (3) dimensions of organizational performance (cost reduction, customer

service management and business operation efficiency).

Previous literature suggested that re-engineering projects significantly improved the

profitability performance of bank but not for growth or the extent of its financial

intermediation (Aregbeyen, 2011). Despite the sound theoretical background and

remarkable results, business process re-engineering has not always led to fantastic

performance. In fact, Bashein et al. (1994) indicated that only 30 per cent of BPR

projects achieved a performance breakthrough. The reasons for large failure could

be as a result of the lack of sustained management commitment and leadership,

unrealistic scope and expectation, resistance to change, non-encouragement to

conceptualization of business process, or non-effective reward systems. It can be

concluded that in organizations, not all BPR factors have a direct effect on

performance (Bashein et al., 1994). Nevertheless, the study validates that BPR

factors are an important determinant of bank performance in Nigeria. The research

supports that the overall BPR implementation is positively associated with

organizational performance.

Moreover, the findings from this study contribute to the empirical research into the

relationship between the IT capability and organizational performance of Nigerian

banks. It was identified that adopting IT has helped Nigerian banks to streamline

the back-office operations by improving both efficiency and cost reduction.

Advances in technology also influence the way bank services are delivered with the

268
aim of making it more convenient for customers. For example, many banks in

Nigeria now have their branches connected on-line real time (24/7). This clearly

reduces the danger of carrying cash. Some banks have ATMs to make cash

available to their customers 24/7. Some Nigerian bank's practice e-banking,

telephone, and mobile banking, money transfer services through MoneyGram.

Western Union Money transfers have enabled the Nigerian Diaspora to send money

to their families (CBN, 2008). IT capability (IT operations, IT objects and IT

knowledge) enables Nigerian banks to participate more effectively in the

international banking arena. For instance, some technologically up to date banks

can access international banking networks in order to efficiently affect fund

transfers, open, amend, and negotiate letters of credit, and retrieve the up to date

status of customer transactions between the banks that joined the Society for

Worldwide Inter-bank Financial Telecommunication (SWIFT). The results from the

study also indicate full support concerning the relationship between IT capability

and organizational performance. The findings suggest that IT capability is an

important source of competitive advantage for banks in Nigeria.

This study, to the author’s knowledge, is the first empirical research to study the

moderating effect of IT capability dimensions of the relationship between BPR

factors and organisational performance in Nigeria. Thus, this study adds to the

existing knowledge of operations management studies on the combined effect of

BPR factors and IT capability and its impact on organisational performance. This

study contributes further to the current body of knowledge by investigating

individually the effects of IT capabilities on the three (3) dimensions of

organizational performance. The results from the study indicate partial support for

269
the interaction effect of BPR variables and IT capability implementation.

Nevertheless, the overall results indicate that some of the variables of BPR and IT

capability interact significantly. Hence, it should be recognized that the role of

these two management approaches complemented each other. The present study

also combined various past measurement studies in measuring the variables of BPR

factors, IT capability and organizational performance. Factor analysis of these

measurements has contributed to new factors within the context of the country

setting the present study was conducted. Thus, this measurement also adds to the

body of current knowledge within the context of future research on BPR factor, IT

capability and organization performance variables in Nigeria.

6.5 Limitations of the study

This study is subject to several shortcomings that limit interpretation of the

findings. One of the limitations to this research is the common method variance

(CMV) is a potential problem in behavioural research (Podsakoff et al., 2003). This

study adopts Harman’s (1967) single factor analysis to test the common method

bias and the design approach to instrument development to reduce common method

bias. Future research may collect data from different sources.

Second, limitation to this study is the application of the cross-sectional design for

survey research that captures the perceptions of respondents at a point in time.

Thus, the study cannot prove causal relationships on a longitudinal basis.

270
Third, limitation to the study is the use of subjective self-reported perceptual

measures in assessing the studies. Even though an attempt was made to identify the

best respondents by contacting the key personnel that provide the best information,

the accuracy of self-perception might be strongly influenced by the respondent’s

experience in the management of the organizations and frame of reference for the

point in time. For instance, perceived biasness may occur if a person with a high

reputation strongly believes that their management practices are more advanced

compared to other organizations.

Fourth limitationin this study is that, the findings cannot be generalized in a larger

context across the cultures of other countries, and business environments may give

a different relationship between BPR factors and IT capability on organizational

performance. Although, the sample size is adequate, representing 74% of the

required sample size.

6.6 Directions for future research

To overcome the limitations to the study, this research suggests the need for further

investigation. As the survey research to the study was based on cross-sectional

design, further work needs to be done to establish the effects of changes over a

longer period of time in the aspect of BPR and IT capability. Therefore, future

research should consider a longitudinal study to examine BPR and IT capability

implementation and how their impact influences organizational performance.

271
Since the present study employed the quantitative technique in the design and

analysis, the information gathered is limited to the questionnaire's response. The

use of qualitative information should be incorporated in future research because this

approach provides insights and understanding of the problem setting. The results

from the study will be more meaningful if both quantitative and qualitative

techniques are employed as bothcan complement each other.

The use of a single person to answer the questionnaires may result in mono-

response bias. Thus, future research should consider multiple respondents to

provide a more balanced perspective of BPR variables, IT capability and

organizational performance perspectives.

The sample from the study is limited to Nigerian banks. Future research should

consider replicating this study in other cultures or countries, especially on the

moderating effect of IT capability dimensions.

In addition, the mediating effect of IT capability should be tested on the

relationship between BPR factors and organisational performance. Furthermore,

further research also needs to be conducted in other sectors or industries besides

banking, such as manufacturing or the construction sector.

This research would help to generalize the findings from this study in a broader

context. Alternatively, a cross-cultural comparative analysis would further enhance

the understanding of the BPR and IT capability of different cultures.

272
6.7 Conclusion

An attempt was made in the present study to investigate the link between BPR

factors and IT capability and their effect on organisational performance. The results

of the present study establish the important role of IT capability towards

competitive advantage and organisational excellence. IT operations, IT objects and

IT knowledge is the most important dimensions of IT capability attributes that

contribute to higher organization performance. Stakeholders in the organization

should recognize the important role that IT operations play in managing the

organization. Putting in competent CIO leadership will provide the right culture for

organizational excellence since IT has the necessary capabilities to drive strategic

competitive advantage and performance. The role of IT capability is not only to

coordinate but also to provide the competitive advantages for organizational

profitability performance and growth.

The overall findings from the study in broad term have proven that, the relationship

between BPR factors, IT capability and organizational performance had been

established for the study. Specifically, new factors have emerged after conducting

factor analysis such as high volume of financial activities and strong capital base

which were considered as the dimensions of adequate financial resources. The BPR

factor such as adequate financial resources and management commitment had

significant positive causal relationship with organisational performance. Also,

adequate financial resources in terms of high volume of activities and strong capital

base are significantly related to cost reduction, customer service management and

business operation efficiency performance. Similarly, management commitment

273
has positive causal relationship with customer service management and operations

efficiency performance. Furthermore, IT investments have a significant positive

association with customer service management performance. However, change

management, customer focus, and BPR strategy alignment had no significant

association with organisational performance in the context of Nigerian banks.

IT capability has a significant moderating influence on the relationship between

management commitment and organisational performance. A higher level of IT

capability has stronger moderating effect on the relationship than low IT capability

attributes. In contrast, IT capability does not have any significant moderating

influence between financial resources and organisational performance. IT capability

has a significant moderating effect on the relationship between customer focus and

organisational performance. In addition, IT capability significantly moderates the

relationship between IT investment and customer service management. Moreover,

IT capability significantly moderates the relationship between change management

and organisational performance. However, IT capability does not moderate the

relationship between BPR strategy alignment and organisational performance.

Finally, the conceptual model of this research was developed from relevant extant

literature which covers the key variables such as BPR factors, IT capability and

organisational performance. Attempt was made in chapter three to synchronise and

relates the variables in the conceptual model with underpinning theories – RBV,

Dynamic capability and Complementarity. This study provides new empirical

contribution to academic knowledge and practitioners. To the academia, more

research on multi-disciplines needs to be conducted to establish the relationship

274
beneficial for the industry and society in general. To the practitioners, the search for

organizational performance and competitive advantage should not be dependent on

a particular management technique but multiple management initiatives, which are

important for survival and success.

275
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APPENDIX 1 QUESTIONNAIRE

299
 SCHOOL OF TECHNOLOGY MANAGEMENT AND
LOGISTICS
UUM-COLLEGE OF BUSINESS
UNIVERSITI UTARA MALAYSIA

SURVEY ON PERCEPTION OF BUSINESS PROCESS RE-ENGINEERING AND

ORGANIZATIONAL PERFORMANCE

Dear Sir/Madam,

TO WHOM IT MAY CONCERN

I am a postgraduate student of University Utara Malaysia, and currently conducting

a survey on manager’s perception of business process reengineering and
organizational performance of Nigerian banks and financial institutions. It is part of
the requirements for the award of PhD. Degree for student to conduct academic
research in his field of study.

Kindly, help by completing this questionnaire as accurately as possible. Please note

that your responses will be treated with utmost confidentiality and would be used
purely for academic purposes. We highly appreciate your co-operations.
Thanking you in anticipation of your response.

Yours sincerely,

Kabiru Jinjiri Ringim Kabirujinjiri@[Link]

PhD Student +6015252975; +23480772615

Dr. Mohd Rizal Razalli rizal@[Link]

Main Supervisor

Dr. Norlena Hasnan norlena@[Link]

Co-supervisor

300
 General Guidelines for the Survey

In most of the questions you are required to circle the options that best represent
your opinion. In some instances, you are required to tick [  ] or write your answers
in the space provided.

There are no rights or wrong answers. Hence, we would appreciate your honest and
complete response to help us understand your views.
We would like to re-assure you that the information you give will be treated
confidentially.

The questionnaire is divided into 4 sections. You are kindly requested to answer the
questions in all the sections.

Kindly tick [  ] your response to all the statement in each of the sections

Section 4: Organization profile and background information: {Choose your

responses}

301
 Section One: Business Process Reengineering Practices

Direction:
The following describe statements about the factors of bank’s Business Process Re-
engineering. Please indicate the extent to which you agree or disagree with the statements
based on the scale provided.

Strongly Slightly Agr Strongly

Disagree Slightly agree
disagree disagree ee agree
1 2 3 4 5 6
Statements Level of Agreement
[Link] employees’ motivation to hard work through effective
reward system has a crucial role in facilitating the effort for 1 2 3 4 5 6
implementation of business process reengineering.
A2. The organization recognizes human involvement in
implementation of business process re-engineering.
1 2 3 4 5 6
A3. The organization trains and educates employees in the
newly introduced operational processes.
1 2 3 4 5 6
A4. There is openness by the management for employees in
the organization to accept changes for improvement.
1 2 3 4 5 6
A5. The organization has effective communication system of
updating employees on reengineering implementation.
1 2 3 4 5 6
A6. The employees have clearly understood the norms, values
and organizational culture.
1 2 3 4 5 6
A7. The organization has flexible structure that empowers
core process employees/owners for effective service delivery.
1 2 3 4 5 6
A8. The employee accepts positive changes easily for
organizational goal achievement.
1 2 3 4 5 6
A.9 The employee empowerment initiatives encourage
improvement of staff productivity in the organization.
1 2 3 4 5 6

B1. The organization has aligned the BPR strategy with

corporate policy.
1 2 3 4 5 6
B2. The organization BPR project is clear to all staff. 1 2 3 4 5 6
B3. The organization’s reengineering effort is towards key
business process.
1 2 3 4 5 6
B4. The organization establishes performance improvement
goal for processes key performance indicators (KPI).
1 2 3 4 5 6

C1. The top management set strategic plans and activity for
customer satisfaction through process reengineering projects.
1 2 3 4 5 6
C2. The top management was committed to ensure employee
contribution to the organization achievement of the 1 2 3 4 5 6
remarkable improvement through business process redesign.
C3. The top management normally initiates business process
reengineering in the organization.
1 2 3 4 5 6
C4. The top management encourages changes to maintain
competitive advantage of the organization.
1 2 3 4 5 6
C5. The top management accepts consultant positive
recommendations on restructuring for implementation in the 1 2 3 4 5 6
organization.
C6. The top management considers business process
reengineering (BPR) as method to improve operational
1 2 3 4 5 6

302
 Strongly Slightly Agr Strongly
Disagree Slightly agree
disagree disagree ee agree
1 2 3 4 5 6
Statements Level of Agreement
process performance in the organization.
C7. The key personnel in the organization are capable of
carrying out related changes.
1 2 3 4 5 6
C8. The top management considers business process re-
engineering (BPR) approach to improve competitiveness of 1 2 3 4 5 6
the organization.

D1. The organization BPR projects result from analysis of

customers.
1 2 3 4 5 6
D2. The organization’s objective is to find a new way of
adding value to customers.
1 2 3 4 5 6
D3. The organization would be able to meet customer
demands in new products and services.
1 2 3 4 5 6
D4. The customer feedback was used when redesigning
processes.
1 2 3 4 5 6

[Link] organization aligns I.T infrastructure and BPR

strategy.
1 2 3 4 5 6
E2. The organization builds an effective I.T infrastructure. 1 2 3 4 5 6
E3. The organization has sufficient budget for a purchase of
an updated hardware and software for operational processes.
1 2 3 4 5 6
E4. The organization achieved proper integration of I.T. 1 2 3 4 5 6
E5. The organization makes effective use of software tools. 1 2 3 4 5 6

F1. The organization documentation process is clear to all

employees.
1 2 3 4 5 6
F2. The organization core processes were redesign for
efficient service delivery.
1 2 3 4 5 6
F3. The organization has periodically evaluated the process
gaps of operational processes.
1 2 3 4 5 6
F4. The organization uses appropriate information technology
software for operational processes.
1 2 3 4 5 6
F5. The organization processes were identified for appropriate
redesign.
1 2 3 4 5 6

G1. The organization is financially sound to conduct its

transactions.
1 2 3 4 5 6
G2. The organization’s strong capital base provides a cushion
for its risk assets.
1 2 3 4 5 6
G3. The organization’s reserve is sufficient for growth. 1 2 3 4 5 6
G4. The organization has a high volume of demand deposit as
cheap fund.
1 2 3 4 5 6
G5. The organization’s volume of deposit is in tenured fund. 1 2 3 4 5 6
G6. The organization has attractive financing product for its
customers.
1 2 3 4 5 6

H1. The organization structure encouraging creativity for a

new way of adding value to customers.
1 2 3 4 5 6

303
 Strongly Slightly Agr Strongly
Disagree Slightly agree
disagree disagree ee agree
1 2 3 4 5 6
Statements Level of Agreement
H2. The organization structure is less bureaucratic for
innovation of customer service.
1 2 3 4 5 6
H3. The organization’s structure is flexible for enhancement
of performance.
1 2 3 4 5 6
H4. The organization employees actively participate to meet
customer demands.
1 2 3 4 5 6
H5. The flattened organization structure offers equal
involvement of employee’s representation in the decision 1 2 3 4 5 6
making processes.

304
 Section Two: IT Capability Attributes

Direction:
The following statements assess the performance of Information technology capability in
banks. You are required to rate your organization on I.T Capability (in terms of I.T
Knowledge and I.T Operations). Please indicate your extent on perceived performance to
the statements based on the scale provided.

Strongly Slightly Slightly Strongly

Disagree Agree
disagree disagree agree agree
1 2 3 4 5 6
Statements Level of Agreement

I1. The organization operations staffs are knowledgeable on

I.T ops. 1 2 3 4 5 6
I2. The organization staffs of I.T department are qualified for
the job. 1 2 3 4 5 6
I3. The organization I.T networking engineers are
professionally qualified. 1 2 3 4 5 6
I4. The organization has an excellent of computer expertise as
consultants. 1 2 3 4 5 6
I5. The organization I.T staffs are proactive in e-banking
innovation. 1 2 3 4 5 6
I6. The organization I.T staffs attend training courses
regularly. 1 2 3 4 5 6

J1. The organization operations are link to branches through

WAN. 1 2 3 4 5 6
J2. The organization technology based links via LAN is
efficient 24/7. 1 2 3 4 5 6
J3. The organization computer link system down time is
minimal. 1 2 3 4 5 6
J4. The organization has computerized all its banking
operational service. 1 2 3 4 5 6
J5. The organization I.T policy is in line with regulatory
guidelines. 1 2 3 4 5 6
J6. The organization I.T operations monitor customer
activities. 1 2 3 4 5 6

305
 Section Three: Organization Performance

Direction:
Section 3: The following statements assess the Non-Financial & Financial Performance of
banks. You are required to rate your organization in the last three years. Please indicate
your extent on perceived performance to the statements based on the scale provided.

Decrease Slightly Slightly Increase

Decrease Increase
Significantly Decrease Increase Significantly
1 2 3 4 5 6
K1. The level of our customer satisfaction with our services 1 2 3 4 5 6
K2. The reactivation of inactive account records 1 2 3 4 5 6
K3. The customer service delivery in branches 1 2 3 4 5 6
K4. The customer relationship management in our branches 1 2 3 4 5 6
K5. The brand name of our organization in the business
environment 1 2 3 4 5 6
K6. The transaction cycle time measure through SLAs in
branches 1 2 3 4 5 6
K7. The operating cost of doing business in branches 1 2 3 4 5 6
K8. The zero error of operational processes 1 2 3 4 5 6
K9. The market share in retail, consumer corporate banking
services 1 2 3 4 5 6
K10. The market share in public sector business 1 2 3 4 5 6

L1. The number of performing loan 1 2 3 4 5 6

L2. The yearly profit before tax performance 1 2 3 4 5 6
L3. The number of non-performing loans 1 2 3 4 5 6
L4. The organization deposit liability growth 1 2 3 4 5 6
L5. The number of recovered bad loan 1 2 3 4 5 6
L6. The fee based income on transaction services 1 2 3 4 5 6
L7. The volume of current and saving account customers 1 2 3 4 5 6
L8. The volume of tenured fund/fixed deposit 1 2 3 4 5 6
L9. The financial performance targets achievement by branches 1 2 3 4 5 6
L10. The level of operating cost 1 2 3 4 5 6

306
 Section 4: Organization Profile and Background Information

Direction:
Please Kindly, tick [  ] in the appropriates answer
Gender
 Male  Female

Does your bank reengineer any of the operational process as a result of

implementing Business Process Reengineering?
 Yes  No

Which of the following processes do you restructured in your operations (You can
choose more than one)
 Branch operations’ (CSO and Teller)  International Operations (L/C, FX,
 Electronic banking service (ATM, POS) etc.)
 Loaning processes and credit analysis  Domestic Operations (Clearing ,
fund transfer)
 Other support services (FINCON,
AUDIT and Legal)
Which of the following does your organization consider the most objective of
business process reengineering program?
 Increasing revenues  Reducing operating cost
 Improving the quality of customer service  Proactive approach to prepare the
 Reactive approach to competitive pressure organization

Reasons for not implementing Business Process Reengineering

 Our bank will not implement BPR method  Our bank have not taken decision on
of performance improvement now BPR implementation yet
 Our bank has implemented other method of  Other reasons – BPR
performance improvement implementation in progress
Which category best describe your organization
 Commercial Bank  Primary Mortgage Finance
 Microfinance Bank

Where are your branches locations? You can choose more than one
 All of them are located in the state capital  Most of them in rural and few in
 Most of them are in state capitals, few in urban area.
cities  Most of them in rural and urban,
only few in cities
Which of the following describe your job title?
 Executive Director /General Manager  SM/MGR
 Deputy General Manager/AGM  Head of Department

What is the size of your organization’s branches?

 1000 – 500 number of branches with ATM  99 – 01 number of branches with
Machines ATM Machines
 499 – 300 number of branches with ATM  Others specify
Machines
 299 – 100 number of branches with ATM
Machines

307
 Number of employees in your organization

 1 – 50 employees including outsourced  1001 – 2,000 employees including

 51 – 100 employees including outsourced outsourced
 101 – 1000 employees including outsourced  More than 2,000 employees
including outsourced

Thank you for your participation and your time in answering the survey. All response will
be treated with the utmost confidence and no single set of responses will be readily
identifiable.

Comments (optional):
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________

308
APPENDIX 2 DEMOGRAPHIC DATA FREQUENCIES

309
 Statistics
Implemented Optional Process
Gender Job Title Category of bank BPR Re-engineered
N Valid 417 417 417 417 417
Missing 0 0 0 0 0
Mean 1.32 2.84 2.17 1.00 6.62

Statistics
Number of
employees in Most objectives Number of
the of BPR to branches with Reason for Non Location of
Organization Organization ATM Machines BPR adoption branches
N Valid 417 417 417 417 417
Missing 0 0 0 0 0
Mean 2.06 3.08 4.56 5.00 2.78

Frequency Table
Gender
Frequency Percent Valid Percent Cumulative Percent
Valid Male 283 67.9 67.9 67.9
Female 134 32.1 32.1 100.0
Total 417 100.0 100.0

Job Title

Cumulative
Frequency Percent Valid Percent Percent
Valid ED/GM 65 15.6 15.6 15.6
DGM/AGM 82 19.7 19.7 35.3
SM/MGR 125 30.0 30.0 65.2
HOD 145 34.8 34.8 100.0
Total 417 100.0 100.0

310
 Category of bank
Cumulative
Frequency Percent Valid Percent Percent
Valid Commercial bank 18 4.3 4.3 4.3
Microfinance bank 312 74.8 74.8 79.1
Primary Mortgage 87 20.9 20.9 100.0
Total 417 100.0 100.0

Implemented BPR
Frequency Percent Valid Percent Cumulative Percent
Valid Yes 417 100.0 100.0 100.0

Optional Process Re-engineered

Cumulative
Frequency Percent Valid Percent Percent
Valid ONLY Branch OPS - CSO, 49 11.8 11.8 11.8
TELLERING, CLG, FTO
Only e-banking services - 6 1.4 1.4 13.2
ATM, POS, INTERNET,
MOBILE, T/PHONE
Only Loan processing, Credit 26 6.2 6.2 19.4
admin and appraisal
Only INTOPS - L/C, 2 .5 .5 19.9
FX,Western
Union/MoneyGram, SWIFT
ONLY 1&3 PROCESSES 239 57.3 57.3 77.2
ONLY 1,2 & 3 PROCESSES 5 1.2 1.2 78.4
ONLY 1, 3 & 5 1 .2 .2 78.7
PROCESSES
ALL 1,2,3,4, 5 & 6 89 21.3 21.3 100.0
PROCESSES
Total 417 100.0 100.0

311
Number of employees in the Organization
Cumulative
Frequency Percent Valid Percent Percent
Valid 1-50 employees including 249 59.7 59.7 59.7
outsource
51-100 employees including 35 8.4 8.4 68.1
outsource
101-1000 employees 53 12.7 12.7 80.8
including outsource
1001-2000 employees 19 4.6 4.6 85.4
including outsource
Above 2000 employees 61 14.6 14.6 100.0
including outsource
Total 417 100.0 100.0

Most objectives of BPR to Organization

Cumulative
Frequency Percent Valid Percent Percent
Valid Increasing revenue 103 24.7 24.7 24.7
Improving the quality of 97 23.3 23.3 48.0
customer service
Reactive approach to 48 11.5 11.5 59.5
competitive pressure
Reducing operating cost 54 12.9 12.9 72.4
Proactive approach for future 85 20.4 20.4 92.8
challenges
To achieve obj 1,2,3, & 4 7 1.7 1.7 94.5
To achieve obj 1,2, 4 & 5 23 5.5 5.5 100.0
Total 417 100.0 100.0

312
Number of branches with ATM Machines
Cumulative
Frequency Percent Valid Percent Percent
Valid 1000 to 500 number of 7 1.7 1.7 1.7
branches with ATM
Machines
499 to 300 number of 21 5.0 5.0 6.7
branches with ATM
Machines
299 to 100 number of 16 3.8 3.8 10.6
branches with ATM
Machines
99 to 01 number of branches 59 14.1 14.1 24.7
with ATM Machines
Other category of orgn 314 75.3 75.3 100.0
without ATM Machines,
POS, etc
Total 417 100.0 100.0

Reason for Non BPR adoption

Cumulative
Frequency Percent Valid Percent Percent
Valid Not applicable as bank 417 100.0 100.0 100.0
implemented BPR method

Location of branches
Cumulative
Frequency Percent Valid Percent Percent
Valid All branches are located in 63 15.1 15.1 15.1
the state capital
Most of the branches are 89 21.3 21.3 36.5
located in state capital, few
in cities
Most of the branches are 194 46.5 46.5 83.0
located in the commercial
city and state capital
Most of the branches are 18 4.3 4.3 87.3
located in rural and few in
the urban areas
Most of the branches are 53 12.7 12.7 100.0
located in rural and urban,
only few in cities
Total 417 100.0 100.0

313
APPENDIX 3 RESULTS OF FACTOR ANALYSIS

314
Factor Analysis (Organizational Performance)
Correlation Matrixa
K3 K4 K5 K7 K8 K9 L3 L5 L8 L10
Correlation K3 1.000 .432 .455 .142 .197 .233 .141 .144 .152 .119
K4 .432 1.000 .443 .148 .129 .186 .166 .154 .166 .133
K5 .455 .443 1.000 .134 .185 .224 .137 .117 .131 .111
K7 .142 .148 .134 1.000 .186 .163 .976 .959 .968 .976
K8 .197 .129 .185 .186 1.000 .422 .191 .178 .186 .185
K9 .233 .186 .224 .163 .422 1.000 .165 .141 .162 .153
L3 .141 .166 .137 .976 .191 .165 1.000 .956 .965 .962
L5 .144 .154 .117 .959 .178 .141 .956 1.000 .972 .964
L8 .152 .166 .131 .968 .186 .162 .965 .972 1.000 .977
L10 .119 .133 .111 .976 .185 .153 .962 .964 .977 1.000

Anti-image Matrices

Sig. (1- K3 .000 .000 .002 .000 .000 .002 .002 .001 .008
tailed)
K4 .000 .000 .001 .004 .000 .000 .001 .000 .003
K5 .000 .000 .003 .000 .000 .003 .008 .004 .012
K7 .002 .001 .003 .000 .000 .000 .000 .000 .000
K8 .000 .004 .000 .000 .000 .000 .000 .000 .000
K9 .000 .000 .000 .000 .000 .000 .002 .000 .001
L3 .002 .000 .003 .000 .000 .000 .000 .000 .000
L5 .002 .001 .008 .000 .000 .002 .000 .000 .000
L8 .001 .000 .004 .000 .000 .000 .000 .000 .000
L10 .008 .003 .012 .000 .000 .001 .000 .000 .000

315
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .885
OP3 OP4 OP5 OP7 OP8 OP9 OP13 OP15 OP18 OP20
Bartlett's Test of Sphericity Approx. Chi-Square 5519.918
Anti-image OP3 .700 -.187 -.208 -.007 -.055 -.064 .009 -.008 -.010 .014
Covariance df 45
OP4 -.187 .718 -.209 .008 .012 -.038 -.012 -.001 -.010 .009
Sig. .000

K3 1.000 .432 .455 .142 .197 .233 .141 .144 .152 .119
K4 .432 1.000 .443 .148 .129 .186 .166 .154 .166 .133
K5 -.208 -.209 .702 -.008 -.043 -.054 -.002 .008 .000 .004
K7 -.007 .008 -.008 .029 .004 -.004 -.019 -.003 -.001 -.013
K8 -.055 .012 -.043 .004 .795 -.293 -.006 -.001 .003 -.006
K9 -.064 -.038 -.054 -.004 -.293 .779 -.002 .015 -.006 .001
L3 .009 -.012 -.002 -.019 -.006 -.002 .040 -.006 -.007 .001
L5 -.008 -.001 .008 -.003 -.001 .015 -.006 .047 -.016 -.006
L8 -.010 -.010 .000 -.001 .003 -.006 -.007 -.016 .030 -.013
L10 .014 .009 .004 -.013 -.006 .001 .001 -.006 -.013 .030
Anti-image K3 .753a -.264 -.296 -.049 -.073 -.087 .054 -.045 -.066 .099
Correlation
K4 -.264 .758a -.294 .058 .016 -.051 -.073 -.007 -.070 .063
K5 -.296 -.294 .750a -.056 -.058 -.074 -.013 .043 .001 .029
K7 -.049 .058 -.056 .884a .027 -.030 -.542 -.079 -.037 -.446
K8 -.073 .016 -.058 .027 .743a -.373 -.031 -.004 .019 -.038
K9 -.087 -.051 -.074 -.030 -.373 .730a -.013 .077 -.038 .007
L3 .054 -.073 -.013 -.542 -.031 -.013 .914a -.142 -.199 .017
L5 -.045 -.007 .043 -.079 -.004 .077 -.142 .939a -.435 -.150
L8 -.066 -.070 .001 -.037 .019 -.038 -.199 -.435 .900a -.439
L10 .099 .063 .029 -.446 -.038 .007 .017 -.150 -.439 .900a
a. Measures of Sampling Adequacy(MSA)

Communalities
Initial Extraction
K3 1.000 .621
K4 1.000 .640
K5 1.000 .636
K7 1.000 .977
K8 1.000 .725
K9 1.000 .698
L3 1.000 .970
L5 1.000 .967
L8 1.000 .979
L10 1.000 .978
Extraction Method: Principal Component Analysis.

