BUSINESS PROCESS MANAGEMENT IN NIGERIAN COMMERCIAL BANKS CHALLENGES AND PROSPECTS
This study is on Business Process Management in Nigerian Commercial Banks: Challenges and Prospects. Business Process Management (BPM) has continued to be relevant in the operations of the Commercial Banks in Nigeria from 1892 till date. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility and integration with technology to improve performance. The challenges bordered on the lack of impact of BPM on the performance of some Commercial Banks in Southern Nigeria, poor implementation of BPM in the Commercial Banks studied that hamper effective and efficient customer service delivery, poor implementation of BPM that will not offer the Commercial Banks studied the opportunity to outperform competitors, challenges posed by BPM that could lead to poor performance of Commercial Banks studied, bad prospects, if the challenges are not properly handled and inept handling of the components of the Business Process that could hamper the performance of the Commercial Banks studied. The objectives of the study were to: find out the impact of Business Process Management on the performance of some Commercial Banks in Southern Nigeria, discover if the implementation of Business Process Management in the commercial banks studied will improve effective and efficient customer service delivery, know whether the implementation of Business Process Management will offer the commercial banks studied the opportunity to outperform competitors, ascertain the challenges posed by Business Process Management that could lead to poor performance of the commercial banks studied, determine the prospects of the commercial banks studied in terms of growth, profitability and maximization of shareholder’s wealth. The banks selected were First Bank Nigeria Plc., Union Bank Nigeria Plc., Oceanic Bank Nigeria Plc., and Zenith Bank Nigeria Plc. The Research Design was a combination of survey, oral interview and model modification. Both primary and secondary data were used. A population size made up of all the senior and junior staff of the 4 selected (four) Commercial Banks totaling 6,000 was reduced using Taro Yamane’s formula to get a sample size of 375. The data presentation tools were tables, simple bar-charts, histograms and pie chart. The data analysis tools were theoretical , correlation and Z test. Six hypotheses were tested using Spearman’s Rank Correlation Coefficient, Z test and Chi-Squared Test. The test re-test reliability of the instrument measure was done and content validity was done. It was found among others that Business Process Management had a positive impact on the performance of the Commercial Banks studied. It was concluded that BPM had a positive impact on the performance of the Commercial Banks studied which implied that the act of aligning the Business Process with organizational goals meant that this concept was good, and useful in making the Commercial Banks studied to achieve their organizational aims in both the shorter and long terms. It was found from the System’s Cybernetic Model that it needed the inputs of man, materials, money, time, energy and knowledge to transform the BPM to the output of improvement in the performance of the commercial banks studied with feedback and control. It was recommended that the managers of the BPM should use it to improve performance in their organizations and this should be backed by policy.
BACKGROUND OF THE STUDY
Right from the early influences Business Process Management at the informal level has continued to exist even in the trade by barter era. There was a situation where goods were being exchanged without the use of money system, management was relevant because of group relationships that were aimed at making exchanges. The goods were the resources, the processes were not developed as it is today. There were instruments for counting but not the type of machine we have today;method has continued to exist (Anyanwu, 2000:58).
Maintenance was not well developed, the process consisted of machine, method, maintenance; there are always the way of doing things. Part of the early influences was the role of gold smiths; they were custodian of silver, gold coins, which were the inputs of the system then. Business Process Management continues to develop; the Total Quality Management was the fore runner of Business Process Management (O’brien,2000:40).
Quality is concerned with fitness for use and meeting the expectations of both internal and external customers so that they do not come back to complain. The internal customers are the workers in the different departments and their managers; the external customers are shareholders and others like stakeholders, capital providers, suppliers, the regulatory agent and the public at large (Bounds, 1994: 20).
The Japan Miracles have been attributed to use of quality circles. Business Process Management as a holistic concept has drawn from Total Quality Management.It involves the continual improvement in quality that is company wide involving every staff from the chairman of the Board of Directors to the least workers in the shop floor (Ross,1995:23).
Business Process Management (BPM) involves the alignment of organizational goals and objectives to ensure improvement in the performance of commercial Banks. Goals are long term aims at a point in the organization missions while objectives are short-term aim at a point in the organization missions (Smith and Fingar, 2007:73). There are two ways of looking at performance.Performance is the extent to which the organizational objectives are been achieved. Secondly, performance is the extent to which an organization is fulfilling the promises made to stakeholders (Yomere and Osaze, 2007:32).
