An Investigation into the Adoption of E Commerce at Premier Banking Corporation

A Research Report presented to the

Graduate School of Business Leadership University of South Africa

In partial fulfilment of the requirements for the MASTERS DEGREE IN BUSINESS LEADERSHIP, UNIVERSITY OF SOUTH AFRICA

by

Precious Rachael Mbire Student # 70994307

ACKNOWLEDGEMENTS
I am indebted to my fellow colleagues, workmates and managers at Premier Bank for their support and contributions during the data collection exercise. In addition, I would like to thank my family for all of their prayers, love and support they have provided me: my mom Vongai, sisters Charity, Beulla and Moreblessing and my little niece Nattie, a true source of joy. I am especially grateful to my supervisor Mr. B. Masiya for his dedication and professionalism in guiding me through this project.

ABSTRACT
This study investigates the level of adoption to e-commerce by Premier Banking Corporation. (PBC) The study was done using the literature survey method and the questionnaire. The questionnaire was administered personally by the researcher leading to a 99% return rate. The major conclusion from this study is that the level of e-commerce at (PBC) is relatively poor as evidenced by the lack of internet banking. Recommendations drawn from this research are that (PBCs) senior management should be committed to the establishment of a more effective information system and invest substantially more in information technology to meet the demanding needs and expectations of customers. The study presents a further study to assess the effects of successful implementation of e-commerce on the operations of PBC.

Contents
Page ABSTRACT................................................................................................................................... 3 This study investigates the level of adoption to e-commerce by Premier Banking Corporation. (PBC).............................................................................................................................................. 3 Contents.......................................................................................................................................... 4 CHAPTER 1 INTRODUCTION AND RESEARCH PROBLEM................................................ 6 1.1 BACKGROUND OF STUDY............................................................................................7 1.2 PROBLEM STATEMENT................................................................................................8 1.3 OBJECTIVES OF THE STUDY......................................................................................8 1.4 STUDY PROPOSITION....................................................................................................8 1.5 STATEMENT OF HYPOTHESIS...................................................................................8 1.6 SCOPE OF THE STUDY..................................................................................................9 1.7 JUSTIFICATION OF THE STUDY................................................................................9 1.8 ASSUMPTIONS OF THE STUDY...................................................................................9 1.9 RESEARCH OUTLINE....................................................................................................9 CHAPTER 2 LITERATURE REVIEW....................................................................................... 10 2.1 INTRODUCTION............................................................................................................11 2.3 BANKING CONSUMER OPTIONS..............................................................................17 2.4 TYPES OF ONLINE BANKING....................................................................................17 2.5 GLOBAL EMPIRICAL RESEARCH ON E COMMUNICATION........................19 2.6 SUCCESS FACTORS IN E-COMMERCE..................................................................21 2.7 GETTING THE BUSINESS ON THE WEB.................................................................24 CHAPTER 3 METHODOLOGY................................................................................................. 27 3.1 INTRODUCTION............................................................................................................27 3.4 SAMPLING.......................................................................................................................29 3.5 DATA COLLECTION.....................................................................................................32 CHAPTER 4 RESEARCH FINDINGS AND DISCUSSION..................................................... 40 4.1 INTRODUCTION............................................................................................................40 4.2 RESPONSE RATE...........................................................................................................40 4.3 LENGTH WITH ORGANISATION..............................................................................40 4.4 UNDERSTANDING E-COMMERCE...........................................................................41 4.5 ELECTRONIC COMMUNICATION TECHNOLOGY USED AT PBC..................43 4.6 LEVEL OF E-COMMERCE AT PBC...........................................................................44 4.7 E-COMMUNICATION PRODUCTS............................................................................45 4.8 BENEFITS OF E-COMMUNICATION........................................................................46 4.9 PROBLEMS OF E-COMMUNICATION.....................................................................46 4.10 SUCCEESFULL IMPLEMENTATION OF E-COMMERCE..................................47 4.11 E-COMMERCE SUITABILITY AT PBC...................................................................48 4.12 RESOURCES FOR E-COMMERCE...........................................................................49 4.13 CHALLENGES BEING FACED BY PBC DUE TO LACK OF E-COMMERCE. 49 4.14 CHAPTER CONCLUSION..........................................................................................50 5. CONCLUSIONS AND RECOMMENDATIONS................................................................... 51 5.1 CONCLUSIONS...............................................................................................................51 5.2 RECOMMENDATIONS OF THE STUDY...................................................................52

5.3 AREA OF FURTHER STUDY.......................................................................................52 APPENDIX A COVERING LETTER...................................................................................... 53 APPENDIX B- QUESTIONNAIRE............................................................................................ 54 LIST OF REFERENCES.............................................................................................................. 59

List of figures
Figure 1 Length in organisation.................................................................................................... 40 Figure 2 level of e-commerce at ZSE........................................................................................... 44 Figure3 Is e-commerce suitable for business at PBC?................................................................. 48 Figure 4 Do you have adequate resources to adopt e-commerce?................................................49

List of tables

CHAPTER 1 INTRODUCTION AND RESEARCH PROBLEM

1.1 INTRODUCTION

An analysis of how the adoption of ecommerce solutions can enhance the performance of Premier Banking Corporation is the focus of this study. This has been necessitated by the advent of the digital age, especially e communication that has offered the financial services sector opportunities for reduced transaction costs, improved customer service and enhancement of customer base. 1.1 BACKGROUND OF STUDY Premier Banking Corporation is a wholly owned subsidiary of Premier Finance Group, a Zimbabwean registered financial services group of companies. The Group comprises of three wholly owned subsidiaries which are, Premier Asset Management, Premier Banking Corporation, (PBC) and Premier Capital Management. PBC is currently the Groups foremost operating subsidiary, having led the companys entry into the financial services sector in 2002 as Premier Discount Company Limited. The Discount House was registered as a financial institution under the Banking Act in August 2002 and opened its doors to the public on 1 October 2002. Premier Discount Company Limited converted to a merchant Bank in November 2004 and consequently changed its name to Premier Banking Corporation. PBC is an integral part of a sophisticated financial sector that consists of the Reserve Bank of Zimbabwe at the apex, commercial banks, merchant banks, discount houses, finance houses and the insurance sector. PBC comprises of six client facing units namely, Agri-finance, Business Banking, Financial Markets, Global Banking, Investment Banking and Personal Banking. The bank is structured to best serve its target clientele and interacts with those clients through a combination of physical and electronic channels that offer a spectrum of banking services, from the basic vanilla products to customised solutions for its diverse market. Despite PBCs well established nature, the bank has not fully capitalized on the technological advancements mostly on the area of e communication. The bulk of the organisations business is carried over the counter physically and this has had far reaching inconveniences to the market especially in todays fast paced technological world where real time decisions ought to be made. This has ultimately constrained the

growth of PBC and has also led to a decline in the number of corporate clients with fully active transactional accounts with the bank. 1.2 PROBLEM STATEMENT PBC has not fully embraced e commerce in its operations and this has been noted as a major growth constraint of the organization. Instead of continuously investing more resources in new technology, it seems the bank has somewhat relaxed after the initial adoption of e commerce programmes. The bank provides a limited range of e commerce products and as such clients have been negatively affected since one can not make real time decisions. Furthermore, the bank seems to have failed to capitalise on the benefits of the e commerce programs adopted. 1.3 OBJECTIVES OF THE STUDY (i) (ii) To assess the level of e commerce at PBC To identify operational constraints caused by the lack of e communication at PBC. (iii) To establish the benefits that have been realised by the bank through the adoption of e commerce solutions. (iv) To analyse how the adoption of e commerce at PBC could facilitate smooth business flow between the bank and its customers. (v) To recommend ways in which PBC could enhance its operations through the adoption of e commerce solutions 1.4 STUDY PROPOSITION

The study proposes that the adoption of e commerce at PBC can lead to the organisations superior performance.

