Information System Service Design and Competitive Advantage Among Commercial Banks in Kenya

Abstract

Amid the 1980s, the relationship between information technology (IT) and efficiency turned into a wellspring of level headed discussion, the shocking changes in PC's basic capacities demonstrated practically difficult to survey as far as their impact on profitability. Data and Communication Technology rose as a method for empowering the organization to accomplish upper hand and additionally enhanced efficiency. This would be accomplished through data framework benefit outline which concentrates on the framework's client capacity and operation adequacy. The reason for the study was to build up the relationship between data framework benefit outline and upper hand among business banks in Kenya. The objectives of the study were a) to determine the benefits of information system service design in commercial banks, b) to establish the challenges experienced by commercial banks when implementing information system service design and c) to determine the relationship between information system service design and competitive advantage among commercial banks in Kenya. Questionnaires were used to collect data from ICT managers, administrators and functional staff in 36 commercial banks in Kenya and analysis was done using frequency and percentages, means and standard deviations, then regression analysis. The results were presented in tables and charts. From the findings those who strongly agreed on the benefits of service design had a high and equal distribution on every aspect of the benefits and this is supported by the high percentage it scored. The lowest percentages were on those who strongly disagreed on the benefits of the service design. This finding indicates that service design is vital for achieving competitive advantage. Accessibility to remote services received the highest score and this can be attributed to customers appreciating and able to access banking services through the various e-banking platforms. Surprisingly reduction of operating cost received the highest score on neither category this can be attributed to respondents not understanding the connection between service design and operating cost. Further, the poor integration between the front stage and back stage and lack of enough training on computerized transaction were the greatest challenges felt by the respondents. The regression results indicated the number of complaints from customers is negatively related to competitive advantage while the number of services on the interface used is positively related to competitive advantage. The research findings concludes that there are far much more benefits than challenges when banks are able to implement information system service design and are therefore able to have an edge or competitive advantage over their rivals. Furthermore the research has established from the relationship between service design and competitive advantage that a unit change in number of services on the interface has a great impact on the competitive advantage of the commercial banks while a reduction of customer complaints also positively affect competitive advantage. The research recommends that banks should also consider ways of tapping on the benefits of system service design in order to achieve growth and sustain competition. The benefits of service design are numerous and can be used as a growth point for the bank. There is need for system developers to come up with more user friendly systems that will have a variety of interfaces offered on the transacting platform and also that will reduce the amount of time required to perform a transaction and one which will have minimum complaints from customers as all these are the measures of information system service design and thus affect competitive advantage directly.