BPM has continued to be relevant to the performance of the Commercial Banking in Nigeria. The ideas of Commercial Banking in Nigeria started in 1890 when the monetization of the Nigeria economy was growing side by side with barter trading. By then, the use of cash had grown sufficiently throughout WestAfrican(Aremu and Saka, 2006: 141).
The modern Banking in Nigeria dates back to 1892, with the establishment of the Africa Banking Corporation in Lagos. In 1893,a merchant named Sir Alfred a shipping magnate in Liverpool, England, took the initiative for the establishment of bank in the Lagos office of Elder Demester Company.In addition, with the support of the colonial government, the formation of the British Bank of West Africa (BBWA) was announced in May 1893 and started operation on March 31st 1894,which later metamorphosized toStandard Bank of Nigeria and presentlyFirst Bank of Nigeria Plc,while Barclays Bank Nigeria becamethe present Union Bank of Nigeria (Aderinto, 2007:11).
There were lots of attempts in the 1930s to established indigenous commercial Banks, unfortunatelymost of the banks failed because of inept management and lack of adequate capital.However three indigenous commercial banks survived namely: National Bank of Nigeria, Agbormagbe Bank and African Continental Bank of Nigeria (Nwankwo, 2008: 52).
In 1946 the first colonial Development planning was introduced by the British government.It was aimed at getting primarily raw material from colonybetween 1960-1985.There were four post-independent development plans of which non of them had the objective of developing commercial banks in Nigeria. Between 1958 and 1959, the Central Bank of Nigeria (CBN) was established to regulate Banking in Nigeria (Anyanwu, 2000:37).
There were indigenous Decrees in 1972 and 1977. In 1977 the Federal Government of Nigeria took 40% shares in some major commercial Banks.In 1988 the Nigeria Deposit Corporation was established to insure the deposit of some commercial banks in Nigeria. On 1st July 2004, CBN came up with a directive stipulating that the commercial banks in Nigeria should increasetheir capital base in terms of shareholder funds from less than N3billion to N25billion within one half year ending 31st December 2005. The method used for the recapitalization exercise included: margin, consolidation, acquisition, internal public offer, deposit, equity, use of internal and external investors; at the end of day the number of banks reduced from 89 to 25 banks. The IBTC/Stanbic merger reduced the number to 24, the re-insuring of the license of Savanah Bank Plc has also brought the number back to 25 banks (CBN, 2010:10).
From 2005, the commercial bankshave continued to face a lot of challenges such as downsize, salary cutting, insider abuse, the need for further re-capitalization of the banks increase in the regulations, by CBN, Nigeria Deposit Insurance Company (NDIC).There was the removal and trail in court of the Chief Executive Officers of some commercial banks in Nigeria by the Federal Government (CBN,2010:27).
Obamuji (2010:34) posits that the changing dynamics of commercial banking in Nigeria due to the challenges posed by deregulation of the financial sector, globalization operation, technological innovation and prudential requirements such as consolidation and re-capitalization exercise of 1st July 2004 in the banking sector force players at all levels to re-engineer their entire business organizations. The banking operations and functions which are intended to meet the emerging challenges call for innovative banking practices through BPM.This is to enable Nigerian commercial banks to incorporate strategic innovative customer schemes, in order to bridge the service gap inherent in Nigerianbanks since 1892 to improve performance and out perform competitors.
Leopold, Harris and Watson (2005:231) states that BPM is a field of Management focused on aligningorganization such as Commercial Banks with wants and needs of clients. It is a holistic Management approach that promote business effectiviness and efficiency while striving for innovation, flexibility and integration with technology to improve performance.
Zairi (1997:73) agree that BPM is abest practice management principle that will help banks seeking to improve operational efficiencies, meet customer demands more quickly and leverage existing technology investment.
Smith and Fingar (2003:126) agree and posit that BPM is a structured method of understanding, documenting, modeling, analysing, simulating, executing, and continuously changing end-to-end business processes and all relevant resources in relation to Bank’s ability to add value to the business.While McAdam (1996:98) posits that BPM covers the entire business process lifecycle and consolidates methodologies and techniques from a number of previous approaches including Business Process Re-engineering (BPR), Process Innovation , Kaizen, Lean Management, Total Quality Management and Constraint theory . BPM utilizes current technology to provide organizations like commercial banks with the ability to map and re-model their business process, deploy processes as applications that are integrated with existing systems and provide managers of the banks with the functionality to the monitor, analyze, control and improve the execution of those process in real time.