316
Total Variance Explained
Component Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues Loadings Loadings
% of Cumulative % of Cumulative % of Cumulative
Total Variance % Total Variance % Total Variance %
1 5.070 50.699 50.699 5.070 50.699 50.699 4.839 48.390 48.390
2 1.994 19.940 70.639 1.994 19.940 70.639 1.911 19.107 67.497
3 1.126 11.262 81.902 1.126 11.262 81.902 1.440 14.405 81.902
4 .581 5.814 87.715
5 .557 5.571 93.286
6 .543 5.434 98.720
7 .051 .510 99.230
8 .036 .355 99.586
9 .024 .244 99.830
10 .017 .170 100.000
Extraction Method: Principal Component Analysis.

Component Matrixa
Component
1 2 3
L8 .978
K7 .977
L3 .974
L10 .973
L5 .969
K5 .711
K3 .705
K4 .655 -.381
K8 .428 .681
K9 .508 .612
Extraction Method: Principal Component Analysis.
a. 3 components extracted.

Rotated Component Matrixa

Component
1 2 3
L10 .984
L8 .981
K7 .981
L5 .978
L3 .977
K4 .794
K5 .785
K3 .770
K8 .840
K9 .812
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 4 iterations.

317
Factor Analysis (I.T Capability)
Correlation Matrixa
I3 I4 I5 I6 J1 J2 J3 J4 J5 J6
Correla I3 1.000 .500 .476 .395 .258 .331 .326 .227 .179 .224
tion I4 .500 1.000 .491 .478 .322 .370 .385 .261 .289 .261
I5 .476 .491 1.000 .490 .319 .369 .314 .257 .366 .324
I6 .395 .478 .490 1.000 .358 .335 .311 .229 .288 .239
J1 .258 .322 .319 .358 1.000 .507 .378 .219 .233 .107
J2 .331 .370 .369 .335 .507 1.000 .548 .302 .260 .187
J3 .326 .385 .314 .311 .378 .548 1.000 .376 .278 .242
J4 .227 .261 .257 .229 .219 .302 .376 1.000 .389 .295
J5 .179 .289 .366 .288 .233 .260 .278 .389 1.000 .410
J6 .224 .261 .324 .239 .107 .187 .242 .295 .410 1.000
Sig. (1- I3 .000 .000 .000 .000 .000 .000 .000 .000 .000
tailed) I4 .000 .000 .000 .000 .000 .000 .000 .000 .000
I5 .000 .000 .000 .000 .000 .000 .000 .000 .000
I6 .000 .000 .000 .000 .000 .000 .000 .000 .000
J1 .000 .000 .000 .000 .000 .000 .000 .000 .015
J2 .000 .000 .000 .000 .000 .000 .000 .000 .000
J3 .000 .000 .000 .000 .000 .000 .000 .000 .000
J4 .000 .000 .000 .000 .000 .000 .000 .000 .000
J5 .000 .000 .000 .000 .000 .000 .000 .000 .000
J6 .000 .000 .000 .000 .015 .000 .000 .000 .000
a. Determinant = .059

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .863
Bartlett's Test of Sphericity Approx. Chi-Square 1162.263
Df 45
Sig. .000
Anti-image Matrices
Communalities
Initial Extraction
I3 1.000 .602
I4 1.000 .621
I5 1.000 .639
I6 1.000 .562
J1 1.000 .605
J2 1.000 .709
J3 1.000 .623
J4 1.000 .571
J5 1.000 .633
J6 1.000 .633
Extraction Method: Principal Component Analysis.

318
 I3 I4 I5 I6 J1 J2 J3 J4 J5 J6
Anti- I3 .653 -.166 -.146 -.065 .001 -.037 -.044 -.033 .065 -.031
image I4 -.166 .590 -.099 -.129 -.030 -.025 -.071 -.013 -.033 -.027
Covari I5 -.146 -.099 .578 -.138 -.033 -.053 .015 .003 -.102 -.079
ance
I6 -.065 -.129 -.138 .645 -.100 -.012 -.015 -.007 -.039 -.024
J1 .001 -.030 -.033 -.100 .684 -.204 -.057 -.009 -.043 .062
J2 -.037 -.025 -.053 -.012 -.204 .567 -.210 -.039 -.011 .006
J3 -.044 -.071 .015 -.015 -.057 -.210 .611 -.129 -.019 -.044
J4 -.033 -.013 .003 -.007 -.009 -.039 -.129 .750 -.173 -.084
J5 .065 -.033 -.102 -.039 -.043 -.011 -.019 -.173 .695 -.199
J6 -.031 -.027 -.079 -.024 .062 .006 -.044 -.084 -.199 .768
Anti- I3 .868a -.267 -.237 -.101 .001 -.061 -.070 -.047 .097 -.044
image I4 -.267 .888a -.169 -.210 -.048 -.043 -.119 -.020 -.052 -.039
Correla I5 -.237 -.169 .878a -.226 -.053 -.093 .024 .005 -.161 -.119
tion
I6 -.101 -.210 -.226 .896a -.151 -.020 -.024 -.009 -.059 -.034
J1 .001 -.048 -.053 -.151 .856a -.328 -.089 -.012 -.062 .085
J2 -.061 -.043 -.093 -.020 -.328 .831a -.356 -.060 -.017 .009
J3 -.070 -.119 .024 -.024 -.089 -.356 .856a -.191 -.030 -.065
J4 -.047 -.020 .005 -.009 -.012 -.060 -.191 .871a -.239 -.111
J5 .097 -.052 -.161 -.059 -.062 -.017 -.030 -.239 .827a -.273
J6 -.044 -.039 -.119 -.034 .085 .009 -.065 -.111 -.273 .845a
Measures of Sampling Adequacy(MSA)

Total Variance Explained

Compon Extraction Sums of Squared Rotation Sums of Squared
ent Initial Eigenvalues Loadings Loadings
% of Cumulative % of Cumulative % of Cumulative
Total Variance % Total Variance % Total Variance %
1 3.981 39.810 39.810 3.981 39.810 39.810 2.394 23.937 23.937
2 1.164 11.637 51.447 1.164 11.637 51.447 2.025 20.249 44.186
3 1.055 10.552 61.999 1.055 10.552 61.999 1.781 17.813 61.999
4 .736 7.364 69.363
5 .649 6.491 75.854
6 .545 5.454 81.308
7 .530 5.298 86.606
8 .493 4.927 91.533
9 .444 4.442 95.975
10 .403 4.025 100.000
Extraction Method: Principal Component Analysis.

319
Component Matrixa
Component
1 2 3
I3 .634 -.208 -.396
I4 .711 -.143 -.309
I5 .716 -.002 -.355
I6 .669 -.142 -.307
J1 .591 -.378 .337
J2 .681 -.291 .402
J3 .667 -.116 .406
J4 .543 .395 .348
J5 .566 .551 .097
J6 .491 .616 -.114
Extraction Method: Principal Component Analysis.
a. 3 components extracted.

Rotated Component Matrixa

Component
1 2 3
I3 .754 .173 .057
I4 .730 .250 .163
I5 .731 .160 .281
I6 .700 .226 .144
J1 .256 .735 -.001
J2 .250 .794 .126
J3 .196 .714 .273
J4 .028 .384 .650
J5 .180 .154 .759
J6 .261 -.064 .749
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 6 iterations.

320
BPR FACTORS - CORRELATION MATRIX

A1 A2 A3 A4 A5 A7 A8 A9
Correlation A1 1.000 .153 .212 .953 .124 .102 .139 .182
A2 .153 1.000 .366 .159 .456 .312 .456 .381
A3 .212 .366 1.000 .197 .329 .488 .335 .527
A4 .953 .159 .197 1.000 .110 .091 .097 .170
A5 .124 .456 .329 .110 1.000 .336 .456 .313
A7 .102 .312 .488 .091 .336 1.000 .284 .328
A8 .139 .456 .335 .097 .456 .284 1.000 .268
A9 .182 .381 .527 .170 .313 .328 .268 1.000
Sig. (1- A1 .001 .000 .000 .006 .019 .002 .000
tailed) A2 .001 .000 .001 .000 .000 .000 .000
A3 .000 .000 .000 .000 .000 .000 .000
A4 .000 .001 .000 .013 .031 .024 .000
A5 .006 .000 .000 .013 .000 .000 .000
A7 .019 .000 .000 .031 .000 .000 .000
A8 .002 .000 .000 .024 .000 .000 .000
A9 .000 .000 .000 .000 .000 .000 .000

B1 B2 B3 B4 C5 C6 C7
Correlation B1 1.000 .361 .463 .430 .096 .051 -.032
B2 .361 1.000 .338 .499 .221 .222 .123
B3 .463 .338 1.000 .327 .053 .080 .046
B4 .430 .499 .327 1.000 .139 .174 .092
C5 .096 .221 .053 .139 1.000 .509 .348
C6 .051 .222 .080 .174 .509 1.000 .497
C7 -.032 .123 .046 .092 .348 .497 1.000

Sig. (1- B1 .000 .000 .000 .025 .150 .260

tailed) B2 .000 .000 .000 .000 .000 .006
B3 .000 .000 .000 .141 .052 .175
B4 .000 .000 .000 .002 .000 .031
C5 .025 .000 .141 .002 .000 .000
C6 .150 .000 .052 .000 .000 .000
C7 .260 .006 .175 .031 .000 .000

321
 D1 D2 D3 D4 E2 E3 E4
Correlation D1 1.000 .297 .547 .405 .076 -.001 .091
D2 .297 1.000 .359 .501 .054 .101 .039
D3 .547 .359 1.000 .369 .033 .083 .095
D4 .405 .501 .369 1.000 -.008 .065 .060
E2 .076 .054 .033 -.008 1.000 .441 .446
E3 -.001 .101 .083 .065 .441 1.000 .514
E4 .091 .039 .095 .060 .446 .514 1.000
Sig. (1-tailed) D1 .000 .000 .000 .061 .491 .031
D2 .000 .000 .000 .135 .019 .214
D3 .000 .000 .000 .250 .046 .026
D4 .000 .000 .000 .439 .092 .112
E2 .061 .135 .250 .439 .000 .000
E3 .491 .019 .046 .092 .000 .000
E4 .031 .214 .026 .112 .000 .000

F4 F5 G1 G2 G4 G5
Correlation F4 1.000 .467 .286 .255 .341 .280
F5 .467 1.000 .376 .199 .330 .298
G1 .286 .376 1.000 .414 .206 .197
G2 .255 .199 .414 1.000 .190 .102
G4 .341 .330 .206 .190 1.000 .405
G5 .280 .298 .197 .102 .405 1.000

Sig. (1-tailed) F4 .000 .000 .000 .000 .000

F5 .000 .000 .000 .000 .000
G1 .000 .000 .000 .000 .000
G2 .000 .000 .000 .000 .018
G4 .000 .000 .000 .000 .000
G5 .000 .000 .000 .018 .000

322
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .750
Bartlett's Test of Sphericity Approx. Chi-Square 4106.692
df 406
Sig. .000

Anti-image Matrices
A1 A2 A3 A4 A5 A7 A8 A9 B1
Anti-image A1 .084 .022 -.004 -.080 .001 .002 -.039 -.009 .019
Covariance A2 .022 .571 -.030 -.028 -.118 -.046 -.180 -.122 .013
A3 -.004 -.030 .532 -.004 -.031 -.196 -.074 -.193 .033
A4 -.080 -.028 -.004 .085 -.001 .001 .037 .006 -.017
A5 .001 -.118 -.031 -.001 .636 -.094 -.167 -.060 -.011
A7 .002 -.046 -.196 .001 -.094 .688 -.027 -.028 -.051
A8 -.039 -.180 -.074 .037 -.167 -.027 .605 .006 -.058
A9 -.009 -.122 -.193 .006 -.060 -.028 .006 .620 .018
B1 .019 .013 .033 -.017 -.011 -.051 -.058 .018 .620
Anti-image A1 .529a .103 -.017 -.951 .004 .006 -.175 -.040 .085
Correlation A2 .103 .739a -.055 -.127 -.196 -.073 -.306 -.205 .022
A3 -.017 -.055 .775a -.021 -.054 -.324 -.131 -.336 .058
A4 -.951 -.127 -.021 .524a -.003 .003 .164 .028 -.075
A5 .004 -.196 -.054 -.003 .830a -.142 -.269 -.096 -.018
A7 .006 -.073 -.324 .003 -.142 .809a -.041 -.043 -.079
A8 -.175 -.306 -.131 .164 -.269 -.041 .659a .010 -.094
A9 -.040 -.205 -.336 .028 -.096 -.043 .010 .789a .028
B1 .085 .022 .058 -.075 -.018 -.079 -.094 .028 .702a
a. Measures of Sampling Adequacy(MSA)

Anti-image Matrices
B2 B3 B4 C5 C6 C7 D1 D2
Anti-image B2 .632 -.093 -.231 -.067 -.014 -.011 .016 -.024
Covariance B3 -.093 .689 -.047 .031 .001 -.046 .018 .019
B4 -.231 -.047 .644 .017 -.048 -.017 -.026 -.011
C5 -.067 .031 .017 .648 -.193 -.058 -.023 .009
C6 -.014 .001 -.048 -.193 .538 -.204 .014 .033
C7 -.011 -.046 -.017 -.058 -.204 .677 -.018 .068
D1 .016 .018 -.026 -.023 .014 -.018 .591 -.020
D2 -.024 .019 -.011 .009 .033 .068 -.020 .605
Anti-image B2 .793a -.142 -.362 -.105 -.024 -.017 .025 -.039
Correlation B3 -.142 .692a -.070 .047 .002 -.067 .028 .030
B4 -.362 -.070 .786a .026 -.081 -.026 -.042 -.018
C5 -.105 .047 .026 .838a -.326 -.087 -.037 .014
C6 -.024 .002 -.081 -.326 .810a -.338 .024 .058
C7 -.017 -.067 -.026 -.087 -.338 .792a -.028 .106
D1 .025 .028 -.042 -.037 .024 -.028 .688a -.033
D2 -.039 .030 -.018 .014 .058 .106 -.033 .628a
a. Measures of Sampling Adequacy(MSA)

323
Anti-image Matrices
D3 D4 E2 E3 E4 F2 F4 F5 G1
Anti-image D3 .592 -.035 .029 -.031 -.008 -.031 .010 .013 -.002
Covariance D4 -.035 .571 .048 -.014 -.034 -.021 .026 -.035 .049
E2 .029 .048 .596 -.127 -.120 -.056 -.040 -.074 -.036
E3 -.031 -.014 -.127 .578 -.171 -.110 -.004 -.028 .020
E4 -.008 -.034 -.120 -.171 .594 -.130 -.020 .022 -.005
F2 -.031 -.021 -.056 -.110 -.130 .687 -.054 .009 -.034
F4 .010 .026 -.040 -.004 -.020 -.054 .638 -.204 .005
F5 .013 -.035 -.074 -.028 .022 .009 -.204 .657 -.155
G1 -.002 .049 -.036 .020 -.005 -.034 .005 -.155 .620
Anti-image D3 .736a -.060 .049 -.053 -.014 -.049 .016 .021 -.003
Correlation D4 -.060 .660a .083 -.024 -.058 -.033 .042 -.057 .083
E2 .049 .083 .851a -.216 -.203 -.087 -.065 -.118 -.060
E3 -.053 -.024 -.216 .808a -.291 -.174 -.006 -.045 .033
E4 -.014 -.058 -.203 -.291 .842a -.204 -.033 .035 -.009
F2 -.049 -.033 -.087 -.174 -.204 .851a -.082 .013 -.051
F4 .016 .042 -.065 -.006 -.033 -.082 .871a -.315 .007
F5 .021 -.057 -.118 -.045 .035 .013 -.315 .803a -.244
G1 -.003 .083 -.060 .033 -.009 -.051 .007 -.244 .780a

Measures of Sampling Adequacy(MSA)

Anti-image Matrices
G2 G4 G5
G2 .808a -.063 .033
G4 -.063 .815a -.300
G5 .033 -.300 .795a
a. Measures of Sampling Adequacy(MSA)

324
Communalities

Initial Extraction
A1 1.000 .969

A2 1.000 .628

A3 1.000 .697

A4 1.000 .968

A5 1.000 .605

A7 1.000 .527

A8 1.000 .599

A9 1.000 .602

B1 1.000 .630

B2 1.000 .590

B3 1.000 .532

B4 1.000 .585

C5 1.000 .581

C6 1.000 .686

C7 1.000 .650

D1 1.000 .683

D2 1.000 .730

D3 1.000 .678

D4 1.000 .656

E2 1.000 .574

E3 1.000 .730

E4 1.000 .691

F4 1.000 .501

F5 1.000 .541

G1 1.000 .692

G2 1.000 .681

G4 1.000 .581

G5 1.000 .644

Extraction Method: Principal Component Analysis.

325
Total Variance Explained
Component Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues Loadings Loadings
% of Cumulative % of Cumulative % of Cumulative
Total Variance % Total Variance % Total Variance %
1 4.481 16.002 16.002 4.481 16.002 16.002 2.263 8.082 8.082
2 3.273 11.690 27.693 3.273 11.690 27.693 2.253 8.046 16.128
3 2.394 8.550 36.243 2.394 8.550 36.243 2.083 7.438 23.566
4 1.785 6.375 42.618 1.785 6.375 42.618 2.081 7.434 31.000
5 1.702 6.078 48.696 1.702 6.078 48.696 2.045 7.302 38.302
6 1.312 4.687 53.383 1.312 4.687 53.383 2.018 7.207 45.509
7 1.122 4.007 57.390 1.122 4.007 57.390 1.992 7.113 52.622
8 1.102 3.937 61.326 1.102 3.937 61.326 1.929 6.890 59.512
9 1.056 3.770 65.096 1.056 3.770 65.096 1.564 5.584 65.096
10 .828 2.957 68.054
11 .767 2.739 70.792
12 .741 2.646 73.438
13 .697 2.491 75.929
14 .671 2.396 78.325
15 .620 2.215 80.540
16 .596 2.130 82.669
17 .560 1.998 84.668
18 .543 1.941 86.608
19 .493 1.762 88.371
20 .483 1.724 90.094
21 .470 1.677 91.771
22 .455 1.624 93.395
23 .427 1.524 94.919
24 .386 1.380 96.299
25 .366 1.307 97.606
26 .343 1.225 98.831
27 .284 1.015 99.846
28 .043 .154 100.000
Extraction Method: Principal Component Analysis.

326
Component Matrixa
Component
1 2 3 4 5 6 7 8 9
A1 .212 .293 -.522 .707 .140 .024 .164 -.057 .124
A2 .363 .487 -.259 -.310 .027 -.005 .286 -.059 -.096
A3 .285 .617 -.245 -.161 .095 -.156 -.333 .066 .027
A4 .211 .282 -.504 .725 .142 .014 .160 -.068 .119
A5 .351 .428 -.303 -.351 -.121 .160 .182 -.102 -.032
A7 .173 .538 -.224 -.255 .000 -.018 -.238 .159 -.100
A8 .257 .475 -.256 -.333 -.020 .110 .327 -.066 -.084
A9 .279 .561 -.214 -.112 .017 -.137 -.348 .103 .008
B1 .243 .340 .397 .148 -.492 .173 .009 .032 .048
B2 .450 .163 .353 .181 -.398 -.023 -.112 -.157 -.081
B3 .244 .298 .318 .175 -.469 .004 -.116 -.124 .056
B4 .377 .277 .308 .255 -.444 .017 .012 -.081 .035
C5 .545 -.208 .079 -.070 -.102 -.346 .232 .203 -.061
C6 .603 -.283 .017 .004 -.122 -.384 .194 .129 -.162
C7 .451 -.274 -.070 .079 -.080 -.426 .189 .290 -.229
D1 .288 .277 .414 .183 .486 -.126 -.153 .205 .012
D2 .247 .154 .528 -.076 .359 .267 .337 -.082 .203
D3 .305 .310 .437 .128 .452 -.171 -.153 .140 .067
D4 .243 .316 .538 -.062 .366 .070 .230 -.104 -.043
E2 .554 -.357 -.112 -.048 .099 -.175 .022 -.238 .164
E3 .530 -.267 -.055 -.109 .124 -.089 -.107 -.572 -.032
E4 .533 -.283 -.049 -.081 .165 -.113 -.258 -.460 -.008
F4 .552 -.340 -.051 .037 .041 .173 -.136 .151 -.059
F5 .491 -.297 -.107 -.018 .022 .361 -.123 .230 -.026
G1 .547 -.194 -.052 -.183 -.087 .159 .131 .259 .450
G2 .369 -.263 -.158 -.159 -.089 .102 -.135 .118 .612
G4 .488 -.222 -.047 .132 .076 .361 -.212 .119 -.280
G5 .409 -.187 -.064 .087 .092 .502 .019 .035 -.409
Extraction Method: Principal Component Analysis.
a. 9 components extracted.

327
Rotated Component Matrixa
Component
1 2 3 4 5 6 7 8 9
A1 .023 -.020 .006 .092 .058 .099 .973 .004 .000
A2 .027 .093 .125 .722 -.012 .267 .088 .052 -.002
A3 .067 .108 -.032 .268 -.057 .766 .117 .062 .027
A4 .032 -.011 .010 .070 .056 .088 .975 .015 -.012
A5 .107 -.063 -.017 .710 .073 .252 .031 .072 .104
A7 .040 .010 -.045 .328 .041 .635 -.026 -.100 -.025
A8 .024 .039 .017 .749 -.005 .179 .055 -.023 .003
A9 .125 .061 -.008 .204 -.017 .727 .104 .024 .030
B1 .754 .106 -.026 .096 .047 .017 -.040 -.179 .062
B2 .711 .095 .153 -.002 .115 .065 -.019 .182 -.037
B3 .719 .031 -.009 .004 -.052 .100 .003 .023 .008
B4 .739 .093 .110 .063 .026 .030 .106 .016 .033
C5 .114 .093 .702 .091 .083 -.030 -.057 .129 .174
C6 .124 .017 .761 .051 .150 -.036 -.001 .237 .092
C7 -.002 -.037 .788 -.028 .139 .008 .062 .057 .012
D1 .051 .733 .110 -.184 .078 .287 .084 -.015 -.039
D2 .111 .729 -.117 .232 .046 -.286 -.076 .036 .166
D3 .094 .736 .102 -.147 -.003 .301 .049 .043 -.009
D4 .152 .741 -.021 .226 -.001 -.077 -.094 .058 -.117
E2 -.038 .029 .330 .028 .116 -.070 .081 .587 .304
E3 .041 .032 .117 .101 .160 -.041 -.007 .821 .043
E4 .012 .050 .122 -.034 .203 .080 -.019 .785 .086
F4 .028 .026 .264 -.072 .553 .022 .011 .216 .267
F5 -.002 -.014 .133 .005 .633 .018 -.006 .084 .339
G1 .075 .070 .243 .172 .216 -.038 -.017 .053 .736
G2 .003 -.091 .041 -.043 .080 .060 -.002 .191 .789
G4 .068 .040 .100 -.053 .729 .062 .055 .147 .042
G5 .024 .041 .033 .157 .762 -.124 .057 .090 -.090
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 8 iterations.

