Data on Banking Industry in Ghana by arw17845

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									                                                                   2009:038



MASTER'S THESIS


E-Business Adoption in the
Banking Industry in Ghana




       Emma Anamuah-Mensah
          Georgia Marfo




               Luleå University of Technology

           Master Thesis, Continuation Courses
                Marketing and e-commerce
 Department of Business Administration and Social Sciences
     Division of Industrial marketing and e-commerce

        2009:038 - ISSN: 1653-0187 - ISRN: LTU-PB-EX--09/038--SE
To God Be The Glory
Great Things He Has
       Done!




                      i
ii
                 ACKNOWLEDGEMENTS

To God Almighty and Our Lord and Saviour Jesus Christ.
We express our profound and deepest gratitude to you. Your grace and mercy have
enabled us to make this milestone. Our reverence to you Father.


To Dr. Anne.Engstrom - our wonderful supervisor
We owe you a special debt of gratitude for your excellent guidance, thorough
supervision and positive criticism that has engineered the production of this work. We
salute you madam! We say God richly bless and increase you abundantly.


To the Staff of the four sampled banks
Our deepest appreciation for your time, efforts and inputs for being used as the case
study in this study. You have our respect Sirs! God bless you all.


To Dr. Kwame Adam- our Friend and Proof Reader
We say special thanks to you for all your energy, time, efforts and contributions. God
bless you.


Finally, to all who shared a word or two with us, encouraged, prayed and supported us
in diverse ways to assist us complete successfully this thesis, we say our Almighty God
bless you with your heart desires for you have helped us to achieve ours.
God Bless Everyone.


While we share the credit of this thesis with all the above-mentioned people,
responsibility for any errors, shortcomings or omissions in this work is solely our own.




                                                                                       iii
                            DEDICATION

This thesis is dedicated to our husbands;

                 Mr. Ebow Amanuah Mensah & Mr. Emmanuel Coffie

For Your Love and Support




                                                                 iv
                              ABSTRACT

This thesis is based on a case study of four banks, in Ghana; two private and two state

banks. The study only sought to examine the adoption of e-Business in the Ghanaian

banking industry with respect to the expected benefits derived by adopting e-business,

the barriers that prevent firms from taking advantage of e-business adoption and the

challenges firms encounter when adopting e-business. The study idea was conceived on

the premise that businesses are always looking for ways of improving their products

and services deliveries and will thus be useful to understand how the adoption of e-

Business can benefit the banking industries in Ghana that is seen to be in the fore-front

of national development. The researchers also wanted to understand how electronic

commerce as a new way of doing business can be introduced effectively in the

Ghanaian banking business especially with the understanding that E-business involves

the fundamental reengineering of business model into a internet based networked

enterprise.


The result of the study indicated that the benefits of e-business are well known to the

banks and represent a formidable force to drive the adoption by many banks in Ghana.

The benefits of e-business are experienced whether or not the bank is state or private.


The various areas where the banks are preparing to use e-business approach includes

familiar and relatively mature electronically-based products in developing markets,

such as telephone banking, credit cards, ATMs, and direct deposit. This means that

most of the banks have recognized the need to change their business process to conform

to changing business trends in order to keep up with competition. Despite the perceived

and experienced benefits of e-business in Ghanaian banking, they also identified

                                                                                          v
several barriers and challenges that could be described as: economic; technical and

technological; ethical and institutional; and socio-cultural. The results also revealed that

the banks consider technology as the most important challenge to the effective adoption

of e-service in the banking industry in Ghana. The study provides some

recommendations towards improving e-business adoption in Ghanaian banks




                                                                                         vi
                                                         Table
of
Contents

ACKNOWLEDGEMENTS ............................................................................................................................. III

DEDICATION ..................................................................................................................................................IV

ABSTRACT ....................................................................................................................................................... V

TABLE
OF
CONTENTS................................................................................................................................ VII

TABLE
OF
TABLES........................................................................................................................................IX

CHAPTER
1:
 INTRODUCTION................................................................................................................. 1

 1.1.
 BACKGROUND ......................................................................................................................................................... 1

 1.2.
 PURPOSE
OF
STUDY ............................................................................................................................................... 4

 1.3.
 RESEARCH
QUESTIONS.......................................................................................................................................... 4

 1.4.
 SIGNIFICANCE
OF
THE
STUDY .............................................................................................................................. 5

 1.5.
 SCOPE
AND
LIMITATION
OF
STUDY .................................................................................................................... 5

CHAPTER
2:
 LITERATURE
REVIEW ..................................................................................................... 7

 2.1.
 THE
EVOLUTION
OF
E‐BUSINESS ........................................................................................................................ 7

 2.2.
 DEFINING
E‐BUSINESS .......................................................................................................................................... 7

 2.3.
 E‐BUSINESS
ADOPTION ......................................................................................................................................10

 2.4.
 BENEFITS
OF
E‐BUSINESS
ADOPTION .............................................................................................................12

 2.5.
 BARRIERS
TO
E‐BUSINESS
ADOPTION.............................................................................................................14

 2.6.
 CHALLENGES
RELATED
TO
THE
ADOPTION
OF
E‐BUSINESS .......................................................................14

CHAPTER
3:
 CONCEPTUAL
FRAMEWORK .......................................................................................16

 3.1.
 INTRODUCTION ....................................................................................................................................................16

   3.1.1.
 Benefits
of
E­Business ................................................................................................................................ 16

   3.1.2.
 Barriers
to
E­Business
Adoption........................................................................................................... 16

   3.1.3.
 Challenges
of
E­Business
adoption ...................................................................................................... 17

 3.2.
 SUMMARIZATION
OF
THEORIES,
CONCEPTS
AND
FRAME
OF
REFERENCE
IN
LINE
WITH
RESEARCH

 QUESTIONS.........................................................................................................................................................................17

   3.2.1.
 Research
Question
One:
What
are
the

benefits
that
may
be
derived
by
adopting
e­
   business ............................................................................................................................................................................ 17

   3.2.2.
 Research
Question
Two:
What
are
the
barriers
to
the
adoption
of
e­business
in
banks

   in
Ghana........................................................................................................................................................................... 18

   3.2.3.
 Research
Question
Three:
What
challenges
do
banks
face
in
adopting
e­business........ 19

CHAPTER
4:
 METHODOLOGY ..............................................................................................................22

 4.1.
 INTRODUCTION ....................................................................................................................................................22

 4.2.
 RESEARCH
PURPOSE ...........................................................................................................................................23

 4.3.
 RESEARCH
APPROACH ........................................................................................................................................23

   4.3.1.
 Strategies
for
Research............................................................................................................................. 24

   4.3.2.
 Study
Area ...................................................................................................................................................... 25

 4.4.
 TYPE
OF
DATA
AND
DATA
COLLECTION .........................................................................................................26

   4.4.1.
 Type
of
data ................................................................................................................................................... 26

 4.5.
 DATA
COLLECTION ..............................................................................................................................................27

   4.5.1.
 Sample
Selection.......................................................................................................................................... 27

   4.5.2.
 Empirical
Data ............................................................................................................................................. 27

   4.5.3.
 Secondary
data............................................................................................................................................. 27

   4.5.4.
 Research
Protocols
and
Case
study
data
base ................................................................................ 28

 4.6.
 DATA
ANALYSIS ...................................................................................................................................................28

   4.6.1.
 Method
of
Analysis ...................................................................................................................................... 29

                                                                                                                                                                                     vii
   4.7.
 QUALITY
DATA.....................................................................................................................................................30

     4.7.1.
 Validity
and
Reliability ............................................................................................................................. 30

           4.7.1.1.
      Validity........................................................................................................................................................................................ 30

       4.7.2.
 Reliability........................................................................................................................................................ 31

CHAPTER
5:
 CASE
STUDY
ANALYSIS .................................................................................................32

 5.1.
 INTRODUCTION ....................................................................................................................................................32

 5.2.
 GENERAL
DESCRIPTION
OF
BANKING
IN
GHANA...........................................................................................32

 5.3.
 INDIVIDUAL
CASE
ANALYSIS ..............................................................................................................................34

   5.3.1.
 Case
One:
Ecobank
Ghana
Ltd. .............................................................................................................. 34

           5.3.1.1.
      E‐business
Adoption
in
Ecobank
Ghana
Ltd. ............................................................................................................. 35

           5.3.1.2.
      Benefits
of
e‐business
adoption
in
Ecobank
Ghana ................................................................................................ 35

           5.3.1.3.
      Barriers
to
the
adoption
of
e‐business
in
Ecobank
Ghana. .................................................................................. 35

           5.3.1.4.
      Challenges
in
the
adoption
of
e‐business
in
Ecobank. ........................................................................................... 35

       5.3.2.
 Case
Two:
Stanbic
Bank
Ghana
Limited
(SBG)............................................................................... 36

           5.3.2.1.
      E‐business
Adoption
in
Standbic
Bank
Ghana
(SBG) ............................................................................................. 36

           5.3.2.2.
      Benefits
of
e‐business
adoption
in
Stanbic
Bank
Ghana ....................................................................................... 36

           5.3.2.3.
      Barriers
to
the
adoption
of
e‐business
in
Stanbic
Bank
Ghana
(SBG)............................................................. 36

           5.3.2.4.
      Challenges
in
the
adoption
of
e‐business
in
Stanbic
Bank
Ghana
(SBG)........................................................ 37

       5.3.3.
 Case
Three:
Agricultural
Development
Bank
(ADB).................................................................... 37

           5.3.3.1.
      E‐business
Adoption
in
Agricultural
Development
Bank..................................................................................... 38

           5.3.3.2.
      Benefits
of
e‐business
adoption
in
Agricultural
Development
Bank
Ltd....................................................... 38

           5.3.3.3.
      Barriers
to
the
adoption
of
e‐business
in
Agricultural
Development
Bank
Ltd ......................................... 38

           5.3.3.4.
      Challenges
in
the
adoption
of
e‐business
in
Agricultural
Development
Bank
(ADB) .............................. 38

       5.3.4.
 Case
Four:
Ghana
Commercial
Bank .................................................................................................. 38

        5.3.4.1.
 E‐business
Adoption
in
Ghana
Commercial
Bank
Ltd............................................................................................ 39

        5.3.4.2.
 Benefits
of
e‐business
adoption
in
Ghana
Commercial
Bank
Ltd ..................................................................... 39

        5.3.4.3.
 Barriers
to
the
adoption
of
e‐business
in
Ghana
Commercial
Bank
Ltd ........................................................ 39

        5.3.4.4.
 Challenges
in
the
adoption
of
e‐business
in
Ghana
Commercial
bank
Ghana ............................................. 40

   5.4.
 CROSS
CASE
ANALYSIS .......................................................................................................................................40

       5.4.1.
 Cross
case
analysis ...................................................................................................................................... 40

       5.4.2.
 Banking
Business
Characteristics
in
Ghana..................................................................................... 40

           5.4.2.1.
      Bank
age
and
Regional
coverage..................................................................................................................................... 40

           5.4.2.2.
      Type
and
location
of
customers....................................................................................................................................... 43

           5.4.2.3.
      Reasons
for
applying
e‐business ..................................................................................................................................... 43

           5.4.2.4.
      E‐services
and
products...................................................................................................................................................... 43

     5.4.3.
 Cross
Analysis
of
Benefits
to
the
adoption
of
E­business............................................................ 43

     5.4.4.
 Cross
Analysis
of
Barriers
to
the
adoption
of
E­business ........................................................... 45

   5.5.
 CROSS
ANALYSIS
OF
PERCEIVED
CHALLENGES
IN
THE
ADOPTION
OF
E‐BUSINESS. .................................47

CHAPTER
6:
 CONCLUSIONS
AND
RECOMMENDATIONS..............................................................49

 6.1.
 BENEFITS
THAT
MAY
BE
DERIVED
BY
ADOPTING
E­BUSINESS ........................................................................49

