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Title: Maturity of Information Technology Governance in the Financial Sector of Ethiopia; a Comparative Study
???metadata.dc.contributor.*???: Dr. Tibebe Beshah
Tagel, Mekonenn
Keywords: IT Governance;Information Technology Governance;Maturity;Financial Sector;Ethiopia
Issue Date: Jun-2016
Publisher: Addis Ababa University
Abstract: Information Technology (IT) changes significantly the way we live, communicate and do business. As a result there are few companies that can afford the luxury of ignoring IT. This pervasive use of technology has created a critical dependency on IT that calls for a specific focus on IT Governance. The aim of this study was to investigate maturity of IT Governance in the financial sector of Ethiopia. Mainly survey methodology was employed to investigate the perceived importance and maturity of IT Governance practices in the financial sector of Ethiopia in terms of IT Governance structure, processes and relational mechanism. Using simple random sampling, two private banks (Dashen Bank and Zemen Bank) and two private insurance companies (National Insurance Company of Ethiopia and Nile Insurance) were selected randomly. Purposive sampling was used to include Commercial Bank of Ethiopia and Ethiopian Insurance Company since one of the objectives of the research was comparing IT Governance maturity between private and public financial institutions. A total of 96 self administered questionnaires were distributed targeting senior business and IT leaders and return rate of 80% was achieved. Regarding data analysis, the quantitative data was analyzed using SPSS and the qualitative data was presented based on predefined themes. Finally the survey result was complemented and triangulated with interview result and document review to answer the research questions. Importance of IT Governance in the financial sector of Ethiopia was rated 4.2 based on a scale from 0(strongly disagree) to 5(strongly agree). This shows that there is a strong consensus between business and IT leaders on the Importance of IT Governance practices. In spite of this keenness, the actual IT Governance maturity was rated 1.2 (level 1) based on generic maturity scale from 0(non-existence) to 5(optimized) i.e. IT Governance issues were recognized but practiced in an informal and ad hoc basis with little or no evidence of standardization. The survey result also shows that, relatively privately owned financial institutions (1.3) reached better level of IT Governance maturity than that of publicly owned (0.94) likewise though IT Governance maturity was rated at initial stage (level 1) in the financial sector of Ethiopia, the banking sector (1.4) reached better level of maturity than the insurance sector (0.7) based on generic maturity scale from 0(non-existence) to 5(optimized). Regarding IT decision making right, IT leaders in the banking sector play superior role than their peers in the insurance sector. The prevalent IT Governance archetype (locus of IT decision making authority) in the banking sector was a combination of IT Monopoly (IT executives has exclusive decision making right on IT Architecture and Infrastructure) and IT Duopoly (IT leaders shares decision making right with business executives on IT principle, business application needs and IT investment and prioritization) whereas it was Business Monarch in the insurance sector i.e. IT leaders have only input rights and the decision right was exclusively held by business executives. Furthermore, among IT Governance mechanisms, relatively IT Governance structure was rated as more important as well as mature than that of IT Governance Processes and Relational mechanism. On the basis of the above results, it can be concluded that, IT Governance maturity is at initial stage (level 1) in the financial sector of Ethiopia. So, to reach desired level of IT Governance maturity and to get the best out of IT investment, financial institutions have to start implementing formal IT Governance which fits to their business strategy and culture by mixing-and-matching elements of existing frameworks.
Appears in Collections:Thesis - Information Science

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