Nwankwo (2008:60) affirms that the challenges have brought BPM to the fore. The formal BPM was developed in the 2000s. It is now a very important business enabler of the bank that it has impacted positively on the performance of the banks, and have helped to out- perform the competitors and increase efficient service delivery among others.
1.2 STATEMENT OF THE PROBLEM
The importance of commercial banks in Nigeria is premised on the ground that they are the main channels of savings and the allocator of credit in the economy. The efficiency, therefore, affects the financial system and the entire economy while their failure erodes public wealth and confidence in economy.
The challenges posed by deregulation of the financial sector, globalization of operations, technological innovation and prudential requirements such as consolidation and re-capitalization exercises are uncertain and unpredictable, that commercial banking industry in Nigeria has continued to have problems that have hampered its performance. A very recent problem is the insider financial abuse which after one audit report, the Central Bank of Nigeria removed the Managing Directors / Chief Executive Officers (C.E.Os) of the banks. It takes time before a new top manager settles down to do the general management job. Moreover, charging the removed C.E.Os to court by Economic and Financial Crimes Commission (E.F.C.C.) gives the banks negative publicity.
Another problem is that of downsizing, embarked by some of the commercial banks; cutting down on the size of the staff throws staff that were previously employed back to the labour market which is now a black spot in achieving our national macroeconomic objectives.Worse still, rather than downsizing, some of the commercial banks have gone into salary cuts. The unions of affected banks after wide
consultation accepted that staff should earn 70% of their previous salaries. This has affected staff morale and motivation has been very low thus worsening employee performance.There are also some commercial banks earmarked by the Central Bank of Nigeria for another round of re-capitalisation. This will further worsen the cost of operations. If this happens, the banks will face some of the dysfunctions of re-capitalisation. The inability of some of the commercial banks to pay reasonable dividends to shareholders erodes shareholder confidence and becomes impossible for the banks to achieve the objective of maximization of shareholders’ wealth.
Methods which constitute essential parts of the process of the commercial banks are very many, that managements of the commercial banks are at a loss which of the methods to embrace and which of the methods to drop. There is an increasing need to empirically determine whether the use of business processes such as business process management can improve the performance of the commercial banks under study.
Another problem of the commercial banks is how they use the machine aspect of the business process. All the commercial banks in Nigeria have adopted on-line banking and the use of some software packages to enhance the delivery of customer services. Ordinary transactions like depositing in savings accounts, depositing in current accounts, withdrawing from savings accounts, cashing owner’s cheques and cashing other people’s cheques which take an average of five minutes in the United Kingdom, United States of America and Germany used to take average times in minutes of 41, 24, 52, 53 and 50 respectively in Nigeria.
Even though the computerization of bank transactions has decreased the times the transactions take, the commercial bank branches have frequent computer system failures, that make the waiting time of customers to increase to sometimes more than one day and this problem is endemic in some of the commercial banks. The problem of the frequent breakdown of the computer systems of some of the commercial banks throws up the problem of maintenance.
A factor which is often very relevant in a comparison of work methods is the need to put the facilities and assets in a good working order. The facilities to be maintained include; buildings, grounds, machinery, computers, vehicles, handling equipment, counting machines, office furniture, data processing equipments, electrical, water and plumbing services. A commercial bank that does not have an optimum maintenance program cannot ensure the reliability of the entire productive and operative system.
Moreover, the functions of management aspect of the Business Process Management namely planning, organising, staffing, leading and controlling are not properly handled in some commercial banks. Also some of the functional areas: operations, marketing, finance, human resource management, research and development and innovation are also not properly handled. Even some managerial activities such as administration, communication, motivation, productivity and social responsibility, conflict resolution, to mention just a few are also not properly handled.
In a business world that promises to continue to be characterized by slow growth, intense global competition, worldwide overcapacity and powerful customers, there is uncertainty as to whether BPM is capable of offering banks studied the opportunity to outperform competitors, take market share away from competitors, and meet customers demand by being effective and efficient and improve performance.