328
Component Transformation Matrix
Component 1 2 3 4 5 6 7 8 9
1 .320 .251 .466 .265 .449 .202 .137 .428 .322
2 .310 .288 -.268 .460 -.274 .542 .220 -.277 -.208
3 .453 .623 -.008 -.293 -.083 -.270 -.475 -.073 -.100
4 .277 .064 .020 -.475 .103 -.172 .778 -.104 -.192
5 -.690 .652 -.117 -.060 .095 .080 .165 .175 -.089
6 .082 .010 -.631 .218 .641 -.257 -.006 -.197 .177
7 -.084 .139 .311 .558 -.204 -.655 .199 -.235 -.012
8 -.164 .078 .378 -.173 .235 .246 -.075 -.773 .275
9 .034 .109 -.243 -.120 -.435 -.043 .171 .045 .831
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.

329
APPENDIX 4 RELIABILITY TEST

330
Reliability Scale: Org. Performance
Case Processing Summary
N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's Alpha N of Items
.865 10

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
K3 44.23 42.215 .304 .872
K4 44.27 42.357 .298 .872
K5 44.26 42.156 .288 .873
K7 44.22 34.164 .854 .826
K8 44.53 42.052 .288 .874
K9 44.40 42.352 .285 .873
L3 44.20 34.435 .855 .827
L5 44.25 34.384 .841 .828
L8 44.21 34.143 .859 .826
L10 44.21 34.407 .841 .828

Reliability Scale: Operations Cost Reduction.

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.993 5

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
K7 19.93 19.002 .982 .991
L3 19.90 19.284 .976 .992
L5 19.95 19.130 .974 .992
L8 19.91 19.021 .983 .991
L10 19.91 19.084 .982 .991

331
Reliability Scale: Customer Service Management

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.705 3

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
K3 9.86 2.383 .522 .614
K4 9.91 2.436 .513 .625
K5 9.90 2.249 .531 .603

Reliability Scale: Biz. Ops Efficiency

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.593 2

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
K8 4.80 .826 .422 .a
K9 4.67 .915 .422 .a
a. The value is negative due to a negative average covariance among items. This violates reliability
model assumptions. You may want to check item coding.

Reliability Scale: I.T Capability

Case Processing Summary
N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

332
 Reliability Statistics
N of Items
Cronbach's Alpha
.830 10

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
I3 44.36 31.947 .517 .815
I4 44.48 30.745 .600 .806
I5 44.48 30.630 .606 .806
I6 44.55 30.570 .554 .811
J1 44.50 31.337 .478 .820
J2 44.53 30.817 .577 .809
J3 44.48 30.822 .559 .810
J4 44.35 33.223 .436 .822
J5 44.16 33.219 .461 .820
J6 44.34 33.711 .384 .827

Reliability Scale: BPR Factors

Item-Total Statistics
Scale Scale Cronbach's
Case Processing Summary
Mean if Variance Corrected Alpha if
N % Item if Item Item-Total Item
Cases Valid 417 100.0 Deleted Deleted Correlation Deleted
a
Excluded 0 .0 A1 135.36 128.367 .236 .798
Total 417 100.0 A2 135.48 125.928 .370 .792
A3 135.57 126.487 .336 .794
a. Listwise deletion based on all A4 135.37 128.516 .234 .798
variables in the procedure. A5 135.61 125.417 .348 .793
A7 135.53 128.764 .208 .800
Reliability Statistics A8 135.52 127.962 .267 .797
Cronbach's A9 135.53 126.831 .308 .795
Alpha N of Items B1 135.45 129.618 .229 .798
.801 29 B2 135.53 125.764 .376 .792
B3 135.42 129.884 .229 .798
B4 135.52 126.361 .340 .794
C5 135.52 125.798 .380 .792
C6 135.49 124.876 .413 .790
C7 135.41 128.565 .279 .796
D1 135.52 127.722 .281 .796
D2 135.47 129.288 .215 .799
D3 135.55 127.253 .305 .795
D4 135.48 128.779 .243 .798
E2 135.41 126.944 .381 .792
E3 135.53 125.125 .381 .792
E4 135.59 125.195 .383 .792
F4 135.46 127.028 .336 .794
F5 135.46 126.422 .378 .792
G1 135.55 128.118 .329 .794
G2 135.46 125.701 .399 .791
G4 135.38 129.405 .227 .798
G5 135.47 126.269 .360 .793
135.57 127.534 .287 .796

333
Reliability Scale: I.T Investment

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.751 4

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item- Cronbach's Alpha if
Deleted Item Deleted Total Correlation Item Deleted
E2 14.41 6.286 .516 .711
E3 14.53 5.326 .588 .670
E4 14.59 5.328 .599 .663
F2 14.47 6.062 .490 .723

Reliability Scale: BPR Project Management

Case Processing Summary

N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.730 4

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
B1 14.51 5.366 .540 .658
B2 14.59 5.180 .519 .670
B3 14.49 5.751 .474 .695
B4 14.59 4.988 .549 .652

334
Reliability Scale: Customer Focus

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.738 4

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
D1 14.48 5.919 .534 .675
D2 14.44 6.137 .486 .703
D3 14.51 5.895 .549 .667
D4 14.45 5.945 .549 .667

Reliability Scale: Mgt. Commitment

Case Processing Summary
N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.712 3

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item- Cronbach's Alpha if
Deleted Item Deleted Total Correlation Item Deleted
C5 9.76 2.969 .499 .662
C6 9.73 2.625 .612 .515
C7 9.65 3.185 .487 .674

Reliability Scale: Change Management

Case Processing Summary

N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

335
Reliability Statistics
Cronbach's Alpha N of Items
.771 8

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
A1 33.69 23.451 .418 .755
A2 33.81 22.955 .523 .738
A3 33.89 22.406 .568 .729
A4 33.69 23.719 .399 .758
A5 33.93 22.707 .479 .745
A7 33.86 23.037 .434 .753
A8 33.84 23.319 .459 .748
A9 33.86 22.896 .491 .742

Reliability Scale: Communication

Case Processing Summary
N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.715 3

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
A2 9.53 3.514 .534 .625
A8 9.57 3.405 .534 .624
A5 9.65 3.188 .534 .626

Reliability Scale: Training & Education

Case Processing Summary
N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.706 3

336
Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
A3 9.59 3.319 .622 .494
A7 9.56 3.478 .466 .690
A9 9.56 3.613 .490 .654
Reliability Scale: Rewards System
Case Processing Summary
N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.976 2

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
A1 4.96 1.196 .953 .a
A4 4.96 1.227 .953 .a
a. The value is negative due to a negative average covariance among items. This violates reliability
model assumptions. You may want to check item coding

Reliability Scale: Adequate Financial Resources

Case Processing Summary

N %
Cases Valid 417 100.0
a
Excluded 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.706 6

337
Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
F4 24.21 10.185 .499 .648
F5 24.31 10.415 .517 .645
G4 24.22 10.206 .451 .662
G5 24.32 10.425 .384 .685
G1 24.22 10.352 .447 .664
G2 24.13 10.934 .342 .696

Reliability Scale: Vol. Fin Activity

Case Processing Summary
N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.683 4

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
F4 14.40 4.970 .475 .612
F5 14.49 5.183 .483 .609
G4 14.41 4.761 .481 .607
G5 14.51 4.808 .431 .643

Reliability Scale: Strong Capital base

Case Processing Summary
N %
Cases Valid 417 100.0
Excludeda 0 .0
Total 417 100.0
a. Listwise deletion based on all variables in the procedure.

Reliability Statistics
Cronbach's Alpha N of Items
.585 2

Item-Total Statistics
Scale Mean if Item Scale Variance if Corrected Item-Total Cronbach's Alpha if
Deleted Item Deleted Correlation Item Deleted
G1 4.95 .988 .414 .a
G2 4.87 .977 .414 .a
a. The value is negative due to a negative average covariance among items. This violates reliability
model assumptions. You may want to check item coding.

338
APPENDIX 5 ASSUMPTION OF NORMALITY

339
340
341
342
343
APPENDIX 6 BIVARIATE CORRELATION

344
 1 2 3 4 5 6 7 8 9 10 11
1 Change Pearson 1 .086 .182** .072 .049 .123* .119* .017 .112* -.025 .017
Management Correlation
Sig. (2- .078 .000 .142 .314 .012 .015 .735 .022 .613 .735
tailed)
2 Adequate Pearson .086 1 .125* .494** .429** .074 .535** .210** .405** .299** .210**
Financial Correlation
resources Sig. (2- .078 .011 .000 .000 .134 .000 .000 .000 .000 .000
tailed)
3 Strategy Pearson .182** .125* 1 .067 .184** .254** .158** .032 .126* .084 .032
Alignment Correlation
Sig. (2- .000 .011 .170 .000 .000 .001 .520 .010 .085 .520
tailed)
4 IT Investment Pearson .072 .494** .067 1 .403** .108* .556** .131** .319** .255** .131**
Correlation
Sig. (2- .142 .000 .170 .000 .027 .000 .007 .000 .000 .007
tailed)
5 Personnel Pearson .049 .429** .184** .403** 1 .084 .490** .122* .337** .284** .122*
Commitment Correlation
Sig. (2- .314 .000 .000 .000 .085 .000 .013 .000 .000 .013
tailed)
6 Customer Pearson .123* .074 .254** .108* .084 1 .042 .050 .076 .004 .050
Focus Correlation
Sig. (2- .012 .134 .000 .027 .085 .395 .308 .123 .928 .308
tailed)
7 I.T Capability Pearson .119* .535** .158** .556** .490** .042 1 .233** .436** .346** .233**
Correlation
Sig. (2- .015 .000 .001 .000 .000 .395 .000 .000 .000 .000
tailed)
N 417 417 417 417 417 417 417 417 417 417 417
8 Cost Pearson .017 .210** .032 .131** .122* .050 .233** 1 .178** .206** 1.000**
Reduction Correlation
Sig. (2- .735 .000 .520 .007 .013 .308 .000 .000 .000 .000
tailed)
9 Customer Pearson .112* .405** .126* .319** .337** .076 .436** .178** 1 .287** .178**
Service Correlation
Management Sig. (2- .022 .000 .010 .000 .000 .123 .000 .000 .000 .000
tailed)
10 Biz Ops Pearson -.025 .299** .084 .255** .284** .004 .346** .206** .287** 1 .206**
Effiecy Correlation
Sig. (2- .613 .000 .085 .000 .000 .928 .000 .000 .000 .000
tailed)
11 Organizational Pearson .017 .210** .032 .131** .122* .050 .233** .904** .178** .206** 1
Performance Correlation
Sig. (2- .735 .000 .520 .007 .013 .308 .000 .000 .000 .000
tailed)
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

345
APPENDIX 7 MULTIPLE REGRESSION ANALYSIS

346
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
dimension0 1 ITCAP2a . Enter
a. All requested variables entered.
b. Dependent Variable: OrgPerfm

Model Summaryb
Model Adjusted R Std. Error of the
R R Square Square Estimate Durbin-Watson
dimension0 1 .404a .163 .161 6.24956 1.880
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: OrgPerfm

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 3153.799 1 3153.799 80.748 .000a
Residual 16208.681 415 39.057
Total 19362.480 416
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: OrgPerfm

Coefficients
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 49.199 .306 160.759 .000
ITCAP2 .444 .049 .404 8.986 .000 1.000 1.000
a. Dependent Variable: OrgPerfm

Collinearity Diagnosticsa
Model Dimension Variance Proportions
Eigenvalue Condition Index (Constant) ITCAP2
1 1 1.000 1.000 .50 .50
2 1.000 1.000 .50 .50
a. Dependent Variable: OrgPerfm

347
 Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 35.2675 53.9260 49.1990 2.75341 417
Residual -17.03924 20.73253 .00000 6.24205 417
Std. Predicted Value -5.060 1.717 .000 1.000 417
Std. Residual -2.726 3.317 .000 .999 417
a. Dependent Variable: OrgPerfm
Regression

Variables Entered/Removedb
Model Variables Entered Variables Removed Method
a
dimension0 1 ITCAP2 . Enter
a. All requested variables entered.
b. Dependent Variable: Cost Reduction

Model Summaryb
Model Adjusted R Std. Error of Durbin-
R R Square Square the Estimate Watson
a
dimension0 1 .233 .054 .052 5.315 1.895
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Cost Reduction

ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 672.316 1 672.316 23.797 .000a
Residual 11724.653 415 28.252
Total 12396.969 416
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Cost Reduction

Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 24.902 .260 95.669 .000
ITCAP2 .205 .042 .233 4.878 .000 1.000 1.000
a. Dependent Variable: Cost Reduction

348
 Collinearity Diagnosticsa
Model Dimension Variance
Condition Proportions
Eigenvalue Index (Constant) ITCAP2
1 1 1.000 1.000 .50 .50
dimension0 dimension1
2 1.000 1.000 .50 .50
a. Dependent Variable: Cost Reduction

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 18.47 27.08 24.90 1.271 417
Residual -11.674 11.531 .000 5.309 417
Std. Predicted Value -5.060 1.717 .000 1.000 417
Std. Residual -2.196 2.169 .000 .999 417
a. Dependent Variable: Cost Reduction

Regression

Variables Entered/Removedb
Model Variables Entered Variables Removed Method
a
dimension0 1 ITCAP2 . Enter
a. All requested variables entered.
b. Dependent Variable: Customer Service Management

Model Summaryb
Model Adjusted R Std. Error of Durbin-
R R Square Square the Estimate Watson
dimension0 1 .436a .190 .188 1.936 1.801
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Customer Service Management

ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 365.822 1 365.822 97.583 .000a
Residual 1555.761 415 3.749
Total 1921.583 416
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Customer Service Management

349
 Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 14.835 .095 156.457 .000
ITCAP2 .151 .015 .436 9.878 .000 1.000 1.000
a. Dependent Variable: Customer Service Management

Collinearity Diagnosticsa
Model Dimension Variance
Condition Proportions
Eigenvalue Index (Constant) ITCAP2
1 1 1.000 1.000 .50 .50
dimension0 dimension1
2 1.000 1.000 .50 .50
a. Dependent Variable: Customer Service Management

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 10.09 16.44 14.83 .938 417
Residual -10.629 4.910 .000 1.934 417
Std. Predicted Value -5.060 1.717 .000 1.000 417
Std. Residual -5.490 2.536 .000 .999 417
a. Dependent Variable: Customer Service Management

Regression

Variables Entered/Removedb
Model Variables Entered Variables Removed Method
dimension0 1 ITCAP2a . Enter
a. All requested variables entered.
b. Dependent Variable: Biz Ops Effiecy

Model Summaryb
Model Adjusted R Std. Error of Durbin-
R R Square Square the Estimate Watson
dimension0 1 .346a .120 .118 1.478 2.009
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Biz Ops Effiecy

350
 ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 123.280 1 123.280 56.445 .000a
Residual 906.394 415 2.184
Total 1029.674 416
a. Predictors: (Constant), ITCAP2
b. Dependent Variable: Biz Ops Effiecy

Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) 9.463 .072 130.754 .000
ITCAP2 .088 .012 .346 7.513 .000 1.000 1.000
a. Dependent Variable: Biz Ops Effiecy

Collinearity Diagnosticsa
Model Dimension Variance Proportions
Eigenvalue Condition Index (Constant) ITCAP2
1 1.000 1.000 .50 .50
2 1.000 1.000 .50 .50
a. Dependent Variable: Biz Ops Effiecy

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 6.71 10.40 9.46 .544 417
Residual -5.343 4.292 .000 1.476 417
Std. Predicted Value -5.060 1.717 .000 1.000 417
Std. Residual -3.616 2.904 .000 .999 417
a. Dependent Variable: Biz Ops Effiecy

Regression
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, . Enter
Cmgt, CUSF,
MgtComit, AdqFina
a. All requested variables entered.
b. Dependent Variable: OrgPerfm
Model Summaryb
Model R Adjusted R Std. Error of Durbin-
R Square Square the Estimate Watson
a
dimension0 1 .393 .154 .142 6.31992 1.910
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
b. Dependent Variable: OrgPerfm

351
 ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 2986.533 6 497.756 12.462 .000a
Residual 16375.946 410 39.941
Total 19362.480 416
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
b. Dependent Variable: OrgPerfm

Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 49.200 .309 158.970 .000
Cmgt .003 .059 .002 .046 .964 .956 1.046
AdqFin .493 .099 .272 4.968 .000 .689 1.451
IT invest .177 .120 .080 1.474 .141 .705 1.418
MgtComit .328 .149 .115 2.198 .028 .750 1.333
CUSF .047 .103 .022 .460 .646 .922 1.085
STRAT .041 .112 .018 .370 .712 .884 1.131
a. Dependent Variable: OrgPerfm

Collinearity Diagnosticsa
Mod Dimensi Variance Proportions
el on Conditi IT
Eigenval on (Consta Cm AdqF inve MgtCo CUS STR
ue Index nt) gt in st mit F AT
1 1 2.016 1.000 .00 .02 .10 .10 .10 .02 .04
2 1.250 1.270 .00 .17 .03 .04 .02 .22 .22
3 1.000 1.420 1.00 .00 .00 .00 .00 .00 .00
4 .890 1.505 .00 .75 .00 .00 .01 .26 .04
5 .769 1.620 .00 .03 .00 .07 .08 .44 .51
6 .577 1.869 .00 .03 .15 .14 .79 .04 .17
7 .497 2.014 .00 .00 .71 .65 .00 .02 .03
a. Dependent Variable: OrgPerfm

Residuals Statisticsa
Std.
Minimum Maximum Mean Deviation N
Predicted Value 38.2607 54.4729 49.1990 2.67940 417
Residual -19.84323 13.36349 .00000 6.27417 417
Std. Predicted Value -4.082 1.968 .000 1.000 417
Std. Residual -3.140 2.115 .000 .993 417

352
 Collinearity Diagnosticsa
Mod Dimensi Variance Proportions
el on Conditi IT
Eigenval on (Consta Cm AdqF inve MgtCo CUS STR
ue Index nt) gt in st mit F AT
1 1 2.016 1.000 .00 .02 .10 .10 .10 .02 .04
2 1.250 1.270 .00 .17 .03 .04 .02 .22 .22
3 1.000 1.420 1.00 .00 .00 .00 .00 .00 .00
4 .890 1.505 .00 .75 .00 .00 .01 .26 .04
5 .769 1.620 .00 .03 .00 .07 .08 .44 .51
6 .577 1.869 .00 .03 .15 .14 .79 .04 .17
7 .497 2.014 .00 .00 .71 .65 .00 .02 .03
a. Dependent Variable: OrgPerfm

Regression
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, Cmgt, . Enter
CUSF, MgtComit,
AdqFina
a. All requested variables entered.
b. Dependent Variable: Cost Reduction

Model Summaryb
Model Adjusted R Std. Error of the
R R Square Square Estimate Durbin-Watson
a
1 .217 .047 .033 5.368 1.894
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
a. Dependent Variable: Cost Reduction

ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 581.971 6 96.995 3.366 .003a
Residual 11814.998 410 28.817
Total 12396.969 416
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
b. Dependent Variable: Cost Reduction

353
 Coefficientsa
Model Standardize
d
Unstandardized Coefficient Collinearity
Coefficients s Statistics
Toleranc
B Std. Error Beta t Sig. e VIF
1 (Constant 24.901 .263 94.724 .000
)
Cmgt -.006 .050 -.005 -.111 .911 .956 1.046
AdqFin .265 .084 .183 3.144 .002 .689 1.451
IT invest .045 .102 .025 .440 .660 .705 1.418
MgtComi .073 .127 .032 .574 .566 .750 1.333
t
CUSF .058 .088 .033 .666 .506 .922 1.085
STRAT -.012 .095 -.006 -.124 .902 .884 1.131
a. Dependent Variable: Cost Reduction

Collinearity Diagnosticsa
Mod Dimensi Variance Proportions
el on IT
Eigenval Conditio (Constan Cm AdqFi inve MgtCom CUS STRA
ue n Index t) gt n st it F T
1 1 2.016 1.000 .00 .02 .10 .10 .10 .02 .04
2 1.250 1.270 .00 .17 .03 .04 .02 .22 .22
3 1.000 1.420 1.00 .00 .00 .00 .00 .00 .00
4 .890 1.505 .00 .75 .00 .00 .01 .26 .04
5 .769 1.620 .00 .03 .00 .07 .08 .44 .51
6 .577 1.869 .00 .03 .15 .14 .79 .04 .17
7 .497 2.014 .00 .00 .71 .65 .00 .02 .03
a. Dependent Variable: Cost Reduction

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 19.95 27.16 24.90 1.183 417
Residual -11.435 7.975 .000 5.329 417
Std. Predicted Value -4.184 1.905 .000 1.000 417
Std. Residual -2.130 1.486 .000 .993 417
a. Dependent Variable: Cost Reduction
Regression
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, . Enter
dimension0 Cmgt, CUSF,
MgtCompt, AdqFina
a. All requested variables entered.
b. Dependent Variable: Customer Service Management

354
 Model Summaryb
Model R Adjusted R Std. Error of Durbin-
R Square Square the Estimate Watson
a
dimension0 1 .461 .213 .201 1.921 1.891
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
b. Dependent Variable: Customer Service Management

ANOVAb
Model Sum of
Squares df Mean Square F Sig.
1 Regression 409.246 6 68.208 18.491 .000a
Residual 1512.337 410 3.689
Total 1921.583 416
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
b. Dependent Variable: Customer Service Management

Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 14.835 .094 157.731 .000
Cmgt .026 .018 .064 1.435 .152 .956 1.046
AdqFin .153 .030 .268 5.070 .000 .689 1.451
IT invest .078 .036 .111 2.135 .033 .705 1.418
MgtComit .149 .045 .166 3.280 .001 .750 1.333
CUSF .008 .031 .012 .263 .793 .922 1.085
STRAT .029 .034 .040 .850 .396 .884 1.131
a. Dependent Variable: Customer Service Management

Collinearity Diagnosticsa
Mod Dimensi Variance Proportions
el on IT
Eigenval Conditio (Constan Cm AdqFi inve MgtCom CUS STRA
ue n Index t) gt n st it F T
1 1 2.016 1.000 .00 .02 .10 .10 .10 .02 .04
2 1.250 1.270 .00 .17 .03 .04 .02 .22 .22
3 1.000 1.420 1.00 .00 .00 .00 .00 .00 .00
4 .890 1.505 .00 .75 .00 .00 .01 .26 .04
5 .769 1.620 .00 .03 .00 .07 .08 .44 .51
6 .577 1.869 .00 .03 .15 .14 .79 .04 .17
7 .497 2.014 .00 .00 .71 .65 .00 .02 .03
a. Dependent Variable: Customer Service Management

355
 Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted 10.86 16.67 14.83 .992 417
Value
Residual -11.400 4.091 .000 1.907 417
Std. -4.009 1.855 .000 1.000 417
Predicted
Value
Std. Residual -5.936 2.130 .000 .993 417
a. Dependent Variable: Customer Service Management

Regression
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, . Enter
Cmgt, CUSF,
MgtCompt, AdqFina
a. All requested variables entered.
c. Dependent Variable: Biz Ops Effiecy

Model Summaryb
Model Adjusted R Std. Error of Durbin-
R R Square Square the Estimate Watson
a
1 .363 .132 .119 1.476 2.067
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtComit, AdqFin
Dependent Variable: Biz Ops Effiecy

ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regressio 135.902 6 22.650 10.390 .000a
n
Residual 893.772 410 2.180
Total 1029.674 416
a. Predictors: (Constant), STRAT, IT invest, Cmgt, CUSF, MgtCompt, AdqFin
b. Dependent Variable: Biz Ops Effiecy

Coefficientsa
Model Standardize
d
Unstandardized Coefficient Collinearity
Coefficients s Statistics
Toleranc
B Std. Error Beta t Sig. e VIF
1 (Constant 9.463 .072 130.88 .000
) 5
Cmgt -.017 .014 -.060 -1.266 .206 .956 1.046
AdqFin .075 .023 .180 3.239 .001 .689 1.451
IT invest .054 .028 .106 1.935 .054 .705 1.418
MgtComit .106 .035 .162 3.054 .002 .750 1.333
CUSF -.019 .024 -.038 -.796 .427 .922 1.085
STRAT .024 .026 .045 .928 .354 .884 1.131

356
 Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, . Enter
Cmgt, CUSF,
MgtCompt, AdqFina
a. All requested variables entered.
a. Dependent Variable: Biz Ops Effiecy

Collinearity Diagnosticsa
Mode Dimension Conditi Variance Proportions
l Eigenval on (Consta Cm AdqF IT MgtCo CUS STR
ue Index nt) gt in invest mit F AT
1 1 2.016 1.000 .00 .02 .10 .10 .10 .02 .04
2 1.250 1.270 .00 .17 .03 .04 .02 .22 .22
3 1.000 1.420 1.00 .00 .00 .00 .00 .00 .00
4 .890 1.505 .00 .75 .00 .00 .01 .26 .04
5 .769 1.620 .00 .03 .00 .07 .08 .44 .51
6 .577 1.869 .00 .03 .15 .14 .79 .04 .17
7 .497 2.014 .00 .00 .71 .65 .00 .02 .03
a. Dependent Variable: Biz Ops Effiecy

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 7.20 10.66 9.46 .572 417
Residual -5.654 3.799 .000 1.466 417
Std. Predicted -3.962 2.097 .000 1.000 417
Value
Std. Residual -3.830 2.573 .000 .993 417
a. Dependent Variable: Biz Ops Effiecy

357
APPENDIX 8 HIERARCHICAL REGRESSION IT CAPABILITY – BPR
FACTORS & OVERALL PERFORMANCE

358
 Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, IT invest, Cmgt, . Enter
CUSF, MgtCompt,
AdqFina
2 ITCAP2a . Enter
3 ITCapCF, ITCapChgMgt, . Enter
ITCapStrat, ITCapITinvst,
ITCapFin,
ITCapMgtCopta
a. All requested variables entered.
b. Dependent Variable: OrgPerfm

Model Summary
Model Std. Change Statistics
Error of
R Adjusted the R Square F Sig. F
R Square R Square Estimate Change Change df1 df2 Change
1 .393a .154 .142 6.31992 .154 12.462 6 410 .000
b
2 .444 .197 .184 6.16458 .043 21.923 1 409 .000
3 .477c .228 .203 6.09167 .030 2.642 6 403 .016
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt

ANOVAd
Model Sum of
Squares df Mean Square F Sig.
1 Regression 2986.533 6 497.756 12.462 .000a
Residual 16375.946 410 39.941
Total 19362.480 416
2 Regression 3819.655 7 545.665 14.359 .000b
Residual 15542.824 409 38.002
Total 19362.480 416
3 Regression 4407.794 13 339.061 9.137 .000c
Residual 14954.686 403 37.108
Total 19362.480 416
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt
d. Dependent Variable: OrgPerfm

