THE IMPACT OF MANAGEMENT PRACTICES ON VALUE OF INFORMATION TECHNOLOGY INVESTMENTS IN NIGERIAN BANKS

Abstract

The broad objective of this study was to evaluate the impact of management practices on value of information technology (IT) investments in banking operations in the South West Nigeria. In order to analyze the effect the maintenance of existing systems versus the development of new IT systems, the study used data collected over a five year period (2001 -2005) on technology expenditure of ten selected banks. The technology expenditures were categorized into: i. Maintenance and ii. Development. A simple correlation between maintenance and development ratio and firm performance was measured from the Cobb-Douglas production function using the net income as output. The results showed that for every management improvement on maintenance of IT system, positive net income increased by 0.030 and was significant (p<0.001). The conclusion drawn from the study was that, development of new IT systems had a significant effect on net income and banks net income will improve if their respective management improve on development of new IT systems