 6.2.
 BARRIERS
TO
THE
ADOPTION
OF
E­BUSINESS
IN
BANKS
IN
GHANA ...............................................................50

 6.3.
 CHALLENGES
THAT
BANKS
FACE
IN
ADOPTING
E­BUSINESS ...........................................................................50

 6.4.
 SUMMARY ..............................................................................................................................................................52

 6.5.
 RECOMMENDATIONS...........................................................................................................................................53

REFERENCES .................................................................................................................................................55

APPENDIX ......................................................................................................................................................72


           Table of Figures

Figure 2-1: Classification of e-business and e-commerce (adapted from EC 2007) .................8
Figure 3-1: Emerged frame of reference..................................................................................21
Figure 5-1: Ghana map inserted with the Regional distribution of banks and Numbers
    showing human population density per square kilometer.................................................42


                                                                                                                                                                                                                    viii
                                     Table
of
Tables

Table 3-1: A table showing research questions and theories used to answer. .........................20
Table 5-1: Description of the four selected Banks in Ghana ...................................................33
Table 5-2: Benefits of e-business adoption, derived from literature review............................44
Table 5-3: Benefits of e-business adoption, additional findings..............................................45
Table 5-4: Barriers to e-business adoption, derived from literature review ............................46
Table 5-5: Challenges of e-business adoption, derived from literature review .......................48
Table 5-6: Challenges of e-business adoption AdditionalFindings .........................................48




                                                                                                             ix
               Chapter
1: Introduction




1.1.Background

   Information and Communication Technologies (ICTs) have become an essential part of
   our lives. In the past decade, the use of ICT throughout society really took off with the
   introduction of the Internet. The Internet started mainly as a network for researchers
   that gave the opportunity to share information and ideas. An important step in the
   commercialization of the Internet was the announcement of the World Wide Web
   (www) in 1991 by Tim Berners-Lee of CERN (Kalakota and Whinston, 1996).

   Today, because the Internet can facilitate the quick and efficient movement of
   information among trading partners at a greatly reduced cost, (Ministry of Commerce
   Barbados, 2005), business via the internet or electronic commerce (E-Commerce) has
   become one of the principal means of doing business.

   In the World Trade Organization (WTO) Work Programme, E-Commerce is
   understood to mean the production, distribution, marketing, sale or delivery of goods
   and services by electronic means. Broadly defined, electronic commerce encompasses
   all kinds of commercial transactions that are concluded over an electronic medium or
   network, essentially, the Internet. Electronic Commerce is a new way of doing
   business. According to Payne (2003) it is transacting or enabling the marketing, buying,
   and selling of goods and/or information through an electronic media, specifically the
   Internet.

   Recently authors have begun to delineate more explicitly a difference between e-
   commerce and e-Business. E-commerce is emerging as the term used when discussing
   the process of transacting business over the Internet. E-Business, on the other hand,
   involves the fundamental reengineering of the business model into an Internet based
   networked enterprise. The difference in the two terms according to most authors is the
   degree to which an organization transforms its business operations and practices

                                                                                 Page 1
     through the use of the Internet (Hackbarth & Kettinger 2000;
     Mehrtens et.al. 2001; Poon 2000; Poon & Swatman, 1997).

     In this study, we will use e-business to describe all electronically based exchanges of
     goods, services and information.

     According to Basu and Muylle (2007), E-Business has dramatically changed how
     companies’ business processes are implemented and has also enhanced industry
     structure and shifted the balance of power between corporations and their suppliers and
     customers. According to them, companies in every industry have had to evaluate the
     opportunities and threats presented by e-Business. By thinking strategically about e-
     Business, managers can select technological solutions that support the company’s
     business strategies and create value for the company and its customers (Cote et al,
     2005).

     The Internet is driving the new economy by creating unprecedented opportunities for
     countries, companies and individuals around the world. Today CEOs worldwide
     recognize the strategic role that the Internet plays in their company’s ability to survive
     and compete in the future. (Al-Mudimigh, 2007). Indeed, currently businesses
     everywhere need to understand the if,
 when
 and how to use electronic commerce. In
     some industries, businesses are learning now that this is no longer an option to
     consider, but a requirement for survival. The reach of the underlying information and
     communication technologies (ICT) making electronic commerce possible is also
     causing unprecedented globalization of business. Businesses in developing countries
     will soon be affected as significantly as those elsewhere (Payne, 2003). In this respect,
     Kofi Annan     former UN Secretary General opined that, the ability of developing
     countries to adopt e-business can be another opportunity for accelerate economic
     growth and development.

     However, according to research conducted, companies and the private sector in Africa
     have not been active initiators of e-commerce. For example, a survey in Ghana (part of
     a Ghana SCAN-ICT study)1 revealed that about 65% of ICT companies do not have a


1
 http://www.uneca.org/aisi/ScanGhana/presentations/The%20Ghana%20Scan-
Workshop%20Programme-Final.pdf

                                                                                    Page 2
     presence on the Internet and 84% reported that they were not involved in e-commerce.
     (Opoku Mensah et al, 2005)

     Though there are a growing number of examples of the use of ICT for electronic
     business (e-Business) in developing countries the effects to date are small compared to
     what is expected to occur (UNCTAD Report, 2002)2.

     As the economy of Ghana is picking up the service industry especially the banking
     industry are extending their national and regional coverage to be able to provide the
     needed financial service. In this development it is expected that the use of the internet
     would facilitate the adoption of e-business in the Ghana banking industry as a means of
     offering fast, flexible, and cost-effective ways of doing business as well as enhance
     their competitiveness. This state of development will be important especially as volume
     of trade increases and Ghana and other developed countries require fast transfers of
     monies, payments across continents, and many other services that promote growth of
     business (Al-Mudimigh, 2007).

     As with most developing countries that have pursued economic and structural reforms,
     Ghana has been undergoing a process of financial sector restructuring and
     transformation as an integral part of a comprehensive strategy for some time (Acquah,
     2006). According to Bawumia (2007) banks in Ghana will need to reinvent themselves
     in this new conducive but challenging environment. This is important because
     electronic transactions will continue to grow and only countries that make a move
     towards embracing e-Business will participate in this revenue generation (Akoh, 2001).

     Banking in Ghana is one of the industries being radically transformed by ICT
     (Frempong, 2007). For example most banks within the main cities of Ghana now
     employ cutting edge technologies to roll out their products to their Ghanaian customers.
     (Bawumia, 2007).



     Banks today are becoming increasingly aware of both the threat and the opportunity
     that the Web represents. ICT- mediated services such as automatic teller machines,
     electronic fund transfer, electronic smart cards, cell phone banking among others, are

2
 UNCTAD Report: "Developing world looks to e-Business for growth"
http://www.apnic.net/mailing-lists/s-asia-it/archive/2002/11/msg00048.html

                                                                                   Page 3
   transforming the traditional ways of banking and providing competitive edge for banks
   that provide those services (Frempong, 2007). But, to be competitive in the Internet
   economy, companies need to harness the power of the Internet successfully (Al-
   Mudimigh, 2007) hence it is important to understand the benefits, barriers and
   challenges related to companies’ adoption of e-business.




1.2.Purpose
of
study

   In Ghana banking is one of the service industries crucial to the growth of its emerging
   economy. Banking is important in the role it plays in capital mobilization and granting
   of financial facilities that is crucial to business development and growth. As businesses
   always need to find ways of improving its products and services deliveries it will be
   useful to understand how the adoption of e-Business can benefit the banking industry.
   The purpose of this study therefore is .to describe the status of adoption of e-business in
   banks in Ghana as a means of identifying their special needs for enhancing the
   adoptions processes.

   The specific objectives to be achieved are to:

      •     identify the benefits of e-business to the banking industry in Ghana;

      •     explore barriers to the adoption of e-business in banks in Ghana; and

      •     describe the challenges encountered in the adoption of e-business.


1.3.Research
questions

   The research questions to be addressed by this study will be:

          o What are the benefits that may be derived by adopting e-business

          o What are the barriers to the adoption of e-business in banks in Ghana,

          o What challenges do banks face in adopting e-business




                                                                                    Page 4
1.4.Significance
of
the
Study

   The significance of this study can be seen in the fact that the outcome can be applied in
   the development of national policy framework as a guide for e-Business adoption,
   which is relevant to the national policy of using the banks to facilitate economic and
   social growth. In this respect the study will improve our understanding of the following
   issues as they apply in the Ghanaian situation.

            o The relevance of e-Business in banking for a developing country like Ghana

            o Expected benefits derived by adopting e-business

            o The barriers that prevent firms from taking advantage of e-business adoption

            o The challenges firms encounter when adopting e-business


1.5.Scope
and
Limitation
of
Study

   In this study, it is assumed that e-Business concerns the recognition of business
   opportunities that are based on ICT. The exploitation of these opportunities for e-
   Business gives a competitive edge. This study focuses on the ability of firms to
   discover and exploit opportunities based on ICT. Again, the emphasis is not on the
   process
 of opportunity recognition itself. Rather, the result (the expected e-Business
   benefits) is related to a firm’s ability to recognize opportunities and the benefits it
   brings. In other words, which firm characteristics explain the recognition of
   opportunities for e-Business leading to its adoption?

   This study will only examine the adoption of e-Business in banking with respect to
   their;

            o benefits

            o barriers

            o challenges




                                                                                 Page 5
Due mainly to time and budgetary constraints this research will cover only four banks.
Two of which are state-owned banks located in Kumasi, the second largest city and the
other two which are private-owned banks located in Accra, the capital of Ghana.




                                                                            Page 6
       Chapter
2: Literature
Review




   In chapter One we set out the outline of our study, stating the pursopse, specific
   objectives, scope of study and research questions. In this chapter we present from a
   literature survey existing views, knowledge and other information relevant to the theme
   of this study but more importantly to the objectives and research questions set for this
   study. This literature review was also conducted to help put the research methodology
   in a better conceptual framework. In this regard the review focused on: the evolution
   and definition of e-business; processes of e-business adoption; benefits, barriers and
   challenges to e-business adoption.


2.1.The
Evolution
of
e‐Business

   E-Business probably began with electronic data interchange in the 1960s (Zwass,
   1996). However, (Melão, 2008) suggests that it was only in the 1990s, primarily via the
   Internet, that e-Business has emerged as a core feature of many organizations. In his
   opinion, the hope was that e-Business would revolutionize the ways in which
   organizations interact with customers, employees, suppliers and partners. Some saw e-
   Business as part of a recipe to stay competitive in the global economy.


2.2.Defining
e‐Business

   The term “e-Business” has a very broad application and means different things to
   different people. Furthermore, its relation with e-commerce is at the source of many
   disagreements. (Melão, 2008) Some authors view e-Business as the evolution of e-
   commerce from the buying and selling over the Internet, and argue that the former is a
   subset of the latter.( Turban et al., 2006). Others defend that, although related, they are
   distinct concepts (Laudon and Traver, 2008). Others use both terms interchangeably to
   mean the same thing (Schneider, 2002). (Kalakota and Robinson, 2000) proposed a
   definition of e-business that clearly stresses the difference between e-commerce and e-


                                                                                   Page 7
    business. More precisely they assume that “e-business is not just about e-commerce
    transactions or about buying and selling over the Web; it is the overall strategy of
    redefining old business models, with the aid of technology, to maximize customer value
    and profits”. Kalakota and Robinson’s definition is of great importance because it
    describes e-business as an essential business-reengineering factor that can promote
    company’s growth. (European Commission, 2007)

    Recently authors have begun to delineate more explicitly a difference between e-
    commerce and e-Business. E-commerce is emerging as the term used when discussing
    the process of transacting business over the Internet. E-Business, on the other hand,
    involves the fundamental reengineering of the business model into an Internet based
    networked enterprise. While e-business refers to more strategic focus with an emphasis
    on the functions that occur using electronic capabilities, e-commerce is a subset of an
    overall e- business strategy. E-commerce aims at adding revenue streams using the
    World Wide Web or the Internet to build and enhance relationships with clients and
    partners. Often, e-commerce involves the application of knowledge management
    systems. On the other hand, e-business involves business processes that span through
    the entire value chain: electronic purchasing and supply chain management, processing
    orders electronically, handling customer service and cooperating with business
    partners. E-business can be conducted using the Web, the Internet, intranets, extranets,
    or some combination of these (European Commission, 2007).

