Department of Enterprise Computing
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Browsing Department of Enterprise Computing by Author "Chege,Stanley Mwangi"
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Publication Open Access Information Technology Strategic Alignment Maturity and Business Performance: A Study of The Banking Industry in Kenya(Mount Kenya University, 2023-05) Chege,Stanley MwangiThis study sought to demonstrate the relationship between the IT Strategic Alignment Maturity and business performance. The Strategic Alignment Maturity Model (SAMM) was applied for assessing the alignment maturity. Business performance can be measured in terms of financial parameters including return on assets and net profit. The main business problem is that managers in the Kenyan banking industry do not have a model that would predict the relationship between business information technology alignment maturity and business performance. The specific objectives are to assess the maturity of each the six criteria namely, governance, communications, value, partnership, technology scope, and skills and the corresponding relationship each has with business performance. The data collection tools were interviews and questionnaires. The data analysis tool was Statistical Package for Social Scientists (SPSS v 24). The participants were the CIOs of all the nine Tier one banks. Tier one banks make approximately 70% of the Kenyan banking industry market size. The research adopted a mixed methodology that utilized both quantitative and qualitative data. The study concluded that alignment maturity level had a relationship with performance of the commercial banks. The findings indicated the average communication criteria maturity within the commercial banks was at 3.10 across all the commercial banks showing a moderate fit for the organization. The results also showed an average value of IT value criteria (mean = 3.09), governance criteria (mean = 3.20) and partnership criteria (mean = 3.19). The study further established that Scope/Architecture criteria and Skills criteria had an average mean of 3.19 and 3.03 respectively which was an indication of moderate fit within the commercial banks. The results of the financial metrics indicated a log of Total assets of 11.699 and an average return of assets (ROA) of 2.7%. The results implied that 36.8% of the changes in the business performance of Tier 1 commercial banks were determined by the strategic business-IT alignment maturity. The coefficient for strategic business-IT alignment maturity was 2.727, Sig = .033<.05 which was an indication that there is a positive significant effect. A change in Business–IT alignment maturity will lead to a 2.727 change in the business performance of the Tier one commercial banks in Kenya. The developed framework focused on how IT strategy, style, skills, staff, structure, and processes contribute to customer experience which leads to better profitability within banks. The findings indicate that the information system organization has a strong positive correlation with the customer experience (P= .861, Sig = .001<.05). The results also show that customer experience has a strong positive and significant effect on the profitability of the commercial banks (P= .739, Sig = .011<.05) testing at 95% confidence level. The zero-order correlation showed that controlling for the customer experience there was positive and significant association between Business-IT alignment and the profitability of commercial banks in Kenya (P= .691, Sig = .029<.05). The study recommends that commercial banks should improve the strategic maturity, invest in digital transformation, continuously review the value of IT investments, and ultimately achieve higher levels of the return on assets.