- OBJECTIVES OF THE STUDY
The objectives of the study are:
- To find out the impact of Business Process Management (BPM) on the performance of some commercial banks in Southern Nigeria.
- To discover if the implementation of Business Process Management in the commercial banks studied will improve effective and efficient customer service delivery.
- To know whether the implementation of BPM will offer the commercial banks studied the opportunity to outperform competitors.
- To ascertain the challenges posed by BPM that could lead to poor performance of the commercial banks studied.
- To determine the prospects of the commercial banks studied if the challenges are properly handled.
- To find out the components of the business process to be managed to improve the performance of the commercial banks studied.
1.4 RESEARCH QUESTIONS
This research will attempt to provide answers to the following questions:
- What is the impact of Business Process Management on the performance of commercial banks studied in Southern Nigeria?
- Would the implementation of Business Process Management in the commercial banks studied improve the effective and efficient customer service delivery?
- Would the implementation of BPM offer the commercial banks studied the opportunity to outperform competitors?
- What are the challenges posed by BPM that could lead to poor performance of the commercial banks studied?
- What are the prospects of the commercial banks studied if the challenges are properly handled?
- What are the components of the business process to be managed to improve the performance of the commercial banks studied?
1.5 RESEARCH HYPOTHESES
The following Hypotheses will serve as an aid to the provision of answers to the stated research questions and also meet the objectives of the study.
Ho1: Business Process Management does not have positive impact on the performance of commercial banks studied in Southern Nigeria.
HA1: Business Process Management has positive impact on the performance of commercial banks studied in Southern Nigeria.
Ho2: The implementation of Business Process Management in the commercial banks studied would not improve effective and efficient customer service delivery.
HA2: The implementation of Business Process Management in the commercial banks studied would improve effective and efficient customer service delivery.
Ho3: The implementation of BPM will not offer the commercial banks studied the opportunity to outperform competitors.
HA3: The implementation of BPM will offer the commercial banks studied the opportunity to outperform competitors.
Ho4: The challenges posed by BPM could not lead to poor performance of thecommercial banks studied.
HA4: The challenges posed by BPM could lead to poor performance of the commercial banks studied.
Ho5: The prospects of the commercialbanksstudied if the challenges are properly handled are not bright.
HA5: The prospects of the commercial banksstudied if the challenges are properly handled are bright.
Ho6: The components of the business process thatcannot be managed to improve the performance of the commercial banks studied.
HA6: The components ofthebusiness process thatcan be managed to improve the performance of the commercial banks studied.
1.6 SIGNIFICANCE OF THE STUDY
The following people will benefit from the information and use it as follows:
1) The shareholders as the owners of the Commercial Banks will benefit by getting increased dividends due to higher profits that result from the effective implementation of BPM.
2) The members of the board of directors will benefits by getting higher allowances.
3) The managers of the Commercial Banks will benefit by more job satisfaction,
Praise and rewards.
4) The entire staff of Commercial Bank studied will benefit by getting more job satisfaction, praise and rewards.
5) The stakeholders: the capital providers, the creditors, the contractors, the suppliers, of the commercial banks studied will be paid as at when due..
6) The regulators of the commercial banks studied wouldbenefit by easy in supervision and compliance with directives.
7) The public at large will benefit by the survival of the commercial Banks so that customers will not lose their deposits and economic growth will be more.
8) Present and potential customers of the commercial bank studied will benefit by the protection of their deposits from loss.
9) Students and Researchers of Banking and Finance, Banking Management, Finance, Money and Banking, Monetary Economics, Management and Business Administration will benefit by learning more on howBusiness Process Management can be used to improve the performance of the commercial banks.
1.7 SCOPE OF THE STUDY
The challenges and prospects of Business Process Management, the impact of BPM on the performance of the commercial banks studied and the components of the business process to be managed constitute the thrust of this study.
1.8 AREA OF THE STUDY
Business Process Management is to be studied in only four commercial banks with headquarters and branches located in Southern Nigeria namely; First Bank of Nigeria Plc, Union Bank of Nigeria Plc, Oceanic Bank of Nigeria Plc, and Zenith Bank Nigeria Plc.
1.9 LIMITATIONS OF THE STUDY
Research Design Limitation: The survey research design has the limitation that it is one shot or at most two shots and this reduces its ability to generate data with which to test the causal relationships of the variables without resorting to rigorous statistical analysis. Also it has the limitation that some respondents are reluctant to provide answers to survey probes.