1.5 STATEMENT OF HYPOTHESIS

(i) Null Hypothesis

There is no relationship between the implementation of e commerce solutions at PBC and its performance. Enhanced performance of PBC is independent of the adoption of the e commerce solutions. (ii) Alternative Hypothesis The implementation of e commerce solutions can enhance the performance of PBC.

1.6 SCOPE OF THE STUDY

The study will be carried out mainly at PBC headquarters in Harare. This is so because of financial and time constraints as well as from the fact that most of the strategic decisions are made and found at the headquarters. The study respondents shall be staff and management at PBC head office and selected clients. 1.7 JUSTIFICATION OF THE STUDY The study results and recommendations will serve to bridge the literature gap that exists since the existing literature reveals little regarding the impact of e commerce in Zimbabwes financial sector. Furthermore, uncertainty exists as to what extent e commerce benefits financial institutions in a developing country like Zimbabwe. The study results will also benefit researchers and consultants in this field with study material. PBC will also benefit if it embraces the recommendations that will be made at the end of this study. 1.8 ASSUMPTIONS OF THE STUDY (i) (ii) The respondents will provide accurate and relevant information The study will receive maximum co operation from the respondents.

(iii) The prevailing situation at PBC will prevail up until the end of the study. (iv) Data collection instruments will have adequate reliability and validity. 1.9 RESEARCH OUTLINE

Chapter 1 is the introduction of the research, which comprises of the background of the problem, statement of the problem, objectives of the study, proposition and justification of the study. Chapter 2 will consist of literature review where the researcher searched literature to gain the opinions of other writers on the research topic. The literature review includes a conceptual framework used to guide the research. Chapter 3 will focus on research methodology. The chapter discusses the research philosophies adopted and the various research methods used to answer the research questions and meet the research objectives. Data collection tools and data analysis methods are discussed. Chapter 4 (results and discussions) presents the study findings and discussion of the study findings. These are findings which form the basis of conclusions and recommendations of the study. Chapter 5 outlines the conclusions and recommendations of the study derived directly from the research findings. Furthermore, the chapter presents the suggested areas of further research as shown by the study findings.

CHAPTER 2 LITERATURE REVIEW

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2.1 INTRODUCTION In this section, literature by different authorities on ecommerce will be reviewed. The historical development of ecommerce, Business to Business (B2B) e commerce, success factors and benefits of ecommerce will be discussed. This section will form the basis on which study findings will be discussed and it provides a link between this study and what other researchers and authors have found out in relation to the research problem, through reviewing related literature. The main thrust of this literature review is to highlight the relationship between variables in the study and empirical evidence so as to provide basis for testing the hypotheses postulated in the previous section and for advancing arguments. Literature review is an essential element of research and according to Leedy (1982), the more one knows about the investigations relevant to ones own study the more one can approach the problem of interest in ones area of investigation. 2.2 HISTORICAL DEVELOPMENT OF ELECTRONIC COMMERCE Kessler (2003) put forward that electronic commerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. It can involve electronic funds transfer, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI) and automated data collection systems. He adds that it typically uses electronic communications technology such as the Internet, extranets, e-mail, e-books, databases and electronic catalogues. This study proposition is going to review how the adoption of such e commerce solutions can enhance the performance of PBC. The meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for example, to send commercial documents like purchase orders or invoices electronically (Bach and Erber, 2001). According to Alexander (2000) e-commerce is defined as the complete set of processes that support commercial/business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. The growth and acceptance of credit cards, Automated Teller Machines (ATM) and telephone banking in the 1980s

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were also forms of e-commerce (Grooves et al, 1997). However, from the 1990s onwards, this would include enterprise resource planning systems (ERP) and data warehousing. In the "dot.com" era, it came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic payment services, like credit card payment authorizations. Today, it encompasses a very wide range of business activities and processes, from ebanking to offshore manufacturing to e-logistics. The ever growing dependence of modern industries on electronically enabled business processes gave impetus to the growth and development of supporting systems. Although a large number of "pure e-commerce" companies disappeared during the dotcom collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add ecommerce capabilities to their web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started ecommerce subsidiaries through which consumers could order groceries online. This resulted in a significant increase of the market share for the supermarkets. In line with the above purchase of groceries, the researcher is going to apply a litmus test of the same on PBC and see whether all banking transactions can be done via e commerce. This will allow clients to log on to PBCs website from anywhere in the world and be able to transact. The evolution of e-commerce in the early 2000s onwards saw multinational (MNCs) or transnational (TNCs) companies establishing regional shared services centers, regional data centers and regional call centers. Today, this is not only a crucial part of a company's long-term corporate strategy in cost containment, but also in maintaining and winning market share in a borderless, global marketplace. The application of such e commerce solutions should be able to increase trade volumes at PBC since it will be able to attract investors from any where in the country and even beyond the borders.

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BUSINESS-TO-BUSINESS E-COMMERCE As the Zimbabwean economy becomes increasingly integrated into the global village, the internet becomes more and more relevant and important as well. No business in this world can achieve sustainable long term growth without the internet. The use of e commerce can be used to get competitive prices. Many Zimbabweans nowadays utilize the internet to search for business information as well as for transaction purposes. Online advertising, marketing and selling is now a common business practice of today, tomorrow and beyond. Most investors in this age especially in foreign markets prefer to buy goods and services in the comfort of their offices using their banks and credit cards. This will create less hustle for both the buyers and the sellers as funds and securities will directly move from one account to the other electronically. Business-to-Business refers to a broad range of intercompany transactions, including wholesale trade as well as company purchases of services, resources, technology, manufactured parts and components, and capital equipment. May (2000) argues that B2B also includes many types of financial transactions between companies, such as reinsurance, commercial credit and electronic networks for trading bonds, securities and other financial assets. He adds that B2B transactions exclude those involving households, such as retail sales, inter-consumer exchange, and employment. Companies in B2B e-commerce offer innovative economic transactions. Daniel (2006) contends that acting as intermediaries, many B2B companies propose to design innovative transactions between a company and its many suppliers; that is, they reorganize supply chains. For example, some B2B companies provide centralized online auctions. Emcmillan (2004) put forward that centralized markets create efficiencies by reducing search costs, allowing buyers and sellers to meet each other through the central exchange. Bahra (2001) argues that when there are many buyers and sellers, centralized markets also can reduce time costs by replacing bilateral negotiation with formal bidding mechanisms and information about transaction prices. Moreover, by partially supplanting the procurement function of buyers and the sales function of suppliers, B2B intermediaries affect company decisions about procurement and intra- firm transfers of goods and services. Cotton (2002) notes that companies may choose to rely more on outside intermediaries for procurement and sales activities, and less on internal

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purchasing and sales personnel. Procter (1998) adds that B2B e-commerce is directed toward alleviating transaction inefficiencies in the supply chain. Companies in manufacturing, mining, construction, transportation, public utilities, and other sectors all buy from and sell to other firms. There is substantial intercompany exchange in the financial sector as well, in such areas as securities trading, investment banking and reinsurance (UNCTAD, 2004). Bodnar and Hopwood (1998) assert that such transactions consume substantial efforts involving marketing and sales, purchasing, financing, technology procurement, and accounting. Ecommerce promises to reduce the costs of inter-business transactions by automating many individual steps in the procurement process. Traditionally, inter-business transactions begin with a company evaluating the input purchasing required to carry out its business strategies or a supplier seeking buyers for its goods and services (Sarmento, 2000). Next buyers search for suppliers (and vice versa), through advertising, trade shows, brokers, and dealers. Buyers then negotiate with potential sellers concerning product specifications and prices, and perhaps conclude a spot transaction or form a long-term contract. After the agreement has been reached, the transaction itself still involves ordering, billing, arrangements for transportation, confirmation of payments, and acceptance of delivery. Norris (2001) put forward that ecommerce innovations aim to reduce the cost of procurement before, during and after the transaction. Before the transaction, Internet technology may lower the cost of searching for suppliers or buyers and making price and product comparisons. Alf Sherk, the founder of e-Chemicals, claims that When youre dealing with one or two drum quantities, the cost of comparison shopping can be more than the value of the product (Jones, 1999). According to Bahra (2001) intermediaries reduce search costs by consolidating markets, providing an assortment of goods and services that gives buyers the cost efficiency of one-stop shopping. He adds that online intermediaries further lower search costs by providing information. Vuksic and Strugar (2001) are for the view that by merely providing a comprehensive list of potential suppliers of a specialized product, the intermediary can significantly reduce search costs for a buyer. Laudon and Laudon (1998) add that costs can be reduced by providing catalogues of product information from different suppliers, enabling easy product comparisons, rather than requiring the buyer to use up costly

