Influence of Business Process Reengineering on Electronic Commerce Strategy as Adopted by Commercial Banks in Kenya

Abstract

The ease of doing business in Kenya remains weak, and the rapid development of information and technology is shaking the
foundation of banking industry. The cut throat competitive pressure has led to survival challenges of many banks. Business
Process Reengineering is therefore management approach to create change through process improvements by reducing
production/service cost, improving quality and customer service. The banking operations and functions intended to meet the
challenges of bank consolidation, minimizing operating cost, outsourcing, portfolio investment, payments and settlement
system call for innovative banking practices through Business Process Re-engineering. The main objective of this study was to
analyze the influence of Business Process Reengineering on e-commerce strategy as adopted by commercial banks in Kenya.
The general objective was operationalized by in-depth study of the following constructs: business analysis and information
management, process excellence, project management. The study employed a descriptive survey research design. Selfadministered
questionnaire was distributed to management, supervisors, clerical and secretariat, and support staff randomly
selected from the commercial banks that are sample respondent. The target population was 36,923, and the sample size of
384. The scope of the study targets was 43 commercial banks in Kenya. The quantitative data was analyzed by the use of
statistical package for social scientists (SPSS). Result from the research findings indicates that business process reengineering
influences electronic commerce strategy adoption by commercial banks in Kenya in different directions and magnitude:
Business analysis by - 0.006, process excellence by 0.173 and project management by 0.108. Process excellence has a positive
and significant relationship with Electronic Commerce strategy as adopted by commercial banks in Kenya. However, business
analysis has a negative and insignificant impact on electronic commerce strategy as adopted by commercial banks in Kenya.
The study recommends that the banks should change their strategic approach to Business Analysis, so that a positive impact
on electronic commerce strategy could be achieved. The study further recommends for improved effective project management
of our commercial banks. The study also recommends for improvement in all process excellence approaches. Future studies
should consider exploring other non-commercial banks so as to support the generalization of the findings. Future studies can
also focus on the influence of other organizational capabilities.