The Instrument Limitation: The questionnaire instrument or primary data collection has the limitation that its structured nature may compel some respondents to give answers that they do not fully endorse. There is also a limitation that some respondents may not have the level of education to answer some questions that they are asked.
The Interview Limitation: The personal interview method of administration of the research instrument has a limitation that the situation may change from interview to interview especially if more than one field data collector is used to gather the data.
The Motivation Limitation: There is also a limitation that some respondents need to be motivated.
The Limitation of the Model: The model has a limitation that it is only an abstraction or representation of reality and not reality itself and so the intuition and judgment of the manager sometimes become very overriding.
Time and Money Limitation: There is also a limitation of the scarcity of time and money resources. This has necessitated the use of methods, machines, maintenance and other machinery and the importance of Business Process Management.
- 10 PROFILES OF THE FOUR SELECTED COMMERCIAL BANKS STUDIED IN SOUTHERN NIGERIA.
First Bank of Nigeria Plc
First Bank of Nigeria Plc for over a century has distinguished itself as a leading financial institution and a major contributor to the economic advancement and development of Nigeria.
The Bank was incorporated as a limited liability company on March 31, 1894, with Head Office in Liverpool by Sir Alfred Jones, a shipping magnate. It started business in the office of Elder Dempster and Company in Lagos under the corporate name of the Bank for British West Africa (BBWA) with a paid up capital of 12,000 pounds sterling, after absorbing its predecessor, the African Banking Corporation, which was established earlier in 1892. In its early years of operations, the Bank recorded an impressive growth and worked closely with the Colonial Government in performing the traditional functions of a Central Bank, such as issue of specie in the West African sub-region (First Bank of Nigeria Plc, 2010:13).
To justify its West African coverage, a branch was opened in Accra, Ghana in 1896 and another in Freetown, Sierra Leone in 1898. These marked the genesis of the Bank’s international banking operations. The second branch of the Bank in Nigeria was in the old Calabar in 1900 and two years later, services were extended to Northern Nigeria(First Bank of Nigeria Plc, 2010:13).
To reposition and take advantage of opportunities in the changing environment, the Bank had at various times embarked on restructuring initiatives. In 1957, it changed its name from Bank of British West Africa to Bank of West Africa. In 1969, the Bank was incorporated locally as the Standard Bank of Nigeria Limited in line with the Companies Decree of 1968. Changes in the name of the Bank also occurred in 1979 and 1991, to First Bank of Nigeria Limited and First Bank of Nigeria Plc, respectively. In 1985, the Bank introduced a decentralized structure with five regional administrations (First Bank of Nigeria Plc, 2010:13).
To further enhance the Bank’s operational efficiency, this was reconfigured into sixteen Area Offices in 2003. In view of the foregoing, it was therefore, a natural progression when in 2001, the Bank began the process of transforming its corporate identity to reflect its rejuvenated focus. The transformation process which began in earnest in 2001 gained momentum in 2003 and was launched on Tuesday, April 27, 2004 with the introduction of a new corporate identity(First Bank of Nigeria Plc, 2010:13).
First Bank got listed on the Nigerian Stock Exchange (NSE) in March 1971 and has won the NSE President’s Merit Award eleven times for the best financial report in the banking sector.In line with the Bank’s mission statement “remain true to our name by providing the best financial services possible” and its brand essence, “dependably dynamic”, the Bank will consistently transform itself as it forges ahead in its second century of qualitative banking to the nation. The company has a total of 6,748 employees and 360 branches in Nigeria (First Bank Nigeria Plc,2010:13).
Union Bank of Nigeria Plc
Union Bank of Nigeria Plc was established in 1917 as a Colonial Bank with its first branch in Lagos. In 1925, Barclays Bank acquired the Colonial Bank, which resulted in the change of the Bank’s name to Barclays Bank (Dominion, Colonial and Overseas). Following the enactment of the Companies Act 1968 and the legal requirement for all foreign subsidiaries to be incorporated locally, Barclays Bank (D C O) in 1969 was incorporated as Barclays Bank of Nigeria Limited. The ownership structure of Barclays Bank remained un-changed until 1971 when 8.33% of the Bank’s shares were offered to Nigerians. In the same year, the Bank was listed on the Nigerian Stock Exchange. As a result of the Nigeria Enterprises Promotion Act of 1972, the Federal Government of Nigeria acquired 51.67% of the Bank’s shares, which left Barclays Bank Plc, London with only 40%. By the enactment of the 1972 and 1977 Nigeria Enterprises Promotion Acts, Barclays Bank International disposed its shareholding to Nigerians in 1979 (Union Bank of Nigeria Plc, 2010:25).