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time to contact the suppliers for the information. Norris (2001) also adds that intermediaries can provide price information for each product. The intermediary may even provide dynamic pricing mechanisms, such as auctions or automated negotiation rules, which cause prices to respond quickly to variations in demand and supply. Furthermore, Alexander (2000) argues that B2B e-commerce attempts to create markets that will replace intra-firm transfers of goods and services. He adds that vertically integrated firms engage in substantial internal sales and procurement activities. Groves et al (1997) note that B2B e-commerce can enable outsourcing of the management of these external and internal transactions; that is, specialized intermediaries may handle many of these transactions. For companies that purchase externally, these intermediaries would substitute for many of the activities of company purchasing departments. May (2000) adds that vertically integrated companies might reorganize to outsource production of goods and services that were previously produced internally, and again rely on intermediaries to help with procurement. The end result would be a fundamental change in the way that businesses transact with each other as well as the way in which businesses are organized. Erber et al (2001) contend that such innovations in economic transactions depend on advances in computer networking technology that significantly reduce the costs of data communication. The Internet and its associated hardware and software technologies can lower the costs of communicating data, both data transmission between companies and within organizations (Intel, 2004). Kessler (2003) assert that although advances in computer networking technology provide the impetus, advances in Internet commerce depend on innovations in the way that transactions are organized. Lowering transaction costs often entails the design of novel types of transactions. For example, the oil companies BPAmoco, Royal Dutch/Shell Group and Totalfina Elf Group along with financial services companies Deutsche Bank, Goldman Sachs, Morgan Stanley Dean Witter and Societ Generale have announced a new electronic marketplace for overthe-counter energy, metal, and other commodities called the Intercontinental Exchange, that will replace transactions that were largely conducted by telephone (Shmukler, 2000). The Intercontinental Exchange market will have various novel features including the provision of information to traders regarding their counterparties, such as their credit worthiness, and information regarding market aggregates (Market News Publishing, 2000).

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Internet commerce offers many of the benefits of electronic data interchange (EDI) without its high costs. Like EDI, Internet commerce offers the benefits of speed and accuracy (Intel, 2005). Ben (2006) adds that by linking their computers, companies can communicate without the costs of translating computer files into paper documents, a process that involves errors, delay and costly clerical personnel. EDI provided these benefits years ago for some companies, but costs were relatively high because EDI involves proprietary software and point-to-point communications (Alexander, 2000). Cotton (2002) argues that internet technology typically involves open standards on a global network. In order to add a new supplier to their EDI purchasing system, for example, a firm would have to establish a new network link with that supplier, and have new software installed on that suppliers computer systems. Shapiro and Varian (1999) argue that internet-based electronic purchasing connections can be much less costly to set up, since they involve hardware connections that the company is probably already using for other purposes, and can likely be established using off-the-shelf software rather than customized proprietary solutions. Bach and Erber (2001) put forward that after the transaction, electronic commerce may allow companies to communicate at very little cost to confirm delivery and to monitor contractual performance. In addition, companies will more readily be able to use the information generated by the transaction to update their inventory and accounting records. Seybold (2000) put forward that companies can automatically link their transactions to software used for supply chain management, enterprise resource planning, and final customer sales. A key technology expected to facilitate B2B ecommerce is the application of Extensible Markup Language (XML). The language is a refinement of the Standard Generalized Markup Language (SGML), which is a language used to define languages. The XML language allows documents to be treated as data, so that computers can exchange data more effectively, thus aiding the automation of data exchange between companies. Standardized XML data-description tags are being developed for different market applications, in order to capture the types of data that are most important in each market (sizes, prices, material grades, colours, delivery methods, etc.). If the standards are generally adopted, this will help manufacturers, suppliers and distributors to exchange commercial information without creating customized formats for each partner (Mitchell, 1999).

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Hypertext Markup Language (HTML) speeded the development of Internet web sites by establishing a standard format for documents that allows users to use a standard browser to view styled text, graphics, and hyperlinks to other Web pages. The XML standard promises similar advantages for exchange of information between businesses, including data on sales, inventory, production, payments and transportation. Using XML, a person can receive and analyze data obtained on the Internet without the need to go back to the host server on which the data is stored, thus vastly speeding up communication and making more efficient use of scarce server capacity and reducing Internet traffic. For example, a user can obtain information from a travel agency about flights on a given day and then compare airfares and itineraries without relying on data processing by the travel agencys server (Bosak and Bray, 1999). Because of its flexibility, XML should allow each industry to establish simple standards for the exchange of data and the execution of commercial transactions.

2.3 BANKING CONSUMER OPTIONS

Bahra 2001 defined three types of business models that are available to the consumer: Brick and mortar institution- financial institution that has a building and personal service representatives but does not offer internet banking services. Brick and click- financial institution that has a physical structure and also offers internet banking services Virtual bank-financial institution that has no public building and exists only online. 2.4 TYPES OF ONLINE BANKING

Internet banking- Conducted through a personal computer that connects to a banking website via the internet. Internet banking can also be conducted via wireless technology through either Personal Digital Assistants (PDAs) or cellular phones.

Electronic Banking is conducted by using Automatic Teller Machines (ATMs), telephones (not via the internet) or debit cards

Advantages of using Online Banking to the clients:

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Convenience- save on time and transport costs to the bank 24 hours by 7 days access to the bank Secure electronic transactions Instant credit/ payments Quicker and easier reconciliations Saving on transit and cash handling fees Reduced staff embezzlement and fraud

Advantages of using Online Banking to the banks Less queues Reduced stationary costs No need to have huge amounts of cash in vaults as most transactions are electronic Reduced pressure on the bank personnel Profitability increases Increased distribution because of the virtual nature of the channels Strengthens the brand

Advantages of using Online Banking to the economy Reduced costs associated with note printing Cheque frauds reduced Improves clearing systems General lifestyle improves because of the better convenience brought by electronic banking. Disadvantages of electronic payment channels The disadvantages of eBanking mainly relate to security threats, abuse of resources, technology complexity, cost challenges, legal issues and cost incurring disadvantages.

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It is imperative that banks adequately address these disadvantages if they are to reap the benefits from e commerce. Security Challenges Document processing using computers is amenable to abuse. Cost incurring disadvantages Ecommunication investments require huge initial costs for a secure network and sophisticated hardware and software. Legal issues Legal issues pose a major constraint to conducting ecommunication on the internet. 2.5 GLOBAL EMPIRICAL RESEARCH ON E COMMUNICATION

Banks are realising that in order to fully exploit the capabilities of the internet, they must reshape their strategies and deliver products in a more innovative manner in terms of product variety and lower prices. (Grooves, Biemer, Lyberg, Massey, Nichloas and Hagel 111 1997). It is possible to conduct on line, all traditional features of banking, due to the product oriented nature of banking. Flexibility of online banking resulted in nearly 30% of savings for consumers. This was the motive that justified the embracing of the internet by Wells Fargo Bank (Laudon and Laudon 1998). According to Sarmento, (2000) if banks can provide what customers want and not be hampered by the legacy of complex internal structures, they will have a chance for survival and growth through the internet. Over the past few years, the internet has had a magnificent effect on financial services because it offers an unprecedented degree of information efficacy. It is estimated that in the United States, only 500 000 households invested online in 1996. (Forrester Research). By 2001, the number of households that conducted on-line financial transactions and grown to about 3.3 million. (Vuksic & Strugar 2001). Today, roughly 4.5 million households use internet banking and or bill payment at least once a month, and that number is expected to increase 53.5 million , nearly 40% of all households by 2008.

