Risk Management and Performance of Information Technology Projects by Commercial Banks In Kenya
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Date
2022
Authors
Okong’o, Ouma Fredrick
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Undertaking an information technology project in a banking environment is a complex task. Studies globally and locally indicate a problem of high failure rate of information technology projects. Standish group report 2019 states that 83.9 percent of information technology projects partially or completely fail. Majority of the projects, 52 percent were over budget, overdue, or lacked promised functionality. Previous studies indicate information technology projects by commercial Banks in Kenya experience the same project performance variations, as projects are either delayed, over budget or have issues with functionality. Risk is a factor that challenges project performance. Project risk management includes risk identification, analysis, response, and monitoring and control of risk in a project. The goal of project risk management is to reduce the likelihood and/or severity of unfavourable risks. The overall goal of this study was to examine the relationship between risk management and performance of information technology project by commercial banks in Kenya, taking into account the moderating effect of project complexity and the mediating effect of risk culture, both of which had been largely overlooked in previous research hence filling a research vacuum. Unit of analysis was thirty six selected IT projects. Questionnaires were used to collect the data from the targeted one hundred and eight respondents. The instrument was tested for reliability by use of Cronbach’s alpha coefficient of internal consistency test and validity by use of selected information technology project professionals’ review. Based on a survey, the research used both descriptive and explanatory research designs. The influence of risk management on performance of information technology projects by commercial banks in Kenya was analyzed using multiple regression analysis. Quantitative data was analyzed using multiple regression analysis model software tool SPSS Version 25. The study adopted empirical model of least squares method while testing the hypotheses. The researcher conducted diagnostic tests of Normality, Linearity, Homoscedasticity and Multicollinearity to see if the data conforms to the basic assumptions of linear regression. The findings were presented using statistical parameter estimates.Tables and figures were used to present data, and supported by explanatory annotations. The results indicated that risk analysis, risk responses and risk monitoring and control had significant effects on the performance of information technology projects in the banking sector. Risk identification was not significant. The study also found out that project complexity had a moderating effect on the relationship between dependent and independent variables. The results indicated that risk culture had no mediating effect on the relationship between risk management practices and performance of information technology projects. The study recommends that banks should consider implementing and fully operationalize risk management practices in information technology projects. The Central Bank of Kenya should also consider putting in place an information technology projects risk policy framework to aid the banks in project undertakings.Knowledge gap is addressed by scholarly work and findings that has resulted from this research by providing statistical data analysis and explanations given on the relationship between risk management and Information Technology project performance undertaken by commercial banks in Kenya.
Description
A Thesis Submitted in Partial Fulfilment of the Requirements for the Award of the Degree of Doctor of Philosophy in Business (Project Management) of Kenyatta University, June, 2022
Keywords
Risk Management, Performance, Information Technology Projects, Commercial Banks, Kenya