To reflect the new ownership structure and in compliance with the Companies and Allied Matters Act of 1990, it assumed the name Union Bank of Nigeria Plc .In line with the Central Bank of Nigeria’s banking sector consolidation policy, Union Bank of Nigeria Plc acquired the former Universal Trust Bank Plc and Broad Bank Ltd and absorbed its erstwhile subsidiary Union Merchant Bank Ltd. The Bank also increased its shareholders’ funds through a Public Offer/Rights Issue in the last quarter of 2005. With these developments, Union Bank remains one of the most capitalized banks in Nigeria. It has a shareholder’ funds of N102.542billion and operates through 386 networks of branches that are well spread across the country, all of which are on-line, real time. The company has a total of 8, 027 employees and 386 branches in Nigeria (Union Bank of Nigeria Plc, 2010:25).
Oceanic Bankof Nigeria Plc
Oceanic Bank was incorporated on March 26, 1990 as a private limited liability company with 100% equity ownership by Nigerian citizens, and licensed on April 10, 1990 to carry on commercial banking (Oceanic Bank of Nigeria Plc, 2010:17).The Bank commenced business on June 12, 1990 at the Waterfront Plaza, Plot 270, Ozumba Mbadiwe Avenue, Victoria Island, Lagos. It was listed on the Nigerian Stock Exchange on June 25, 2004. Oceanic Bank International Plc, therefore, is a sixteen year old commercial bank with business offices located in several parts of Nigeria (Oceanic Bank of Nigeria Plc, 2010:17).
The Bank is one of the largest in Nigeria. Her financial year runs from October 1 to September 30 of the subsequent year. Oceanic bank’s impressive performance over the years accounts for the quality of its customer portfolio which includes Corporate Organizations, High Net-worth Individuals, the Federal Government and some State Governments. The company has a total of 3,743 employees and 320 branches in Nigeria (Oceanic Bank of Nigeria Plc, 2010:17).
Zenith Bankof Nigeria Plc
Zenith Bank Plc is presently the most capitalized company on the Nigerian Stock Exchange (NSE), with a market capitalization of N612.82 billion as at end – June 2007 and the biggest bank in Nigeria in terms of total assets plus contingents which stood at N1, 178.39 billion as at June 2007 (Zenith Bank of Nigeria Plc, 2010:33).
The bank was established in May 1990 and started operations in July same year as a commercial bank. It became a public limited company on June 17, 2004 and was listed on the Nigerian Stock Exchange on October 21, 2004 following a highly successful initial public offering (IPO), which recorded a subscription level of 554%. The bank presently has a shareholder base of above one million, an indication of the wide acceptability of the Zenith brand (Zenith Bank of Nigeria Plc, 2010:33).
Its head office is located at 87, Ajose Adeogun Street, Victoria Island, Lagos, Nigeria. With over two hundred and fifty (250) branches and business offices nationwide connected online, real time, Zenith Bank has presence in all the state capitals, the Federal Capital Territory (FCT) and numerous towns and cities (Zenith Bank of Nigeria Plc, 2010:33).
With about three hundred (300) business offices, connected online-real time, the Zenith franchise covers all the state capitals, the Federal Capital Territory (FCT), and major towns and cities in Nigeria. The Bank’s wide area network facility is efficiently deployed and seamlessly integrated through a related communication company (Zenith Bank of Nigeria Plc, 2010:33).The Bank’s business location strategy and infrastructure deployment reflect its commitment to customer enthusiasm at all times in all business offices nationwide. The same unique brand of financial services awaits customers in each location. The company has a total of 3,911 employees and 250 branches in Nigeria (Zenith Bank of Nigeria Plc, 2010:33).
1.11 DEFINITIONS OF TERMS
Process: Thisis a sequence of activities, steps or behavior Mayer,(2000:20).