Figure 2-1: Classification of e-business and e-commerce (adapted from EC 2007)




                                                                                 Page 8
The difference in the two terms according to most authors is the degree to which an
organization transforms its business operations and practices through the use of the
Internet (Hackbarth & Kettinger, 2000; Mehrtens et.al., 2001; Poon, 2000; Poon &
Swatman, 1997)

Some commonly used definitions of e-Business are presented by;

     o Earl (2000) “e-Business is about re-engineering or redesigning business
        processes to match customers’ expectations in the new economy”

     o El Sawy (2001) “e-Business involves rethinking and redesigning business
        processes at both the enterprise and supply chain level to take advantage of
        Internet connectivity and new ways of creating value”

     o Kalakota and Robinson (2001) “e-Business is the complex fusion of
        business processes, enterprise applications, and organisational structure
        necessary to create a high performance business model”

     o Laudon and Traver (2008) “e-Business refers primarily to the digital
        enablement of transactions and processes within a firm, involving only the
        information systems under the control of the firm”

     o Papazoglou and Ribbers (2006) “e-Business can be defined as the conduct of
        automated business transactions by means of electronic communications
        networks (e.g., via the Internet and/or possibly private networks) end-to-end”

     o Schneider (2002) “business activities conducted using electronic data
        transmission technologies such as those used in the Internet and the World
        Wide Web”

     o Turban et al. (2006) “e-Business refers to a broader definition of e-
        commerce], not just the buying and selling of goods and services, but also
        servicing customers, collaborating with business partners, and conducting
        electronic transactions within an organization”

     o Windrum and Berranger (2002) “E-business is the integration of the internet and
        related ICTs into the business organization”


                                                                             Page 9
   According to (Melão, 2008) the clear commonalities among these definitions, include
   the improvement of business processes and the use of ICT in intranets, extranets and
   the Internet to conduct business. He defines e-Business as the use of ICT as an enabler
   to (re)design, manage, execute, improve and control business processes both within and
   between organizations. Thus, front- and back-office integration and multi-channel
   integration become crucial in e-Business, which requires a challenging process
   improvement approach to support the necessary organizational, technological and
   social changes.

   E-Business can describe companies operating in the ICT producing sectors as well as
   new emerging sectors and industries such as in the area of digital content. However, at
   a more fundamental level, the term e-Business also describes the application of
   information and communication technologies to business processes in all sectors of the
   economy to reduce costs, to improve customer value and to find new markets for
   products and services (Department of Enterprise, Trade and Employment, 2004).

   Electronic business methods enable companies to link their internal and external data
   processing systems more efficiently and flexibly, to work more closely with suppliers
   and partners, and to better satisfy the needs and expectations of their customers. E-
   Business refers to more strategic focus with an emphasis on the functions that occur
   using electronic capabilities. (Yen-Yi, 2006)

   In this study we will, as previously stated, use e-business to describe all electronically
   based exchanges of goods, services and information.


2.3.E‐Business
Adoption

   The organizational adoption of an innovation has been defined as the adoption of an
   internally generated or purchased device, system, policy, program, process, product, or
   service that is new to the adopting organization (Daft, 1982)

   E-business commonly involves integration of the internet and related ICTs into the
   business organization and has two facets. One is the integration of the supply chain so
   that production and delivery become a seamless process. The other is the creation of
   new business models based on open systems of communication between customers,


                                                                                 Page 10
suppliers and partners. Where the integration of the supply chain provides increased
efficiency and significant cost advantages through waste minimization, the
development of new products and services are facilitated by new ways of conducting
business based on internet working between organizations and individuals. (Windrum,
and De Berranger, 2002

It is possible to trace a number of stages through which firms are passing as they
progress towards e-business.      Each stage is associated with a higher degree of
internetworking and sophistication in communication modes, progression from
traditional commerce to e-commerce business models which require more radical
restructuring of the internal structures. (Windrum and De Berranger, 2002).

In order to acquire a holistic view of the electronic business adoption phenomenon the
academic and research community has focused its research attention on the analysis of
the electronic business adoption process. Within this framework, a great amount of
effort has been placed on the examination of the electronic business adoption process as
well as on the investigation of the significant factors that affect the specific process.
The results of the specific research attempts and developments have led to the
formulation of certain electronic business adoption models (European Commission,
2007).

The Stages theory has been widely used as a way of examining the adoption and
progression of various aspects of electronic business in organizations. The main
assumption of the Stages theory is that organizations progress towards electronic
business through a number of clearly defined and successive stages or phases. Each
adoption stage or phase is characterized by the existence of distinctive applications,
benefits and problems while it reflects a particular level of maturity in terms of the use
and management of Information Systems and Information Technologies (Taylor and
Murphy, 2004).

It is also assumed that the electronic business adoption process is linear, while the
outcomes and the developments of the progressive process are cumulative. (European
Commission, 2007).




                                                                              Page 11
   Within the Staged adoption models, early stages of electronic business adoption are
   typically characterized by gaining access to the Internet followed by the use of
   relatively simple applications, such as electronic mail (e-mail), in order to dispense and
   gather information. Later, the business starts to publish a wider range of information in
   order to market its products or services and perhaps provide after-sales support. The
   deployment of electronic commerce practices comes next, allowing the users of the
   corporate site to order and/or pay for goods and services. In the most mature stages, the
   corporate website is fully integrated with the various back office systems such as
   enterprise resource planning (ERP), customer relationship management (CRM), and
   integrated supply chain management (SCM) applications (Mendo and Fitzgerald, 2005)

   Electronic business can be approached in many different ways, depending on the
   specific business process that might be carried out through the Internet. Thus, several
   Internet usage profiles or approaches are possible. A company must determine which
   profile or combination of profiles best suits its particular business context and strategy.
   (Mendo and Fitzgerald, 2005)


2.4.Benefits
of
E‐Business
Adoption

   According to Basu and Muylle (2007), companies can gain two fundamental types of
   benefits from e-Business. These are generally described as:

   Value Creation or Value Enhancement for one or more of a company’s stakeholder
   groups; and Lower Cost of providing goods and services to the market place.

   Examples under Value Creation include Improvement in internal and external
   communication through effective e-marketing, Increment of sales through an e-
   commerce website integrated with a back office systems and Improvement in supplier
   relations and productivity through collaborative workspaces (Basu and Muylle, 2007).

   And examples under Lower Cost are: reduction in communication and travel costs
   using online meeting tools; shared workspaces and; benefit from license free open
   source alternatives to proprietary software (http://www.nb2bc.co.uk/what_is_e-
   Business).




                                                                                 Page 12
Businesses also see tremendous opportunities for cost saving, revenue generation,
increased market share, marketing and market access, and improving customer service
through direct links that facilitate speedy enquiry and feedback. Similarly, consumers
can inter alia, access the world market through the virtual economy on the Internet,
choose from a wider variety of products, and shop in the comfort of their homes.
Globalization and specifically liberalization of communication networks have all
facilitated this break-through that further presents a massive boost for international
trade. (Mark Bynoe, 2002)

Akoh (2001) answers the question why firms should go the e-Business way and
outlines the tremendous benefits derived by firms who have already integrated e-
Business in their business processes. According to him it is shown that the cost of a
full-service trading transaction is about $150. It will cost $69 doing the same using a
discount broker and $10 using an online broker! That’s about $140 saving on doing
business on the web.

Ako (2001) states that it will cost all parties (the bank, consumer, service provider, etc.)
$1.27 for a banking transaction (could be as little as making a cash withdrawal) at a
bank branch, $0.27 using an ATM machine and $0.01 banking using the Internet! And
in addition Ako iterates that doing business electronically does not only reduce cost but
tremendously affects the speed and efficiency of businesses.

Windrum and Berranger (2002) suggest that the commercial benefits of e-business lie
in five areas.

Firstly, firms are able to expand their geographical reach. Secondly, important cost
benefits lie in improved efficiency in procurement, production and logistics processes.
Thirdly, there is enormous scope for gaining through improved customer
communications and management. Fourthly, the Internet reduces barriers to entry for
new market entrants and provides an opportunity for small firms to reorient their supply
chain relationships to forge new strategic partnerships

Finally, e-business technology facilitates the development of new types of products and
new business models for generating revenues in different ways.




                                                                               Page 13
2.5.Barriers
to
E‐Business
Adoption

   According to Windrum and Berranger (2002 ) it is hypothesized that many of the
   factors affecting the successful adoption of new technologies such as e-business are
   generic in nature and that the successful adoption of internet technologies in part
   depends on how these are used in conjunction with the other technologies and
   management practices that form a ‘technology cluster .

   However the most critical barrier can be ascribed to the very limited information and
   communication infrastructure available in most countries in Africa (Ben Akoh 2001).

   Reasons vary widely among sectors and countries and are most commonly related to
   lack of applicability to the business, preferences for established business models,
   (OECD, 2004)

   . Common barriers include: unsuitability for the type of business; enabling factors
   (availability of ICT skills, qualified personnel, network infrastructure); cost factors
   (ICT equipment and networks, software and re-organisation); security and trust factors
   (security and reliability of e-commerce systems, uncertainty of payment methods, legal
   frameworks and Intellectual Property Right); and challenges in areas of management
   skills, technological capabilities, productivity and competitiveness (OECD, 2004).
   Lack of reliable trust and redress systems and cross-country legal and regulatory
   differences also impede e-business adoption (OECD, 2004).

   It is however important to note that barriers to e-Business adoption work differently
   according to organizational type and culture. Areas of training and people development
   need to be addressed. (Aranda-Mena and Stewart, 2005).




2.6.Challenges
Related
to
the
Adoption
of
E‐Business

   Many writers of e-Business and e-commerce extol the enormous potential and
   opportunities provided for consumers and businesses globally. However there are some
   drawbacks and the benefits to be derived tend to be overstated. (Mark Bynoe, 2002)



                                                                              Page 14
While many commentators hold the view that e-commerce has many advantages for
developing countries, the African continent has a number of major challenges to
overcome before it can more fully exploit the benefits of e-commerce. A number of
constraints, specific to doing e-Business in Africa, are apparent (Akoh, 2001). These
include but not limited to the following: Low level of economic development and small
per-capita incomes; limited skills base with which to build e-commerce services; the
number of Internet users needed to build a critical mass of online consumers and; lack
of familiarity with even traditional forms of electronic commerce such as telephone
sales and credit card use (ibid).

Perhaps one of the greatest constraints to the adoption of e-Business as a means to
generate efficiencies is a cultural reluctance to interface with buyers and suppliers
electronically. Such challenges remain major obstacles, limiting the potential benefits
of e-Business (Akoh, 2001). Other challenges are the cost of implementation, security
concerns, perceived customer readiness, lack of knowledge of IT and e-Business, the
relatively high costs associated with investments in ICTs, the lack of technical and
managerial skills and reluctance on the part of companies to network with other
enterprises and lack of executive support and concerns regarding the reliability of
technology (Department of Enterprise, Trade and Employment, 2004).




                                                                           Page 15
  Chapter
3: Conceptual
Framework




3.1.Introduction

   The previous chapter provided a review of literature relevant to our research questions.
   This chapter will provide the conceptualization, which constitutes the frame of
   reference for this study. The main aim of this chapter is to select relevant theories and
   concepts that will be used in this study. The frame of reference provides guidance in the
   collection of data and also helps to fulfill the purpose of describing the adoption of e-
   business in banks in Ghana


   3.1.1. Benefits
of
E‐Business

   Benefits expected to be gained from e-Business as an option is a big deciding factor for
   a firm’s decision to go the e-Business way. Some of these benefits include value
   creation and value enhancement, improvement in internal and external communication
   (Basu and Muylle, 2007), cost saving, increased market share, speed and efficiency of
   doing business and improvement in customer service (Akoh, 2001). These elements of
   benefits are the expected answers to our first research question, “What are the benefits
   that may be derived by adopting e-business?”