359
 Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 49.200 .309 158.970 .000
Cmgt .003 .059 .002 .046 .964 .956 1.046
AdqFin .493 .099 .272 4.968 .000 .689 1.451
ITinvest .177 .120 .080 1.474 .141 .705 1.418
Mgt. .328 .149 .115 2.198 .028 .750 1.333
Commitment
CUSF .047 .103 .022 .460 .646 .922 1.085
STRAT .041 .112 .018 .370 .712 .884 1.131
2 (Constant) 49.198 .302 162.972 .000
Cmgt -.017 .057 -.014 -.302 .763 .951 1.052
AdqFin .359 .101 .198 3.562 .000 .634 1.577
ITinvest -.028 .125 -.013 -.226 .821 .619 1.616
MgtComit .140 .151 .049 .930 .353 .697 1.434
CUSF .082 .101 .037 .810 .419 .917 1.090
STRAT .000 .109 .000 .003 .998 .879 1.138
ITCAP2 .309 .066 .281 4.682 .000 .547 1.829
3 (Constant) 49.218 .337 145.972 .000
Cmgt -.024 .059 -.019 -.404 .686 .885 1.130
AdqFin .323 .103 .178 3.120 .002 .588 1.701
ITinvest -.020 .128 -.009 -.158 .874 .578 1.730
Mgt. .187 .154 .066 1.212 .226 .653 1.532
Commitment
CUSF .097 .101 .045 .959 .338 .887 1.127
STRAT -.006 .109 -.003 -.058 .953 .860 1.163
ITCAP2 .350 .070 .318 4.971 .000 .468 2.139
ITCapChgMgt -.016 .009 -.090 -1.735 .084* .711 1.407
ITCapFin -.014 .014 -.060 -.953 .341 .489 2.047
ITCapITinvst -.024 .019 -.108 -1.249 .212 .257 3.898
ITCapMgtCopt .063 .024 .225 2.646 .008** .265 3.770
ITCapCF -.033 .017 -.094 -1.886 .060* .772 1.296
ITCapStrat .011 .019 .032 .590 .555 .638 1.567
a. Dependent Variable: OrgPerfm

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 33.7732 56.2274 49.1990 3.25510 417
Residual -18.23115 14.86163 .00000 5.99573 417
Std. Predicted Value -4.739 2.159 .000 1.000 417
Std. Residual -2.993 2.440 .000 .984 417
a. Dependent Variable: OrgPerfm

360
 HIERARCHICAL REGRESSION ON IT CAPABILITY – BPR
FACTORS & OPERATIONS COST REDUCTIONS
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, ITinvest, . Enter
Cmgt, CUSF,
MgtCompt, AdqFina
2 ITCAP2a . Enter
dimension0 3 ITCapCF, . Enter
ITCapChgMgt,
ITCapStrat,
ITCapITinvst,
ITCapFin,
ITCapMgtCopta
a. All requested variables entered.
b. Dependent Variable: Cost Reduction
Model Summary
Model Std. Change Statistics
Adjusted Error of R
R R the Square F Sig. F
R Square Square Estimate Change Change df1 df2 Change
1 .217a .047 .033 5.368 .047 3.366 6 410 .003
dimension0 2 .260b .067 .051 5.317 .020 8.970 1 409 .003
c
3 .295 .087 .057 5.300 .019 1.429 6 403 .202
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt
ANOVAd
Model Sum of Squares df Mean Square F Sig.
1 Regression 581.971 6 96.995 3.366 .003a
Residual 11814.998 410 28.817
Total 12396.969 416
2 Regression 835.528 7 119.361 4.223 .000b
Residual 11561.441 409 28.268
Total 12396.969 416
3 Regression 1076.460 13 82.805 2.948 .000c
Residual 11320.509 403 28.091
Total 12396.969 416
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt
d. Dependent Variable: Cost Reduction

361
 Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) 24.901 .263 94.724 .000
Cmgt -.006 .050 -.005 -.111 .911 .956 1.046
AdqFin .265 .084 .183 3.144 .002 .689 1.451
ITinvest .045 .102 .025 .440 .660 .705 1.418
MgtComit .073 .127 .032 .574 .566 .750 1.333
CUSF .058 .088 .033 .666 .506 .922 1.085
STRAT -.012 .095 -.006 -.124 .902 .884 1.131
2 (Constant) 24.901 .260 95.638 .000
Cmgt -.017 .050 -.016 -.335 .738 .951 1.052
AdqFin .191 .087 .132 2.198 .028 .634 1.577
ITinvest -.068 .108 -.039 -.634 .526 .619 1.616
MgtComit -.031 .130 -.013 -.236 .814 .697 1.434
CUSF .077 .087 .044 .888 .375 .917 1.090
STRAT -.034 .094 -.019 -.364 .716 .879 1.138
ITCAP2 .170 .057 .193 2.995 .003 .547 1.829
3 (Constant) 24.833 .293 84.651 .000
Cmgt -.023 .051 -.022 -.443 .658 .885 1.130
AdqFin .170 .090 .117 1.883 .060 .588 1.701
ITinvest -.057 .111 -.032 -.514 .607 .578 1.730
MgtComit .001 .134 .000 .007 .995 .653 1.532
CUSF .086 .088 .049 .973 .331 .887 1.127
STRAT -.037 .095 -.020 -.391 .696 .860 1.163
ITCAP2 .204 .061 .232 3.326 .001 .468 2.139
ITCapChgMgt -.014 .008 -.098 -1.742 .082* .711 1.407
ITCapFin -.003 .012 -.018 -.261 .794 .489 2.047
ITCapITinvst -.007 .016 -.042 -.450 .653 .257 3.898
ITCapMgtCopt .030 .021 .135 1.464 .144 .265 3.770
ITCapCF -.023 .015 -.082 -1.522 .129 .772 1.296
ITCapStrat .014 .016 .050 .839 .402 .638 1.567
a. Dependent Variable: Cost Reduction
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 17.89 28.96 24.90 1.609 417
Residual -11.697 8.476 .000 5.217 417
Std. Predicted Value -4.357 2.522 .000 1.000 417
Std. Residual -2.207 1.599 .000 .984 417
a. Dependent Variable: Cost Reduction

362
 Hierarchical Regression: I.T CAPABILITY – BPR FACTORS &
CUSTOMER SERVICE MANAGEMENT

Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 STRAT, ITinvest, Cmgt, CUSF, . Enter
MgtCompt, AdqFina
2 ITCAP2a . Enter
dimension0
3 ITCapCF, ITCapChgMgt, . Enter
ITCapStrat, ITCapITinvst,
ITCapFin, ITCapMgtCopta
a. All requested variables entered.
b. Dependent Variable: Customer Service Management
Model Summary
Model Change Statistics
Std. Error R
R Adjusted R of the Square F Sig. F
R Square Square Estimate Change Change df1 df2 Change
1 .461a .213 .201 1.921 .213 18.491 6 410 .000
dimension0 2 .497b .247 .234 1.881 .034 18.240 1 409 .000
c
3 .515 .265 .241 1.872 .019 1.691 6 403 .122
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt

ANOVAd
Model Sum of Squares df Mean Square F Sig.
1 Regression 409.246 6 68.208 18.491 .000a
Residual 1512.337 410 3.689
Total 1921.583 416
2 Regression 473.812 7 67.687 19.122 .000b
Residual 1447.770 409 3.540
Total 1921.583 416
3 Regression 509.376 13 39.183 11.182 .000c
Residual 1412.206 403 3.504
Total 1921.583 416
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt
d. Dependent Variable: Customer Service Management

363
 Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
Std.
B Error Beta t Sig. Tolerance VIF
1 (Constant) 14.835 .094 157.731 .000
Cmgt .026 .018 .064 1.435 .152 .956 1.046
AdqFin .153 .030 .268 5.070 .000 .689 1.451
ITinvest .078 .036 .111 2.135 .033 .705 1.418
Mgt. Commit .149 .045 .166 3.280 .001 .750 1.333
CUSF .008 .031 .012 .263 .793 .922 1.085
STRAT .029 .034 .040 .850 .396 .884 1.131
2 (Constant) 14.835 .092 161.010 .000
Cmgt .020 .018 .050 1.142 .254 .951 1.052
AdqFin .116 .031 .202 3.756 .000 .634 1.577
ITinvest .021 .038 .030 .543 .587 .619 1.616
Mgt. Commit .096 .046 .108 2.095 .037 .697 1.434
CUSF .018 .031 .026 .577 .564 .917 1.090
STRAT .017 .033 .024 .522 .602 .879 1.138
ITCAP2 .086 .020 .248 4.271 .000 .547 1.829
3 (Constant) 14.901 .104 143.816 .000
Cmgt .021 .018 .053 1.162 .246 .885 1.130
AdqFin .114 .032 .201 3.600 .000 .588 1.701
ITinvest .013 .039 .019 .332 .740 .578 1.730
MgtComit .101 .047 .113 2.132 .034 .653 1.532
CUSF .023 .031 .034 .741 .459 .887 1.127
STRAT .016 .034 .021 .466 .641 .860 1.163
ITCAP2 .086 .022 .247 3.951 .000 .468 2.139
ITCapChgMgt -.001 .003 -.011 -.213 .831 .711 1.407
ITCapFin -.005 .004 -.068 -1.112 .267 .489 2.047
ITCapITinvst -.012 .006 -.168 -1.989 .047* .257 3.898
ITCapMgtCopt .017 .007 .190 2.288 .023* .265 3.770
ITCapCF -.008 .005 -.069 -1.417 .157 .772 1.296
ITCapStrat .001 .006 .011 .208 .835 .638 1.567
a. Dependent Variable: Customer Service Management

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 9.26 16.56 14.83 1.107 417
Residual -11.106 4.261 .000 1.842 417
Std. Predicted Value -5.042 1.560 .000 1.000 417
Std. Residual -5.933 2.276 .000 .984 417
a. Dependent Variable: Customer Service Management

364
 Hierarchical Regression I.T CAPABILITY – BPR FACTORS &
BUSINESS OPERATIONS EFFICIENCY

Variables Entered/Removedb
Model Variables
Variables Entered Removed Method
1 STRAT, ITinvest, Cmgt, CUSF, MgtCompt, . Enter
AdqFina
dimension0 2 ITCAP2a . Enter
3 ITCapCF, ITCapChgMgt, ITCapStrat, . Enter
ITCapITinvst, ITCapFin, ITCapMgtCopta
a. All requested variables entered.
b. Dependent Variable: Biz Ops Efficiency

Model Summary
Model Std. Change Statistics
Error of R
R Adjusted the Square F Sig. F
R Square R Square Estimate Change Change df1 df2 Change
1 .363a .132 .119 1.476 .132 10.390 6 410 .000
b
dimension0 2 .394 .155 .141 1.458 .023 11.314 1 409 .001
c
3 .427 .182 .156 1.445 .027 2.229 6 403 .040
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt

ANOVAd
Model Sum of Squares df Mean Square F Sig.
1 Regression 135.902 6 22.650 10.390 .000a
Residual 893.772 410 2.180
Total 1029.674 416
2 Regression 159.961 7 22.852 10.746 .000b
Residual 869.713 409 2.126
Total 1029.674 416
3 Regression 187.896 13 14.454 6.920 .000c
Residual 841.777 403 2.089
Total 1029.674 416
a. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin
b. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2
c. Predictors: (Constant), STRAT, ITinvest, Cmgt, CUSF, MgtCompt, AdqFin, ITCAP2,
ITCapCF, ITCapChgMgt, ITCapStrat, ITCapITinvst, ITCapFin, ITCapMgtCopt
d. Dependent Variable: Biz Ops Efficiency

365
 Coefficientsa
Model Unstandardized Standardized Collinearity
Coefficients Coefficients Statistics
B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) 9.463 .072 130.885 .000
Cmgt -.017 .014 -.060 -1.266 .206 .956 1.046
AdqFin .075 .023 .180 3.239 .001 .689 1.451
ITinvest .054 .028 .106 1.935 .054 .705 1.418
MgtComit .106 .035 .162 3.054 .002 .750 1.333
CUSF -.019 .024 -.038 -.796 .427 .922 1.085
STRAT .024 .026 .045 .928 .354 .884 1.131
2 (Constant) 9.463 .071 132.518 .000
Cmgt -.021 .014 -.071 -1.529 .127 .951 1.052
AdqFin .052 .024 .125 2.195 .029 .634 1.577
ITinvest .019 .030 .038 .655 .513 .619 1.616
MgtComit .075 .036 .114 2.089 .037 .697 1.434
CUSF -.013 .024 -.027 -.560 .576 .917 1.090
STRAT .017 .026 .032 .667 .505 .879 1.138
ITCAP2 .052 .016 .207 3.364 .001 .547 1.829
3 (Constant) 9.484 .080 118.552 .000
Cmgt -.022 .014 -.076 -1.582 .114 .885 1.130
AdqFin .039 .025 .093 1.583 .114 .588 1.701
ITinvest .024 .030 .047 .788 .431 .578 1.730
MgtComit. .085 .037 .130 2.323 .021 .653 1.532
CUSF -.012 .024 -.023 -.483 .629 .887 1.127
STRAT .015 .026 .028 .582 .561 .860 1.163
ITCAP2 .061 .017 .239 3.635 .000 .468 2.139
ITCapChgMgt -.001 .002 -.035 -.649 .517 .711 1.407
ITCapFin -.006 .003 -.104 -1.620 .106 .489 2.047
ITCapITinvst -.005 .004 -.092 -1.039 .299 .257 3.898
ITCapMgtCopt .016 .006 .247 2.820 .005** .265 3.770
ITCapCF -.002 .004 -.027 -.536 .592 .772 1.296
ITCapStrat -.004 .004 -.048 -.858 .391 .638 1.567
a. Dependent Variable: Biz Ops Efficiency

Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 6.04 10.93 9.46 .672 417
Residual -5.512 3.532 .000 1.422 417
Std. Predicted Value -5.091 2.177 .000 1.000 417
Std. Residual -3.814 2.444 .000 .984 417
a. Dependent Variable: Biz Ops Efficiency

366
APPENDIX 9 POPULATION FRAME OF NIGERIAN BANKSAND
RANDOM SAMPLE SELECTION

367
 MICROFINANCE
Random
No Name Address
No.
1 Nsehe Microfinance Bank Limited 115, Ikot Ekpene Road, P.M.B.1168, 0.9999
Uyo, Akwa Ibom
2 Akwengwu Microfinance Bank 10/0229, Idanuha Quarters, Okene- 0.9987
Limited Lokoja Road, Oga
3 Orisun Microfinance Bank Limited 16, Meleki Street, Olusegun Osoba 0.9978
Way, Ago Iwoye
4 Honey Microfinance Bank Limited 8, Furendano Street, Ikija-Ijebu 0.9974
5 Gideon Trust Microfinance Bank 6, Soloki Street, Aguda 0.9972
Limited
6 FEDPOLY Microfinance Bank Limited Federal Polytechnic Nasarawa 0.9969
7 Moyofade Microfinance Bank 121, Oba Moyepe Way, Ejigbo 0.9966
Limited
8 Citigate Microfinance Bank Limited 116/118 Ago Palace Way, Okota- 0.9964
Isolo
9 Josad Microfinance Bank Limited Near Esu Kuchikau Palace, Kuchikau - 0.9919
Masaka
10 Ideato-South Microfinance Bank C/O Mrs Nkiru Ekekwe, St. Joseph's 0.9909
Limited Catholic Church
11 All Seasons Microfinance Bank Abuja 0.9903
Limited
12 Accion Microfinance Bank Limited 2nd Floor, Fabac Centre, 3, Ligali 0.9894
Ayorinde Avenue
13 Gashua Microfinance Bank Limited Gashua, Bade Local Govt Area, 0.9893
14 Osumenyi Microfinance Bank Limited Eke Market Square, [Link] 191, 0.9878
Osumenyi, Nnewi So
15 North Capital Microfinance Bank Batsari Local Govt Area 0.9866
Limited
16 Amba Microfinance Bank Limited 1, Makurdi Road, Lafia Local Govt 0.9829
Area
17 Lovonus Microfinance Bank Limited Suite 9, Block 10, Wuse Market 0.9824
18 Grassroot Microfinance Bank Limited 280, Maiduguri Road, Kano 0.9818

19 Ikire Microfinance Bank Limited 133, Olorisa Oko, Ikire 0.9798

20 Leap Microfinance Bank Limited No.5 Okelue Street, Off Nnebisi 0.9794
Road, West End
21 City Mission Methodist Microfinance 1. Alhaji Ade Thanni Street, Surulere 0.9793
Bank Ltd
22 Bekwarra Microfinance Bank Limited Ogoja, Cross River State 0.9781

23 UCB Microfinance Bank Limited Old Afor Market Square, Umunya, 0.9776
Oyi Local Govt Are

368
 Random
No Name Address
No.
24 Grand Fortress Microfinance Bank Plot 10, Opp. Motor Park, Old Lagos 0.9775
Limited Road, New Gara
25 Ilobu Microfinance Bank Limited Osogbo Road, Ilobu 0.9715
26 Bam Microfinance Bank Limited Suit D77/67, Efab Mall, Ahmadu Bello 0.9694
Way, Area 11
27 Triple A Microfinance Bank Limited Plot 826, Solomon Lar Way, Cadastral 0.9684
Zone B5
28 Global Trust Microfinance Bank C/O 5, Anthony Ukpo Crescent, Zone 0.9672
Limited A
29 Ologbon Microfinance Bank Limited Ologbon Area, Osogbo Road, 0.9658
Ogbomoso
30 Progress Link Microfinance bank Isanlu, Yagba East Local Government 0.9629
limited Area, Kogi Sta
31 Common Trust Microfinance Bank C/O Suite 26, Angels Plaza, Plot 1243 0.9623
Limited
32 Unicredit Microfinance Bank Limited C/O Olufemi Babajide, 1st Floor, No. 0.9617
5, Williams S
33 Mayfair Microfinance Bank Limited 28, Johnson Street, Onike-Yaba 0.9616
34 Parallex Microfinance Bank Limited 55, Kudirat Abiola Way, Oregun-Ikeja 0.9595

35 GS Microfinance Bank Limited C/O Unit 219, All Seasons Place, 74, 0.9593
Isheri Road,
36 Riverside Microfinance Bank Limited Market Road, Ado Odo 0.9589

37 Avunegbe Microfinance Bank Limited No.2, jattu Road, Auchi 0.9589

38 Swift Microfinance Bank Limited C/O Generic Capital Management, 0.9586

181 Jubilee Road
39 Oyan Microfinance Bank Limited Oyan Asaba Road, Owode Market 0.9583
Square, Oyan
40 Afotamodi-Ogunola Microfinance 1, Ajina Street, Isara Remo 0.9577
Bank Limited
41 Sepeteri Microfinance Bank Limited Saki Road, Idi-Emi, Sepeteri East 0.9574
Local Govt Area
42 New Era Microfinance Bank Limited Bolorunpelu Market, Lanlate 0.9559
43 Odoakpu Microfinance 81 Bida Road, [Link] 548, Onitsha 0.9554
44 Taura Microfinance Bank Limited No 1, Main Street, Taura 0.9551
45 Rima Microfinance Bank limited Sambo Road, S/Gari, Goronyo, P.M.B. 0.9549
02355, Sokoto
46 Sunrise Microfinance Bank Limited Afor Main Market, Eha-Alumona 0.9539
47 Creekline Microfinance Bank Limited 5, Swam Road, GRA, Warri 0.9536

369
 Random
No Name Address
No.
48 Oluchukwu Microfinance Bank Bethany House, 1, Akor Street, 0.9534
Limited Onitsha, Anambra St
49 NPF Microfinance Bank Limited 1, Ikoyi Road, Obalende, Lagos State 0.9523
50 Gains Microfinance Bank Limited 129, Lokoja Road, Dekina 0.9514
51 Daily Capital Microfinance Bank 101, Borno Way, Ebute Meta 0.9509
Limited
52 Halmond Microfinance Bank Limited Suites 139/46, Ikota Shopping 0.9507
Complex, VGC, Ajah
53 Argungu Microfinance Bank Limited 18, Kanta Road, Argungu 0.9487
54 Keystone Microfinance Bank Limited 4, Agbonyin Street, Off Adelabu 0.9483
Street, Surulere
55 Chartwell Microfinance Bank Limited 94, Broad Street, Lagos 0.9474

56 Merchant Microfinance Bank Limited 163, Jubilee Road, Aba 0.9472

57 Obudu Microfinance Bank Limited No. 1, Ranch Road, Obudu 0.9466

58 Riggs Microfinance Bank Limited 5, Imam Abib Adetoro Street, Victoria 0.9465
Island
59 Infinity Microfinance Bank Limited 4, Demurin Street, Ketu, [Link] 0.9445
8293, Somolu, Lag
60 Wealthstream Microfinance Bank 213, Kirikiri Road, Olodi-Apapa 0.9426
Limited
61 Transwealth Microfinance Bank 16, Estate Hospital Road, Dallimore 0.942
Limited Junction
62 Active Point Microfinance Bank 18A Nkemba Street, Uyo 0.9419
Limited
63 Mutual Benefit Microfinance Bank 10, Apapa Road, Oyingbo, Ebute- 0.941
Limited Metta
64 Ozizza Microfinance Bank Limited No. 1, Water Works Road, 0.9404
65 Umuchukwu Microfinance Bank 8, Bende Road, Umuahia, Abia State 0.9392
Limited
66 Nkpologwu Microfinance Bank Eke Market, Nkpologwu, P.M.B.25, 0.9345
Limited Aguata, Anambra S
67 Katagum Microfinance Bank Limited Palace Road, Katagum Zaki LGA, 0.931
Bauchi State
68 County Microfinance Bank Limited C/O Mark Monshanne; 127, Old Ojo 0.9289
Road, Amuwo odofi
69 Oke-Oba Microfinance Bank Limited Ogbomoso-Igbeti Road, Tewure Orire 0.9276
Local Govt Area
70 Umejei Microfinance Bank Limited 124B, Umejei Road 0.9264
71 Aku Diewa Microfinance Bank Aku, Igbo-Etti Local Govt Area 0.9263
Limited

370
 Random
No Name Address
No.
72 AMJU-Unique Microfinance Bank Delta 0.9257
Limited
73 OCON Success Microfinance Bank Fakeye Area, Oja-Odan Yewa North, 0.9253
Limited Ilaro
74 Interglobal Microfinance Bank C/O Sunfonia, 82, Isheri Road, Opp 0.9247
Limited Grammar School
75 Legacy Microfinance Bank Limited ECWA Road, Zonkwa 0.9241
76 Zigate Microfinance Bank Limited 12, Station Road, Agbado 0.9227
77 Asha Microfinance Bank Limited C/o 11, Boyade Oluwole Street, Off 0.9225
Awolowo Way
78 Future Growth Microfinance Bank c/o Suite 26, Angels Plaza, Ladoke 0.9225
Limited Akintola Boule
79 Partnership Microfinance Bank 5B, Oguta Road, Onitsha 0.9221
Limited
80 Uvwie Microfinance Bank Limited 214, Effurun - Warri Road, By Jakpa 0.9199
Junction, Effu
81 New Mercantile Microfinance Bank Suite 9/12, SAAB Plaza, Plot3, Hamza 0.9195
Limited Abdullahi Way
82 Ethics Microfinance Bank Limited 48, Afariogun Street, Off Airport 0.918
Road, Oshodi
83 Amazu Microfinance Bank Limited Lagos 0.9166
84 UNIUYO Microfinance Bank Limited Akwa Ibom 0.9161
85 Decency Microfinance Bank Limited Afor-Ibeji Market Square, Old 0.9158
Umuahia
86 Eagle Flight Microfinance Bank 129B, Ajamimogha Road, Warri 0.9144
Limited
87 Kaugama Microfinance Yanleman Road, Kaugama 0.9143
88 Dangizhi Microfinance Bank Limited Mokwa Road, Enagi 0.9135
89 Kisi Microfinance Bank Limited Central Market Square, Kisi 0.9124
90 ACJEC Microfinance Bank Limited No.6, High Court Road, Awka 0.9114
91 Obosi Microfinance Bank Limited Obosi Town, Idemili Local 0.9112
Government Area, Anambra
92 Stako Microfinance Bank Limited 74, Mobil Road, Ajegunle, Apapa 0.9097
93 ACE Microfinance Bank Limited 3, Daniel Aliyu Street, Kwali, Abuja 0.9076
94 e-Barclays Microfinance Bank c/o Leverages Optimal, Plot 44 Sani 0.9068
Limited Abacha Road (B
95 MBA Microfinance Bank Limited C/O Arioye Abayomi & Co. Behind 0.9067
No.2, Old Otta Rd
96 Ijomu-Oro Microfinance Bank Opposite the Town's Market, Ijomu- 0.9053
Limited Oro
97 Kings Microfinance Bank Limited 7, Ikorodu Road, Maryland 0.9036

371
 Random
No Name Address
No.
98 United Microfinance Bank Limited No. 2, Udumoto Quarters, Ekpan, 0.903
Effurun
99 Ebonyi State University Microfinance CAS Ebonyi State University, 0.9026
Bank Ltd Abakaliki
100 Uga Microfinance Bank Limited Oye Market Square, [Link] 508, 0.9013
Uga, Aguata LGA, A
101 U & C Microfinance Bank Limited Choba Park Shopping Complex, 0.9005
University of Port Ha
102 Business Support Microfinance Bank Plot 92, Obafemi Awolowo Way, 0.8998
Limited Suite B2/B3 Jabi Plz
103 Okpofe Microfinance Bank Limited Ezin-ihitte Mbaise, Imo 0.8993
104 Ukpor Microfinance Bank Limited Afor Ukpor Market, Nnewi South 0.8975
Local Government Ar
105 SBDC Microfinance Bank LImited C/O Joseph Akele, Investment House 0.8957
Ring Road, Oppo
106 Susu Microfinance Bank Limited 34, Commercial Avenue, Sabo-Yaba 0.8956
107 Alekun Microfinance Bank Limited 6, Oladipo Diya Road, Odogbolu 0.8947
108 Jemko Microfinance Bank Limited Jemko House, Obeledu-Igboukwu 0.8943
Road, Anocha LGA,
109 Royal Blue Microfinance Bank 127, Herbert Macaulay Street, Ebute- 0.8941
Limited Metta
110 Egosal Microfinance Bank Limited No. 125, Market Road, Aba 0.8926
111 Aramoko Microfinance Bank Limited Civic Centre, Aramoko Ekiti 0.8926
112 Ito Microfinance Bank Limited Obarike Ito, Obi Local Government 0.8909
Headquarters
113 Garu Microfinance bank Limited Off Emir Road Drive, Ilelah Street, 0.8909
Bauchi
114 Finex Microfinance Bank Limited c/o FESL, 22nd Floor Stock Exchange 0.8894
Building, Marina
115 SPEC Microfinance Bank Limited 23, Algeria Street, Wuse Zone 3, 0.886
Abuja
116 IMAD Microfinance Bank Limited Plot 251, Millenium Builders Plaza, 0.8856
117 Stateside Microfinance Bank Limited 2, Creek Road, Apapa 0.8854

