Browsing by Author "Onsongo, Elsie"
Now showing 1 - 4 of 4
Results Per Page
Sort Options
- PublicationEvaluating information technology investments - a survey of Kenyan Commercial BanksOnsongo, ElsieThis study attempts to provide empirical evidence on the current state of practice in Kenyan banking institutions in evaluating IT investments ex ante. Results of the survey show that the most popular investment appraisal techniques used in such evaluation in Kenyan banks are cost-benefit analysis, technical arguments, risk analysis, competition, payback period and return on investment, while the least popular are the Internal Rate of Return, computer-based techniques and Net Present Value. The fundamental conclusion of this research is that in the banking industry, the level of usage of sophisticated techniques that integrate financial and strategic analysis to appraise IT investment is low compared to the usage of “traditional” appraisal techniques that focus on the financial return of an investment. Results of this study will help to establish banking industry-wide benchmarks and best practices in
- PublicationFirm size and information technology investment appraisal: evidence from commercial banks in KenyaOnsongo, ElsieInformation technology expenditure in banks consumes an ever increasing portion of operating costs and revenues. As organisations continue increasing their investment in IS, the process of evaluating potential Information Technology (IT) investments becomes an important activity for an organisation’s management. This study attempts to establish whether the choice of IT investment appraisal approaches is associated with the size of a firm using evidence from commercial banking institutions in Kenya. Results of the survey show that there is a correlation between choice of approach and firm size. Among the banking institutions in Kenya, medium-sized banks focus the most on both the strategic and analytical approaches to IT investment appraisal. Majority of small banks have adopted relatively simple economic techniques such as payback period and cost-benefit analysis, and they do not focus on the more sophisticated analytical and integrated approaches as much as the medium-sized and large banks. Finally, large banks have adopted all of the appraisal approaches explored in this study. The results of this study help to establish banking industry-wide benchmarks and best practices in IT investment evaluation, thereby assisting IT executives to make more informed decisions for future investments.
- ItemInformation systems investment appraisal in commercial banks in Kenya : theory and practiceAteya, Ismail Lukandu; Onsongo, ElsieA review of literature on the practise of Information Systems investment appraisal in firms suggests a gap between theory and practice. In an attempt to explore the extent of this gap, this research reviews the theory of fixed asset investment when applied to the current state of practice of IS investment evaluation among Kenyan banking institutions. Results of the survey show that the level of usage of discounted cashflow (DCF) techniques and sophisticated analytical and integrated techniques is low compared to the usage of simple financial and strategic techniques. To illustrate, simple ratio-based techniques were found to be very popular, with Cost Benefit analysis being used by 92% of responding banks, Payback Period (60%) and Return on Investment (60%). Appraisal techniques that consider strategic arguments were also found to be very popular, i.e. technical considerations (92%), competitive advantage (64%) and Critical Success Factors and SWOT analysis (56% each). On the other hand, DCF techniques were unpopular i.e. Net Present Value (8%) and Internal Rate of Return (0%). Further, analytical and integrated appraisal techniques were also found to be relatively unpopular: value analysis (28%), scoring models (16%), computer based techniques (4%), the Balanced Scorecard (56%) and Information Economics (40%). In addition, a partial relationship was found between the adoption of a type of investment appraisal technique and the size of a firm. As the size of the firm, determined by the book value of total assets increases, the usage of strategic and analytical techniques increases, while at the same time, the use of ratio-based techniques reduces. Based on these findings, this study highlights the shortcomings of normative fixed asset investment theory when applied to IS investment appraisal
- ItemInformation technology investment evaluation – an empirical study of the techniques adopted by commercial banks in KenyaOnsongo, ElsiePaper presented at ICT conference of 2008. Theme : ICT's Role towards a Knowledge Economy.