   3.1.2. Barriers
to
E‐Business
Adoption

   Windrum and De Berranger (2002) states that factors affecting the successful adoption
   of new technologies such as e-business are generic in nature. However reasons vary
   widely among sectors and countries. Common barriers include security and trust
   factors, unsuitability for the type of business, enabling environment and cost factors.
   Other barriers (OECD, 2004) have already been discussed in chapter two. From the
   literature cited it is abundantly clear that there are certain issues or factors that
   constitute barriers to the smooth adoption of e-business.



                                                                                Page 16
   This addresses our second research question “What are the barriers to the adoption of e-
   business in banks in Ghana”


   3.1.3. 
Challenges
of
E‐Business
adoption

   Though the expected benefits in the adoption of e-business are enormous, firms
   adopting this new way of doing business can also expect some challenges as well.
   According to (Akoh, 2001) some of these challenges are specific to doing business in
   Africa. They include low level of economic development, limited information and
   technological infrastructure, culture and high cost of investment. This reference is
   formulated in view of our third research question, What challenges do banks face in
   adopting e-business ?




3.2.Summarization
of
theories,
concepts
and
frame
of

    reference
in
line
with
research
questions.


   3.2.1. Research
Question
One:
What
are
the

benefits
that
may
be

          derived
by
adopting
e‐business

   To be able to describe the benefits to the adoption of e-business, the following theory
   has been utilised.

        o Value creation or value enhancement. (Basu and Muylle, 2007)

        o lower cost. (Ben Akoh ( 2001); Windrum &, De Berranger, (2002); Basu and
            Muylle (2007), )

        o Improvement in internal and external communication. (Windrum & De
            Berranger (2002) ; Basu and Muylle (2007) )

        o Increment of sales. (Basu and Muylle, 2007)

        o Integrated with a back office systems. (Basu and Muylle, 2007)

        o Improvement in supplier relations. (Basu and Muylle, 2007)



                                                                               Page 17
     o Improvement in Productivity (Basu and Muylle, 2007)

     o Cost saving. (Ben Akoh, 2001), Mark Bynoe, 2002, )

     o Revenue generation. (Mark Bynoe, 2002), (Windrum, P. &, De Berranger, P.,
         2002 )

     o Increased market share. (Mark Bynoe, 2002)

     o Marketing and market access. (Mark Bynoe, 2002)

     o Improving customer service. (Mark Bynoe, 2002)

     o Speed and efficiency. (Ben Akoh ( 2001); Windrum. &, De Berranger ( 2002 )

     o Expand geographical reach. (Windrum & De Berranger, 2002 )

     o Reduces barriers to entry for new market. (Windrum, P. &, De Berranger, P.
         2002 )

     o Facilitates development of new products and new business models. (Windrum,
         P. &, De Berranger, P. 2002 )


3.2.2. Research
Question
Two:
What
are
the
barriers
to
the
adoption
of

       e‐business
in
banks
in
Ghana

To be able to describe the barriers to the adoption of e-business, the following theory
has been utilised.

     o Lack of applicability to the business. (Windrum and De Berranger,. 2002)

     o Preferences for established business models. (Windrum and De Berranger.
         2002)

     o Unsuitability for the type of business. (OECD,2004)

     o Enabling factors. (OECD,2004)

     o Cost factors. (OECD,2004)



                                                                           Page 18
     o Security and trust factors (OECD,2004)

     o ICT competencies within the firm. (OECD,2004)

     o Availability and cost of appropriate interoperable systems. (OECD,2004)

     o Network infrastructure and Internet-related support services.. (OECD,2004)

     o Cross-country legal and regulatory differences. (OECD,2004)


3.2.3. Research
Question
Three:
What
challenges
do
banks
face
in

       adopting
e‐business

To be able to describe the benefits to the adoption of e-business, the following theory
has been utilised.

     o Low level of economic development. (Akoh, 2001)

     o small per-capita incomes (Akoh, 2001)

     o Limited skills base. (Akoh, 2001)

     o Lack of familiarity (Akoh, 2001)

     o Cultural reluctance. (Akoh, 2001)

     o Availability of information and communication infrastructure (Akoh, 2001)

     o Cost of implementation. (DETE, 2004)

     o Security concerns. (DETE, 2004)

     o Perceived customer readiness. (DETE, 2004)

     o Knowledge of IT and e-Business. (Department of Enterprise, Trade and
         Employment, 2004)

     o High costs associated with investments in ICTs. (Department of Enterprise,
         Trade and Employment, 2004)




                                                                           Page 19
             o Lack of technical and managerial skills. (Department of Enterprise, Trade and
                  Employment, 2004)

             o Reluctance on the part of companies to network with other enterprise.
                  (Department of Enterprise, Trade and Employment, 2004)

             o lack of executive support (Department of Enterprise, Trade and Employment,
                  2004)

             o Organizational type and culture. (Aranda-Mena and Stewart, 2005)

       The table below summarizes our research questions and theories used to answer them.

Table 3-1: A table showing research questions and theories used to answer.
Research question              Theories used to         Content
                               answer

What are the benefits that     Basu and Muylle (2007)   Value creation or value enhancement, lower
may be derived by adopting                              cost, Improvement in internal and external,
                               Ben Akoh ( 2001)
e-business                                              communication, Increment of sales, Integrated
                               Windrum &De Berranger    with a back office systems, Improvement in
                               (2002)                   supplier relations, Improvement in Productivity,
                                                        revenue generation, Increased market share,
                               Mark Bynoe (2002)        marketing and market access, improving
                                                        customer service, speed and efficiency, expand
                                                        geographical reach, reduces barriers to entry for
                                                        new market, facilitates development of new
                                                        products and new business models

What are the barriers to the   Windrum De Berranger     Lack of applicability to the business, Preferences
adoption of e-business in      (2002)                   for established business models, Unsuitability
banks in Ghana                                          for the type of business, Enabling factors, Cost
                               OECD,(2004)
                                                        factors, Security and Trust factors, ICT
                                                        competencies within the firm,
                                                        Availability and cost of appropriate
                                                        interoperable systems, Network infrastructure
                                                        and internet-related support services,
                                                        Cross-country legal and regulatory differences.
                               Akoh, (2001)
What challenges do banks                                Low level of economic development, small per-
                               DETE (2004)
face in adopting e-business                             capita incomes, Limited skills base, Lack of
                                                        familiarity, Cultural reluctance, availability of
                                                        information and communication infrastructure,
                                                        Cost of implementation, security concerns,
                                                        Perceived customer readiness




                                                                                            Page 20
    In this study the benefits of e-business are conceptualized as issues or factors perceived
    by respondents as beneficial for e-business adoption. Similarly, barriers are those
    factors perceived to be impediments to the adoption of e-business. Finally challenges
    are conceptualized to be the perceived factors that make it difficult to adopt e-business.




Figure 3-1: Emerged frame of reference




                                                                                  Page 21
            Chapter
4: Methodology




    The previous chapter which represents our conceptual framework provided the
    theoretical bases for the planning and implementation of our research. In this chapter
    we present the detail methodology showing the logical framework that discusses the
    research purpose, research approach, data collection and data analysis


4.1.Introduction

    Many writers have written extensively on research methodology. The underlying factor
    in most studies on research methodology is that the selection of methodology is based
    on the research problem and stated research questions. Methodologies cannot be true
    or false, only more or less useful (Silverman, 2003). Nachamias et al (1996) for
    instance states that methodologies are considered to be systems of explicit rules and
    produced, upon which research is based, and against which claims for knowledge are
    evaluated. Conducting any type of research should be governed by a well-defined
    research methodology based on scientific principles. Eldabi and others (2002) have
    suggested a series of steps as a research paradigm to be followed in a methodology in a
    research. However, certain quality criteria such as reliability and validity should be
    used as demonstrated in Figure 4.1 (CF, Foster, 1998).

Figure 4-1: Research Paradigm presentation for methodology. Source: Foster
          (1998)




                                                                               Page 22
   For the purpose of this research the schematic approach shown in Figure 4.1 will be
   adopted.


4.2.Research
Purpose

   The purpose of this thesis is to conduct an exploratory and descriptive research in order
   to gather as much information as possible concerning the adoption of e-Business as an
   option in a competitive business environment in Ghana. Specifically this will be in
   respect of the banking business. According to Yin (1994) exploratory research is
   designed to allow a researcher to just look around with respect to some phenomenon,
   with the aim to develop suggestive ideas. Exploratory research is often used when a
   problem is not well known, or the available knowledge is not absolute. The technique
   that is best suited for information gathering when performing an exploratory research is
   interview (Yin, 1994). We are employing exploratory study because it gives valuable
   insight of the problem and result drawn from this study will be in firm grasp of
   essential characters. It has also been demonstrated that exploratory research provides
   suggestive ideas through reviewing information from problem area. (Chisnall, 1997)


4.3.Research
Approach

   The research approach in this study is chosen based on the purpose and the research
   questions set out to be addressed. In an exploratory research such as this a qualitative
   approach will be adopted.

   Qualitative data are characterized by the richness and fullness based on the opportunity
   to explore a subject. The nature of qualitative study is primarily to understand, not to
   explain. Qualitative research implies an emphasis on processes and meanings that are
   not measured in terms of quantity amount, intensity or frequency.

   The main features of quantitative research approaches have been described by Miles
   and Huberman (1994) as shown below.

        o The aim of qualitative analysis is a complete, detailed description

        o Recommended during earlier phases of research projects



                                                                                Page 23
     o Researcher may only know roughly in advance what he/ she is looking for

     o The design emerges as the study unfolds

     o Researcher is the data gathering instrument

     o Data is in the form of words, pictures or objects.

     o Qualitative data is more “rich”, time consuming, and less able to be
         generalized

     o Researcher tends to become subjectively immersed in the subject matter

We are using the qualitative approach for our study because we want to have a deeper
understanding of e-Business adoption and its ability to give competitive edge. By
using the qualitative approach we will get the opportunity to explore our subject matter.
We are seeking to understand more about e-Business adoption and its competitive
nature and not to explain it.


4.3.1. Strategies
for
Research

Yin (2003) has described five primary strategies for research in social sciences to
collect empirical data. According to him, depending on the character of the research
questions, to which extent the researcher has control over behavioral events and to what
degree the focus is on contemporary event, the research can choose from the following:

     o Experiments;

     o Survey;

     o Analysis of archival records;

     o    History;

     o Case Study.

In our study we have used a case study approach since our research deals with “how”
barriers, benefits and challenges related to e-business adoption in Ghanaian banks can
be described.”. This is because the form of our research question is “how” e-Business

                                                                             Page 24
adoption has or can help firms to stay ahead of competition in their respective
environments. In this thesis we are using the four banks in Ghana as a case study.


4.3.2. Study
Area

This section describes the banking environment in Ghana with respect to the policy and
legal framework under which the banking industry in Ghana operates.

The banking industry in Ghana is controlled by the Bank of Ghana acting as the central
bank. The total number of registered commercial banks under the bank of Ghana
numbers up to 23 as at January 2008. These comprises 5 state owned banks and 18
other private or multinational banks. In addition to the 23 banks, the sector also
comprises a range of non-bank financial institutions, including several community
banks established to mobilize rural savings.