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Given the wealth of opportunities the internet creates for financial services companies and the accelerated pace with which banks are going online, having an internet presence will become a strategic necessity for most banks, thrifts and other financial institutions. From 1977 to 1988, Citibank, an early adopter of ATM technology, increased its market share in New York City from 4% to 13.4%. ATMs were a substantial driver of this impressive growth. Indeed in its early stages, the ATM was a source of strategic differentiation for Citibank and other early adopters, but as technology was deployed more widely, the source of value associated with the ATM shifted. No longer does ATM differentiate a bank, it is now expected by consumers as a basic service offering. ATMs have migrated from a differentiator to a strategic necessity and so will internet banking. For most banks, the future of the internet lies in how well it can be integrated with more traditional delivery channels. But in the end, profitability will depend primarily on the quality of the products and services that banks deliver to customers, not necessarily on how those products are delivered. (Cotton 2000). More recently, banks have augmented their distribution networks with transactional web sites, which allow customers to open accounts, apply for loans, check balances, transfer funds and make and receive payments online. Despite the many factors inhibiting the growth of e commerce in Africa, and minimal progress in appropriate legislation, commercial concerns in several African countries are actively pursuing e commerce ventures, albeit on a small scale. Two rather imperfect measures of e commerce activities are the extent of internet and web based activity in a country. Table 1 below shows a breakdown for SADC countries in terms of internet subscribers per country and the international bandwidth used.

Table1 Overview of internet usage and international bandwidth for Southern African Countries (Jensen, 2001) Country Dialup Number International International

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Internet Subs Total Total South Africa Total Excluding SA Mauritius Botswana Zimbabwe Tanzania Namibia Zambia Mozambique D.R.Congo Angola Malawi Seychelles Swaziland # 892,850 750,000 142,850 35,000 25,000 20,000 20,000 15,000 6,500 6,000 4,500 4,000 2,400 3,000 1,200

ISPs

Bandwidth Kbps

Hubs #

132 75 57 1 6 8 14 3 3 5 5 4 2 2 2

793,634 750,050 43,634 4,096 14,000 5,120 4,096 3,072 3,072 2,048 2,048 192 1,024 4,098 256

32 5 27 1 1 1 3 2 3 3 3 1 3 2 2

In several respects South Africa is unique in Africa as regards e commerce. Accordingly it is dealt with separately. In the SADC region (excluding South Africa) the overall volume of e business is very small and growing at a slower rate than world e business. For several well known reasons, South Africas e commerce characteristics straddle the line between developed and developing countries. The South African market is leveraged by its superior technical, social and capital infrastructure. It has been noticed that during the last few years, African governments started lifting barriers to competition in the whole continent. Africas international internet bandwidth will grow tenfold in the next five years, mostly driven by the demand for data services. (Pyramid 2004) 2.6 SUCCESS FACTORS IN E-COMMERCE Ben (2006) put forward that an e-commerce company will survive not only based on its product, but by having a competent management team, good post-sales services, wellorganized business structure, network infrastructure and a secured, well-designed website. Such factors include:

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A good management team armed with good and sound information technology strategy. A company's IT strategy should be a part of the business re-design process.

Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants today process credit card transactions on site through arrangements made with commercial banks or credit cards companies.

Providing reliability and security. Parallel servers, hardware redundancy, failsafe technology, information encryption, and firewalls can enhance this requirement.

Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.

Constructing a commercially sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot-coms might not have gone into bankruptcy.

Engineering an electronic value chain in which one focuses on a "limited" number of core competencies -- the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)

Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).

Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.

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Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.

Streamlining

business

processes,

possibly

through

re-engineering

and

information technologies. Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisors and selectors. May (2000) asserts that naturally, the e-commerce vendor must also perform such mundane tasks as being truthful about its product and its availability, shipping reliably, and handling complaints promptly and effectively. Bhasin (2003) put forward that a unique property of the internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. Erber et al (2001) note that a successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. They add that many factors go into making this possible. Such factors include: Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in nonelectronic commerce. Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals. Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help. Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the faceto-face human interaction found at a traditional point of sale.

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Providing a sense of community. Chat rooms, discussion boards, soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect.

Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.

Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all product information is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.

Helping customers do their job of consuming. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.

2.7 GETTING THE BUSINESS ON THE WEB There are three steps to analyze when looking at the creation of an online business: Consideration, Implementation, and Finalization. Consideration How does a business know whether they should engage in such a practice? Despite the obvious advantages to e-commerce, it does not always meet the long term needs of a company (Groves et al, 1997). Alexander (2000) notes that if the market for the product or service is quite small, then there is no need to engage in e-commerce as it will be less difficult to gain competitive advantage and would only result in unnecessary costs and expenses. May (2000) put forward that if the company wishes to remain domestic and not expand its services, then a company would be better suited to follow the normal processes of advertising than participating in e-commerce. Seybold (2001) notes that a company must consider whether the business would even succeed or thrive in the e-commerce environment. For example, selling food online would not be a viable venture, as the ultimate costs (wastage, storage, transportation) would outweigh the benefits.

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However, Cotton (2002) argues that if a company believes that their product has great market potential outside of their domestic realm, and feel that they can participate in e-commerce, then some time must be taken to lay down the floor plan for the business. Some aspects to consider are:
i. ii. iii. iv. v.

What is the idea for the business? Is it a product or service? What is the name of it? Will you emphasise price, quality, service, or another point? What is the target market?

Implementation The key to successfully starting and creating an online business is choosing the right Web host (Intel, 2005). Try to find one that offers guarantees, is flexible, responds to your concerns, and quite simply is one that offers the services that you want and need. Once the firm has found the right Web host and created an account, the next step is start building the firms site. Daniel (2006) put forward that having an attractive yet simple site will have a great impact. Ensure that it projects the right image and is directed to the right target market for your product. It should be easy to navigate and have a solid search option. Also clarify what sorts of policies you will implement, such as return policies, acceptance or rejection of credit cards, check-out, and any other payment options such as cheques or money orders. If selling products, there are many types of software out there to help you create an effective and efficient ordering system. Look at the features that you will need for your site and compare them to the software that is available. Finalization Now that the firm has created the website and is ready to begin, the next important step is to market your online business (Intel, 2005). The options are numerous and can include:
i.

Join a search engine and pay a fee for placement

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ii. iii. iv. v.

Contract with affiliate sites and programs Advertise Virally market Use promotions

A key step is developing some sort of PR strategy. Cotton (2002) put forward that customers are the most important aspect of the business. Make them happy. This can include offering links on your site to answer Frequently Asked Questions (FAQs), shipping quickly, designing a system for easy returns, as well as any other type of customer service ( Norris, 2001). Ben (2006) asserts that it is also important to constantly change and maintain the freshness of the organisations site. This includes altering colors and creating new displays. Daniel (2006) adds that another noteworthy option is to include some sort of statistical counter so as to find out where the customers are logging in from and what they doing on the site. Test any advertisements that you create to they are. see how effective

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CHAPTER 3 METHODOLOGY

3.1 INTRODUCTION Research methodology is the philosophical basis on which research is founded, White B (1998). It basically looks at the research design, units of analysis, data collection instruments, the population and sample of interest.