118 Confidence Microfinance Bank 77, Bank Road, Ijesa-Isu Ekiti 0.8847
Limited
119 ACFL Microfinance Bank Limited Niger Insuarnce Plaza, 2nd Floor 0.882
120 Ubulu Microfinance Bank Limited Ogwashi-Uku-Umunede Road, Ubulu- 0.8811
Uku
121 Lekki Microfinance Bank Limited Km 15, Lagos/Epe Expressway, 1st 0.8792
Gate Jakande Esta
122 Haven Microfinance Bank LImited 51/53, Kudirat Abiola Way, Ikeja 0.8783

372
 Random
No Name Address
No.
123 Ebedi Microfinance Bank Limited Opposite Aseyn Palace, 0.8781
124 Trusthouse Microfinance Bank House 6, 2nd Avenue, FESTAC Town 0.8774
Limited
125 Ogbete Microfinance Bank Limited Local Govt Building, Ogbete Main 0.8742
Market, Ogbete
126 Palmcoast Microfinance Bank 3, Awka Efak Street, Uyo LGA 0.8728
Limited
127 Lofty Heights Microfinance Bank 102, Edo Textile Mill Road 0.8705
Limited
128 Ajiya Microfinance Bank Limited c/o Leadway Assurance Co. Ltd, NN 0.8692
28/29 Constitut
129 Ebu Microfinance Bank Limited Ekeoha / Ikah Road, Oshimili Local 0.8692
Govt Area
130 Ultimate Microfinance Bank Limited Owode market, Ayobo Road, Ipaja 0.8684
131 Omasi Microfinance Bank Obodongwu-Iwollo, Iwollo Ezeagu 0.8661
Local
132 Echo Microfinance Bank Limited 2, Betty Dumbri Street, Ori-Okuta, 0.866
Ikorodu
133 Amoye Microfinance Bank Limited Community Bank Premises, Oke- 0.8652
Aodu
134 Wealthbasket Microfinance Bank 19B, Layi Ajayi-Bembe's Street, 0.8616
Limited Parkview, Ikoyi
135 Bowen Microfinance Bank Limited Baptist Academy Compound, 0.8589
Obanikoro, Ikorodu Road
136 GTI Microfinance Bank Limited C/O GTI Capital Limited, Lagos 0.8579
137 Hinache Microfinance bank Limited 53, Funtua/ Yashe Road, Malunfashi, 0.8574
Katsina State
138 Plus Microfinance Bank Limited Ogun 0.8571
139 Mbawulu Microfinance Bank Limited Zone 16, No. 6-9, Main Market, 0.8569
Nnewi, P.O.Box1155,
140 Lavunkpan Microfinance Bank Lagos-Bida Road, Lavun Local Govt 0.8547
Limited Area, Kutigi
141 UNN Microfinance Bank Limited University of Nigeria, Nsukka 0.8542
142 Ipodo-Ikeja Microfinance Bank 46, Obafemi Awolowo Way, 0.8532
Limited
143 Metro Microfinance Bank Limited 15, Otunubi Street, Off Haruna 0.8505
Street, Ogba-Ikeja
144 Chrisore Microfinance Bank Limited 1, Omisore Crescent, Ile-Ife 0.8503
145 Catland Microfinance Bank Limited 14, Oke-Owode Street, Ilese-Ijebu 0.8489
146 Coconut Avenue Microfinance Bank 2, Tex Olawale Crescent, Coconut Bus 0.8487
Limited Stop, Apapa
147 Excellent Microfinance Bank Limited No. 2, Ezekwesili Street 0.8454

373
 Random
No Name Address
No.
148 Ugboju Microfinance Bank Limited Ogobia-Ugboju Road, [Link] 1260, 0.8425
Otukpo, Benue St
149 Corestep Microfinance Bank Limited C/O Engr. Robert Dike, Okota Road, 0.8423
Isolo
150 Daffo Mangai Microfinance Bank 1, New Layout, Daffo Mangai 0.8419
Limited
151 Cowries Microfinance Bank Limited House 6, Second Avenue, Festac 0.8418
Town
152 Ours Microfinance Bank Limited 23/25 Olofa Way, Offa 0.8388
153 Goldman Microfinance Bank Limited 3B, Ezenei Avenue, Asaba 0.8383
154 Support Microfinance Bank Limited 22, Isheri North Road, Isheri Estate, 0.8383
Ifo-Otta
155 Kwara Commercial Microfinance 159, Ibrahim Taiwo Road, Ilorin 0.837
Bank Ltd
156 Gufax Microfinance Bank Limited c/o Suite 26, Angels Plaza, Plot 1243, 0.8357
Ladoke Akin
157 Bawyi Microfinance Bank Limited Niger 0.8357
158 Forward Microfinance Bank Limited 5, O'Connor Street, Onitsha 0.8347
159 Petra Microfinance Bank Limited St. Dominic Priory; 356 Herbert 0.8322
Macaulay Way
160 Okpuala-Ngwa Microfinance Bank Okpuala-Ngwa, Isiala-Ngwa LGA 0.8291
Limited
161 Splendid Microfinance Bank Limited 75, Aguiyi Ironsi Street, Maitama 0.8276
District
162 Oakland Microfinance Bank Limited Sokedile House, Oka, Akoko South 0.8258
LGA
163 Lifegate Microfinance Bank Limited 497, Ikorodu Road, Ketu 0.8237
164 Greenland Microfinance Bank Afor Market Square, Akatta 21, Orlu 0.8183
Limited Road, Amaigbo,
165 Ijare Microfinance Bank Limited 34, Obasola Street, Ijare 0.8173
166 FEDETH Co-op Microfinance Bank Federal Secretariat Phase 1, Rm 5B 0.817
Limited 022, Annex III
167 Gaa Akanbi Microfinance Bank Bola Saadu House, 10, Ahmadu Bello 0.8166
Limited Way
168 DEC-Enugu Microfinance Bank 3-5, DEC Avenue, Independent 0.8166
Limited Layout, Enugu
169 Jamis Microfinance Bank Limited 140, Benue Crescent, Wadata, 0.8147
Makurdi
170 COWAN Microfinance Bank Limited Ondo 0.8125
171 Ohafia Microfinance Bank Limited 87 Arochukwu Road, Amaekpu, 0.8124
Ohafia, Abia State
172 IOC Microfinance Bank Limited Sabo Market, Isale Oyo, Oyo 0.8121

374
 Random
No Name Address
No.
173 Omak Microfinance Bank Limited 33, Station Road, Osogbo 0.812
174 Umuawulu Microfinance Bank Awka South Local Govt Area 0.8107
Limited
175 Bethel Microfinance Bank Limited 43B, Kenyatta Street, 0.8106
176 Berachah Microfinance Bank Limited 5A Adekunle Banjo Avenue, 0.8088
177 Ezebo Microfinance Bank Limited Afor Igwe Umudioka, 0.8087
178 Amegy Microfinance Bank Limited 1, Paul Odulaja Crescent, Ifako 0.8072
Gbagada
179 Dollars Microfinance Bank Limited c/o Dollar Pharmacy Limited, Plot 12, 0.8005
Julius Nyere
180 Alache Microfinance Bank Limited 12, Bank Road, Ogoja 0.7992
181 Ajuta Microfinance Bank Limited Market Road, Loso Quarters, Ogbagi 0.7984
Akoko
182 Uli Microfinance Bank Limited KM 45, Onitsha-Owerri Road, 0.7964
P.M.B.144,Uli, Anambra
183 Osogbo Microfinance Bank Limited Opposite Osun State Hospital 0.7953
Management Board
184 Igbo-Ukwu Microfinance Bank [Link] 370, Igbo-Ukwu, Agata Local 0.7941
Limited Government Are
185 LASU Microfinance Bank Limited Lagos State University Campus, Lagos 0.7938
Badagry Expr
186 Hebron Microfinance Bank Limited Mafa House, 4, Fola Agoro Street, 0.7931
Somolu
187 High Street Microfinance Bank 1, Okesalu Street, Ikotun 0.793
Limited
188 Akalabo Microfinance Bank Limited Co-operative House, Afor Market 0.7925
Square
189 Covenant University Microfinance Km 10, Idiroko Road, Canaan Land, 0.7921
Bank Limited Ota
190 Ekondo Microfinance Bank Limited 9, Chamley Street, Calabar 0.7919
191 Global Heritage Microfinance Bank 156, Ibrahim Taiwo Road 0.7909
Limited
192 BishopGate Microfinance Bank 39, Agege Motor Road, Moshalashi 0.7908
Limited
193 Ejiamatu Microfinance Bank Ltd Oye Market Square, Mmili John 0.7907
Road, Ojoto Byepass
194 Frontline Microfinance Bank Limited Ezinifite, Nnewi South Local Govt 0.7898
Area,
195 Estate Microfinance Bank Limited 31/311 Road, Gowon Estate, Ipaja 0.7891
196 Ajewole Microfinance Bank Limited Ilorin Road, Sabo, Ogbomosho 0.788
197 Pinnacle Microfinance Bank Limited 304-305, Ansar Plaza, Mpape Hills, 0.7865
Mpape District

375
 Random
No Name Address
No.
198 CreditLink Microfinance Bank Limited NASDCORP House, 40 Ladoke 0.7857
Akintola Boulevard,
199 Warji Microfinance Bank Limited Warji, Bauchi 0.7841
200 Waila Microfinance Bank Limited 7, Chrisgold Plaza, Kefii Road, 0.7827
Mararaba
201 Premium Microfinance Bank Limited Plot 1, Road 2, Owode Housing 0.7826
Estate,
202 Crown Microfinance Bank Limited 14B, Nsukka Road, Ibagwa Aka 0.7823
203 Harvest Microfinance Bank Limited Olujudo Road, Ido-Ekiti 0.7821
204 Essence Microfinance Bank Limited Chief S.A. Memorial Building 0.7817
Complex, Ikole Road
205 Ogberuru Microfinance Bank Limited Eke Market Square, Ogberuru 0.7814

206 UBA Microfinance Bank Limited UBA House, 57, Marina 0.7812
207 Bungudu Microfinance Bank Limited Ahmadu Bello Way, Bungudu 0.7805
208 Orisuihiteukwa Microfinance Bank Ekeututu Market Square, 0.7793
Limited Orisuihiteukwa Orsu Local
209 Planet Microfinance Bank Limited 14, Isheri Oshun Road, Off Ijegun 0.779
Road, Ikotun
210 Aracom Microfinance Bank Limited 57, Hospital Road, 0.7785
211 Ogboefere Microfinance Bank Ogboefere Market, Onitsha, 0.7757
Limited Anambra State
212 AB Microfinance Bank Limited Lagos 0.7749
213 Mega Microfinance Bank Limited No.1, Sultan Dasuki Way, Kubwa 2nd 0.7747
Gate
214 Rakib Microfinance Bank Limited [Link] 13909, Kibiya Local 0.7744
Government Area, Kano
215 Oha Microfinance Bank Limited Square (Afieyi), Oha Orerokpe Okpe 0.7726
Local Govt Area
216 United People Microfinance Bank 18, Pump Street, Jos, Plateau State 0.7715
Limited
217 Orokam Microfinance Bank Limited Markurdi Road, Adoka, P.M.B. 2224, 0.7708
Otukpo, Benue S
218 Ifelodun Microfinance Bank Limited Charity Club House, Oke-Afo Street, 0.7706
Ikirun
219 Kadpoly Microfinance Bank Limited Behind Central Admin Block, Kaduna 0.77
Polytechnic, Tu
220 Avyi Microfinance Bank Limited No. 12, Roger Road, Wukari 0.7666
221 Obafemi Awolowo University Oduduwa Hall Complex, Obafemi 0.7664
Microfinance Awolow University,
222 Gulfare Microfinance Bank Limited Yauri-Zuru Road, Opp. Rijau LG 0.7639
Secretariat, Rijau

376
 Random
No Name Address
No.
223 Ighomo Microfinance Bank Limited 7, Akpakpava Road, 0.7637
224 Landrock Microfinance Bank Limited Lagos 0.7634
225 IMT Microfinance Bank Limited Independence Layout, Enugu 0.7629
226 Ifeanyichukwu Microfinance Bank 51A, Ikorodu Road, Fadeyi, Lagos 0.7607
Limited
227 Akesan Microfinance Bank Limited Ifedapo Co-operative House, Ibadan 0.7563
Road,
228 Everest Microfinance Bank Limited 7, Park Road, Off Nkwo Main Market, 0.7556
Nnewi Anambra
229 Acorn Microfinance Bank Limited 11, Okrika (Station) Road 0.7546
230 Shelter Microfinance Bank Limited Plot 25, Phase II, Beckley Estate, 0.7539
Agege
231 Ughievwen Microfinance Bank 1, Hospital Road, Otughieven Ughelli 0.752
Limited South Local G
232 Well Woman Microfinance Bank 2nd Flr, Right Inner Wing - NAOWA 0.7517
Limited Shopping Plaza
233 Orofia Industrial Layout Microfinance Orofia Idustrial Layout, P.M.B.2020, 0.7507
Bank Njikoka LGA,
234 Sapphire Microfinance Bank Limited 111, Abak Road, Uyo 0.7497
235 Alor Microfinance Bank Limited Nkwor Alor Market Square, Idemili 0.7496
South LGA, Anamb
236 Mokin Microfinance Bank Limited Obada Market, Ilara Mokin Ifedore 0.7478
Local Govt Area
237 Aguda Titun Microfinance Bank 21, Shonola Street, Aguda Titun, 0.7466
Limited Ogba
238 Osomhe Microfinance Bank Limited Mission Road, Iyhiochia Quarters, 0.745
Fugar
239 Lift Microfinance Bank Limited 6 S&T Road, Uselu 0.745
240 Blue Intercontinental Microfinance Herbert Macaulay Way, Ebute-Meta 0.7447
Bank Ltd
241 IPMAN Satellite Microfinance Bank 3, Alhaji Sunmonu Street, Opp. NNPC 0.7439
Limited Depot, Ejigbo
242 Taraba Microfinance Bank Limited 19, Ahmadu Bello Way, Jalingo 0.7431
Shopping Complex
243 Pace-Setter Microfinance Bank Confidence Motors Office Complex, 0.7426
Limited Sabo Ojoo
244 Gracefield Microfinance Bank Bukuru, Jos South Local Government 0.7422
Limited Area
245 CKC Microfinance Bank Limited CKC Mile One, Diobu, Port-Harcourt 0.7398
246 Asset Matrix Microfinance Bank C/O Humphrey Adeji, 21, Ibikunle 0.7398
Limited Street

377
 Random
No Name Address
No.
247 Chibueze Microfinance Bank Limited 82 Ehi/Asaba Road, Aba, Abia State 0.7384

248 Bonded Microfinance Bank Limited C/O 1, Adeniyi Street, Itire, Surulere 0.7367
249 Silver Microfinance Bank Limited Kerang Ampana Road, Mangu Local 0.7355
Govt Area
250 Ichi Microfinance Bank Limited KM 6, Onitsha Okigwe Road, Ichi, 0.7351
Ekwusigo LGA, Ana
251 M & M Microfinance Bank Limited Suite D1, Plot 599, Gwarjo Close, Off 0.7344
Gimbiya Str
252 Woliwo Microfinance Bank Limited 10, Akunnia Njote Street, Woliwo 0.7333
Layout, Onitsha,
253 CRUTECH Microfinance Bank Limited Cross River University of Technology 0.7307
Microfinance
254 Amaifeke Microfinance Bank Limited 95, Ihioma Road, Amaifeke Orlu 0.7296

255 Chevron Employee Co-operative No.6, Udeko Medical Road, Off 0.7295
MFB Chevron Drive
256 Altitude Microfinance Bank Limited Zone B, Block 14 Extension, 0.727
ASPAMDA
257 Korede Microfinance Bank Limited 3, Luwoye Street, Igbotako 0.7269
258 Iludun Oro Microfinance Bank Iludun-Oro, Kwara State 0.7263
Limited
259 Girei Microfinance Bank Limited Along Girei-Mubi Road Market, P.A. 0.7263
Girei, Adamawa
260 Ekimogun Microfinance Bank Limited 2, Ifore Street, Ondo 0.7263

261 Ndiolu Microfinance Bank Limited Parmanent Site, Government House, 0.7254
P.M.B. 6031, Awk
262 Snow Microfinance Bank LImited 233, Herbert Macaulay Road, Yaba 0.725
263 Moneycom Microfinance Bank 31B, Oyeleke Street, Alausa-Ikeja 0.7247
Limited
264 Providence Microfinance Bank Suite 3; 21, Ogundana Street, Off 0.7246
Limited Allen Avenue, Ik
265 Olu-Basiri Microfinance Bank Limited 205, Old Ikirun Road, Sabo Junction 0.7227

266 First Index Microfinance Bank 27, Annex Adelabu Shopping 0.7185
Limited Complex
267 Hitech Microfinance Bank Limited 44A, Forces Road, Onikan 0.7178
268 Summit Microfinance Bank Limited B2, 317 Real Vision Plaza, Dei-Dei 0.7173
269 Minna Microfinance Bank Limited N.E 150Y, Adjacent Bank PHB, Bosso 0.7121
Road, Minna

378
 Random
No Name Address
No.
270 Mercury Microfinance Bank Limited 6, Olayiwola Street, New Oko-Oba 0.7119
Ifako-Ijaiye
271 Pearl Microfinance Bank Limited 6, Taiwo Ishola Street, Off Lola 0.7113
Holloway Street
272 Standard Microfinance Bank Limited Bornoma House, No 94 Mohammed 0.7066
Mustapha Way.
273 Bowman Microfinance Bank Limited 1, Bode Onifade Street, Ewu-Tuntun 0.7057
274 Living Spring Microfinance Bank 1, Diamond Hill 0.7052
Limited
275 Peniel Microfinance Bank Limited Km 20, Badagry Expressway, Opp. 0.7037
LASU Main Gate, Oj
276 Ilora Microfinance Bank Limited Akibo Market, Oja-Isale, Ilora, Oyo 0.7021
277 Ahetou Microfinance Bank Limited Akabuka, Onne Local Government 0.7015
Area
278 Apex Trust Microfinance Bank FMBN Building, 1, Adekunle Fajuyi 0.6998
Limited Road, Dugbe
279 Akpo Microfinance Bank Limited Akpo Junction, Akpo, Aguata LGA, 0.699
Anambra State
280 Maxitrust Microfinance Bank LImited 15B, Agudama Street, D-Line, Port 0.6984
Harcourt
281 Ile-Oluji Microfinance Bank Limited 3, Iparaku Street, Oke-Aro, Ile-Oluji 0.6982
282 Sunbeam Microfinance Bank Limited 1, Ugbonhan Street, Efon Alaye 0.6969

283 Destiny Microfinance Bank Limited 1, Old Aji Road, Agrute 0.6948
284 Ini Microfinance Bank Limited 4, Market Road, Nkan Ini Local 0.6945
Government Area, Ak
285 UNICAL Microfinance Bank Limited University of Calabar, P.M.B. 115, 0.6928
Calabar, Cross
286 Ikorodu Division Microfinance Bank 102, Sagamu Road, Ikorodu 0.6912
Limited
287 Mode Microfinance Bank Limited Akonobi Avenue, [Link] 235, Neni, 0.6891
Anaocha LGA, An
288 Glory Microfinance Bank Limited Plot 295, Ijegun-Ikotun Road, Ijegun 0.6876
289 Shoreline Microfinance Bank Limited C/O 23, Ladipo Kuku Street, Off Allen 0.6855
Avenue
290 Enugwu Ukwu Microfinance Bank No. 108, Sapele Road, 0.6833
Limited
291 FCE Obudu Microfinance Bank Federal College of Education, 0.6828
Limited
292 Barnawa Microfinance Bank Limited Plot 3, Mozambique Road, Bamawa, 0.6826
Kaduna South

379
 Random
No Name Address
No.
293 Happy Note Microfinance Bank Plot 11/12, Neigborhood Centre, 0.6805
Limited Phase II, Lugbe
294 Iyamoye Microfinance Bank Limited Idifin Quarters, Omuo, Kabba Road, 0.6797
Iyamoye Ijumu L
295 Neighborhhod Microfinance Bank C/O Fleet House, 105, Olu Obasanjo 0.6786
Limited Road, Port-Harcourt
296 Orita Basorun Microfinance Bank Plot 1, Salami Layout, Orita Basorun 0.6764
Limited
297 Global Initiative Microfinance Bank 88, Awolowo Road, South-West Ikoyi 0.6757
Limited
298 Castle Microfinance Bank Limited 159, Nnewi-Ozubulu Road, Ugwu- 0.6743
Orie
299 Yerwa Microfinance Bank Limited No. 15, Ahmadu Bello Way 0.6713
300 First Option Microfinance Bank 42, Kogberegbe Street, Opp. Isolo 0.6681
Limited Gen. Hospital
301 Udoka Microfinance Bank Limited Nwagu Market Square, Agulu 0.6678
Aniocha Local Govt. Are
302 Enugu-Ukwu Microfinance Bank Enugu-Ukwu Civic Centre, Enugu- 0.6666
Limited Ukwu, Anambra State
303 Women Development Initiative MFB 3rd Floor, Kano Foundation Building 0.6664
Limited Kano.
304 Amucha Microfinance Bank Limited Bank House, Amucha, Via Orlu Njaba 0.6661
305 Auchi Microfinance Bank Limited 40, Otaru Road, Auchi 0.6657
306 ABC Microfinance Bank Limited Mission Road, Okada, 0.6653
307 Seedvest Microfinance Bank Limited 15, Awolowo Way, G. Allen Area, 0.6637
Dugbe
308 FUTO Microfinance Bank Limited Federal University of Technology, 0.6616
309 Ojoo-Shasha Microfinance Bank 11, Arulogun / Army Barracks Road, 0.6603
Limited Ojo
310 Patrickgold Microfinance Bank No.95, Old Abeokuta Motor Road, 0.6597
Limited Opp Post Office
311 First Credit Microfinance Bank Suite 4, E-Bar Plaza, 20, Admiralty 0.6593
Limited Way, Lekki
312 Kamba Microfinance Bank Limited Along Dole Kaino Road, Kamba, 0.6588
Dandi Local Governme
313 Ojokoro Microfinance Bank Limited Lagos-Abeokuta Express, Ijaiye Bus 0.658
Stop, Ojokoro,
314 Dakingari Microfinance Bank Limited Kebbi 0.6543

315 Greenfield Microfinance Bank Gwarimpa 0.6542

Limited

380
 Random
No Name Address
No.
316 Bauchi Investment Corporation MFB 37, Abdulkadir Ahmed Road, Bauchi 0.6528
Limited
317 Oyinyechi Microfinance Bank Limited One Market, Ngodo-Isuochi, 0.6521
Umeneohi LGA
318 Ifedapo Microfinance Bank Limited Ajegunle-Sango Road, Saki 0.6511
319 Awe Microfinance Bank Limited Awe-Iwo Road, Awe 0.6497
320 Okeagbe Microfinance Bank Limited A2, Rufus Giwa Road, Afa, Okeagbe 0.646
321 New World Microfinance Bank Dutse, Jigawa 0.646
Limited
322 Gboko Microfinance Bank Limited J.T.T. House, 40, J.S. Tarka Way, 0.6457
Gboko
323 First Lowland Microfinance Bank Mabudi, Langtang South Local Govt 0.6453
Limited Area
324 Citadel Microfinance Bank Limited 1, Abbi Avenue, Badagry Expressway, 0.6425

325 Gold Microfinance Bank Limited Block C, Suite 1 & 2, Local Airport 0.6373
Office Complex
326 Parkway Microfinance Bank Limited C/O Dale & Parker Consulting, Brian 0.636
Tracy Int'l, 2
327 Darazo Microfinance Bank Limited Market Square, Darazo 0.6339
328 Alkaleri Microfinance Bank Limited c/o Alkaleri Local Government Area, 0.6321
Alkaleri
329 East Gate Microfinance Bank Limited 135, Aba-Owerri Road, Aba 0.6314
330 First Herital Microfinance Bank 7, Oluwakemi Street, Alapere Ketu 0.6304
Limited
331 VCL Microfinance Bank Limited 15, Oladosu Street, Off Olayinka 0.6268
Bamgbose Street,
332 Ikoyi-Ile Microfinance Bank Limited Shehu Hannafi House, Igbeti Road 0.6256
Orire Local Govt
333 Ijebu Ife Microfinance Bank Limited 165, Ajalorun Street, Ijebu-East Local 0.6247
Govt Area
334 FUT Minna Microfinance Bank Federal University of Technology 0.6246
Limited Campus, Minna
335 Bejin-Doko Microfinance Bank Lavun Local Govt Area, Bida 0.6246
Limited
336 FBN Microfinance Bank Limited c/o 35, Marina 0.6228
337 Harmony Microfinance Bank LImited No. 18, King George V. Road, Onikan 0.6223
338 Okuku Microfinance Bank Limited Oba Oyinlola Way, Okuku 0.6204
339 Royal Trust Microfinance Bank 28, Agbado Road, Iju-Ishaga 0.6181
Limited
340 Chanelle Microfinance Bank Limited No. 7, Oduduwa Crescent, GRA - Ikeja 0.6177