The past few years have seen a phenomenal growth in the Ghanaian banking sector.
Ghana’s financial sector according to the Bank of Ghana is well-capitalized, very
liquid, profitable and recording strong asset growth. The banking sector has seen major
capital injection partly because of the political stability, attainment of micro and macro-
economic stability and the government’s desire to make Ghana the “financial hub” of
the Sub-region. For instance net interest income for the industry increased by 19% from
¢2.7tn in 2004 to ¢3.2tn in 2005 (George M and Bob-Milliar, 2007). Over the five-year
review period, net profit had increased by about 56%. Industry net profit after tax
margin dipped from 29.64% (2001) to 23.99% (2005). Industry return on equity (ROE)
has decreased steadily from a high of 43.9% in 2001 to 26.9% in 2005, while return on
assets dropped from 5.7% to 3.5 percent giving an indication of the increasing
competitive nature of the banking industry (Pricewater House Coopers, 2006).

The Ghanaian banking sector is now very vibrant and modern. According to
Dr.Mahamadu Bawumia, (the second Deputy Governor of BoG), bank branches in
Ghana increased by 11.3 per cent from 309 to 344 between 2002 and 2004 with 81 new
branches springing up from 2004 and 2006 indicating an increase of 23.5 per cent.
Most banks now employ cutting edge technologies to roll out their products to their
Ghanaian customers. Banking halls are housed in ultra modern buildings, staffed with
well trained ladies and gentlemen. Ghanaians living in the big commercial towns are


                                                                              Page 25
   now spoilt for choice. Twenty three banks are chasing the about 10 per cent of the
   bankable segment of the population. Nigerian banks have added to the competition and
   are well represented in the new banking sector in Ghana. (George M and Bob-Milliar,
   2007).

   Because of the very fierce but healthy competition in the banking sector, daily
   newspapers are adorned with catchy adverts of re-branded or new products all in an
   attempt to lure new customers to their products and services. Many banks in the
   commercial centers now work half day on Saturdays, thus making it possible for busy
   workers to access banking services at the weekend. (Price-water House Coopers, 2006).

   Recent and emerging developments suggest that cost competitiveness, customer
   sophistication, technology and regulatory changes will be the main drivers of change in
   the industry and the banks that are able to position themselves to embrace these
   challenges will emerge winners. (ibid)

   The banking sector in Ghana has remained one of the sectors with the brightest
   opportunities despite increasing competition (Price-water House Coopers, 2006).


4.4.Type
of
Data
and
Data
Collection


   4.4.1. Type
of
data

   Both primary and secondary data will be used in our study. Primary data that will
   provide empirical data will be collected through, interviews, and administration of
   structured questionnaires. These will give specific responses to our research questions.
   Primary data is recognized as data that is gathered for a specific research in response to
   a particular problem through interviews, questionnaires or observations. Secondary
   data information is that obtained through various kinds of documents, e.g. Research
   reports, annual reports, books and articles.

   Most researchers agree that qualitative research should try to use as many different
   sources as possible. This is on the general observation that no single source has
   complete advantage of all other sources (Yin, 1994; Denscombe, 1998). For instance
   according to Denscombe (2000) interviews are suitable when there is the need to gather


                                                                                Page 26
   detailed data and information from very few respondents, but the researcher would
   have to decide whether or not the study needs the type of information and if it will be
   possible to rely on the information these few respondents would provide the researcher
   with.


4.5.Data
collection


   4.5.1. Sample
Selection

   The population of banks sampled from Banks in Kumasi and Accra were categorized
   into two main blocks i) two State-owned banks, and ii) Private-owned banks From each
   category the sample units will be the managers responsible for e-buisness. A manager
   from each bank will be selected from each category.

   We have to take a sample because it is often impossible or too much expensive to
   collect data from all the potential units. Hence samples are chosen to represent the
   relevant attributes of the whole population. In this respect we note the caution by
   Graziano and Raulin (1997) that because the samples are not perfectly representative of
   the population from which they are drawn, we are unlikely to be able to generalize our
   conclusions to the entire population.


   4.5.2. Empirical
Data

   The empirical data was mainly qualitative description given by the managers of the
   sampled banks. This is important to be able to evaluate and describe the adoption of e-
   Business application on the target banks. This data will be collected mainly through
   the administration of structured questionnaires (see Appendix 1).


   4.5.3. Secondary
data

   This data was required to describe the environment in which the selected industry
   operates. The data was obtained mainly from records and reports of the industry, from
   the website, books articles and journals.




                                                                              Page 27
   4.5.4. Research
Protocols
and
Case
study
data
base

   In the research protocol, the objectives of the study were restated in question forms to
   emphasize the importance of all the components of the research and how the outputs
   are expected to contribute to improving knowledge on e-Business adoption in Ghana.
   In this respect the research protocol will be done with the following issues in mind

        o barriers to the adoption of e-business in banks in Ghana,

        o benefits of e-business, and

        o challenges encountered in the adoption of e-business


4.6.Data
Analysis

   Data Analysis generally consists of examining, categorizing, tabulation or otherwise
   recombining the evidence to address the initial proposition of a study. According to
   Yin (1994), the ultimate goal of analyzing data is to treat the evidence fairly, to produce
   compelling analytical conclusions and to rule out alternative interpretations. In another
   sense data analysis is seen to consist of three concurrent flows of activities (Miles and
   Huberman, 1994). These three are data reduction, data display, and conclusion drawing
   and verification.

   Data reduction as an integral part of data analysis will be carried out to sharpen, sort,
   focus, discard, and organized the data in a way that allows for final conclusions to be
   drawn and verified. In this sense data reduction refers to the process of selecting,
   focusing, simplifying, abstracting, and transforming the raw data (Miles & Huberman,
   1994).

   Data display refers to an organized assembly of information that permits conclusions,
   drawing and action taking. Deductions and conclusion will be drawn from the data to
   decide what things mean from the beginning of data collection. We do this by noting
   regularities, patterns, explanations, possible configurations, causal flows, and
   propositions. However, we hold such conclusions lightly, while maintaining both
   openness and degree of skepticism. This is important because according to Chisnall
   (1997) the stability and consistency of results derived from research is contingent on


                                                                                 Page 28
the probability that the same results could be obtained if the measures used in the
research were replicated. Essentially, reliability is connected with consistency, accuracy
and predictability of specific research findings. In addition, the role of reliability is to
minimize the errors and biases in this study. Two things that were adopted to increase
reliability in this study are the use of case study protocol and the development of a case
study database.


4.6.1. Method
of
Analysis

In this study the findings have been presented in narrative descriptions and where
possible, tables, charts and figures are also used to indicate trends and pattern that
facilitate discussions

Alvesson and Sköldbery (1994), state the three ways for drawing conclusions. These
are Inductive, Deductive, and Adductive

Inductive method is used to draw conclusions based on empirical findings. This
method is normally used when established theories in the field of study are limited and
the purpose is to form a new theory.

Deductive method is used when drawing conclusion perceived as valid when it is
logically connected. Usually in deductive studies, theories and literature that have been
established already is used as foundation for the new research.

Adductive method is similar to Inductive method. Here the researcher starts with the
empirical facts, just as in the inductive method. However, theoretical pre-conceptions
are not rejected. In adductive method a separate case is interpreted according to the
theoretical pattern as if it was true, would explain the case. The result is then confirmed
based on the new observations. The new observation from the study is then compared
with the theoretical frame of reference.

Based on the explanations above, our method of analysis is based on the          deductive
Method. Our research is based on existing literature on e-business.




                                                                               Page 29
    This is in order because it presented to us a foundation upon which to build on by
    presenting a guide for our questionnaire that will enable us to collect our data upon
    which conclusions could be drawn based on the empirical findings.


4.7.Quality
Data


    4.7.1. Validity
and
Reliability

    Research quality is generally described by the validity and reliability of the research
    methodology and data. In this thesis where the research is more of a qualitative
    assessment we apply the quality criteria for the purpose of “generating understanding”
    of the research issues identified in relation to e-business adoption in Ghanaian banks.
    Patton (2001) states that the validity and reliability are two factors that any qualitative
    researcher should be concerned about while designing a study, analyzing results and
    judging the quality of the study

    4.7.1.1. Validity



    Validity refers to the extent to which a measure reflects the concept it intends to
    measure. If the measures used actually measure what they claim to, and if there are no
    logical errors when drawing conclusions from the data, the study is said to be valid
    (Trochim, 2005,)

    Generally the quality of empirical research can be assessed through four specific tests
    described by Yin (1994) and as presented below.

   Table 4-1: A table describing quality of research.
    Tests                 Description
    Reliability           Demonstrating that the operations of a study can be repeated with the same results

    Construct Validity    Establishing correct operational measures for the concepts being studied

    Internal Validity     Establishing casual relationships whereby certain conditions are shown to lead to
                          other conditions, as distinguished from spurious relationships.

    External Validity     Establishing the domain to which a study’s findings can be generalized.




                                                                                              Page 30
4.7.2. Reliability

Reliability means dependability or consistency (Neumann, 2006: 196). It indicates the
likelihood that a given measurement technique will repeatedly yield the same
description of a given phenomenon. The role of reliability is to minimize the errors and
biases in a study. (Yin, 2003,)

To ensure reliability in this study we mapped out the detailed procedure for sample
selection, selection of research instruments (mainly questionnaire), designing the
questionnaire, and administration of questionnaire. To have a representative sample of
the banks we made an initial visit to their headquarters and obtained information on
their regional coverage and location of branches within the study area. Through
informal contacts we managed to sensitize the selected branches and gave some
indication of the issues that our study seeks to investigate. This helped to design
realistic interview questions. A draft questionnaire was administered to few banks to
test the relevance of the questions and revised before the final administration. To ensure
candid response each respondent was assured of the anonymity of his or her answers.
Similarly to have a better understanding of the issue being addressed the questionnaire
were distributed a couple of weeks before the interviews. Further explanations were
provided in the course of the interview.

However, despite these attempts of maintaining a high reliability in this study, personal
biases on the part of the respondents in answering the questions and on the part of the
researches in recording the answers cannot be ruled out. Hence we cannot be exact on
the influence of attitudes and vales on the respondents and ourselves in the study.

With respect to constructed validity of this study, we have used a combination of
consultations, phone interviews and questionnaire to collect data. The collected data
and recorded notes from the interviews have been captured on a computer in a specified
format.




                                                                              Page 31
     Chapter
5: Case
Study
Analysis




5.1.Introduction

   This chapter deals with the output of the analysis of the questionnaire. Here empirical
   data collected on four Ghanaian banks are presented. The data was collected through
   personal interview and via emails. Each case is examined individually and a cross case
   analysis is also done. The outputs are presented in the form of tables and charts. The
   outputs are presented to indicate the responses to the three main questions:

        o What are the benefits that may be derived by adopting e-business?

        o What are the barriers to the adoption of e-business in banks in Ghana?

        o What challenges do banks face in adopting e-business?

   Before addressing the research questions, some characteristics of the banks are
   presented.


5.2.General
Description
of
Banking
in
Ghana

   The banking industry in Ghana is controlled by the Bank of Ghana acting as the central
   bank. The total number of registered commercial banks under the bank of Ghana
   numbers up to 23 as at January 2008. These comprises five state owned banks and 18
   other private or multinational banks.

   Over the past ten years, Ghana has been undergoing the process of financial sector
   restructuring and transformation as an integral part of a comprehensive programme to
   ensure that the country achieves emerging market status. The recent developments in
   the country's banking environment with the liberalization of entry encouraged foreign
   banks and investors, noticeably those from Nigeria to consider the country as a good
   destination for their investment.


                                                                                  Page 32
      Liberalizing entry and encouraging foreign banks and investors into the financial
      services industry has increased competition in the banking industry as well as the
      introduction of strong business practices, technology, products and risk management
      systems. Many of the traditional local banks in Ghana responded to the competition
      brought by the foreign banks by rethinking their strategy, and reshaping their focus and
      direction in order to be attractive to customers. (Daily Graphic, 2008)

      In this study, four banks have been chosen. Two traditional banks (Ghana Commercial
      bank and Agricultural Development Bank) and two foreign banks (Ecobank Ghana Ltd
      and Stanbic Bank Ghana)

      The table below describes these four chosen banks.

