Effects of Business Process Re-engineering on project implementation of Core Banking Software: a case of Kenyan commercial banks in Nairobi County

Abstract

Today, Business Process Re-engineering (BPR) has become a necessity in the business world because it is considered one of the main effective approaches to introducing change and development in an existing business process. BPR is one of the most important solutions for organizational improvements in all business processes and performance measures. However, there are reports of high failure rates of 70% when not well administered. The main reason behind this is that the administration tends to be more focused on the process and ignores the surrounding environment. The other reasons are the lack of tools to identify the causes of the contradictions and inefficiencies. Even though numerous studies have been done on Business Process Re-engineering, none of them delineated the various BPR components and tried to ascertain their effect on the implementation of core banking software. The broad research objective of this study was to analyse the effects of business process re-engineering on project implementation of Core Banking Software at commercial banks in Nairobi County. Specific objectives were to examine the effects of Information Technology, Financial Resources, and Organizational Culture on the implementation of Core Banking Software at the Kenyan commercial banks in Nairobi County. A descriptive research design taking a quantitative approach was adopted because it establishes the relationship between the study variables. The target population was representative of the respective Kenyan commercial banks in Nairobi County from a population of 42 regulated banks. The study employed primary data, which was collected by the use of a close-ended online questionnaire. It was a cross-sectional study since data was collected across several units in a uniform time frame. Data was analysed through SPSS and interpreted through quantitative methods as per the research's objectives and questions. The study utilized descriptive statistics to gauge the existence of business process re-engineering key factors and implementation of core banking software. The researcher employed inferential statistics, including correlation analysis and multiple linear regression to analyse data collected during the study. The study found that information technology has a positive and significant influence on the implementation of Core Banking Software. The study also found that financial resources has a positive and significant influence on the implementation of Core Banking Software at the Kenyan commercial banks. Further findings revealed that organizational culture has a positive as well as a significant influence on the implementation of Core Banking Software at the Kenyan commercial banks. The study concludes that information technology, financial resources and organizational culture have a positive as well as a significant influence on the implementation of Core Banking Software at the Kenyan commercial banks. The study, therefore, recommended that commercial banks in Kenya should make use of information technology in the implementation of Core Banking Software. Banks should give priority to the allocation of funds for business re-engineering process. More so banks should consider building a culture of teamwork that is stable, risk-taking and result oriented.