381
 Random
No Name Address
No.
341 Star Microfinance Bank Limited B45, Samson Odugbesan Street, 0.6169
342 Bestway Microfinance Bank Limited Civic Centre Complex, Adazi-Enu 0.6169
343 Crowned Eagle Microfinance Bank 132, Isawo Road, Owutu, Ikorodu 0.6168
Limited
344 Gbede Microfinance Bank Limited Kabba-Ilorin Road, Ayetoro Gbede 0.6167
345 Greenfield Lagos Microfinance Bank 497, Ikorodu Road, Ketu 0.6154
Limited
346 Green Acres Microfinance Bank 7, Laula Ibrahim Street, Akoka-Bariga 0.6153
Limited
347 Karis Microfinance Bank Limited 66, Segun Osoba Road, Agbado Ifo 0.615
Local Govt Area
348 Lapai Microfinance Bank Limited No. 7, Ahmadu Bello Way, Lapai 0.6139
349 Avalon Microfinance Bank Limited 7th Floor, Forshore Towers, Osborne 0.6137
Road, Ikoyi
350 First Royal Microfinance Bank 12, Chalmer Street, Calabar 0.6083
Limited
351 Kajola Microfinance Bank Limited Kajola Integrated Investment 0.6068
Limited,
352 Oche Microfinance Bank Limited B63, Shell Camp, Owerri 0.6066
353 Kwatashi Microfinance Bank Limited Gusau-Zaria Road, Kwatarkwashi 0.6051
354 Pathfinder Microfinance Bank Osogbo Road, Temidire Okejigbo, Ila 0.6049
Limited Orangun
355 Excel Microfinance Bank Limited Hospital Road, Sango Eruwa 0.6043
356 Prolific Microfinance Bank Limited 9, Ijaiye Road, Ogba 0.6036
357 Bakassi Microfinance Bank Limited 199 Ndidem Iso Road, Opposite 0.5999
Parliamentary Villag
358 Oroke Microfinance Bank Limited Ibaka Quarters, Ikare Road, Akungba 0.5992
Akoko
359 Naisa Microfinance Bank Limited Along Kontagora Road, Yauri Nsako 0.5987
360 Zion Microfinance Bank Limited 144, Benue Crescent Wadata, 0.598
Makurdi, Benue State
361 Ajeko Microfinance Bank Limited Market Square, Ate-Iyale Road, 0.596
362 Olabisi Onabanjo University Mini Campus, Ago Iwoye 0.591
Microfinance Bank
363 Bancorp Microfinance Bank Limited 4/6, Mobolaji Bank Anthony Road, 0.5894
Marina
364 Edo Microfinance Bank Limited 248, Ugbowo-Lagos Road, Egor Local 0.5882
Govt Area
365 Novel Microfinance Bank LImited 10/12 Ogedengbe Road, Apapa 0.587
366 KJL Microfinance Bank Limited Amazing Grace Plaza, Alekuwodo, 0.5847
Okefia, Osogbo

382
 Random
No Name Address
No.
367 Nri Microfinance Bank Limited Eke Market Square, Nri Anaocha 0.5812
Local Govt Area
368 Isuofia Microfinance Bank Limited Ekwusigo Park, Isuofia 0.5811
369 Ohon Microfinance Bank Limited Aiyeunle-Gbedde, Ijumu Local 0.5798
Government Area, Kogi
370 Atyap Microfinance Bank Limited Samaru-Kataf Round-About, Kaduna 0.5786
State
371 Bethseda Microfinance Bank Limited C/O Harry C. Nnadiekwe 11, Abibu 0.5771
Oki Street
372 Okpoga Microfinance Bank Limited Bank Road, Ugwu-Okpoga 0.5761
373 Minji-Se Churchill Microfinance Bank 26, Churchill Road 0.576
Limited
374 Balera Microfinance Bank Limited No. 2, Kafanchan Road, Lere 0.5751
375 Co-operative Union Microfinance C/O Ministry of Agric & Natural 0.5748
Bank Limited Resources
376 Cash Cow Microfinance Bank Limited 186A, Igbosere Road, Lagos Island 0.5731

377 Enterprise Microfinance Bank 119, Ipaja Road, Near Pen Cinema 0.5728
Limited
378 Ihioma Microfinance Bank Limited 245, Ihioma Road, Orlu 0.567
379 Umuhu Okabia Microfinance Bank United Citizen Hall, Umuhu Okabi 0.5647
Limited Orsu Local Govt A
380 Yeneng Microfinance Bank Limited Old Maternity Road, Ganawuri Riyom 0.5646
Local Govt Area
381 Landgold Microfinance Bank Limited 3, Oke-Aro Road, Oke-Aro 0.5638
382 Apple Microfinance Bank Limited 26, Agbon Street, Oru-Ijebu 0.5605
383 Nsukka Township Microfinance Bank 69, Enugu Road, Nsukka 0.5601
Limited
384 Needs Microfinance Bank Limited Lagos 0.5568
385 Molusi Microfinance Bank Limited 67A, Apoje Road, Oke Agbo Ijebu- 0.5559
Igbo
386 Ikoyi-Osun Microfinance Bank 30, Ibadan Road, Oju-Oja, 0.5558
Limited
387 Iwoama Microfinance Bank Limited No. 12, Okrika/Refinery, 2D, Okrika 0.5548
Mainland, Okri
388 Royal Crown Microfinance Bank 19, Oduwano Street, Fegge Onitsha, 0.5538
Limited Anambra State
389 New Starz Microfinance Bank Ltd 18, Adebanke Ajayi Street, Gbagada, 0.5518
Lagos
390 Umu-Oma Microfinance Bank Ogbaru Relief Market, Onitsha 0.5511
Limited

383
 Random
No Name Address
No.
391 Unyogba Microfinance Bank Limited 1, Alloma Road, Opposite Market 0.5483
Square, Ejule, Ofu
392 Sincere Microfinance Bank Limited 145, Olofa Way, Offa 0.5481
393 Crest Microfinance Bank Limited 43, Obafemi Awolowo Way, 0.5454
394 Ibeto Microfinance Bank Limited The Ancestors House, 57 Onitsha 0.5451
Road, Nnewi, Anamb
395 Ikpe-Annang Microfinance Bank Ikpe Annang Essien, Udim Local Govt 0.5428
Limited Area
396 Unique Trust Microfinance Bank Umuaka Youth Crusade, Civic Hall 0.5421
Limited Building Afor Um
397 Sal-Fol Microfinance Bank Limited Oyo Town 0.5419
398 Borgu Microfinance Bank Limited Plot 191, Ibrahim Taiwo Road, New 0.5411
Bussa
399 RIC Microfinance Bank Limited 1, Adeola Hopewell Street, Victoria 0.5376
Island
400 Nooble Microfinance Bank Limited 22, Agulu Avenue, Amafor West, 0.5364
Nkpor Agu, Anambra
401 Adaigbo Microfinance Bank Limited 12, NEPA Road, Ogwashi-Uku 0.5363
402 Ujoelen Microfinance Bank Limited No. 1, Sir Ezekiel Ainable Way, 0.5345
Ujoelen Ekpoma Esa
403 Gold Package Microfinance Bank 5, Omoba Street, Off Union Bank 0.5344
Limited Road, Ughelli
404 Conpro Microfinance Bank Limited Blk 0116-123, Ikota Shopping 0.5337
Complex, VGC
405 Nwannegadi Microfinance Bank 51, Bishop Shenahan College Road, 0.5325
Limited Orlu, Imo Street
406 Randalpha Microfinance Bank Randa Area, Behind Baptist 0.53
Limited Seminary, Ogbomoso
407 Biyama Microfinance Bank Limited 50, Mubi Road, Hong Local Govt Area 0.5288
408 Ndiorah Microfinance Bank Limited 1, Okosisi Lane, New Parts Market, 0.5287
Nkpor Onitsha,
409 Verdant Microfinance Bank Limited Lagos 0.5286
410 Irele Microfinance Bank Limited 45, Olofun Street, Irele LGA, Ode- 0.5277
Irele
411 Levite Microfinance Bank Limited 1, Henshaw Crescent, Mgbuoba, 0.525
Port-Harcourt
412 Kabba Microfinance Bank Limited 9, Market Road, Kabba, Kogi State 0.5248
413 Convenant Microfinance Bank Afor Ibeji Market Square Umuahia, 0.5247
Limited Abia State
414 Solace Microfinance Bank Limited 38, Effurun/Sapele Road, Effurun 0.5241
415 Caretaker Microfinance Bank Limited Adebowale's House, Caretaker 0.5233

384
 Random
No Name Address
No.
416 Ipapo Microfinance Bank Limited Co-operative House, Market Square 0.5219
417 Iyin Ekiti Microfinance Bank Limited 128, Owolabi Street, Iyin Ekiti 0.5212
418 Olofin Microfinance Bank Limited 2, Moore Street, Ile-Ife 0.5211
419 Lawyers Microfinance Bank Limited Trinity House, Plot 431 Cadastral 0.521
Zone B06
420 Otukpo Microfinance Bank Limited 7, Makurdi Road, Otukpo 0.518
421 Langtang Microfinance Bank Limited 90, Solomon Lar Way, Near Coca Cola 0.5179
Depot Langtang
422 Kadupe Microfinance Bank Limited Sango Market, Saki 0.5173
423 Kano-West Microfinance Bank Kofar Kudu, Gwarzo 0.5153
Limited
424 Nagarta Microfinance Bank Limited No. 47, Abdullahi Fodio road, [Link] 0.5144
4229, Sokoto
425 Hedgeworth Microfinance Bank Gouba Plaza, Suite B06/C06, 1st/2nd 0.5124
Limited Floor
426 Pillar Microfinance Bank Limited Ogobia-Otukpo Road 0.5117
427 Mopa Microfinance Bank Limited Ilorin-Kabba Road, P.M.B.10, Odole 0.5108
Mopa, Mopamuro
428 Rephidim Microfinance Bank Limited 10, Lateef Salami Street, Ajao Estate 0.5104

429 Bama Microfinance Bank Limited Bama Main Market, Barma LGA, 0.5093
Borno State
430 Kpacharka Microfinance Bank Kpacharka, Agwara LGA 0.5058
Limited
431 Iwoye-Ijesha Microfinance Bank 1, Market Square, Iwoye-Ijesha 0.5042
Limited
432 West-End Microfinance Bank Limited 11, Community Road, Igbesa, Ado 0.5038
Odo Local Govt Are
433 Fiyinfolu Microfinance Bank Limited 1, Emmanuel High Street, 0.5026
434 Okuta Microfinance Bank Limited 512, Efianagi Iyayi Road, Egba Land 0.5023
Uhumuode Local
435 Lordsville Microfinance Bank Ltd C/O [Link] 72748, Victoria Island, 0.5022
Lagos
436 Uzondu Microfinance Bank Limited St. Mary's Catholic Parish Compound, 0.5019
Arthur Eze
437 Afribank Microfinance Bank Limited 51/55 Broad Street, P.M.B. 12021, 0.4968
Lagos
438 Dunamis Microfinance Bank Limited 106 Emmanuel High Street, Ogudu 0.4968
GRA, Ojota, Lagos
439 Rockshield Microfinance Bank Leaders Plaza 3, Aladelola Street, 0.4952
Limited Ikosi-Ketu

385
 Random
No Name Address
No.
440 Chikum Microfinance Bank Limited Catholic Archdiocese of Owerri, Villa 0.4951
Assupmta
441 Coastline Microfinance Bank Limited 1, Ekpen Road, Okere, Warri 0.4949

442 Ogoja Microfinance Bank Limited Mission Road, Ogoja 0.4913

443 Kafur Microfinance Bank Limited No.3, Ballaji Road, Malali GRA 0.4909
444 Solid Rock Microfinance Bank 17, Ijemo Agbadu Road, Agoko 0.4899
Limited
445 Ospoly Microfinance Bank Limited Osun State Polytechnic Campus, Iree, 0.4889
Osun State
446 Gombe Microfinance Bank Limited BOC 54, Biu Road, Gombe State 0.4889
447 Okengwe Microfinance Bank Limited 1, Lagos Road, c/o Okengwe P.A, 0.4887
Ozuja Ward Okengwe
448 Capstone Microfinance 187, Igbosere Road, Lagos 0.4856
449 Ogbomosho Microfinance Bank Takie Square, Ilorin Road, 0.4851
Limited Ogbomosho
450 Calm Microfinance Bank Limited 45/47, Martins Street, Great Nigeria 0.4838
House, Lagos
451 Balogun Fulani Microfinance Bank 9, Balogun Fulani Road, 0.4835
Limited
452 Eastman Microfinance Bank Limited 1, Temple Avenue, G.R.A 0.4829
453 Dolphin Microfinance Bank Limited 72, Enerhen Road, Udu Clan, Warri 0.4823
454 Trust Microfinance Bank Limited 10, Local Govt Road, Owode-Egba 0.4819
455 Ure Microfinance Bank Limited Kaduna-Lissam, Takum 0.4816
456 Best Star Microfinance Bank Limited Irefin Junction, Itu-Taba Oje, Ibadan 0.4814
457 Ibolo Microfinance Bank Limited 86, Olofa Way, Offa 0.4807
458 Mabinas Microfinance Bank Limited F73/74, Mangal Plaza, Central Mkt, 0.4799
Off Ahmad Bello
459 Esan Microfinance Bank Limited Central Road, Ubiaja 0.4798
460 Obeledu Microfinance Bank Limited Jemko House, Obeledu-Igbo Ukwu 0.4784
Road, Anocha LGA
461 Wudil Microfinance Bank Limited No. 2, Aliu Dandarman Road, Wudil 0.4774
462 Confluence Microfinance Bank 5, Ibrahim Taiwo Road 0.4773
Limited
463 Ntueke Microfinance Bank Limited Ntueke-Dikenfafi, Urualla 0.4769
464 Kurama Microfinance Bank Limited Yarkasuwa 0.4756
465 Diobu Microfinance Bank Limited 15B, Bishop Barahart Street, Port- 0.4747
Harcourt
466 Nsu Microfinance Bank Limited Orieagu-Umuahia Road, Umuakagu 0.4739
Nsu Ehime Mbano
467 Garki Microfinance Bank Limited Plot 559C, Area 11, Garki, Abuja 0.4736

386
 Random
No Name Address
No.
468 Oba Microfinance Bank Limited Afor Oba Market Square, Oba, Idemili 0.4734
Local Governm
469 Michika Microfinance Bank Limited Michika Main Market, Adamawa 0.4711
470 Biztrust Microfinance Bank LImited 107B, Allen Avenue, Ikeja 0.4687
471 Jesse Field Microfinance Bank Lagos 0.4679
Limited
472 Coral Microfinance Bank Limited Alaba Suru, Amukoko, Araromi- 0.4663
Ifelodun LGA,
473 BOI Microfinance Bank Limited 23, Marina-Lagos 0.4654
474 CSD Microfinance Bank Limited 2, Okim Osabor Street, Ikom 0.4643
475 Oja Tesan Egbeda Microfinance Bank 2, Station Market Road, Erunmu 0.4639
Limited Egbeda Local Govt A
476 Oka Microfinance Bank Limited Sokedile House, Oka Akoko South 0.4636
Local Govt Area
477 Blue Ridge Microfinance Bank 84, Abule Nla Road, Ebute-Metta 0.4623
Limited
478 Compass Microfinance Bank Limited Plot 1, Blk 60, Road 14, Fola Osibo 0.461
Estate, Lekki
479 Safegate Microfinance Bank Limited 1st Floor, No.26, Obafemi Awolowo 0.4604
Way, Ikeja
480 Wase Microfinance Bank Limited 1, Opposite Emir's Palace, Wase Local 0.4604
Govt Area
481 Aniocha Microfinance Bank Limited Umeadi House, Ogbeofu Quarter 0.4589
482 Akokwa Microfinance Bank Limited Oris-Akokwa Market Square, 0.458
483 Birni Microfinance Bank Limited Yantabirni Quarters, Zaria City 0.457
484 Boji Microfinance Bank Limited Old Abraka Road, Agbor 0.4564
485 Modiya Microfinance Bank Limited Lagos-Kaduna Road, Opposite GTC 0.454
Mokwa, Niger State
486 Al-Barakah Microfinance Bank 1, Thanni Olodo Street, Jibowu-Yaba 0.4518
Limited
487 Insight Microfinance Bank Limited A80, Oke Oja street, Ijebu-Ijesha 0.4517
488 Oraezue Microfinance Bank Limited 3, Igwieke Odu Street, Onitsha, 0.4513
Anambra State
489 Onyx Microfinance Bank Limited 5th Floor, Eleganza House; 15, Joseph 0.4512
Street
490 I.C. Microfinance Bank Limited 107, Ogunlana Drive 0.4482
491 Awka-Etiti Microfinance Bank KM 1-3, Nnobi Awka Etiti Road, 0.4469
Limited Idemili LGA, Anambr
492 Izzi Microfinance Bank Limited Iboko Town, Izzi Local Government 0.4437
Area
493 Total Trust Microfinance Bank 19, Odunawo Street, Onitsha 0.443
Limited

387
 Random
No Name Address
No.
494 Abriba Microfinance Bank Limited Erinma Hall Secretariat, Abriba 0.4429
495 Uda Microfinance Bank Limited 35, Market Road, Eguare-Ekpoma 0.441
496 Briyth Covenant Microfinance Bank Plot 19, Water Corporation Road, Off 0.4407
Limited Ligali Ayorin
497 Broadview Microfinance Bank 52, Odunlami Street, Lagos Island 0.4406
Limited
498 Atlas Microfinance Bank Limited Plot 1077, Cadastral Zone BO2, Old 0.4391
Federal
499 Ogige Microfinance Bank Limited 20, Market Road, Alu Dele Nsukka 0.4387
500 Garewa Microfinance Bank Limited Farkari, Katsina State 0.4386
501 Ehor Microfinance Bank Limited 7, Royal Street, Ehor 0.4367
502 Mecies Microfinance Bank Limited No. 1, Mobolaji Ajibola Street, 0.4357
Thomas Estate
503 First Golden Mercury Microfinance 12, Fajuyi Road, Ile-Ife, Ife Central 0.4324
Bank Ltd LGA
504 Crystal Gold Microfinance Bank 55, Shogbamu Street, Bariga 0.4285
Limited
505 KSF Microfinance Bank LImited C/O The Rain Institute, 43, Afribank 0.426
Street,V/Island
506 Havilah Microfinance Bank Limited 47, Old Ojo Road, Badagry 0.4253
Expressway
507 Anchorage Microfinance Bank Highbury Plaza, 104 Gado Nasco 0.4243
Limited Road, Kubwa, abuja
508 Advance Microfinance Bank Limited 18, Udoh Street, Uyo 0.4226
509 Nibo Microfinance Bank Limited Eke Market Square, Awka South LGA, 0.4221
Anambra State
510 Imani Microfinance Bank Limited Zuru-Rikoto, Zuru 0.4192
511 Vining Microfinance Bank Limited Oba Akinjobi Road, G.R.A Ikeja 0.4181
512 Irolu-Remo Microfinance Bank Ijesha Ijebu Road, Irolu-Remo 0.4169
Limited
513 Seed Fund Microfinance Bank 38, Sunmola Street, Mende Maryland 0.4142
Limited
514 Layelu Microfinance Bank Limited 102, Broad Street, Odo-Aye 0.4142
515 Osanta Microfinance Bank Limited Dibu Ojerinde House, Ajegunle Oke- 0.4138
Afin, Igboho Ore
516 Oduduwa Microfinance Bank Limited 5B, Aderemi Road, Ile-Ife 0.4136

517 Consumer Microfinance Bank AISA House, Plot 2087, Herbert 0.4133
Limited Macaulay Way,
518 Iseri Microfinance Bank Limited 32, Ajegunle Street, Iseri 0.4129
519 Babura Microfinance Bank Limited Babura 0.4119
520 Ihima Microfinance Bank Limited 118, Lagos Road, Ihima 0.4115

388
 Random
No Name Address
No.
521 Good Neighbors Microfinance Bank 40, Saka Tinubu Street, Victoria 0.4113
Limited Island
522 Touchgold Microfinance Bank 354, Abeokuta Expressway, Abule 0.4088
Limited Egba
523 Dikenafai Microfinance Bank Limited Dikenafai Postal Agency, 0.4073

524 Chukwunenye Microfinance Bank Catholic Cathedral Premises, 0.4056

Limited
525 Ibogun Microfinance Bank Limited C/O Consultant, 7th Floor; 6 Broad 0.4002
Street, Lagos
526 Sky-Line Microfinance Bank Limited No.2, Baba Street, Abuja-Keffi Road, 0.3983
Opp. Conoil
527 Mainland Microfinance Bank Limited 13, Odozi Street, Agbor 0.3973

528 Ohambele Microfinance Bank Ukwa East Local Govt Area, Aba 0.397
Limited
529 Addossar Microfinance Bank Limited 4th Floor, Globe Motors Building, 0.397
530 Nurthorn Microfinance Bank Limited Unity Bank House, Mbiama-Yenogoa, 0.3966
Yenogoa
531 Uromi Microfinance Bank Limited 76, Ubiaja Road, Uromi 0.3965
532 Misau Microfinance Bank Limited No. 2, Kano-Kari Road, Misau 0.3963
533 Amram Microfinance Bank Limited No. 3, Nekede Road, Owerri 0.3951
534 New Life Microfinance Bank Limited Plot 373, Lateef Jakande Road, 0.3915
Agidingbi
535 Kada Microfinance Bank Limited 1243, Ladoke Akintola Boulevard, 0.3912
Garki II
536 AKCOFED Microfinance Bank Limited C/O Edet Ukim, 1 Mobolaji Ajibola 0.3882
Thomas Estate
537 Apa Microfinance Bank Limited Makurdi Road, Adoka, Otukpo 0.3875
538 Seed Capital Microfinance Bank 2, Montgomery Road, Yaba 0.3806
Limited
539 Tangale Microfinance Bank Limited 60, Gombe-Yola Road, Billiri 0.3792
P.M.B.0008, Billiri,
540 Balogun Ajikobi Microfinance Bank 13, Ajikobi Street, Ilorin 0.3786
Limited
541 Ohha Microfinance Bank Limited No. 1, Ogui Road, 0.3773
542 Bunkasa Microfinance Bank Limited 7, Jos Road, Jere, Kagarko LGA 0.3771
543 Aiyetoro Gbede Microfinance Bank Aiyetoro Gbede, Ijumu Local Govt 0.3737
Limited Area
544 Jewel Coop Microfinance Bank Commercial Layout, Gombe 0.373
Limited

389
 Random
No Name Address
No.
545 IC-Global Microfinance Bank Limited No.1, Ibrahim Kefas Road, Okpohro 0.3727
Junction, Oleh
546 Yaf Microfinance Bank Limited 3A, Och'Idoma Road, Off Otukpo- 0.3715
Enugu Expressway
547 Jen Microfinance Bank Limited Near Government Day School, Hen 0.3676
Karim Lanlido
548 Dutse Microfinance Bank Limited Main Street, Central Market, Dutse, 0.3674
Jigawa State
549 First Ideal Microfinance Bank Limited 13, Alao Street, Ajao Estate, Isoloe 0.3657

550 Okwuta Benin Microfinance Bank 75, Akpakpava Road, Benin City 0.3656
Limited
551 Numo Microfinance Bank Limited Umueze Umunumo Ehime, Ehime 0.3634
Mbano Local Govt
552 Obodoukwu Microfinance Bank Ideato North Local Govt Area 0.3628
Limited
553 Credit Express Microfinance Bank 23/29, Abibu Oki Street, Lagos 0.3627
Limited
554 Orie-Orba Microfinance Bank Limited 1, Obollo Road, Orba, Udenu Local 0.3603
Govt Area,
555 Headstone Microfinance Bank 7, Adesanya Street, Akute 0.3603
Limited
556 Shongom Microfinance Bank Limited Yola Road, Kaltungo, Gombe State 0.3594

557 Utuh Microfinance Bank Limited Oye Market Square, Utuh Nnewi 0.3585
South Local Govt Are
558 Gwadabawa Microfinance bank Illella Road, BakinKasuwa, 0.3583
Limited Gwadabawa,
559 Egbe Microfinance Bank Limited Ilorin - Kabba Federal Road, Egbe 0.3581
560 Faith Microfinance Bank Limited 38, Bola Road, Agbokojo, Off Agbeni 0.358
Market
561 Oredegbe Microfinance Bank Limited 42, Igbalaye Street, Idanre Road, 0.3565
Oke-Aro
562 Ikenne Microfinance Bank Limited Tai Solarin Way, Ikenne Remo, 0.355
Ikenne Ekiti Local G
563 Citiserve Microfinance Bank Limited 360, Ikorodu Road, Maryland 0.3548
564 Solid Base Microfinance Bank Limited Okedagba Quarters, Opp. Baptist 0.3539
High School
565 Golden Funds Microfinance Bank 2, Red Cross Way, Ogbete 0.3529
Limited
566 Nkpa Microfinance Bank Limited Amaohoro Nkpa, Bende Loacal 0.3522
Government Area

390
 Random
No Name Address
No.
567 Chidera Microfinance Bank Limited 39/55, Chime Avenue, New Haven 0.3516
568 MAPOLY Microfinance Bank Limited Moshood Abiola Polytechnic, Ojere 0.3515
Campus, Ibara
569 Aguleri Microfinance Bank Limited 16, Irenso Street, Amaeze, Aguleri 0.3514
570 DCFA-Universal Microfinance Bank C/O Co-operative Shopping Centre, 0.3513
Limited Olotu Road, Ughe
571 Gidauniya Alheri MFB Limited 50, Aminu Kano Way, Kano 0.3509
572 Igangan Microfinance Bank Limited No. 1, Community Bank Road, Isale 0.3477
Akao Igangan, Ib
573 Onima Microfinance Bank Limited Onicha Ezin Ihitte, Mbaise Local Govt 0.3468
Area
574 Ilorin Microfinance Bank Limited Exit Gate of Baboko Market, Along 0.3461
Kuntu Street, Ofa
575 Calabar Microfinance Bank Limited 72 Egerton Street, Calabar, Cross 0.3456
River State
576 Umunne Microfinance Bank Limited Igwebuike House, No. 11 Neni Road, 0.3432
Oye Market, P.O
577 Legend Microfinance Bank Limited Old Okuku / Okua Road Junction Inisa 0.3425
Town
578 Microcred Microfinance Bank Nigeria 1, Kachia Road, Kaduna 0.342
Limited
579 Obollo Microfinance Bank Limited 21, University Road, Obollo-Afor 0.3418
Udenu Local Govt
580 Gamawa Microfinance Bank Limited Near Central Primary School, 0.3408
Gamawa
581 Transizzi Microfinance Bank Limited Iboko Town, Izzi Local Govt Area 0.3407
582 Heritage Microfinance Bank Limited Opposite C.C.C., Oro-Ago, Ifelodun 0.3347
LGA
583 Corporate Microfinance Bank 1 & 2, Soetan Street, Jankara, Apapa- 0.3344
Limited Ganga
584 Guddiri Microfinance Bank Limited No. 40, Old Kano Road, Azare 0.3332
585 Foresight Microfinance Bank Limited 45, Opeilu Road, Agbado Station 0.3315

