Relationship between Information, Communication and Technology Strategy and Competitive Advantage among Commercial Banks in Nairobi County

Abstract

Commercial banks have continued to implement Information, Communication and Technology (ICT) in order to keep up with the competition and changing consumer needs and wants in the competitive business environment with the aim of gaining competitive advantage. Integration of ICT with the organization’s strategies has become a driving force of competition among financial institutions in Kenya towards achieving improved service efficiency and effectiveness. The study aimed to evaluate the relationship between ICT strategy and competitive advantage among commercial banks in Nairobi County. The study identified four research variables IT-Business alignment, IT-driven innovation, business intelligence and IT-Business process re-engineering that have significant influence on competitive advantage. The research design used in this study was descriptive survey where qualitative analysis was put into use by use of closed-ended questionnaires. The research study employed purposive sampling a subset on the the target population in this study that comprised the 43 registered commercial banks in Nairobi County. Data analysis was done using a multivariate regression model in the Statistical Package for Social Sciences (SPSS). From the findings, IT-business alignment, IT-driven innovation, business intelligence and IT-business process re-engineering significantly influenced competitive advantage. ICT strategies were developed with employee competence in mind and aimed at supporting the overall organizations goals. ICT strategy promoted innovations besides focusing on meeting the changing customer needs and facilitating creation of new applications that provided direct strategic advantage. Business intelligence systems enhanced accuracy on strategic reporting besides improving speed and accuracy of strategic decision making. The study recommends that commercial banks knowledge management ought to be promoted by ICT strategy embracement, ICT strategy ought to promote human resource response to business strategy and commercial banks ought to recognize ICT related opportunities that supported business strategy. The study further recommends that IT innovation strategy ought to provide room for persuasions of new clients to the organization and IT innovation strategy ought to allow for timely commercialization of innovations. The business intelligence systems ought to enhance accuracy on strategic reporting, commercial banks business intelligence systems ought to improve speed and accuracy of strategic decision making.