Table 5-1: Description of the four selected Banks in Ghana




                                                                             Customers



                                                                                         Coverage
                                                             ebusiness




                                                                                                       Branches
                                                             Products




                                                                                         Regional
                          Adopted



                                            Reason




                                                                             Target
   Bank


            Type

                    Age




Ecobank Private 10        Yes Responds to new           Internet           Corporate,     60%          41
Ghana Ltd Owned               Market Trends             Banking SMS        and Retail
                                                        Banking, E-
                                    To gain competitive statments, E-
                                    advantage           alerts, ATMs
Stanbic   Private   9     Yes Business strategy        Electronic          Corporate,     20%          16
Bank      Owned                                        Banking, Internet   and Retail
Ghana Ltd                           Responds to        Banking,
                                    Customer Needs
                                                       Mobile Banking
Agricultur State 44       Yes Response to              Internet Banking,   Retail and    100%          50
al         Owned              changing market          Sms Banking, E-     Corporate
Developm                      trends                   Statements , E-
ent Bank                                               Alerts Atms,
                                                        Online fee
                                                       payment
Ghana     State 55        Yes To keep up with          MasterCard          Small         100%         141
Commerci Owned                competition              Commernet           savings
al Bank                                                (internet)          depositors,
                                    To increase        banking) Ezwich     sme and
                                    deposits                               corporate
                                                                           entities




                                                                                                    Page 33
5.3.Individual
Case
analysis

   In chapter 2, a comprehensive literature on benefits, barriers and challenges to the
   adoption of e-business was presented. In chapter three, these theories are further
   expounded and conceptualized. Our criteria for examining and describing the status of
   e-business adoption in sampled banks are based on these theories.


   5.3.1. Case
One:
Ecobank
Ghana
Ltd.

   Ecobank Ghana Ltd (EBG), founded in 1989 is part of the leading independent regional
   banking Group in West and Central Africa serving wholesale and retail businesses. It
   has a network of banks covering 18 countries namely: Benin, Burkina Faso, Cameroon,
   Cape Verde, Central Africa, Côte d’Ivoire, Ghana, Guinea, Guinea Bissau, Liberia,
   Mali, Niger, Nigeria, Sao Tome, Senegal, Sierra Leone, Chad and Togo, with plans to
   establish presence in East and Southern Africa.

   The Group has a network of over 320 branches and offices established in the last
   nineteen years. Ecobank Transnational Incorporated (ETI) the parent company of the
   Ecobank Group plays a central role in the definition and implementation of common
   policies and standards on the basis of a “one bank” concept across the group’s network.

   Ecobank Ghana is supervised and regulated by the Banking Supervision Department of
   the Bank of Ghana (BOG), which is the Central Bank of Ghana. EBG has over 25
   branches and customer service points in Ghana and a head count of 268. Return On
   Equity (ROE) has consistently been over 40 percent in the last five years and Return
   On Assets (ROA) in the range of 4 percent.

   Ecobank Ghana Limited, together with subsidiaries, provides merchant banking, retail
   banking, and investment banking products and services to wholesale and retail
   customers in Ghana. Its deposit products include current, savings, and deposit accounts.
   The company’s loan portfolio comprises personal loans, car and motor loans, home
   mortgage loans, and business loans. Ecobank Ghana also offers cards; letters of credits
   and bills for collections; transfer and payments; foreign exchange; and western union
   services. In addition, the company offers finance leasing, automated teller machine,
   Internet banking, telephone banking, and Ecobank regional cards services. It serves


                                                                               Page 34
     individuals, small and medium enterprises. Major competitors include Barclays Bank,
     Standard Chartered Bank and Stanbic Bank.3

     5.3.1.1. 
E‐business
Adoption
in
Ecobank
Ghana
Ltd.


     Ecobank Ghana adopted e-business as a response to new market trends and as a
     competitive strategy. Some of their E-business products include Internet Banking, SMS
     Banking, E-statements, E-Alerts and ATMS. Ecobank Ghana agrees that turnover of
     the bank has increased since the adoption of e-business even though no specific margin
     was given to this question because of company policy.

     5.3.1.2. Benefits
of
e‐business
adoption
in
Ecobank
Ghana


     Ecobank Ghana agrees that adopting e-business as a strategy is one of the important
     steps the bank has taken in its development due to the tremendous benefits e-business
     adoption provides. According to them their perceived benefits include convenience to
     customers, speed and quality of service, reduction of queues in banking halls and
     reduction in the total overhead cost such as reduction in employee recruitment and
     reduction in space for clients and customers. These are factors that pushed their drive to
     adopt e-business.

     5.3.1.3. Barriers
to
the
adoption
of
e‐business
in
Ecobank
Ghana.


     To stay competitive and to respond to the new market trends, Ecobank Ghana adopted
     e-business as one of its strategies. The bank acknowledges that there were indeed
     certain barriers that they needed to overcome. These barriers they perceived include
     ICT competencies within the firm and enabling factors such as availability of ICT
     skills, qualified personnel and network infrastructure.

     5.3.1.4. Challenges
in
the
adoption
of
e‐business
in
Ecobank.


     Despite the benefits, Ecobank Ghana agreed there were challenges as they adopted e-
     business. According to them, the greatest challenge they perceived is cost of
     bandwidth, which is a great deterrent to their quest to adopt e-business.




3
 http://business.everythinghana.com/index.php?option=com_mtree&task=viewlink&link_id=
20&Itemid=26

                                                                                   Page 35
     5.3.2. Case
Two:
Stanbic
Bank
Ghana
Limited
(SBG)

     Stanbic Bank Ghana Limited (SBG) is part of the Standard Bank Group, one of
     Africa’s largest banking groups, with operations across the continent of Africa and
     other parts of the world.

     Stanbic Bank was incorporated in Ghana in 1999 to provide a comprehensive range of
     banking services to both corporate and retail clients. SBG’s core competency is
     “relationship banking”. Stanbic Bank currently offers the following services: Retail
     Banking, Wholesale Banking, Investment Banking, Treasury Products and Trade
     Finance.

     Major competitors include Barclays Bank, Standard Chartered Bank and Ecobank
     Ghana Ltd.4

     5.3.2.1. E‐business
Adoption
in
Standbic
Bank
Ghana
(SBG)


     Stanbic Bank Ghana has adopted e-business over the past six years as purely a business
     strategy and as a responds to customer needs. Some of the e-business products include
     Electronic Banking (POS, ATMs Etc), Internet Banking, Mobile Banking, etc Stanbic
     bank agreed that turnover of the bank has increased since the adoption of e-business
     though no specific margin was indicated as a response to the question.

     5.3.2.2. Benefits
of
e‐business
adoption
in
Stanbic
Bank
Ghana



     Stanbic bank Ghana agreed that adopting e-business has brought them benefits. Their
     perceived benefits included speed and quality of service, simplification of working
     process and accuracy of delivery of service.

     According to them e-business enhanced their business processes that gave them a boost
     in their customer acquisition and relationships.

     5.3.2.3. Barriers
to
the
adoption
of
e‐business
in
Stanbic
Bank
Ghana
(SBG).


     Stanbic Bank Ghana adopted e-business as purely a business strategy and a response to
     customer needs. The bank acknowledged that they needed to overcome certain barriers
4

http://business.everythinghana.com/index.php?option=com_mtree&task=viewlink&link_id=
64&Itemid=26

                                                                               Page 36
       as they adopted e-business. Apart from barriers as conceptualized in chapter three,
       which the bank agreed and perceived as barriers, they did not come up with any new
       perceived barriers as at the time of data collection.

       5.3.2.4. Challenges
in
the
adoption
of
e‐business
in
Stanbic
Bank
Ghana
(SBG).


       Even though Stanbic bank Ghana agreed that there were some challenges during their
       adoption of e-business, the bank did not identify any other perceived challenge apart
       from what has been conceptualized as challenges in chapter three.


       5.3.3. Case
Three:
Agricultural
Development
Bank
(ADB)

       Agricultural Development Bank (ADB) was set up by an Act of Parliament in 1965 to
       promote and modernize the agricultural sector through appropriate but profitable
       financial inter-mediation. The Government of Ghana owns 51.83% shares while the
       Bank of Ghana owns 48.17% shares.

       The Bank accordingly supports improved technology adoption, marketing and
       processing activities, equity participation in innovative ventures and activities, which
       impact positively on the agricultural sector.

        The bank does not limit its operations to the agricultural sector alone. However, it
       allows for a balance in the distribution of its loanable funds between the agricultural
       sector and the rest of the economy.

       The bank provides small and large-scale agricultural and agro-industrial financing and
       related export financing for agricultural products to promote agricultural development.
       It also carries out commercial banking activities to spread the risks (commercial,
       corporate, international banking and treasury management). The bank offers a range of
       products and special financing schemes.

       Agricultural Development Bank has about 50 branches around the country. ADB
       operates one of the fastest funds transfers around the Globe. The bank is the sole agent
       for Western Union Service and is linked by Satellite to the Bank.5



5
    http://www.agricbank.com/AboutUs.aspx

                                                                                   Page 37
5.3.3.1. E‐business
Adoption
in
Agricultural
Development
Bank



ADB adopted e-business in 1999 to respond to the changing marketing trends in the
Ghana banking industry. Their e-business products include, Internet Banking, SMS
Banking, E-statements, E-Alerts, ATMS and Online fee paying system (OFPS)
According to ADB with         the introduction of e-business the bank’s turnover has
increased to about GH¢ 1,200,000.00 as at the time of data collection.

5.3.3.2. Benefits
of
e‐business
adoption
in
Agricultural
Development
Bank
Ltd


Since the introduction of e-business, ADB has had its tremendous benefits. According
to them, accuracy of delivery of service, increased growth in customer population and

increased staff confidence at work are some perceived benefits they have gained since
the adoption of e-business.

5.3.3.3. Barriers
to
the
adoption
of
e‐business
in
Agricultural
Development
Bank
Ltd


ADB agreed with perceived barriers as conceptualized in chapter three.

5.3.3.4. Challenges
in
the
adoption
of
e‐business
in
Agricultural
Development
Bank

         (ADB)


ADB acknowledges that there have been quite a number of challenges despite the
benefits. Specific challenge they perceived is the advances in technology. According to
them due to the competitive nature of the industry the players attempt to out-do each
other by introducing cutting edge technologies for their products and services.
According to ADB, months after introducing a new service or product competitors try
to introduce the same service or product with higher technology.


5.3.4. Case
Four:
Ghana
Commercial
Bank

Ghana Commercial Bank Limited (GCB) is a Ghanaian-based bank founded in 1953
and is headquartered in Accra, Ghana as of July 2008; the Company had 141 branches
distributed throughout the country. The Company’s services include GCB XPRESS,
personal loans, GCB fast international money transfer, GCB MONEYGRAM, trade
services and automated teller machine (ATM) services.




                                                                           Page 38
     Ghana Commercial Bank Limited provides banking products and services for
     individuals and corporate bodies in Ghana., The company’s corporate banking products
     and services comprise current accounts, call deposit accounts, and cash management
     services; short and medium term credit facilities in local and foreign currencies; fixed
     deposits, treasury bills, negotiable certificate of deposits, and premium certificate of
     deposits; money transmission services, including telegraphic transfer, cash collection,
     and Internet banking; and international payments, foreign currency purchases, bills for
     collection, letters of credit, foreign exchange accounts, guarantees, pre-export finance,
     and post-shipment finance for importers and exporters. Ghana Commercial Bank also
     offers business advisory, customer service and product development, relationship
     management and market structuring, and business development services for small and
     medium sized enterprises. 6

     5.3.4.1. E‐business
Adoption
in
Ghana
Commercial
Bank
Ltd


     Ghana Commercial Bank adopted e-business in 2006 firstly as a result of the fierce
     competition in the Ghana banking industry and secondly to increase their deposit. Some
     of the e-business products the bank has introduced include Master Card 2, CommerNet
     (Internet) banking and e-zwich (An electronic payment system). GCB agreed that since
     the introduction of e-business the bank has seen its turnover increase however, figures
     were not available to confirm this.