586 New Image Microfinance Bank Post Office Building, Odeda 0.3313
Limited
587 Freedom (Lagos) Microfinance Bank 445, Agege Motor Road, Bolade, 0.3306
Limited Oshodi
588 Adazi- Nnukwu Microfinance Bank Near Eke Market, Adazi Nnukwu, 0.3303
Limited Adazi, Anambra Stat
589 Busu Microfinance Bank Limited Busu, Via Doko, Lavun Local Govt 0.3296
Area
590 AACB Microfinance Bank Limited Adazi-Ani Town Hall, Adazi Ani, 0.3283

391
 Random
No Name Address
No.
591 Moneywell Microfinance Bank No. 1, Ezimgbu Road; Off Circular 0.3271
Limited Road, GRA Phase
592 Ihiala Microfinance Bank limited Bank House, Orlu Road, Ihiala Local 0.3264
Government Are
593 Nnokwa Microfinance Bank Limited Eke Nnokwa Market Square, [Link] 0.3249
155, Nnokwa, Ana
594 KHB Microfinance Bank Limited 5, Secretariat Road, Kafin Hausa LGA 0.324
595 Odu Microfinance Bank Limited Anyigba-Dekina Road, [Link] 35, 0.324
Odu Ogbo, Ogboyag
596 Standard Abia Microfinance Bank C/O Generic Capital Management, 0.3203
Limited 181 Jubilee Road
597 Abokie Microfinance Bank Limited c/o Plot 2, Murtala Mohammed 0.3196
Square, Independence
598 Awgbu Microfinance Bank Limited Eke Awgbu Market Square, Awgbu 0.3189
599 Ulayin Microfinance Bank Limited 18, Okeyinmi Street, 0.317
600 Ola Microfinance Bank Limited No. 1, Bank Road, Ola Ejigbo Local 0.3169
Govt Area
601 Gusau Microfinance Bank Limited Opposite Main NEPA Office 0.3165
602 Babba Microfinance Bank Limited A126, Ahmadu Bello Way, Agaie 0.3163
603 Matol Microfinance Bank Limited Bokkos, Bokkos Local Govt Area 0.3161
604 Ibokwe Microfinance Bank Limited 275, Nnebisi Road, Asaba 0.3153
605 Utako Microfinance Bank Limited Utako District, Abuja 0.3139
606 Tasued Microfinance Bank Limited Km 54, Abeokuta/Ibadan Road, Orile 0.3136
Ilugun, Odeda L
607 Ekuombe Microfinance Bank Limited 2, Community Bank Road, 0.3129

608 Omuma Microfinance Bank Limited Bank House, Omuma Market Square, 0.3128
Omuma
609 Ekwulobia Microfinance Bank 1, Mission Road, Ekwulobia, P.M.B. 0.3098
Limited 24, Aguata, Ekw
610 Ilu Tuntun-Osoro Microfinance Bank Bank House, Broad Street, Ilu 0.3091
Limited Tuntun-Osoro
611 Umuoji Microfinance Bank Limited Nkpor/Umuoji Road, Umuoji Idemili 0.3074
North Local Govt
612 Alvana Microfinance Bank Limited Alvan Ikoku College of Education 0.3072
613 Viva Microfinance Bank Limited Lagos 0.306
614 Townserve Microfinance Bank C/O Gbasemo Street, Aga 0.3058
LImited
615 Olive Microfinance Bank Limited Room 202, OPIC Plaza, Ikeja 0.3049
616 Arondizuogu Microfinance Bank Arodizuogu, Ideato North Local Govt 0.3048
Limited Area

392
 Random
No Name Address
No.
617 Obokun Microfinance Bank Limited Adeyemi House, Ogo Agbala Street, 0.3045
Ibokun
618 Sadau Microfinance Bank Limited 2, Kofar Fada Road, Itas 0.3035
619 Mustard Microfinance Bank Limited Plot 16, Omole Layout, Ogunnusi 0.3033
Road, Omole B/stop
620 Hasal Microfinance Bank Limited Plot 2015, Herbert Macaulay Way, 0.2996
Wuse Zone 6
621 CAFON Microfinance Bank Limited Catholic Family of Archangel Raphael 0.2992
Chaplaincy
622 UNAAB Microfinance Bank Limited University of Agriculture Abeokuta 0.2986
623 Adkolm-Emerald Microfinance Bank C/O Pastor Ademiluyi O. Adekoya 3, 0.2977
Limited Ademiluyi Stree
624 Bigthana Microfinance Bank Limited No.6. Ali Akilu Road, Kaduna 0.2928
625 KOWA Microfinance Bank LImited 9A, MacDonald Road, Ikoyi 0.2904
626 Omu Microfinance Bank Limited 1, Otunba Gbenga Daniel Road, Omu 0.2899
Ijebu
627 Ugborimili Microfinance Bank Ogbo-Ogwu, Abuja Line, Bridge Head 0.2892
Limited Market, Fegge,
628 Hamda Microfinance Bank Limited Opposite Ginger Market, Dura 0.2886
Kafanchan Road, Kwoi,
629 Oro-Ago Microfinance Bank Limited Opposite C.C.C., Oro-Ago, Ifelodun 0.2875
Local Govt Area
630 KRGY Microfinance Bank Limited Kanti Area, Kano - Daura Road 0.2863
631 Complete Trust Microfinance Bank 5/7, Dobblin Avenue, Alaba Int'l 0.286
Limited Market
632 Finmal Microfinance Bank Limited C/O Rotimi Ajayi & Co., Suite 104, 0.2849
Anbeez Plaza
633 Madelyn Microfinance Bank Limited Madelyn Plaza, 18-22, Ekpeyong 0.2847
Street, Off Marina
634 Osi Microfinance Bank Limited Egbe Road, Osi, Ekiti Local Govt Area 0.284
635 Macrod Microfinance Bank Limited 80, Isoko Road, Ughelli, 0.2836
636 Nations Microfinance Bank Limited 76, Orlu Road, Nkwere 0.2835
637 Octopus Microfinance Bank Limited 24, Community Road, Opp. Police 0.2826
Station Otto-Ijani
638 Grants Microfinance Bank Limited Plot 224, Phase 2, Specialist Hospital 0.282
Road, Gwagwa
639 Idese Microfinance Bank Limited 422, Ejigbo Road, Odo Ori, Iwo 0.2819
640 Re-Union Microfinance Bank Limited 34, Ogoja Expressway, Abakaliki 0.2798

641 Associated Investment Trust 40, Apapa Road, Oyingbo 0.2795

Microfinance Bank

393
 Random
No Name Address
No.
642 Okigwe Industrial Microfinance Bank 141, Owerri Road, Okigwe 0.2786
Limited
643 Mwaghavul Microfinance Bank 16 A, Pankshin Road, P.O. Box, 283, 0.2784
limited Mangu, Plateau
644 EDS Microfinance Bank Limited 30B, Babs Animashaun Road, 0.2779
Surulere
645 Top Mega Trust Microfinance Bank Idama Plaza, 23/25 Okumagba 0.2763
Limited Layout, Warri
646 Osina Microfinance Bank Limited Afor Osina, Ideato North Local Govt 0.2759
Area
647 Visa Microfinance Bank Limited 1st Floor, Outer Left Wing, Gouba 0.2745
Plaza
648 Merit Microfinance Bank Limited No. 21 Orlu Road, Amaigbo, Imo 0.2745
State
649 UNIFA Microfinance Bank Limited C/O Co-operative Shopping Centre, 0.2741
Olotu Road
650 Natex Microfinance Bank Limited [Link] 172, Nanka, Orumba North 0.2736
LGA, Anambra Stat
651 Iperu Microfinance Bank Limited 94, Akesan Road, Iperu Remo 0.2734
652 Afemai Microfinance Bank Limited 61B, Bode Road, Jattu-Uzairue 0.2696
653 Reality Microfinance Bank Limited Reality House, Oladele George Str, By 0.2691
AP Station
654 Igbo-Ora Microfinance Bank Limited Asalu Compound, Igberekodo, Igbo 0.2681
Ora
655 Royal Exchange Microfinance Bank 13, Oke-Olowogbowo Street, 3rd Flr, 0.2656
Limited Off Broad Str
656 Vineland Microfinance Bank Limited Abitos House, Sangotedo, Lekki-Epe 0.2651
Expressway
657 Satellite Microfinance Bank Limited Plot E49, Road 53, Victoria Garden 0.2635
City, Lekki
658 Aloaye Microfinance Bank Limited 31, Mission Road, Agenebode 0.2625
659 Phoenix Microfinance Bank Limited IBB Market, GRA Road, P.M.B. 65, 0.2618
Suleja, Niger Sta
660 Eso-E Microfinance Bank Limited 224, Akarigbo Street, Sabo Sagamu 0.261
661 New Heights Microfinance Bank 24/26 Balogun Street, Lagos 0.2607
Limited
662 First Choice Microfinance Bank C/O Femi Deru, 1, Femi Deru Close, 0.2597
Limited Ikeja
663 Interland Microfinance Bank Limited Atan, Ilugun-Alaro, Ijebu North-East 0.2595
LGA Ijebu-Ode
664 Ogbe-Ahiara Microfinance Bank Onugot House, Afor Ogbe Market, 0.2584
Limited

394
 Random
No Name Address
No.
665 Mabon Microfinance Bank Limited Ihiala LGA, Onitsha-Owerri Express 0.2577
Road, Ihiala
666 Ahmadu Bello University Main Campus, Opp. Post Graduate 0.2557
Microfinance Bank School,
667 Liberty Microfinance Bank Limited No. 16, Balewa Road, Ankpa 0.2551
668 Apeks Microfinance Bank LImited Ghalib Chambers, 2nd Floor, Ghalib 0.2549
House 24, Abdul
669 Apex Microfinance Bank LImited C/O Goldenbridge Ultimate Services 0.2534
Limited, FMBN B
670 New Age Microfinance Bank Limited Old UAC Building, Osele Market, 0.2523
Ikare
671 First Mutual Microfinance Bank No. 38, Gana Street, Maitama District 0.2523
Limited
672 Eruwon Microfinance Bank Limited 21, Church Street, Eruwon, Ijebu-Ode 0.2511

673 Wapo Microfinance Bank Limited Kogi 0.2493

674 Santrust Microfinance Bank Limited 314B, Akin Ogunlewe Street, Off 0.2492
Ligali Ayorinde
675 Kopo-Kope Microfinance Bank C/O Rose Queen Business 0.2482
Limited Consultants, Suite F95
676 Namoda Microfinance Bank Limited Kaura Namoda 0.2473
677 Topclass Microfinance Bank Limited 14, New Market Road, Onitsha, 0.2468
Anambra State
678 A.D.A Microfinance Bank Limited Nasarawa 0.2466
679 All Workers Microfinance Bank Ugisi Orji, Uratta 0.2459
Limited
680 Supreme Microfinance Bank Limited 38, Zainab Street, Medina Estate, 0.2437
Gbagada
681 Finatrust Microfinance Bank Limited 46, Toyin Street, Ikeja 0.2431
682 Leadcity Microfinance Bank Limited Lead City University, Old Toll Gate, 0.2426
Ibadan/Lagos
683 Agosasa Microfinance Bank Limited 5, Ilupeju Estate, Ipokia Road, 0.2423
684 Wetland Microfinance Bank Limited 38, Deco Road, Warri 0.2421
685 RNG Ringim Universal Microfinance Opp. Ringim Central Market, Ringim 0.241
Bank Ltd LGA
686 Peace Microfinance Bank Limited Utako District 0.2403
687 Pyramid Microfinance Bank Limited Spicery Building, 11/13, Onayade 0.2396
Street, Igbobi Sa
688 Prosperity Microfinance Bank Jeremiah 17:8 Place, 1 Siluko Road, 0.2386
Limited Benin City
689 TSM Microfinance Bank Limited 15A, Adebisi Popoola Street, Lekki 0.2365
Phase I

395
 Random
No Name Address
No.
690 Abatete Microfinance Bank Limited Abatete Town, Idemili Local Govt 0.2357
Area,
691 Gworok Microfinance Bank Limited Along Kaduna/Kafanchan Road, 0.2348
692 UNIMAID Microfinance Bank Limited University of Maiduguri Campus, 0.2322
maiduguri
693 Equinox Microfinance Bank Limited [Link] 20, Umuchu, Aguata LGA, 0.23
Anambra State
694 Network Microfinance Bank LImited C/O P.O. Box 987, Ikorodu 0.2289
695 Nopov Microfinance Bank Limited 7-9 Mambilla Street, Maitama 0.2287
696 Agbarho Microfinance Bank Limited 1, Diamond Hill, Calabar, Cross River 0.2277
State
697 DEC Microfinance Bank Limited 5, Kaduna Road, Bauchi 0.2264
698 Isu Microfinance Bank Limited Amurie Omanze Community, Isu 0.226
Local Govt Area
699 Magajin Gari Microfinance Bank Ago Market, Behind Emir's Palace 0.226
Limited
700 Nwabosi Microfinance Bank Limited Isiekenesi, Ideato South Local Govt 0.2256
Area
701 Iwade Microfinance Bank Limited Iwade House, Oke Aje Market, Ijebu- 0.2249
Ode
702 Sama Microfinance Bank Limited 19, Okrika Road, 0.2229
703 Astra Polaris Microfinance Bank Ogunmakin Market, Ogunmakin 0.2209
Limited
704 Mayfield Microfinance Bank Limited NCR House, 6 Broad Street, Lagos 0.2208
705 Credit Plus Microfinance Bank 176, Herbert Macaulay Way, 0.2189
Limited Adekunle, Yaba
706 Dambatta Microfinance Bank Limited 7, Kano Road, Kofar Yamma, 0.2178
Dambatta
707 Unilorin Microfinance Bank LImited Permanent Site of University of 0.217
Ilorin,
708 Amuro Microfinance Bank Limited Ilorin-Kabba Road, Post Office Close 0.2161
709 Aiyepe Microfinance Bank Limited 1, Ikenne Road, Odogbolu Local Govt 0.2159
Area,
710 Cosmopolitan Treasure Base 17, Adokiye Avenue, Abuloma-Trans 0.2149
Microfinance Bank Amadi Axis
711 Prospects Microfinance Bank LImited C/O J.J. Akpan; 93, Udo Umana 0.2141
Street,
712 Aja-Yejebwo Microfinance Bank KM 8, Minna-Zungeru Road, 0.2132
Limited Maikunkele, Minna
713 First Global Microfinance Bank 20, Rumuola Road, Luli Mall Plaza, 0.2117
Limited Port Harcourt
714 Seed Microfinance Bank Limited 2, Montgomery Road, Yaba 0.2116

396
 Random
No Name Address
No.
715 AZSA Microfinance Bank Limited C/O Cousins & Co. 27, Kakawa Street, 0.2114

716 Sagamu Microfinance Bank Limited 67, Ewusi Street, Sagamu 0.2108
717 Akin Microfinance Bank Limited Block F, Ika Oqua Market, Big Qua 0.2104
Town
718 Target Microfinance Bank Limited 40/42, Nandu Plaza, Ndola 0.2103
Cresecent, Off Michael O
719 Traders Microfinance Bank Limited International Trade Fair Complex, 0.2078
Amuwo Odofin Loc
720 Chigbe-Yaji Microfinance Bank Abuja 0.2054
Limited
721 Desmonarchy Microfinance Bank 633, Lagos-Abeokuta Expressway, 0.2054
Limited Abule Taylor Bus
722 Ngala Microfinance Bank Limited Along Main Road, Gamboru-Ngala, 0.2036
Borno State
723 Crystabel Microfinance Bank Limited 186, Mbiama/Yenegoa Road, 0.2027
Yenegoa
724 Ngegwe Microfinance Bank Limited No. 77 Hospital Road, Ogale-Eleme 0.2024
725 Awkuzu Microfinance Bank Limited P.M.B. 2, Awkuzu, Oyi LGA, Anambra 0.2019
State
726 Hallowed Microfinance Bank Limited Praise Plaza, Agbo-Edo Market, By 0.1993
New Motor Park,
727 Cedar Microfinance Bank Limited 24, Tafa Balewa Crescent, 0.1972
728 Golden Choice Microfinance Bank C/O De-Ben Petroleum Filling Station, 0.1972
Limited Onne/Wharf R
729 Annointed Microfinance Bank No. 2, Effurun-Sapele Road, Effurun 0.1971
Limited
730 Dadin Kowa Microfinance Bank FMBN Building, Secretariat Junction, 0.1964
Limited Jos
731 Elim Microfinance Bank Limited C/o Lagos Presbyterian Church, 0.1948
732 Fidfund Microfinance Bank Limited Suite BS 129, Old Banex Plaza, Wuse 0.1944
II
733 Up-Henry Microfinance Bank Limited C/O 2nd Floor, 31, Igbosere Road, 0.1932
Near City Hall
734 New Golden Pastures Microfinance 197, Warri/Sapele Road, Warri 0.192
Bank Ltd
735 Think Microfinance Bank Limited Plot 78, Ralph Shodeinde Street, 0.1886
Lagos House
736 Boluwaduro Microfinance Bank Isale Idofin Quarters, Otan Ayegbaju 0.1883
Limited
737 IMSU Microfinance Bank Limited Imo State University Owerri 0.1883
738 Owotutu Microfinance Bank Limited 23, Ladipo Street 0.1879

397
 Random
No Name Address
No.
739 Senchi Microfinance Bank Limited Senchi Town, Zuru Local Government 0.187
Area
740 Cardinal Rock Microfinance Bank 83, Iju Road, Ifako Ijaiye 0.1863
Limited
741 Ovidi Microfinance Bank Limited 1, Attah Road, Okene 0.1833
742 Iwa Microfinance Bank Limited Ayetoro-Oke, Okeho 0.1827
743 UAM Microfinance Bank Limited Plot 144, Oba Akran Avenue, Ikeja 0.1827
744 Equator Microfinance Bank Limited c/o 154, Ade Odedina Street, Victoria 0.1822
Island
745 Agbowu Microfinance Bank Limited Ogbaagba Olaoluwa Local Govt. Area, 0.1806

746 Polyunwana Microfinance Bank Akanu Ibiam Fed. Polytechnic, 0.1801

Limited Unwana-Afikpo
747 BFL Microfinance Bank Limited Hall 1, Abuja Shopping Mall 0.1801
748 Moneywise Microfinance Bank 29, Ladipo Kasunmu Street, Off Allen 0.1729
Limited Avenue, Ikeja
749 Civic Microfinance Bank Limited Araromi Market, Agodi Gate 0.1717
750 Pana Microfinance Bank Limited Former Bank of the North Blding, 0.1672
Opp UK Bello Sch
751 Awka Microfinance Bank Limited 176 A, Nnamdi Azikiwe Avenue, 0.1661
Awka
752 Assets Microfinance Bank Limited C/O Ali-Paak Consulting, 19 Tinubu 0.1648
Street Square
753 Trustfund Microfinance Bank Limited 60, Adesuwa Road, G.R.A 0.1642

754 Aliero Microfinance Bank Limited Attahiru Road, Aliero Local 0.1632
Government Area, Alier
755 Flourish Microfinance Bank LImited 12, Issa Williams Street, Oke Arin 0.1623
756 Sherperd Trust Microfinance Bank C/O House 2A, Blk K, Abraham 0.1613
Limited Adesanya Housing Est
757 Abigi Microfinance Bank Limited 28, Moborode Odofin Street, 0.1607
758 Kernel Microfinance Bank Limited Oyo-Ibadan Road, Idi-Igba, Ilora, Oyo 0.1597

759 Nun Microfinance Bank Limited KM25, Mbiama/Yenegoa Road, 0.1585

Yenizue-Crene
760 Coalcamp Microfinance Bank Limited 29, Taylor Avenue, Coalcamp 0.1572

761 Top Trust Microfinance Bank Limited 7, Lanla Ibrahim Street, Akoka, Bariga 0.1564

762 Fieldreams Microfinance Bank 22, Akerigbere Street, Off Idejo 0.155
Limited Street,
763 Oko Microfinance Bank Limited Oko Aguata LGA Anambra State 0.1539

398
 Random
No Name Address
No.
764 Ayete Microfinance Bank Limited Ayete Postal Agency, Ayete 0.1527
765 Nassarawa Microfinance Bank 17, Umaru Makama, Dogo Road, 0.1525
Limited Nasarawa, Nassarawa S
766 Abucoop Microfinance Bank Limited Plot 251, Millenium Builder's Plaza, 0.1525
767 Kontagora Microfinance Bank Old Market/Lagos-Kano Road, 0.1518
Limited Ungwuwan Gwari, ontag
768 Ndiagu Microfinance Bank Limited 101, Ogoja Road, Ndiagu Layout 0.1497
769 Idumuje Microfinance Bank Limited Abuano Square, Idumuje Ugboko, 0.1497
Anicha North Local
770 Fortis Microfinance Bank Limited Plot 2388 Herbert Macaulay Way 0.1485
(North), Wuse Zone
771 Sovereign Microfinance Bank Limited 45, Isolo Road, Mushin 0.1469

772 Ikole Ekiti Microfinance Bank Limited Oba Adeleye Road, Ikole Ekiti 0.1438

773 Gapbridge Microfinance Bank 15A Oko-Awo Street, Off Adetokunbo 0.1423
Limited Ademola Street,
774 Nice Microfinance Bank Limited P.M.B.2002, Awka South LGA, 0.1423
Anambra State
775 Stockcorp Microfinance Bank Limited 3rd Floor, Awmar Plaza, Gudu District 0.1419

776 SVP Microfinance Bank Limited 14/55 Mile 1, Diobu, Port-Harcourt 0.1415
777 Daniels Global Microfinance Bank c/o No. 1, Fatima Street, Rayfield 0.1405
Limited
778 Truebond Microfinance Bank LImited 27, Adeola Adeleye Street, Off Coker 0.1392
Road, Ilupeju
779 Iyede Microfinance Bank Limited Town Hall Square, Otor-Iyede, Isoko 0.1383
North Local Go
780 Keffi Microfinance Bank Limited 1, Abubakar Burga Road, Turaki 0.1368
House, Keffi
781 Otun-Ekiti Microfinance Bank Limited Odo Oja Road, Otun Ekiti 0.1352

782 Endwell Microfinance Bank Limited NUT Endwell Shopping Plaza, No.3 0.1349
Shiroro Road
783 Abia State University Microfinance Uturu, Isuikwuato LGA, Abia State 0.1339
Bank Ltd
784 Brooks Microfinance Bank Limited 81, Nwaniba Street, Uyo, Akwa Ibom 0.1336
State
785 Lavender Microfinance Bank Limited 14, Lagos-Abeokuta Road, Lafenwa- 0.1322
Abeokuta
786 Olowolagba Microfinance Bank 5, Kafi Street, Off Obafemi Awolowo 0.1322
Limited Way, Alausa

399
 Random
No Name Address
No.
787 Edet Microfinance Bank Limited Edet Ukpom Market Square, Ukpom 0.132
Local Government
788 Okaiuga Microfinance Bank Limited [Link] 82, Okaiuga-Nkwoegwu, 0.132
Umuahia
789 Neu-Kom Microfinance Bank Ltd Plot 741 Banex Plaza, Wuse II, Aminu 0.1317
Kano Crescent
790 Achina Microfinance Bank Limited Achima Aguata LGA, Anambra State 0.1285
791 Peopleserve Microfinance Bank C/O Enterprise Integrators 87, 0.1275
Limited Ozumba Mbadiwe Str.
792 Ihechiowa Microfinance Bank Civic Centre, Umuye, Ihechioma 0.1268
Limited Arochukwu Local Gov
793 Uvuru Microfinance Bank Limited Orie Ovuru Market Square, Mbaise 0.1266
794 Yabo Microfinance Bank Limited No. 3, Shehu Shagari Road, Yabo 0.1266
795 Ilaro Polytechnic Microfinance Bank Audit Building, East Campus Federal 0.1266
Limited Polytechnic, I
796 CUB Microfinance Bank Limited C/O Ministry of Agric & Natural 0.1262
Resources
797 Titare Microfinance Bank Limited Marine Base Bus Stop, Marine Base 0.1259
798 Manna Microfinance Bank Limited C/O True Trust BDC, 19, Tinubu 0.1237
Street 6th Floor
799 Mutunchi Microfinance Bank Limited No. 3, Ballaji Road, Malali GRA, 0.1199
Kaduna
800 Hamdala Microfinance Bank Limited No. 1 Sarkin Yaki Road, Tundun 0.1186
Wada, Makarfi
801 Balogun Gambari Microfinance Bank Ojagboro, Ilorin 0.1184
Limited
802 OSCOTECH Microfinance Bank Osun State College of Technology, 0.1171
Limited Esa Oke
803 Green-Bank Microfinance Bank 68, Abakaliki Road, Enugu 0.1163
Limited
804 Aogo Microfinance Bank Limited Oba Adesanoye House, 0.1157
805 Giwa Microfinance Bank Limited No. 2, Galadima Salmanu Road, 0.1143
806 Nwanne-Ukwu Microfinance Bank Amauzu Amaeke, Ovim, Isuikwato 0.1135
Limited LGA
807 Ibu-Aje Microfinance Bank Limited 10, Obafemi Awolowo Way 0.1133
808 Aspire Microfinance Bank LImited No. 254, Umusadegi Road, Kwale 0.1121
809 Imowo Microfinance Bank Limited 51A, Ibadan Road, Ijebu Ode 0.1119
810 Omiye Microfinance Bank Limited Co-operative Building, Market Square 0.1092
Ilupeju-Ekiti
811 Fahimta Microfinance Bank Limited Muhammadu Buhari Way, 0.1079
812 Ishiagu Microfinance Bank Limited Ivo Local Govt Area 0.1076
813 EWT Microfinance Bank Limited 34 Blantyre Street, Wuse 2, Abuja 0.1053

