Effect of business intelligence techniques on organizational performance: a survey of selected commercial banks in south rift counties in Kenya

Abstract

The major role of Business Intelligence Techniques in an enterprise is data resource utilization. Banks could create more value by leveraging on the data they have. However, greater portion of contemporary banks confront difficulties such as data underestimation, fragmented financial systems, small banks serving niche markets and are not contributing to competition in the sector, limited Outreach program of financial systems, fraud detection, mismanagement and even loss of business among others have remain glaring in the sector. Business data and data analysis process have necessitated the need for precise choices to be made and adoption of new tasks that enhances business performance. The general objective of the study was to establish the effects of Business Intelligence Techniques on organizational performance in Banking Sector in Kenya. The study sought to achieve the following objectives; to determine the effects of BI analytical techniques on organizational performance in banking sector, examine the level of effectiveness of BI measuring techniques on organization performance in banking sector, establish the contribution of Business Knowledge Discovery techniques on organizational performance in banking sector and to evaluate the influence of BI Reporting techniques on organizational performance in banking sector. The study adopted descriptive research design. The theories which guided the study were diffusion of innovation theory, theory of technology and technological acceptance model. The study was carried out in selected commercial banks in South Rift Regions specifically Bomet, Kericho and Narok counties. The target population of the study was 820 employees working in commercial banks in Bomet, Narok and Kericho Counties. 246 employees were sampled through random sampling of staff working in the bank and purposive sampling was used to select the managers. The response rate was 94.7% since out of the 246 questionnaires which were distributed 233 were returned having been fully filled. Questionnaires were the primary source of data which was collected from the sampled respondents through drop and pick method. The reliability test was done using Cronbach alpha and a value of 0.867 was actualized after the research instrument was pilot tested in commercial banks in Nakuru County; this indicated the research instrument was reliable. Validity of the instrument was achieved through construct validity where the instrument was subjected to scrutiny by the experts in the area of study. Data was analyzed using descriptive and inferential statisticsand results presented by use of bar graphs, percentages, frequency distribution, pie charts and tables. The study establish that there was a strong significant relationship between business analytical ethnics and organizational performance (r=0.953, P<0.01), measuring techniques (r = 0.946, p<0.01), business knowledge discovery techniques (r = 0.956, p<0.01) and business reporting techniques (r=0.926, p<0.01). The value of R2 which was 72.3% indicated that the dependent variable was explained by the variables included in the study. The study established that; banks need to use data mining tools for extracting information in a database; data visualization enabled easy comparison of the performance of bank.