     5.3.4.2. Benefits
of
e‐business
adoption
in
Ghana
Commercial
Bank
Ltd


     Though e-business has been adopted for just about two years, GCB agrees that they
     have had some benefits. According to them some perceived benefits to the bank
     include enhanced Public image of the bank, positive change in customers and
     confidence in customers’ accounts.

     5.3.4.3. Barriers
to
the
adoption
of
e‐business
in
Ghana
Commercial
Bank
Ltd


     GCB acknowledged that it took them quite a while to adopt e-business due to the huge
     barriers they perceived stood in their way. The bank agreed that their perceived
     barriers are the same as what has been conceptualized in chapter three.


6
 http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1250601
2

                                                                                  Page 39
   5.3.4.4. Challenges
in
the
adoption
of
e‐business
in
Ghana
Commercial
bank
Ghana


   Ghana Commercial Bank agreed that they did encounter some challenges. Specifically
   they identified the increased pace in technological advancement as a perceived
   challenge to deal with.


5.4.Cross
Case
Analysis

   In this section of the case study analysis, data collected from the four selected banks is
   crossed analyzed. Cross case, analysis means analyzing data from the selected cases to
   look out for similarities and differences in order to draw conclusions.


   5.4.1. Cross
case
analysis

   The trends and status in e-business adoption among the sample banks is presented here
   in terms of characteristics of the bank (ownership, years of existence, national coverage
   and number of branches), reasons for adoption, e-products, target customers and
   national coverage.


   5.4.2. Banking
Business
Characteristics
in
Ghana


   The characteristics of respondent banks are described in terms of age of bank,
   ownership and extent of national coverage and category of customers that the banks do
   business with.

   5.4.2.1. Bank
age
and
Regional
coverage



   The national coverage of the banks is based on the banks having at least one branch in
   the ten regions in Ghana.      As such although Ecobank Ghana (EBG) Ltd has 41
   branches, just nine short of Agricultural Development Bank (ADB), it has 60%
   coverage whiles ADB has 100%. This is because EBG has a presence in only six of the
   ten regions in Ghana.

   The sampled banks have been in operation in Ghana between 9 and 55 years. It is noted
   that the oldest bank sampled is a state owned bank. This reveals that Ghana has a long
   history of state owned banking. However, in recent years more private banks continue
   to be established as is indicated by the youngest bank that is only 9 years old in Ghana.


                                                                                Page 40
Out of the four banks sampled (Ownership type) only the state banks are operating
across the ten regions in Ghana as indicated by coverage of between 100% in both case
(Table 5-1 and Figure 2-1).

A premise for state-owned enterprises and banks in particular, is that political
objectives take primacy over the quest for growth and development. In this “political
view,” politicians use state-owned banks and other enterprises “to provide employment,
subsidies and other benefits. State-owned banks are particularly desirable as
instruments for the distribution of political largess because their lending activities can
influence all sectors of the economy and banks frequently operate large branch
networks spanning all or most regions of a country.

Traditionally the state-owned banks have provided services for government employees,
and state owned enterprises, putting it in the realms of retail and corporate banking.

ADB has traditionally targeted its services at the 60% of Ghanaians that are into
agriculture. Whiles GCB has banked mainly non-agriculture industries. Both banks
networks reflect the scope of their business.

With respect to the wholly private banks, their coverage is generally below 70% with
majority only present in few regional capitals as indicated in chart one. The private
banks have consistently started up in the city capitals targeting large and small
corporations. They deliver both retail and corporate banking services, but the corporate
services seems to be the determining factor for locating a branch in a region. For
instance, none of the private banks have a presence in the Central region of Ghana.
Although it is a populous region, it has very few and small industries that are not
attractive enough for the private banks. In such regions the state-owned banks would
have already secured the business of the industries located there.




                                                                              Page 41
Figure 5-1: Ghana map inserted with the Regional distribution of banks and
          Numbers showing human population density per square kilometre



    The three northern regions are sparsely populated and have little or no industries. Here
    it is evident that only the state-owned banks have presence.




                                                                                Page 42
5.4.2.2. Type
and
location
of
customers



For the four banks sampled the private banks indicated that they are targeting mainly
the business entities. On the contrary, the state banks indicated that their major
customers are government organizations and private individuals. This pattern of
distribution of major customers is also likely to affect the level and success of e-
business application.

With reference to the location of customers, the private banks indicated that their
customers are heavily represented in the cities, while the state banks operated evenly in
the cities and urban settlements.

5.4.2.3. Reasons
for
applying
e‐business



The respondents gave several different reasons that they perceived to have influenced
the banks’ decision to adopt e-business strategies in their banking business. Two of the
responses given by the sampled banks (EBG and ADB) were as a result of changing
trends in the business environment while one ( SBG) indicated that it is a strategic
move, while two others (EBG and GCB) said it is to keep up with competition. The
likelihood of having a competitive edge when e-business is adopted was given by two
(state) banks (GCB and ADB).

5.4.2.4. 
E‐services
and
products



Six types of services were listed by at least one or more banks as shown in Table 2. The
banks described E-services as those business services that can be provided for a
business or consumer via internet or thorough electronic means.


5.4.3. Cross
Analysis
of
Benefits
to
the
adoption
of
E‐business

As indicated from literature the adoption of e-business brings some benefits to
businesses. All the sampled banks indicated that they have gained some benefits since
the adoption of e-business. All of them indicated that their turnover has increased. They
have also expanded their geographical reach and increased their market share. E-
business has facilitated the development of new business models and has improved
their productivity.




                                                                             Page 43
     All of them have noticed improvement in customer service and external and internal
     communications. They have also seen increment in sales and cost of doing business has
     reduced.

     The other benefits they have all gained include growth of customer population,
     customer confidence in their account records and staff confidence at work improved.
     Again, they indicated that e-business enabled them to simplify working process, reduce
     queues in the banking halls and reduce total overhead cost such as acquiring more
     space and recruiting more employees.

Empirical data from the four cases in our study mainly supports the factors identified as
benefits of e-business adoption in the literature review (Table 5-2).

     .

Table 5-2: Benefits of e-business adoption, derived from literature review
 Benefits




                                                                                        GCB
                                                                    EBG



                                                                                ADB
                                                                          SBG
 Value creation or value enhancement                                 √     √     √       √

 lower cost of doing business                                        √     √     √       √

 Improvement in internal and external communication                  √     √     √       √

 Increment of sales                                                  √     √     √       √

 integrated with a back office systems                               √     √     √       -

 Improvement in supplier relations                                   -     √     √       -

 Improvement in Productivity                                         √     √     √       √

 cost saving                                                         √     √     √       √

 revenue generation                                                  -     √     √       √

 Increased market share                                              √     √     √       √

 marketing and market access                                         √     √     -       -

 Improving customer service                                          √     √     √       √

 speed and efficiency                                                √     √     √       √



                                                                                      Page 44
 Benefits




                                                                                            GCB
                                                                   EBG



                                                                                    ADB
                                                                            SBG
 expand geographical reach                                             √        √    √       √

 reduces barriers to entry for new market                              -        -     -      √

 facilitates development of new products and new business
                                                                       √        √    √       √
 models

Besides the benefits identified in our review of the literature, the empirical data shows
evidence of an additional set of benefits of e-business adoption. These twelve additional
benefits in our study are presented in Table 5-3

Table 5-3: Benefits of e-business adoption, additional findings




                                                                                            GCB
                                                                 EBG




                                                                                    ADB
                                                                           SGB
                     Any Other Benefits

Convenience to customers                                          √         -        -        -

Speed and quality of service                                      √         √        -        -

Reduction of queues in banking hall                               √         -        -        -

Reduction in total overhead cost such as reduction in employee    √         -        -        -
recruitment and reduction in space for clients
Simplification of working process                                  -         √        -        -

Accuracy of delivery of service                                   -         √        √        -

Increased growth in customer population                           -         -        √        -

Increased Staff confidence at work                                -         -        √        -

Effective and efficient banking procedures                        -         -        -        -

Enhanced Public image                                             -         -        -        √

Positive change in customers                                      -         -        -        √

Confidence in their accounts                                      -         -        -        √




      5.4.4. Cross
Analysis
of
Barriers
to
the
adoption
of
E‐business

      As has been noted in the conceptual framework in chapter three, there are indeed
      barriers to the adoption of e-business. The four sampled banks all indicated that


                                                                                          Page 45
     Preference for established business models and Cost factors such as costs of ICT
     equipment and networks, software and re-organization are perceived barriers they
     encountered in their quest for e-business adoption. However, contrary to literature,
     none of the sampled banks agreed that Security and trust factors are a perceived barrier.
     Again only two of the banks (EBG and ADB) agreed that enabling factors such as
     availability of ICT skills, qualified personnel and network infrastructure are perceived
     barriers. Further, SBG and GCB agreed that availability and cost of appropriate
     interoperable systems are perceived barriers as suggested by literature. Moreover, only
     ADB and EBG agreed that Lack of applicability to the business and ICT competencies
     within the firm were perceived barriers respectively.

     Out of ten factors identified as barriers to e-business adoption in our literature review,
     nine were supported by empirical data from the four cases (Table 5-4).

Table 5-4: Barriers to e-business adoption, derived from literature review
Barriers                                                                           Responses




                                                                                                GCB
                                                                              EBG


                                                                                          ADB
                                                                                    SBG
Lack of applicability to the business                                          -     -    √      -

Preference for established business models                                     √     √    √     √

Unsuitability for the type of business                                         -     -    √      -

Enabling factors (i.e. availability of ICT skills, qualified personnel,
                                                                               √     -    √      -
network infrastructure

Cost factors (i.e. costs of ICT equipment and networks, software and re-
                                                                               √     √    √     √
organization)

Security and trust factors                                                     -     -     -     -

ICT competencies within the firm                                               √     -     -

Availability and cost of appropriate interoperable systems                     -     √     -    √

Network infrastructure and Internet-related support services                   √     -    √      -

Cross-country legal and regulatory differences                                 √     √     -     -

Any other barriers                                                             -     -     -     -


                                                                                    Page 46
5.5.Cross
analysis
of
perceived
Challenges
in
the
adoption

    of
e‐business.

   The banks agreed with literature as indicated in their responses that despite the benefits
   of adopting e-business, there are several challenges that are likely to retard the rate of
   adoption. Fifteen main issues were listed as major challenges (Table 5.5). For instance
   all the sampled banks indicated that Low level of economic development, Limited
   skills base and Organizational type and culture are all perceived challenges they
   encountered when adopting e-business. However, contrary to literature none of the
   banks agreed that Lack of executive support was a challenge.

   Again only EBG and ADB agreed that Reluctance on the part of companies to network
   with other enterprise and Lack of technical and managerial skills are challenges
   respectively. Also, customer readiness was thought to be a perceived challenge as three
   of the banks namely EBG, ADB and GCB agreed with literature as conceptualized in
   chapter three. Two banks (SBG and GCB), (EBG and GCB) and (ADB and GCB)
   agreed that Small per-capita incomes, Cultural reluctance and Availability of
   information and communication infrastructure were challenges respectively. Only one
   bank EBG and ADB agreed that Reluctance on the part of companies to network with
   other enterprise and Lack of technical and managerial skills.

   In addition to what we had perceived as challenges in the chapter on conceptualization,
   the sampled banks brought out other challenges they have encountered. These include
   Cost of Bandwidth, Advances in technology and Increased pace in technological
   advancement.