3.2 RESEARCH PHILOSPHY Based on the positivism philosophy, the research will take both qualitative and quantitative approaches in order to provide an in-depth analysis of the data. Research paradigms incorporate the fundamental philosophical concepts and values about the nature of reality and the scientific pursuit of knowledge. Essentially, two schools of thought about the research process dominate the literature: positivism (quantitative) and phenomenological (qualitative) research. They hold diametrically different views about the way in which knowledge is developed and judged as being acceptable. Taking into consideration the strengths and weaknesses that flow from purely positivism and phenomenological bias in research, the researcher will adopt a mixed approach that draws from both extremes, but, with a heavy inclination towards the latter. This approach is considered to be adequate as it enables the researcher to increase the reliability and validity of the findings because weaknesses of one method are balanced by the strengths of the other method.

POSITIVISM RESEARCH Positivist research is generally quantitative and involves the use of numerical measurement and statistical analysis of measurement to examine phenomena. It views reality as consisting phenomena that can be observed and measured (Remenyi et al, 1998:32) thus assuming that the researcher is independent of and neither affects nor is affected by the subject of the research (Chill and Johnson, 1997). The advantages of this quantitative approach are that it places great premium on objectivity and reliability of findings and encourages replication. Applied to social sciences and business management research, positivism may not always be appropriate, as all

27

social phenomena cannot be accurately and reliably measured, thus reducing the validity of the findings.

PHENOMENOLOGICAL RESEARCH In contrast, phenomenological or qualitative researchers argue that the world is socially constructed and that science is driven by human interests and that the researcher, as a subjective entity, is part of the world he or she is observing. Total objectivity, is therefore an impossible aim. The advantages of this qualitative, interpretive orientation in research are that the findings often have greater validity and less artificiality as the process of observing phenomena in natural, real-life settings often allows researchers to develop a more accurate understanding of those phenomena.

Good qualitative research often reveals depth of understanding and richness of detail. Research driven by phenomenological philosophy is sometimes undermined by the subjectivity of the researcher and the poor reliability of the findings in that, two researchers may arrive at different conclusions based on their observations of the same phenomena at the same time (Saunders et al 2003:84). 3.3 RESEARCH DESIGN A research design is a plan and structure of investigation so conceived to obtain an answer to a research problem, Jones A.R (1996). In this study, the researcher will use the descriptive survey approach combined with case studies in order to elicit as much information as possible from the respondents. A case study uses multiple sources of evidence, Johnson (1994), and this has the advantage of exposing the researcher to a wide range of views on the subject matter being investigated. www.statpac.com/surveys/sampling.htm. (17 November 2006: 11.05 a.m.) states that whatever the research question(s) and objectives, there will be need to collect data to answer them. The website further advises that it is incumbent on the researcher to clearly define the target population to which the objectives of the study are addressed. For the purpose of this study, the researcher will identify two major groups of people that have both direct and indirect influences on the operations of PBC. The first group is composed of people or individuals who work from within the organization and are mandated with policy formulation and implementation. This group

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of influencers include chief executive officer and line management, operating core staff as well as supporting staff. On the other hand, the second group will comprise of the banks clients and also corporates who do not currently hold accounts with PBC. 3.4 SAMPLING Samples will be drawn from various levels of employees in the participating organisations using the stratified sampling method. A sample is a proportion of the population that is representative, Babie (1989). The stratified sampling method was used to ensure that all sections of the population were represented in the samples that were drawn in order to have a representative balance of views. Stratified sampling uses natural divisions of a sample frame such as sex, age, income group, or occupation and this ensures adequate representation of the population. Sampling Techniques For some research questions, it is possible to survey an entire population as it would be of a manageable size. However, for many research questions and objectives, it will be impossible to either collect or to analyse all the data available owing to restrictions of time, money and often accessibility. In order to overcome these challenges, the researcher will employ sampling techniques. Sampling techniques provide a range of methods that enable one to reduce the amount of data to collect by considering only data from a subgroup rather than all possible cases or elements. Sampling is therefore likely to be less expensive, saves time, have manageable data and produce equally or more accurate results than a population (Henry 1990). Sampling techniques can be divided into two groups namely; probability and non-probability sampling.

Probability Sampling Probability sampling is based on the concept of random selection a selection procedure that ensures that each element of the population is given a known chance of selection and is usually equal for all cases. Five main cases can be used to select a probability sample and these are simple random sampling, systematic sampling, stratified random sampling, cluster sampling and multistage sampling.

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This technique is most commonly associated with surveybased research (Sanders et al, 2005) where there is need to make statistical inferences from the sample about the population. With probability sampling, researcher bias and subjectivity is reduced or eliminated through the random selection of elements. and time consuming. Although it provides the researcher with a powerful statistical analytical tool, probability sampling is rather costly

Non-Probability Sampling In contrast, non-probability sampling is non random, subjective and purposive in that the research may select the sample using deliberate and consciously controlled criteria other than those associated with randomness of selection. Since the probability of each element being selected from the population is not known, it is almost impossible to address objectives or questions that require statistical inferences about the characteristics of the population. For this reason, non-probability sampling is more frequently used for exploratoryqualitative studies such as case study research.

Cost and time variables may also influence the choice of non-probability sampling as probability sampling requires careful planning and comprehensive effort in electing the population and establishing the sampling frame. Non-probability is also more flexible as it allows the researcher to capture a wider range of important facets than the probability sampling. Despite its simplicity, the fact that it allows researcher bias and subjectivity to affect sampling procedures, the research findings are subject to distortions. As with probability sampling, non-probability sampling is divided into five main categories, namely; convenience judgement or purposive, quota, maximum variation and snowball sampling.

Sampling method used

In view of the research objectives and the pros and cons of the probability and nonprobability sampling techniques, the researcher will use non-probability sampling due to its flexibility in selecting the sample. A quota sampling technique will be used to identify target groups of respondents who are in a position to provide necessary and

30

informed opinions which would assist in testing the hypothesis as stated in Section 1.8 above.

According to Saunders et al (2005), quota sampling may be an appropriate choice to improve the representativeness of the study if the population is divided proportionately into predetermined categories and the elements in each category are deliberately selected from the population until a particular quota has been met for each category. Saunders et al (2005) went further by stating that the quota sampling requires two basic conditions first, the categories should have a distribution in the population that can be estimated and, secondly, the variable used in forming each category should be pertinent to the topic of study.

In this respect, the researcher first identified the categories and their proportions as they are represented in the population. To reinforce the quota sampling method, a judgemental sampling method was also incorporated in order to identify or choose relevant elements and or respondents from each category to the issues being studied. This method was considered to be appropriate because samples or elements were chosen deliberately as they were considered to be representative of the population on the basis of the samples knowledge of the companys business fundamentals.

Sample Size

The size of the sample is almost always a compromise between the accuracy (confidence) of the findings and the amount of time and money needed in the collection, checking and data analysis. Given these competing influences, it is not surprising that the final sample size is almost a matter of judgement as well as of calculation (Saunders et al, 2005). Any research must, however, be guided by the fact that a sample that is too small is not likely to be representative of the population, while one that is too large is likely to increase costs and time demands without producing significant benefits. Bell J. (1999) submitted that statistically, a minimum sample of 30 is held by many researchers to be acceptable.

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Cognisant of this advice, the researcher considered that a proportion of one third (1/3) from each of the population categories as defined above, giving a total sample of 70 would suffice for purposes of this study. The sample (refer to table 2) would be representative to meet the requirements of this enquiry since it is the quality, rather than the quantity of the sample that is the researchers prime concern. The quality of the sample is important as valuable lessons can be drawn from it and be applied successfully to the economy at large.