Business process: Thisis defined as any set of activities performed by a business that is initiated by an event, transforms information, materials, or business commitments, and produces output (Harmon, 2003:127).
Business process design: Thisis defined as the act making major changes in existing process or creating new processes. Depending on the size of the process, this can be a major undertaking or is done infrequently (Fisher, 2004:98).
Business Process Management (BPM):Thisis defined as the act of aligning processes with the organisation’s strategic goals, designing and implementing process architectures, establishing process measurement systems that collaborate with organisational goals, and educating the organisation so that the organization will manage processes effectively (Leopold, Harris, and Watson, 2005:231).
Business Process Re-Engineering (BPR):This is defined as the process of looking at it again, re-designing, re-positioning, re-structuring, re-positioning, re-organizing, re-processing and the business processes: methods, machines and maintenance of firms in an industry in other to make them perform better (Harmon, 2003:127).
Customer service: This is defined as the act of providing intangible benefits to consumers and users of the activities of such firms as banks, insurance companies, consulting companies, law firms etc (Zeithaml and Bitner, 2003:4).
Information Technology (IT):Thisis defined as a function that analyses, creates, maintains and supports applications and databases used in an organization especially if they use electronic data processing systems aimed at processing data that is in the form of words, computer codes and figures (Harmon, 2003:130).
Total Quality Management (TQM):Thisis the process of insuring that there is total customer satisfaction and adherents to design production and performance standards using such as acceptance sampling, visual inspection and even statistical quality control that run from the highest person at the board level to the lowest labourer in the organization (Banjoko, 2008:88).
1.12 ORGANIZATION OF STUDY
The study is arranged into five chapters with references and appendix attaches. Chapter one cover the introduction to the study and it states the main problem being investigated. The second chapter examinesthe Conceptual and theoretical framework of the study includingtheprevious related studies or literature, on the subject matter.
Chapter three provides information onresearch design and methodology; the necessary statistical tools used in the analysis of the study are mentioned. In chapter four, data that is collected using the field survey is presented after a rigorous analysis of the data has been completed. The findings of the analysis of the data and results are discussed. The summary of major findings, conclusion, recommendations, contribution to knowledge and area for further TABLE OF CONTENTS
Title Page i
Approval Page iii
Table of Contents vi
List of Tables xi
List of Figures xii
CHAPTER ONE: INTRODUCTION
• Background of the Study 1
• Statement of the Problem 4
• Objectives of the Study 6
• Research Questions 7
• Research Hypotheses 7
• Significance of the Study 8
• Scope of the Study 9
• Area of the Study 9
• Limitations of the Study 9
• Profile of the Selected Commercial Banks
Studied in Southern Nigeria. 10
• Definition of Terms 14
• Organization of the study 15
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Introduction 18
2.2 Historical Background of Business Process Management 18
2.3 Conceptual Framework 19
2.3.1 Business Process Definitions 19
2.3.2 Business Process Properties and Models 21
2.4 Business Process Management 22
2.4.1 Process Management Defined 22
2.4.2 Concepts of Business Process Management 23
2.4.3 Business Process Management Principles and Practices 24
2.5 Business Process Management Life Cycle. 26
2.5.1 Design and Analysis 27
2.5.2 Configuration 27
2.5.3 Enactment 28
2.5.4 Evaluation 28
2.6 The Concept of Organizational Performance 29
2.6.1 Measuring Organizational Performance 30
2.6.2 Factors that Affect Organizational Performance 30
2.7 The Concept of Business Process Re-engineering 31
2.8 The Concept of Total Quality Management 33
2.9 Comparative Analysis between Total Quality
Management and Business Process Reengineering 36
