Information Technology Conceptualization and Performance in Deposit Taking Microfinance Institutions in Kenya

Abstract

It has been matter of concern for firms in making decisions to invest or not to invest in Information Technology (IT) to provide improvements in productivity and business efficiency. There is no conclusive evidence that the high levels of spending on IT by businesses improves their productivity, leading to the coining of the term IT Productivity Paradox. The impact of Information Technology investments in the Kenyan banking system is an important issue as this type of investment constitutes a substantial component of costs and exerts a strong influence on Deposit Taking Microfinance Institution (DTMFI) operations and strategies. The main objective of this study was to investigate the relationship between conceptualization of Information Technology and DTMFIs' performance. A survey approach was deemed necessary in unearthing general views. This study adopted a simple random sampling technique to collect the data for analysis of the relationship between conceptualizations of IT and DTMFIs performance. The study used primary data gathered from the respective DTMFIs through the use of questionnaires administered to the relevant departments of the various DTMFIs under study. The questionnaire was administered to 67 respondents comprising of managers at the same level of the organization for each DTMFIs. This study yielded data that require both qualitative and quantitative analysis. From the findings and discussions, the study concludes that DTMFIs conceptualize IT as means to create an impact in performance. DTMFIs also make decisions to conceptualize IT due to industrial pressure. The study concludes that firms make decisions to invest in IT depending on financial capabilities as well as IT technical abilities. Organizational culture or value also influences DTMFIs decision making in investing in IT. The study also made a conclusion that implementation of IT should be done to save resources, reduce costs and make firms satisfy customers well and generally improve firms performance. The study recommends organizations to invest in IT to improve staff capabilities, provide choice of communication and also provide quality products and services. This will make the organizations to evaluate IT productivity capabilities and IT conceptualization’s impact in improving organizational performance. The study also recommends businesses to focus on specific strategies for firm to improve its profitability and eventually increase in revenue.