Table 2 Sample size Category

Sample Size

PBC Clients PBC staff Listed corporates but non clients TOTAL

40 20 10 70

Research Instruments Research instruments are the tools used for gathering data for research. Using more than one method of collecting data is often a prudent procedure. In this light the researcher will use questionnaires and personal interviews.

The researcher will engage various groups of employees in interviews during lunch breaks in order to complement questionnaires so that some of the shortcomings of questionnaires could be addressed. 3.5 DATA COLLECTION In almost all studies, a researcher has two main sources of data, namely, primary and secondary data sources. However, there are several data collection methods available to the researcher and these include, survey, experiment and ethnography. Some of these clearly belong to the deductive tradition, others to the inductive approach. Allocating these data collection strategies to one tradition or the other is unduly

32

simplistic because these strategies are not mutually exclusive to each other (Bell 1999:78). With this in mind and the need to answer the research objectives, the researcher will use both primary and secondary data.

Primary Data

Primary data will be mainly collected through a survey method directed at stakeholder groups considered to be in a position to give relevant informed opinions e commerce in the banking environment. The survey method is considered to be appropriate because it allows for the collection of a large amount of data from a sizeable population in a highly economical way. The survey method is also flexible and adaptable, thus it gives the researcher more control over the research process. In order to collect relevant, reliable and adequate primary data, the researcher will use the self administered questionnaire and the interviewer administered method.

Self Administered Questionnaire

A common place for observing data beyond the physical reach of the observer is the questionnaire, Leedy (1980). The researcher will employ the questionnaire method of collecting data, which is a set of written questions that are either mailed to the individual or simply handed out. The questionnaire will be divided into three sections. Section A will solicit information on demographic data for the respondents, as it is always important to know such information as age and gender of the respondents. Section B will seek to obtain data through the use of close-ended questions, which, according to Bouma and Atkinson, (1999), are questions that force the respondent to select a single response from a list. Section C is meant to collect data through open-ended questions designed in such a way that the respondents were given room to express themselves in their own words. The whole set of questions will enable comprehensive responses to be given to the research to give a true picture on the subject researched on.

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Self administered questionnaires are those which are completed by the respondents without direct interference from the interviewer. Such questionnaires can be conducted electronically through e-mail, through postal services, through the fax, or personally hand delivered to each respondent and collected.

In this study, the researcher will use the self-administered questionnaire as the main mode of primary data collection because of its flexibility to capture data from different sets of people at no extra costs. A self-administered questionnaire also allows respondents to work through the questionnaire at their own pace and any possible bias brought to bear by the presence of an interviewer is avoided. Furthermore, questionnaires provide uniform or standardized data, which is normally easy to process and present. The main shortcoming of the questionnaire method is that respondents would be trying to recreate their views and attitudes which they held at a past time. People usually tend to forget some important facts and end up guessing in order to fill the questionnaire.

To gain maximum synergy, the researcher will craft the questionnaire in such a way that the questions individually and collectively provide the relevant information or data required to successfully address the research objectives and questions. In this regard, the questionnaire will have a range of question categories, each consisting of a small number of related questions, intended to elicit information of a particular type relating to the research topic. Due to the time factor and poor response rate associated with the postal questionnaires, the researcher will resort to the personal hand delivery and collection questionnaire as well as the online e-mail questionnaire.

Interviewer Administered Questionnaire

Responses to this type of instrument are recorded by the interviewer on the basis of each respondents answers and these include telephone questionnaires and structured interviews. The researcher will try to avoid telephone interviews because of the complexity of the subject matter, the time taken and the relative costs involved. Telephones would only be limited for constantly reminding respondents of the impending deadlines.

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Semi-structured interviews are also preferred to total structured interviews as the researcher would want to gather more information or data by varying the order in which questions are asked and by asking new questions in the context of the research limits.

The main advantages of using interviews are: the high response rate they can elicit getting in-depth and comprehensive information assist the respondents who may have difficulty comprehending some questions respondents appreciate the seriousness of the researchers commitment to the study.

The face-to-face interviews will be limited to the management of PBC as they are the core architectures and executors of the companys e commerce strategies.

Both close-ended and open-ended questions will be used to collect data where appropriate. Close-ended questions are used to circumscribe the respondents responses to questions that needed specific answers. This also helps to guard against unnecessary digression by the respondents. In this respect, single-option responses, multiple choice questions, rating questions and ranking questions were used. The closed-ended questions also provided easy coding and data analysis. On the other hand, open-ended questions were used for probing sensitive issues as respondents are provided with enough space to write their responses.

Advantages of the questionnaire As a data collection instrument, the questionnaire was preferred due to the following considerations; The cost of sending out questionnaires is relatively low and this is considered to be appropriate given the current hyperinflationary environment prevailing in Zimbabwe.

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The approach allows time and space for respondents to think and assimilate questions. Confidentiality is guaranteed through ensuring anonymity.

The questionnaire allows for use of close-ended questions, which are easy to administer and help keep the minds of the respondents focused on the subject.

Questionnaires enable the researcher to cover a wider geographical area,

However questionnaires have their own limitations, which include the following; degree of literacy in order for them to understand them and respond accordingly. This means that views of illiterate people cannot be captured using the questionnaire method. However given the topic under study the researcher is comfortable that there will be no illiterate respondents. Some respondents may lose their questionnaires or simply withhold them and the researcher would be required to redistribute more questionnaires to ensure a high response rate. Questionnaires are inappropriate for complex issues that may need further explanation to and from the respondents. Completion of questionnaires can be delegated to other individuals who may not necessarily be the prime target of the researcher. However it is possible to minimize limitations of questionnaire method and the researcher was always on guard in order to keep these limitations at minimum levels. Using simple language and making items clear helps in reducing limitations of questionnaires. Questionnaires are suitable for respondents with some acceptable

Personal Interviews Interviewing involves verbal discussion with the target individual, White B (1998). The researcher approached selected research subjects and asked structured questions where spontaneous responses were obtained.

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Interviewing individuals helps in addressing some of the shortcomings of the questionnaire method, especially where illiterate respondents were involved. The success of a personal interview depends on the integrity and skill of the interviewer, Fred Carswell (1995). In this light the researcher had to be tactful in order to keep the interview consistent with the objectives of the research. Some of the identified advantages of the interview method include the following; Interviews have a high response rate compared to questionnaires since a skilled interviewer can persuade all but the most reluctant to answer the questions. The interviewer can explain questions that the interviewer cannot understand. It enables the interviewer to verify the answers by making visual checks of age and appearance, for example, through observation and non-verbal communication. Offers the potential of collecting more information than other methods.

However personal interviews have their own limitations that the researcher has to manage in order not to compromise the quality of the study and these include; The interviewer may, even unknowingly, introduce bias through the way he asks questions. A good example is asking leading questions. Failure to control the interview process. Due to the nature of the research, some people may be too embarrassed to give personal information in an interview and might end up withholding important information. It may turn out to be a very expensive method especially where interviewees are geographically dispersed.

In order to minimize limitations of the interview method, the researcher will use good interpersonal skills coupled with her working experience, as a relationship manager, to ensure that the identified limitations of the personal interview method will not influence the outcome of the research.

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3.6 DATA COLLECTION PROCEDURES Various steps will be taken in administering research instruments and collecting of data from the research subjects in this study. The researcher will use the telephone, fax machine and the postal system in order to communicate with the research subjects. For ease of collecting the completed questionnaires, envelopes will be provided to the respondents so they will seal their responses inside the envelopes and hand them over to the chosen representative. The researcher will then get in touch with the representative to collect the responses from a single point. In order to ensure that the identified challenges will not interfere with the research, the researcher will employ good time management and planning techniques so that maximum use of time is achieved given the power cuts.

