EFFECT OF STRATEGIC INFORMATION COMMUNICATION TECHNOLOGY ADOPTION ON PERFORMANCE OF DEPOSIT TAKING SACCOS IN KISII REGION, KENYA

Abstract

Globally, performance is a key concern to every organization while information communication technology (ICT) has been viewed as a tool that can be adopted to strategically enhance it. Consequently, organizations have unprecedentedly adopted ICT in recent years. The unprecedented speed of adoption of ICT around the world has raised general expectations about their potential effect on firms’ competitive advantage. Deposit taking SACCOs (DTSs) are also preoccupied with sustainable performance hence contribution to Kenya’s vision 2030 yet they face considerable competition from banks and micro finance institutions (MFIs) .Savings and credit cooperative organizations (SACCOs), have consequently been adopting ICT yet some continue to perform poorly as seen in their dwindling membership and rate of dividend as witnessed in their final accounts. The main study purpose was to evaluate effect of strategic ICT adoption on performance of DTSs in Kisii region; Kenya .Specific objective was to determine effect of ICT policy implementation on performance of SACCOs. The study was guided by Resource Based Theory which considers performance of an organization as a function of both the tangible and intangible resources it has and Innovation Diffusion Theory which explains how, why and what rate new ideas and technology spread. The theories were applied within a conceptual framework encompassing ICT variables and their effect on performance. The research design was a correlation survey. The target population was 45 respondents comprising of nine chief executive officers and 36 departmental heads in nine DTSs in Kisii region. A pretest on five respondents drawn from one Sacco found the instruments to be reliable with Cronbach’s α=0.83625. Instrument validity was reviewed by experts at Maseno University School of Business and Economics. Research instruments were administered on a saturated sample of 40 respondents to collect primary data. Using a multiple regression analysis the study ICT policy implementation at β=0.255 (p=.022) to be statistically significant positive predictors of Sacco performance. This means that a unit adoption of ICT policy implementation will lead to an increase in the level of performance by 25.5%. The study concluded that improved ICT policy implementation yielded better performance in deposit taking SACCOs. The study recommended strategic implementation of ICT policies by deposit taking SACCOs. The study’s significance is in informing: Sacco managers in implementation of ICT policies; governments in making informed ICT policy implementation policies and academicians in using the findings as a benchmark for future research.