   Tables 5-5 and 5-6 show empirical data from our four cases with respect to challenges
   of e-business adoption




                                                                                Page 47
Table 5-5: Challenges of e-business adoption, derived from literature review
Challenges




                                                                                              GCB
                                                               EBG




                                                                                     ADB
                                                                          SBG
Low level of economic development                                √         √          √        √

Small per-capita incomes                                         -         √          -        √

Limited skills base                                              √         √          √        √

Lack of familiarity                                              √         -          -        √

Cultural reluctance.                                             √         -          -        √

Availability of information and communication infrastructure     -         -          √        √

Security concerns                                                -         √          √        √

Perceived customer readiness                                     √         -          √        √

Knowledge of IT and e-Business                                   √         -          -        √

High costs associated with investments in ICTs                   √         -          -        √

Lack of technical and managerial skills                          -         -          √        -

Reluctance on the part of companies to network with other        √         -          -        -
enterprise

Lack of executive support                                        -         -          -        -

Organizational type and culture                                  √         √          √        √

Cost of implementation                                           -         √          -        √




Table 5-6: Challenges of e-business adoption AdditionalFindings
 Any other challenge
                                                                                              GCB
                                                                     EBG



                                                                                      ADB
                                                                               SGB




 Cost of Bandwidth                                                   √          -         -     -


 Advances in technology                                               -         -         √     -


 Increased pace in technological advancement                          -         -         -    √




                                                                                           Page 48
Chapter
6: Conclusions
and
Recommendations




      In this chapter, we draw conclusions from the study and make recommendations for
      future research, as well as recommend on how e-business may be integrated into
      Ghanaian banking activities to ensure business growth.


   6.1.Benefits
that
may
be
derived
by
adopting
e‐business

      It is obvious from the study that the benefits of e-business are well known to the banks
      and represent a formidable force to drive the adoption by many banks in Ghana. The
      general recognition of the positive impact of e-business on: reduction of cost of doing
      business; volume of sales of products and services; speed and accuracy of service
      delivery; market share, improved productivity and customer service and; expansion of
      geographical reach, appear very attractive to the banks.

      In view of the enumerated benefits, responding banks have come to accept e-business
      as a novelty that has a very great potential of improving their public image

      This is because processes that need staff to handle have been electronically simplified
      and put online for clients to access. Though this study did not involve talking to clients,
      it became clear that banks perceived the adoption of e-business to produce positive
      change in clients’ attitude as well as their own staff. This conclusion is on the
      observations that clients became more confident in their accounts statements and
      appreciative of the reduced time in transacting business; while staff exhibited
      noticeable changes in their confidence at work.

      The benefits of e-business are experienced whether or not the bank is state or private.




                                                                                     Page 49
6.2.
Barriers
to
the
adoption
of
e‐business
in
banks
in
Ghana

   From our study, the prominent perceived barrier to the adoption of e-business by the
   respondents was their preference for established business models and cost factors. The
   banks in the industry take little risk and favour business models that have been the
   hallmark of the industry for decades. The emergence of foreign banks into the industry
   whose established business models are centered around e-business have caused some
   banks to explore the opportunities in the new models. However, these banks are still
   conservative and would always prefer established models where the alternative exists.

   In a country where most hardware, software and qualified personnel are still imported
   to implement and support solutions such as e-business, the costs are high. Often the
   setup and recurring cost of maintaining these systems are prohibitive. Banks that are
   able to train and build competences in their own staff have lower cost of adopting e-
   business than those that have to import the expertise.


6.3.Challenges
that
banks
face
in
adopting
e‐business

   The challenges to e-business adoption by banks in Ghana may be described as
   economic; technical and technological; ethical and institutional; and socio-cultural.

   In the economic perspective, Ghana like other developing countries in Africa has a low
   level of economic growth as depicted by the Low Gross Domestic Product (GDP).
   This economic situation poses a challenge to the banks’ ability to price products and
   services on the local market so as to be able to recover the full cost of investment and
   possibly have a reasonable profit margin. Therefore, an accelerated growth of the
   Ghanaian economy can be seen as a necessary ingredient to increased demand for e-
   business products and services making it more attractive for banks to expand on their e-
   businesses.

   Associated with the ethics is the security clients’ data or record with the banks. The
   level of security risk associated with an e-business product or service pose different
   challenges to different banks. Improvements are required to ensure client confidence.
   Technical and managerial skills available locally for e-business are also limited. This is
   influencing the choice of technology. Consequently, it can become difficulty for banks


                                                                                 Page 50
to keep abreast with technological advancement as well as make improvement to meet
the changing global trends. This situation is likely to be more serious with banks that
appear to be averse to technological development. At institutional level the
administrative structure, the nature of its bureaucratic processes and operational ethics
make a significant difference in the banks outlook for adoption of e-business. This was
evident between the state and private banks as the private banks appeared more vibrant
in their quest for e-business adoption.

Technical equipments and other accessories supporting the e-systems are manufactured
to certain specification and standards that may not necessary function optimally under
the tropical Ghanaian environment. This presents a huge challenge in the absence of the
technical expertise and competence to select right combination of specifications. The
major concern here is that some applications that work well in developed countries
cannot work in Ghana because for example the bandwidth needed to support such
systems and application is simply unavailable and the cost woefully expensive.
Additionally the pace of technological advancement makes products and solutions
obsolete in a short time after its implementation before a new technology has to be
adopted. The associated cost of switching technologies in such events is contributing to
the varying degrees of e-business adoption among banks. Unfortunately, the internal
economy is still not so strong to provide quick returns for regular investments in
technology and training. Again Ghana is still at the foundation stage of putting ICT
infrastructure (e.g., improving its telecommunication infrastructure) such that in the
near future, this would not be a perceived challenge anymore.




The banks have also taken notice of the significance of the Ghanaian socio-cultural
settings on the customer acceptance of new ways of doing business. In this respect, the
banks especially those operating in the urban and rural areas (where social and cultural
norms are stronger) are unlikely to move faster in the adoption of e-business strategies.

                                                                              Page 51
   Generally, the responses show that whereas knowledge of IT and E-business were
   apparent in some situations there were limited skill base for e-business. This situation
   is likely to affect the quality of service, which can then negatively impact on the
   customers’ response to the service and eventually influence customer behavior to e-
   business.




6.4.Summary

   In the previous chapter, it was indicated that all the four banks have adopted e-business
   though their reasons were not the same. The results of the responses show that the
   banks are more or less doing their normal business via the net.

   It can be deduced that all the banks are in some manner responding to changing trends
   in how business is conducted. If a business wants to be effective, efficient and stay
   competitive , the business cannot help but to adopt technology to enhance business
   processes and one of such technology is e-business.

   The four banks all have varied reasons for adopting e-business and this stems from their
   peculiar corporate persona. At the time of the interview we learnt that Agricultural
   Development Bank was at the verge of being sold by the government to increase its
   productivity. The staff was desperate to keep the status-quo or own it. Management
   sought strategies to improve productivity and efficiency.         E-business was readily
   accepted as a strategy to make the bank abreast with the new market trend.

   Ecobank Ghana Ltd from its inception in Ghana has tried to keep up with new market
   trends and gain a competitive advantage in the industry, adopting e-business was a
   natural choice.

   Stanbic Bank Ghana Ltd the youngest of the banks, its parent company Standard Bank,
   South Africa has already adopted e-business as part of their business strategy so easier
   to go that way too.




                                                                                Page 52
   Ghana Commercial Bank, the largest bank in the country with 141 branches and
   increasing profitability adopted e-business to keep up with competition and increase
   their market share.

   The analysis of the responses to the questionnaire have shown that Ghanaian banks are
   competing strongly for customers and to this end most banks believe that to have a
   competitive edge they need to improve on the way they do business and one sure
   approach is the adoption of e-business strategies. However, the levels of integration
   achieved by the banks have been influenced significantly by the customers’ locations.
   There is higher integration in banks located in the cities and dealing mainly with
   business entities or government organizations than those located in the urban areas.
   This situation is driven by the fact that Internet facilities are more accessible to the
   banks and customers in the cities than customers in the urban areas. This situation also
   reaffirms the banks concern for technology as the most important challenge to the
   effective adoption of e-service in the banking industry in Ghana.

   The various areas where the banks are preparing to use e-business approach includes
   familiar and relatively mature electronically-based products in developing markets,
   such as telephone banking, credit cards, ATMs, and direct deposit. It also includes
   electronic bill payments and products mostly in the developing stage, including stored-
   value cards (e.g., smart cards/smart money) and Internet-based stored value products.

   In this study, it can be concluded that E-business in state banks in Ghana is in the early
   stages of development and most banking is still done the conventional way. However,
   there is an increasing growth of online banking in the private banks indicating a
   promising future for online banking in Ghana.

   This means that most of the banks have recognized the need to change their business
   process to conform to changing business trends in order to keep up with competition.


6.5.Recommendations

   This study was only an exploratory and descriptive one to have a general over view of
   the status of e-business approach in the banking industry in Ghana. At the end of this




                                                                                 Page 53
study, we find the need to recommend for further studies that will address the
following:

     o   Market factors, obstacles, problems and issues affecting the growth of e-
         business in Ghana.

     o What are the trends and prospects for e-business in the urban and rural areas in
         Ghana?

     o What is the status of national policy and regulations on e-banking?

     o Evaluate consumer dimensionality of e-services, and how they perceived the
         current e-service quality and the influences on the consumer behaviour.

     o Determinants of e-service quality, consumer satisfaction and behavioural
         intentions to advice banks on their bid to improve their competitive advantage
         through the adoption of e-business strategies.




                                                                             Page 54
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                                                                     Page 71
Appendix


                                       Questionnaire

                     Master of Science Thesis Research Questionnaires

Department of Business Management, Lulea University of Technology Sweden
TOPIC: E-business, a strategic Option in a Competitive Banking Business Environment

1. Business Environment and Characteristics

 Bank Name



 Ownership Type


 When was is established?


 How many branches do you have all
 over Ghana


 What is the extent of regional
 coverage in Ghana?




 Target Customers



 Major Competitors




 2. E-business Adoption

 Has the bank adopted e-business




                                                                            Page 72
       When was e-business adopted?




       Why was e-business adopted?




       What are some of your

       e-business products



       Has the bank’s turnover increased

       since the adoption of e-business?




       What is the margin?




3. Barriers to e-business adoption

The following are some barriers companies face when adopting e-business. Kindly indicate
which one is applicable to you.


                                           Barriers                                        Yes   No


 Lack of applicability to the business


 Preference for established business models E.G a lot of paper works




 Unsuitability for the type of business



 Enabling factors (such as availability of ICT skills, qualified personnel, network
 infrastructure



                                                                                      Page 73
                                      Barriers                                      Yes   No


 Cost factors (such as costs of ICT equipment and networks, software and re-
 organization)



 Security and trust factors



 ICT competencies within the firm



 Availability and cost of appropriate interoperable systems



 Network infrastructure and Internet-related support services



 Cross-country legal and regulatory differences



 Any other barriers? Please state below:




4. Benefits in e-business adoption

The following are some benefits companies derive from adopting e-business.

Kindly indicate which one is applicable to you




                                                                               Page 74
                                    Benefits            Yes    No


Value creation or value enhancement




lower cost of doing business




Improvement in internal and external communication




Increment of sales




integrated with a back office systems




Improvement in supplier relations




Improvement in Productivity




cost saving




revenue generation




                                                     Page 75
                                   Benefits                          Yes    No


Increased market share




marketing and market access




improving customer service




speed and efficiency




expand geographical reach



reduces barriers to entry for new market




facilitates development of new products and new business models




                                                                  Page 76
        5. Challenges in e-business adoption

        The following are some challenges companies face when adopting e-business.

        Kindly indicate which one is applicable to you


                                 Challenges                                    Yes        No


Low level of economic development




small per-capita incomes




Limited skills base




Lack of familiarity




cultural reluctance.




Availability of information and communication infrastructure




Cost of implementation




                                                                                Page 77
                                    Challenges                         Yes       No


Security concerns




perceived customer readiness




knowledge of IT and e-Business



high costs associated with investments in ICTs




lack of technical and managerial skills




reluctance on the part of companies to network with other enterprise




lack of executive support




organizational type and culture




Any other challenge? Please state




                                                                       Page 78

								
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