Ethical Considerations In research, ethics are terms of a code of behaviour appropriate to academic conduct, Babie (1989). Throughout the whole process of this study, from seeking access to the organisations to data collection, analysis and reporting, ethical considerations were observed. The following are some of the ethical issues taken into account by the researcher in this study.

The confidentiality of data collected and the anonymity of participants will be upheld by the researcher. Participants names and identification particulars will neither be requested for nor documented. In the publication and analysis of results, some information that could reveal confidential organisational aspects or those issues perceived to have the potential to tarnish the image of the organisations involved were left out.

Property Rights The research will seek to avoid, at all costs, infringing on legal property rights. The researcher thus obtained permission to conduct the research and to have access to other relevant information on PBC.

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3.7 DATA PRESENTATION AND ANALYSIS PROCEDURES The researcher will analyze the data collected using the SPSS method and results will be presented using tables, charts and descriptive statistics. Charts and tables aid in data presentations in that they have a visual impression and enable the reporter to present complex data in a simple and comprehensive way. Data will also be analyzed in percentages for ease of interpretation by readers.

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CHAPTER 4 RESEARCH FINDINGS AND DISCUSSION

4.1 INTRODUCTION This chapter presents the research findings and discussion. These will be discussed in relation to the literature of the study.

4.2 RESPONSE RATE A total of 70 questionnaires were sent to the study respondents 65 were successfully completed and returned representing a study response rate of 93%. The response rate is high enough to warrant validity of the study findings.

4.3 LENGTH WITH ORGANISATION

Figure 1 Length in organisation

From the study findings most of the respondents (46 %) have 1-2 years with PBC, 45% have 3-5 years, and 6 % have above 5 years, whereas an insignificant 3 % have less than a year with PBC. Given that PBC established its entrance in the market in 2002, it can be concluded that most of the respondents have been with the organisation for a reasonably long time, hence are familiar with the processes at the organisation and thus their contributions are of great value to the study.

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4.4 UNDERSTANDING E-COMMERCE Table 3 below shows how the respondents understood e-commerce. Table 3 Understanding e-commerce Response % of respondents Facilitation of commercial transactions 62 electronically Complete set of processes that support 59 commercial /business activities on a network Buying and selling of goods and service 71 over an electronic system Using the internet to trade 69

Table 3 shows that the majority of the respondents (71%) held that e-commerce is the buying and selling of goods and services over an electronic system, 69% believed that it is the using of the internet to trade, 62 % were of the view that e-commerce is the facilitation of commercial transactions electronically while only 59% held that it is a complete set of processes that support commercial or business activities on a network. Table 4 Understanding e-commerce Response Facilitation of commercial transactions electronically Complete set of process that support commercial/business activities on a network Buying and selling of goods and service over an electronic system Using the internet to trade

% of respondents 62 59 71 69

Table 4 shows that majority of the respondents (71%) held that e-commerce is the buying and selling of goods and services over an electronic system, 69% believed that it is the using of the internet to trade, 62% were of the view that e-commerce is the

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facilitation of commercial transactions electronically while only 59% held that it is a complete set of processes that support commercial or business activities on a network. Kessler (2003) put forward that electronic commerce (also referred to as EC, ecommerce or ecommerce) consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. Seybold (2001) asserts that the 'electronic' or 'e' in e-commerce or e-business refers to the technology/systems; the 'commerce' refers to be traditional business models. According to Alexander (2000) e-commerce is defined as the complete set of processes that support commercial/business activities on a network. In the 1970s and 1980s, this would also have involved information analysis. In light of the above the respondents may have an understanding of ecommerce and entails that the respondents may have an understanding of the concepts under study. Their contributions add value to the study findings.

Table 5 what respondents think e-commerce involves Response Buying, selling, distribution, marketing and servicing of products or services over electronic systems

% of respondents 59 63

Electronic funds transfer 37 Supply chain management 43 Electronic data collection 67 Electronic data interchange The study findings show that most of the respondents (67%) held a perception that ecommerce involves electronic data interchange, 59% said it involves buying, selling,

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distribution, marketing and servicing of products or services over electronic systems, and 37% believed that e-commerce consists of electronic data collection. From the study findings e-commerce involves electronic data interchange, electronic funds transfer and buying, selling, distribution, marketing and servicing of products or services over electronic systems. In light of the above this would therefore improve the processes of PBC if e-commerce is adopted as information would be easily obtained and transferred between PBC and its clients. English (2002) notes that the information technology industry might see e-commerce as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems.

4.5 ELECTRONIC COMMUNICATION TECHNOLOGY USED AT PBC Table 6 below represents the clients responses on the e-communication services that they are aware of and have utilised with PBC.

Table 6 Communication services at PBC Communication technology Internet Email Point of Sale/ATM Tele-banking EDI (Paynet) Internet banking

% of respondents 0 100 100 3 83 0

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From the findings in Table 6 all of the respondents (100%) have used POS/ATM and email. 83% use EDI (Paynet), 3 % have used tele-banking, and non (0%) reported to have used internet banking or front end and backend processes. Therefore, e-mail, POS, EDI are used extensively at PBC. No respondents indicated to they have utilized internet banking, or front end and back end processes and this can be explained by the non-availability of these services at PBC. This result is not in line with world trends as reported by UNCTAD (2004) that internet and particularly e-communication have continued to grow at a fast pace since 2001 with internet users growing up to 655 million by end of 2002 and developing countries accounting for almost a third of new internet users world wide in 2001.

4.6 LEVEL OF E-COMMERCE AT PBC Figure 2 shows the level of e-commerce implementation at PBC

12%

2%

Poor Averag e

86%

Figure 2 level of e-commerce at ZSE

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From the study findings majority of the respondents (85%) held a percetion that the level of e-commerce at PBC is poor, 12% believed that the level of e-commerce is average whereas 2% said the level of e-commerce at PBC is good. From the study it is percieved that the level of e-commerce at PBC is poor. This entails that PBC should therefore adopt the latest communication technologies like the internet so that it would have all its activities being accessed by the firms on the internet and also the transactions to be done electronically.

4.7 E-COMMUNICATION PRODUCTS E-communication products are summarised in Table 7 below. Table 7 E-communication products Product Statement enquiries Bill Payments Point of Sale Terminals Account transfers Telebanking Internet banking

% of respondents 0 0 90 3 0 0

Research results reveal that the main e-communication product utilized by clients is Point of Sale terminals (90%) and an insignificant 3% indicated that they use it for account transfers. None of the respondents reported using other e-communication products such as internet banking, telebanking, account transfers, statement enquiries or bill payments. This result is inconsistent with the observation by Barnes and Hunt (2001) that an increasing number of business transactions are taking place electronically due to convenience of accessing bank accounts on their office computers, obtaining statements and transferring money between accounts from the comfort of offices.

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4.8 BENEFITS OF E-COMMUNICATION Research results on the benefits of e-communication are shown in Table 8 below. Table 8 Benefits of e-communication Benefit Easy access to money Reduced queues in banking halls Effective communication with customers Revenue generation Competitive advantage Cost savings

% of respondents 95 80 60 70 63 70

Research results show that the major benefit of e-communication is access to money (95%), reduced queues in banking halls (80%), revenue generation 70%, effective communication with customers, revenue generation (65)%, technology gives a competitive advantage (63%) and cost savings 56%. As reported by UNCTAD (2004) e-communication allows businesses and entrepreneurs to have a competitive edge over others. Coulson-Thomas (2003) also suggests that e-communication results in improved customer services.

4.9 PROBLEMS OF E-COMMUNICATION Study results on what respondents felt were the problems with e-communication are shown in Table 9 below. Table 9 Problems with e-communication Problem Huge cost of security High rate of technical obsolescence in IT related hardware and software Unauthorised users compromise confidentiality, integrity and availability of sensitive information Low user interface

% of respondents 85 70 90 62

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Study findings show that the main problem of e-communication is difficulty to authenticate users (90%); high cost of security (85%), high rate of technical obsolescence in IT related hardware and software (70%), and low user interface (62%). Jolly (2003) found out that internet software was generally designed with security as an afterthought. He further notes that e-communication products require major initial costs for a secure network, sophisticated hardware and software.