400
 Random
No Name Address
No.
814 Eduek Microfinance Bank Limited Winmos House, 202 Abak Road 0.105
815 Monarch Microfinance Bank Limited No. 45, Ogoja Road, Abakaliki 0.1016
816 Idah Microfinance Bank Limited 19, Peter Achimugu Street, Idah, Kogi 0.1012
State
817 Maigatari Microfinance Bank Limited 2, Chiroma Ahmadu Street, Maigatari 0.1005
LGA
818 Rehoboth Microfinance Bank Limited 4, Oyemade Street, Santos Layout, 0.0976
Dopemu-Agege
819 Fortress Microfinance Bank Limited 6, Babalola Gardens, Lekki Phase I, 0.0963
Lekki
820 Kogi Microfinance Bank Limited Adankolo Area, Opposite Kogi FM 0.0943
Station
821 Shinkafi Microfinance Bank Limited Magaji Shinkafi Road, Isa Local Govt 0.0934
Area
822 Ijesa Isu Confidence Microfinance 77, Bank Road, Ijesa-Isu Ekiti 0.0916
Bank Limited
823 Odenigbo Microfinance Bank Limited 8, Bank Road, Ikoyi 0.0904

824 Bmazazhin Microfinance Bank IBB Road, Gawu - Babangida 0.0898

Limited
825 Ogiyan Microfinance Bank Limited 1, Ola Road, P.M.B. 4006, Ejigbo. 0.0893
Osun State
826 Imodi-Imosan Microfinance Bank 19, Market Square, Imodi-Ijebu 0.0893
Limited
827 Ningi Microfinance Bank Limited 4, Bank Road< Ningi LGA, Bauchi 0.0892
State
828 Dominion Microfinance Bank Limited Eke Ihembosi, Ekwusigo Local Govt 0.0892
Area
829 Udezulu Microfinance Bank Limited 3, New Midiket Road, Nnewi 0.0871
830 Ranmilowo Microfinance Bank Apinnite Area, Saki, Osun State 0.0867
Limited
831 Island Microfinance Bank Limited 33, Moloney Street, Obalende 0.0866
832 Acuity Microfinance Bank Limited 167, Adeniji Adele Road, Lagos 0.0865
833 Peoples Microfinance Bank Limited Orofia Industrial Layout, Abagana, 0.0854
Njijoka Local G
834 Combined Benefits Microfinance 2, Yakoyo Road, Ifo Local Govt Area 0.0842
Bank Limited
835 Ajose Microfinance Bank Limited Ejinrin Road, Ijebu South 0.0837
836 ECB Microfinance bank Limited 3, Station Road, Ede 0.0799
837 ICB Microfinance Bank Limited Illah-Asaba Road, Oshimili North 0.0793
Local Govt Area,

401
 Random
No Name Address
No.
838 CIT Microfinance Bank Limited 22, Bentley Street, Off King George V 0.0789
Road, Onikan
839 Ogidi Microfinance Bank Limited Akpakaogwe, Old Enugu/Onitsha 0.0768
Road, Ogidi
840 Polybadan Microfinance Bank The Polytechnic, Ibadan Ventures, 0.076
Limited Ibadan
841 Otuo Microfinance Bank Limited Oluma Quarters, Otuo, Afuze Owan 0.0754
East Local Govt A
842 Iba Microfinance Bank Limited 3, Palace Way, Iba 0.0741
843 Safeline Microfinance Bank Limited FRSC Multipurpose Co-Operative 0.0733
Society, Abuja
844 Ijebu-Imusin Microfinance Bank Ola, Ijebu-Imusin, Ijebu East 0.0732
Limited
845 Golden Crescent Microfinance Bank 12, Fajuyi Road, Ile-Ife, Ife Central 0.0715
Limited Local Govt A
846 FIMS Microfinance Bank Limited City Plaza, 2nd Floor, Plot 596, 0.0707
Ahmadu Bello Way
847 Onibu-Ore Microfinance Bank SW9/90 Dogo Bus Stop, Apata 0.0685
Limited
848 Chelsea Microfinance Bank Limited Onicha Ugbo, Asaba 0.0626
849 JHN Microfinance Bank Limited Bank 6, Peka Close, Wuse II 0.0621
850 Idemili Microfinance Bank Limited 1, Agulu Road, [Link] 24, Nnobi 0.0601
Idemili LGA, Anam
851 Okporo Microfinance Bank Limited Okporo Postal Agency Building 0.0597
Okporo-Orlu Local Go
852 Toki Rainbow Microfinance Bank 68, Nkpogu Street, Off Trans Amadi 0.0586
Limited Industrial Layo
853 Sabon Yelwa Microfinance Bank 85 Kachia Road, Sabon Tasha, 0.0571
Limited Kaduna, [Link] 8678,
854 Mar-Bonch Microfinance Bank 14, Apongbon Street, Lagos 0.0546
Limited
855 Anya Microfinance Bank Limited Line C4/1-6 Relief Market, Obodo- 0.0542
Ukwu Road,
856 Nkpolu-UST Microfinance Bank University of Science & Technology, 0.0538
Limited
857 Nakowa Microfinance Bank Limited Old Jos Road, Opp. Jafaar Gate 0.0537
Kongo, Zaria Local
858 Lift Above Poverty Organisation Plot 6, S & T Road, Opposite Nselu 0.053
Microfinance Market, Benin
859 Congress Microfinance Bank Limited Lagos 0.0505
860 Bukuru Microfinance Bank Limited 8, Jos Road, Jos South Local Govt 0.0495
Area,

402
 Random
No Name Address
No.
861 Treasure Microfinance Bank Limited Agbala Oko Area, Egbado North Local 0.0489
Govt Area
862 Uvuoma Microfinance Bank Limited 4, Holy Ghost Road, Umuahia 0.0486
863 Links Microfinance Bank LImited C/O Dee-Unique School; 7/9 Dee- 0.0474
Unique Close Abesan
864 Ishie Microfinance Bank Limited 165, Odukpani Road, Ishie Town 0.0473
865 Omuaran Microfinance Bank Limited 92, Aperan Road, Omuaran, Irepodun 0.0468
Local Govt Area
866 Bosak Microfinance Bank Limited Plot 8, Cocoa Industries Road, Ogba 0.0466
867 Garden City Microfinance Bank 54, Mbonu Street, D-Line 0.0451
Limited
868 Iyeru Okin Microfinance Bank Olofa Way, Offa 0.0438
Limited
869 Eden Microfinance Bank Limited Suite 3C, Prince's Court, Ahmed 0.0422
Onibudo
870 Express Microfinance Bank Limited 120, Clifford Street, Aba, Abia State 0.0417
871 Ilisan Microfinance Bank Limited 30, Olofin Street, Ilisan-Remo 0.0381
872 Kenechukwu Microfinance Bank Bishop Shenahan Hospital (Annex), 0.037
Limited
873 Funds Matrix Microfinance Bank 38, Sunmola Street, Mende, 0.0347
Limited Maryland
874 Ere City Microfinance Bank Limited Beside Ere City Town Hall, Ere Ijesha 0.0346
875 Mainsail Microfinance Bank Limited Plot 25B, Bodija Mini Shopping 0.0334
Centre, Bodija Mkt
876 Fame Microfinance Bank Limited 3, Constitution Crescent, Aba 0.033
877 Gwong Microfinance Bank Limited Off Kafanchan Road, Fadan Kogoma 0.0317
878 CEDEP Microfinance Bank Limited 1, Abdu-1 Mohammed Street, 0.0274
879 Okwuta Microfinance Bank Limited 33, NTA Road, Rumuokauba 0.0271
880 Brass Microfinance Bank Limited Zungeru Road, P.M.B. 10, Bida, Niger 0.0263
State
881 Nkpor Microfinance Bank Limited 96, Nnamdi Azikiwe Ave, Nkpor, 0.026
Idemili North LGA
882 Mbaitoli Microfinance Bank Limited Nwaorieubi Market Square, Mbaitoli 0.0247
LGA
883 Gobarau Microfinance Bank Limited 35, Madawaki Way, katsina 0.023
884 Savingscorp Microfinance Bank Plot D43, Lagos Crescent, Off Ladoke 0.0228
Limited Akintola Bld
885 Inri Microfinance Bank Limited C/O 653, TOS Benson Crescent, Off 0.0198
Okonjo Iweala
886 Iloffa Microfinance Bank Limited Ilorin/Lokoja Federal Highway, Iloffa 0.0197
Oke-Ero Loca

403
 Random
No Name Address
No.
887 Urban Microfinance Bank Limited 1, Aloma Road, Opp. Market Square 0.0175
Ejule, Ofu Local
888 Oraukwu Microfinance Bank Limited [Link] 127, Oraukwu Town, Idemili 0.0158
LGA, Anambra St
889 Meridian Microfinance Bank LImited Suite 8, 1st Floor, Abule-Ado 0.0144
Shopping Complex, By
890 Janmaa Microfinance Bank Limited 1, Jebba Junction, Eiyenkorin 0.0141
891 Fadan Chawai Microfinance Bank No. 8B, Kagoro Road, Kafanchan 0.0114
Limited
892 Royal Microfinance Bank Limited No. 7, King Jaja Street, 0.0073
893 Adazi-Enu Microfinance Bank Limited Nkwor Market Square, Adazi- Enu, 0.0063
Anaocha Local Go
894 Uzuakoli Microfinance Bank Limited 37, Market Road, Uzuakoli 0.0052
895 Ummah Microfinance Bank Limited Sokoto Street, Yola Market, Ummah 0.0045
896 Mgbidi Microfinance Bank Limited Owerri-Onitsha Road, Mgbidi 0.0032
897 Umuchinemere Microfinance Bank Plot 5, Ikwuato Street, Uwani 0.002
Limited
898 Arochukwu Microfinance Bank Amaikpe Square, Afor Arochukwu 0.0018
Limited Market
899 Fufore Microfinance Bank Limited 25, Gurin Road, Funfore, Adamawa 0.0017
State
900 Viva Microfinance Lagos 0.0016

404
 COMMERCIAL BANK

Random
No Name Address
No.
1 Access Bank Plc 1665, Oyin Jolayemi Street, Victoria 0.98
Island
2 Citibank Nigeria Limited 11 Idowu Taylor Street 0.94
3 Diamond Bank Nigeria Plc Plot 730 Adeola Hopewell Street Victoria 0.92
Island, L
4 Ecobank Nigeria Plc 2, Ajose Adeogun Street 0.89
5 Enterprise Bank Plot 143, Ahmadu Bello Way, Victoria 0.78
Island, Lagos
6 Equitorial Trust Bank Plc Plot 1092, Adeola Odeku 0.64
7 Fidelity Bank Plc 2 Kofo Abayomi Street 0.63
8 First Bank of Nigeria Plc 35 Marina 0.62
9 First City Monument Bank Plc Primrose Towers, 6-10 Floors 17A 0.59
Tinubu Square
10 First Inland Bank Plc 4/6 Adetokunbo Ademola Street, 0.58
11 Guaranty Trust Bank Plc Plot 1669, Oyin Jolayemi Street 0.55
12 Intercontinental Bank plc Plot 999C Danmole Street, Victoria 0.53
Island
13 Key Stone Bank Plot 707, Adeola Hopewell Street, 0.51
14 MainStreet Bank 94, Broad Street, 0.48
15 Oceanic Bank International Waterfront Plaza, Ozumba Mbadiwe 0.35
Nigeria Plc
16 Skye Bank Plc Plot 708/709, Adeola Hopewell Street, 0.32
17 Stanbic - IBTC Bank Plc Walter Carrington Crescent, Vicoria 0.31
18 Standard Chartered Bank Nigeria 105B, Ajose Adeogun Street 0.30
Plc
19 Sterling Bank Plc Sterling Towers, 20 Marina, Lagos. 0.29
20 Union Bank of Nigeria Plc 36, Marina Lagos 0.25
21 United Bank For Africa Plc 57, Marina Lagos 0.16
22 Unity Bank Plc Plot 785, Herbert Macauly Way, 0.14
23 Wema Bank Plc Wema Towers 54, Marina Lagos Island 0.09
24 Zenith Bank Plc Plot 84, Ajose Adeogun Street, Victoria 0.04
Island, Lagos

405
 MORTGAGE BANK
Random
No Name Address
No.
1 A & G MORTGAGES LIMITED 4B Mobolaji Bank Anthony Way, 0.9993
Maryland, Ikeja
2 ABBEY BUILDING SOCIETY LIMITED 19 Warehouse Road, Apapa, Lagos 0.9896
3 ACCESS HOMES & MORTGAGES Plot 1665, Oyin Jolayemi Street, 0.969
LIMITED Victoria Island
4 ACCLAIM HOME SAVINGS & LOANS 3A Adebayo Mokuola Steet 0.9535
LTD
5 ACCORD SAVINGS & LOANS LTD 2 Aromire Avenue 0.9135
6 ADAMAWA SAVINGS & LOANS 1, Bishop Street, Jimeta, Yola 0.9077
LIMITED
7 AG HOMES SAVINGS & LOANS 96, Opebi Road, Ikeja, 0.9024
LIMITED
8 AKWA SAVINGS & LOANS LIMITED 42 Oron Road 0.886
9 ALLWELL SAVINGS & LOANS 90 Upper New Market Road 0.8856
LIMITED
10 AMEX SAVINGS & LOANS LIMITED 10, Ogui Road, Enugu 0.8854
11 ANAMBRA HOME OWNERSHIP CO. 1 Prince Arthur Eze Road , 0.8847
Ltd
12 ASO SAVING & LOANS PLC FMBN Building, Cadastral Zone A0, 0.882
CBD, Abuja
13 BENHOUSE BUILDING SOCIETY 41 Railway Bye -Pass 0.8811
LIMITED
14 CENTAGE SAVINGS & LOANS 14 Allen Avenue 0.8792
LIMITED
15 CITIHOMES SAVINGS & LOANS Kajola House, 62/64 Campbell Street, 0.8783
LIMITED Lagos
16 CITY CODE SAVINGS & LOANS 6 Davies Street 0.8781
LIMITED
17 CONFLUENCE SAVINGS & LOANS Ltd GFO2, Area 10 Shopping Complex, 0.8774
Garki,
18 CONSOLIDATED ESTATE BUILDING 9/11 Station Road, 0.8742
19 COOP SAVING & LOANS LIMITED 15 Seventh Day Adventist Road 0.8728
20 CORNERSTONE BUILDING SOCIETY 71 Adeniyi Jones Avenue 0.8705
LTD
21 CREDENCE SAVINGS & LOANS Eleganza Plaza, Opp. Alaba Market 0.8692
LIMITED
22 CROSSOVER SAVINGS & LOANS 82, Adeniran Ogunsanya Street, 0.8692
LIMITED Surulere
23 CYMON SAVINGS & LOANS LIMITED 18A, Sinaranjo Street, Victoria Island 0.8684
Lagos

406
 Random
No Name Address
No.
24 DALA BUILDING SOCIETY LIMITED No. 1, Abdullahi Bayero Way, 0.8665
Nassarawa, Kano
25 DELTA BUILDING SOCIETY LTD 126 Nnebisi Road 0.8661
26 DIAMOND BUILDING SOCIETY 58, Norman Williams Street, S/W Ikoyi, 0.866
LIMITED Lagos
27 ESTAPORT BUILDING SOCIETY 5, Oremeji Street, Ilupeju, Lagos 0.8652
LIMITED
28 EURO - BANC SAVINGS & LOANS 8 Fure Avenue, 0.8616
LIMITED
29 FBN MORTGAGES LIMITED 76, Awolowo Road, Ikoyi 0.8589
30 FHA HOMES SAVINGS & LOANS LTD. 54-56, 34 Crescent 0.8579
31 FIRST AMALGAMATED BUILDING Jabel House, Ibrahim Taiwo Road, 0.8574
LTD.
32 FIRST CAPITAL SAVINGS & LOANS 37 Murtala Mohammed Way, Jos 0.8571
LTD
33 FIRST GENERATION HOMES Syndicate Plaza, Plot 404 Ahmadu 0.8569
(SAVINGS ) Bello Way, Garki
34 FOKAS SAVINGS & LOANS LTD. Laderin House, 23Quarry Road, Ibara 0.8554
35 FUTUREVIEW MORTGAGES LIMITED 37, Awolowo Road, Ikoyi 0.8547
36 GATEWAY SAVINGS & LOANS Plots 10 & 11, Aderupoko Drive, Ibara 0.8542
LIMITED
37 GLOBAL TRUST SAVINGS & LOANS Plot 740 Adeola Hopewell street , 0.8532
LTD. P.M.B.80130
38 GT HOMES LIMITED Graet Nigeria House 0.8505
39 GUARDIAN TRUST SAVINGS & Lagos 0.8503
LOANS
40 HAGGAI SAVINGS AND LOANS 21 Ereko Street, 0.8501
LIMITED
41 HALLMARK HOMES SAVINGS & 58B Adeola Odeku Street 0.8489
LOANS
42 HARVARD TRUST SAVINGS & LOANS 2, Red Cross Way, P.M.B 01515, 0.8487
LTD.
43 HOME FOUNDATION SAVINGS & 3, Oba Akran Avenue 0.8454
LOANS
44 HOME TRUST SAVINGS & LOANS Greenwich House, 1698A Oyinjolayemi 0.8425
LIMITED Street, VI
45 HOMEBASE MORTGAGE LIMITED Plot 639, Adeyemo Alakija Street, 0.8423
Victoria Island
46 HORIZON BUILDING SOCIETY LTD. Plot 146, Lusaka Road 0.8419
47 IMANI SAVINGS & LOANS LTD. Block 9, Imani Estate 0.8418
48 INFINITY TRUST SAVINGS & LOANS Plot 6A/769, Ahmadu Bello Way, Garki 0.8388
II, Abuja

407
 Random
No Name Address
No.
49 INTEGRATED HOMES SAVINGS & Lagos 0.8383
LOANS
50 INTERCONTINENTAL HOMES Plot 2E-4E, Ligali Ayorinde Street, 0.8383
LIMITED
51 JIGAWA SAVINGS & LOANS LIMITED Maigatari EPZ Complex, Gumel 0.8374
52 JUBILEE-LIFE SAVINGS & LOANS 28, King George V Road 0.837
53 JUBILLEE BUILDING SOCIETY 3, Sumbo Jibowu Street, Off Ribadu 0.8357
Road
54 KEBBI STATE HOME SAVINGS & Ahmadu Bello Way 0.8357
LOANS
55 KOGI STATE SAVINGS & LOANS LTD. 4, Old John Holt Road 0.8347
56 LAGOON HOMES SAVINGS LOANS Plot 292 Ajose Adeogun Street 0.8339
LTD.
57 LAGOS BUILDING & INVESTMENT Central Business District, 0.8322
CO.
58 LEVERAGE HOME SAVINGS & 13, Idunmagbon Avenue 0.8291
LOANS
59 LIVINGSPRING SAVINGS & LOANS 23A Obafemi Awolowo Way, 0.8276
LTD.
60 MAGNET SAVINGS & LOANS 22 Tijani Asogbon Street 0.8258
LIMITED
61 MAYFRESH SAVINGS & LOANS 83 aba - owerri Road 0.8237
LIMITED
62 METRO MORTGAGES LIMITED 1, Chief Mike Nwankoni Street 0.8183
63 MIDLAND MORTGAGES LIMITED 453, Nnebisi Road, Avanti Plaza, Asaba 0.8173

64 MORTGAGE GUARANTY SAVINGS AP Plaza, Adetokunbo Ademola 0.817

Crescent
65 MORTGAGES PHB LIMITED Plot 14B Anifose Street, Off Adeola 0.8166
Odeku Street
66 MULTIBANC SAVINGS & LOANS LTD Plot 290 Ajosse Adeogun Street 0.8166
67 MUSTARD SEED MORTGAGE 88A, Opebi Road, Ikeja 0.8147
LIMITED
68 MUTUAL ALLIANCE SAVING & 209 Oron Road Uyo 0.8125
LOANS
69 NEW CAPITAL SAVINGS & LOANS 10, Durban Street, Wuse II, 0.8124
70 NEW PRUDENTIAL BUILDING 28 Oba Akran Avenue 0.8121
SOCIETY
71 OASIS SAVINGS & LOANS LIMITED 298 Ikorodu Road 0.812
72 OCEANIC HOMES (SAVINGS & 7, Randle Road, Apapa 0.8113
LOANS)

408
 Random
No Name Address
No.
73 OMEGA SAVINGS & LOANS LIMITED PCI Engineering Close, Off Idowu 0.8107
Taylor,
74 OWNERS HOME SAVINGS & LOANS 290 A Ajose Adeogun Street 0.8106
LTD
75 PASSWORD SAVINGS & LOANS 14 Ola Street 0.8088
LIMITED
76 PEAK SAVINGS & LOANS LIMITED 12 Adetounbo Ademola Street 0.8087
77 PERSONAL TRUST SAVINGS & 67 Ogunlana Drive ,Surulere 0.8072
LOANS
78 PLATINUM SAVINGS & LOANS 61, Yakubu Gowon Crescent, Asokoro 0.8005
LIMITED
79 POST SERVICE SAVINGS & LOANS 1B, Mcgregor Road, Ikoyi 0.7992
80 REFUGE HOME SAVINGS & LOANS 4 Adeniyi Joes Avenue 0.7984
81 RESORT SAVINGS & LOANS LIMITED 18a Keffi Street 0.7964
82 ROYAL SAVINGS & LOANS LIMITED 37 Effurun, Sapele Road 0.7953
83 SAFE TRUST SAVINGS & LOANS 18 Keffi Street, 0.7941
LIMITED
84 SAKKWATO SAVINGS & LOANS 8 Kano Road , Sossoco Building 0.7938
LIMITED
85 SKYE BUILDING SOCIETY LIMITED Plot 6 Commercial Business District, 0.7931
TISCO Plaza
86 SKYFIELD SAVINGS & ANS LIMITED 192A, Jide Oki Street, Off Ligali 0.793
Ayorinde Street,
87 SOLID TRUST SAVINGS & LOANS 20, Saka Tinubu Street, 0.7925
88 SPRING MORTGAGE LIMITED 16, Diya Street, Gbagada, Lagos 0.7921
89 STALLION HOME SAVINGS & LOANS 34 Ogunlana Drive, Surulere 0.7919
90 STB BUILDING SOCIETY LIMITED 64 Awolowo Road 0.7909
91 SUNTRUST SAVINGS & LOANS 9th Floor, Re-Insurance Building 0.7908
LIMITED
92 SUPREME SAVINGS & LOANS 10A Falomo Shopping Center 0.7907
LIMITED
93 TARABA SAVINGS & LOANS LIMITED Investment House, 134, Hammaruwa 0.7902
Way,
94 TMC SAVINGS & LOANS LIMITED Plot 287 Ajose Adeogun Street 0.7898
95 TRANS ATLANTIC MORTGAGES No. 60, Mbiama-Yenagoa Road, Ekeki 0.7891
LIMITED
96 TRINITY SAVINGS & LOANS LIMITED 18 Moloney Street 0.788
97 UNION HOME SAVINGS & LOANS Royal House 153 Ikorodu Road 0.787
98 UNITED MORTGAGE LIMITED Plot 732A, Adetokunbo Ademola 0.7865
Street,

409
APPENDIX 10 RESEARCH PROCESS

410
 Selection of
Problem Definition Problem sampling
discovery technique

Sampling

Exploratory Probability Random

research Stratified Sampling

Data Collection

Collection of data
Main Survey Pilot Study Field work

Data Analysis

Problem definition & Research Objectives Coding of data

Research Design
Selection of Data Processing
Research Method
Conclusion & Report

Interpretation of
findings
Quantitative, Survey, Questionnaire

Report

411
APPENDIX 11 LIST OF PUBLICATION FROM THE WORK

412
 JOURNAL PUBLICATION

1. Effect of Business Process Re-engineering Factors and Organizational

Performance of Nigerian Banks: I.T Capability as Moderating Factor.
Published in International Journal of Business and Social Sciences (IJBSS),
2(13), 198-201.2011.

2. Radical innovation in financial institution: Exploring the Business Process

Reengineering practices and the level of its implementation in Nigerian
banks. Published in International Journal of Business Management
Tomorrow (IJBMT), 1(3), 1-12. 2011.

3. IT Capability as Moderator between Business process Reengineering

Factors and Organizational Performance of Banks in Nigeria. Published in
African Journal of Business Management (AJBM), ISI INDEX April Vol. 6
(16) 5551 – 5567 DOI 105897/AJBM11.2792

4. A Framework of Business Process Re-engineering Factors and

organizational Performance of Nigerian Banks. Published in Asian Social
Science Vol. 8, No. 4, pp. 1-14 doi:10.5539/ass.v8n4p203 April, 2012

5. CSF of Business Process Management for Small and Medium Nigerian

bank. Published in Business and Management Review Vol. 2(1) pp. 83 – 91
March, 2012

6. The Relationship between Information Technology Capability and

Organisational Performance in Nigerian Banks. Published in International
Journal of Technology and Management ISSN 1927-9000 Vol. 1(1) pp. 1-
10. 2012

413
 INTERNATIONAL CONFERENCE PROCEEDINGS PUBLISHED

1. Critical Success Factors of Business Process Re-engineering and Operational

Performance of Banks in Nigeria: Information Technology Capability as Moderator. A
paper presented at Pacific Rim Objective Measurement Symposium 2010: Theme:
Constructive Measurement for Greater Accountability conducted at The International
Islamic University Malaysia (IIUM) Kuala Lumpur 30th June, 2010.

2. Examining the role of Information Technology Capability on Bank Operational

Process Performance. Paper presented at the 2nd International Conference on
Technology and Operations Management (2nd ICTOM) Theme: Seeking Dynamism,
Competitiveness and Sustainability conducted at Bay view Hotel – Langkawi Malaysia
5th – 7th July 2010.

3. Business Process Re-engineering Success and Failure Factors. Paper presented at the
2nd International Conference on Technology and Operations Management (2nd ICTOM)
Theme: Seeking Dynamism, Competitiveness and Sustainability conducted at Bay
view Hotel – Langkawi Malaysia 5th – 7th July 2010.

4. Radical innovation in financial institution: Exploring the Business Process

Reengineering (BPR) practices and the level of its implementation in Nigeria. 3 rd
International conference on Arab and Malaysian Global Business and Entrepreneurship
held at AMGBE, Amman, Jordan. July 9-13, 2011.

414