2.10 The key Characteristics that Differentiate Business Process
Management from Business Process Re-engineering. 37
2.11 The Concept of Banking 38
2.11.1 Meaning of Banks and Why Do Banks Exist 38
2.12 Theoretical Framework 40
2.13 Business Process Management Maturity Model 50
2.14 Implementing Business Process Management in a Bank 57
2.14.1 Important Drivers for BPM in Banks. 58
2.14.2 Where BPM can be implemented in a Bank 59
2.14.3 When to implement BPM in a Bank 62
2.14.4 Criteria preparing for BPM 62
2.15 The critical success and failure factors of BPM 63
2.15.1 Critical Success factors of BPM 63
2.15.2 Critical failure factors of BPM 64
2.16 Implementing Business Process Management (BPM) 64
2.16.1 The Critical Business Process Steps to the Success of a
BPM Initiative 65
2.16.2 Technology Planning, Selection and Rollout Steps 67
2.17 Evolution of Banking Industry in Nigeria. 71
2.18 Basic Theories of Bank Management 76
2.18.1 The Commercial Loan Theory 77
2.18.2 The Shift Ability Theory 77
2.18.3 The Pool-Of Funds Approach Theory 78
2.18.4 The Anticipated Income Theory 78
2.18.5 Conversion of funds Approach Theory 79
2.18.6 The Modern Approach (Gap Analysis) Theory 79
2.18.7 Theory of Distress 80
2.19 Determinants of Commercial Banks Performance in
an Economy 80
2.19.1 Leading Rate 81
2.19.2 Depositors Rate 81
2.19.3 Ownership and Control 82
2.19.4 Management Effects 82
2.19.5 Market Structure 82
2.20 Regulatory Institutions in the Nigeria Banking Industry. 83
2.20.1 Central Bank of Nigeria 83
2.20.2 Nigeria Deposit Insurance Corporation (NDIC) 84
2.21 Theories of Competition 85
2.21.1 Theory of the perfect competitive market 85
2.21.2 Theory of the monopolistic competitive market. 85
2.21.3 Game Theory 86
2.22 Environment Defined 86
2.22.1 The Task Environment 86
2.22.2 The General or Macro Environment 87
2.22.3 The International Environment 87
2.23 Environmental Scanning 88
2.24Environmental Factors Influencing Banks Marketing Activities 89
2.24.1 The Micro – Environment 90
2.24.2 The Macro- Environment 91
2.25 Model Modification 92
2.25.1 Adaptation of The System’s Cybernetic Model 93
2.25.2 Adaptation of PEST Model 95
2.26 Summary of the Review of Related Literature 97
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 112
3.2 Research Design 112
3.3 Sources of Data 112
3.3.1 Primary Data 112
3.3.2 Secondary Data 113
3.4 Population of Study 113
3.4.1 Sample Size Determination 113
3.4.2 Stratified Sample Distribution 114
3.4.3 Description of the Research Instrument 115
3.5 Data Presentation and Analysis 116
3.6 Data Presentation Tools 116
3.6.1 The Chi Square 116
3.6.2 Decision Rule 117
3.6.3 Spearman Rank Correlation 117
3.6.4 The Z-test Statistic 117
3.7 Reliability and Validity of The Research Instrument 118
3.7.1 Reliability of Instrument 118
3.7.2 Validity of Instrument 119
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS, MODEL SOLUTION AND DISCUSSION OF RESULTS
4.1 Introduction 121
4.2 Analysis of Data 121
4.3 Data Presentation 122
4.4 Percentage Analysis 130
4.5 Analysis using Relative frequencies 132
4.6 Correlation Analysis 136
4.7 Analysis using Z test 137
4.8 Cross-tabulated Analysis 139
4.9 Theoretical Analysis 140
4.10 Hypotheses Testing 140
4.11 Model Solution 142
4.12 Discussion of the Result on the Impact of BPM on the
Performance of Some Commercial Banks in Southern Nigeria. 145
4.13 Discussion of Result on Whether the Implementation
Of BPM Improves Effective and Efficient Customer
Service Delivery. 146
4.14 Discussion of Result on Whether the Implementation of BPM
Will Offer theCommercial Banks Studied the
Opportunity to Outperform Competitors. 147
4.15 Discussion of the Result on the Challenges posed by
BPM that would lead to Poor Performance of the Commercial
Banks studied. 148
4.16 Discussion of the Result on the Prospects of the Commercial
Banks Studied if the Challenges are Properly Handled. 149
4.17 Discussion of the Result on the Components of the
Business Process to be Managed. 149
4.18 Findings Related to the Theory of Business Life Cycle. 149
CHAPTER FIVE: SUMMARY OF MAJOR FINDINGS, CONCLUSION, RECOMMENDATIONS, CONTRIBUTION TO KNOWLEDGE AND AREA FOR FURTHER STUDY
5.1 Summary of Major Findings 152
5.2 Conclusion 153
5.3 Recommendations 154
5.4 Contribution to Knowledge 154
5.5 Area for further Study 155
Table of Contents