4.10 SUCCEESFULL IMPLEMENTATION OF E-COMMERCE Table 10 shows the technical and management aspects that PBC should take into consideration to successfully implement e-commerce. Table 10 Implementation of e-commerce Response % of respondents

Having a competent team with good and sound IT strategy Providing an easy and secured way for customers to effect transactions

59

63

Providing an attractive website

57

Constructing a commercially sound business model

45

From the study findings majority (63%) of the respondents believed that for PBC to successfully implement e-commerce they should provide an easy way for customers to effect transactions, 59% said it should have a competent team with good and sound IT strategy whereas 45% held that PBC would succefully implement e-commerce by constructing a commercially sound business model. Ben (2006) put forward that an ecommerce company will survive not only based on its product, but by having a competent management team, good post-sales services, well-organized business

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structure, network infrastructure and a secured, well-designed website. Such factors include: Sufficient work done in market research and analysis. E-commerce is not exempt from good business planning and the fundamental laws of supply and demand. Business failure is as much a reality in e-commerce as in any other form of businesses. For a successful implementation of e-commerce PBC should take into account the above factors and thus would enhace its e-commerce implementation. 4.11 E-COMMERCE SUITABILITY AT PBC

36% 64%

Yes No

Figure3 Is e-commerce suitable for business at PBC?

Figure 3 shows that the majority (64%) of the respondents held that e-commerce is suitable for the business at PBC whilst 36% suggested otherwise. The results show that e-commerce may probably be suitable for business at PBC. Bhasin (2003) argues that certain products/services appear more suitable for online sales; others remain more suitable for offline sales. He adds that many successful purely virtual companies deal with digital products, including information storage, retrieval, and modification, music, movies, office supplies, education, communication, software, photography, and financial transactions. In light of the above the business at PBC is suitable for electronic commerce and thus it should be adopted to enhance the transaction processing and also to improve the business processes at PBC.

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4.12 RESOURCES FOR E-COMMERCE

41% 59%
Yes No

Figure 4 Do you have adequate resources to adopt e-commerce?

PBC has adequate resources to adopt e-commerce according to the majority (59%) of the respondents in Figure 4 whilst 41% suggested otherwise. This means that PBC may perhaps have adequate resources to adopt e-commerce and thus it should adopt e-commerce so as to enhance smooth flow of the business processes at PBC. 4.13 CHALLENGES BEING FACED BY PBC DUE TO LACK OF E-COMMERCE Study results on the challenges being faced by PBC due to lack of e-commerce are shown in table 11 below. Table 11 Challenges faced due to lack of e-commerce Challenges Inaccurate recording It does not attract foreign investors Transaction takes time to be effected Information flow is slow Information is not readily available for probable investors. % of respondents 53 20 63 58 57

From the study findings most of the respondents (63%) held that the challenges being faced by PBC due to lack of e-commerce is that transactions took time to be effected, 57% believed that information is not readily available for probable investors and 53% said that there is inaccurate recording, 20% said it does not attract foreign investors. In light of the above PBC should therefore adopt e-commerce so as improve its information and business flow. Bahra (2001) asserts that there are advantages to engaging in e-commerce. First, providing fast and efficient service leads to a

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competitive advantage, and presents the opportunity to reach out to a larger target market.

4.14 CHAPTER CONCLUSION This chapter has presented findings on electronic communications technology, level of e-commerce at PBC, benefits of e-commerce and problems of e-commerce. The findings on the challenges being by PBC due to lack of e-commerce were also presented in this chapter. The next chapter presents the study conclusions and recommendations.

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CHAPTER 5

5. CONCLUSIONS AND RECOMMENDATIONS This chapter will present the conclusions and recommendations of the study. An area of further study will also be presented. 5.1 CONCLUSIONS The study presents the following conclusions; The level of e-commerce at PBC is poor as the widely used communication technology is telephones. The Internet is not mostly used at the PBC and thus probable investors who are far the PBC would not easily access information on the PBC. ii. From the study findings for PBC to successfully implement e-commerce it should provide an easy way for customers to effect transactions, should have a competent team with good and sound IT strategy and should construct a commercially sound business model. The benefits of e-commerce according to the study findings is that online processing improves logistics, it reduces the costs of processing transactions and e-commerce enhances transparency in pricing. The main problems associated with the adoption of e-commerce are that it becomes a victim of organized crime, over estimation of resource competence, failure to coordinate, failure to understand buyers and under estimation of time requirements. From the study findings the challenges being faced by the PBC due to lack of e-commerce is that transactions take time to be effected, it does not attract foreign investors, information is not readily available for probable investors and there is inaccurate recording.

i.

iii.

iv.

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5.2 RECOMMENDATIONS OF THE STUDY The study presents the following recommendations; i. The PBC should adopt e-commerce so as to enhance efficiency, speed and effectiveness of processes at the stock market. This can be done by acquiring state of the art computer equipment and network systems. ii. For the PBC to successfully implement e-commerce it should provide an easy and secured way for clients to effect transactions, have a competent staff with good and sound IT strategy and should also provide an attractive website. This website would enable probable investors who are far from the PBC to access information on its trading and business. iii. Top management at PBC should be committed to the establishment of a more effective information systems programme. This makes it easier for the whole organisation to be committed as management will be leading by example. The management should also ensure that there are adequate resources to successfully implement e-commerce. This ensures that there would be smooth flow of the implementation process as resources would be available rather than a situation where business would come to a halt due to system failure as a result of inadequacy of resources. iv. E-communication is dynamic and regular reviews are necessary to keep data secure from new threats. PBC staff should keep abreast with world developments on e-commerce. 5.3 AREA OF FURTHER STUDY The study presents an area of further study to assess the effects of successful implementation of e-commerce on the operations of PBC.

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APPENDIX A COVERING LETTER

Precious R. Mbire 48 Cavell Drive, Southerton Harare + 263 11 880 107/ + 263 4 851642-9 rmbire@premierfinance.com

15 August 2008

To whom it may concern Dear Sir/ Madam

RE: AN INVESTIGATION INTO THE LEVEL OF ADOPTION TO E-COMMERCE AT PREMIER BANKING CORPORATION

I am a Master of Business Leadership Student at the University of South Africa carrying out a research project titled An Investigation into the level of adoptiveness of ECommerce at Premier Banking Corporation. Since you are a stakeholder of the bank, I appreciate that you would be an excellent source of information. I would like to learn more about your service expectations in terms of E-Commerce and your perception of the state of the subject aforementioned at Premier Banking Corporation. The questionnaire will take approximately 10 minutes to answer and I hope that you are able to spare your time to answer the questions attached. If you have any questions, please contact me by phone on or by email on the details indicated at the top of this letter. I appreciate your time in considering my request and assure you that your responses will be treated with strict confidence. Yours sincerely,

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Precious R. Mbire

APPENDIX B- QUESTIONNAIRE
1. DEMOGRAPHICS Could you please share some information about yourself so we can group you with similar PBC stakeholders? 1.1 Race 1.2 Age 1.3 Sex 1.6 Phone and telefax

18- 30yrs 56 + yrs Male

31- 45yrs

46- 55yrs Female

2. BEHAVIOURAL PATTERN Please kindly tick and comment where appropriate. 2.1 2.1. 1 2.1. 2 Frequency Which branch do you visit frequently? Why? (e.g. service delivery, proximity, companys choice etc) How frequently have you used the banks services within the past year? How do you make transactions?
6 months or less Between 6 to 12 months Between 1-3 Years More than 3 Years

Daily

Weekly

Fortnightly

Monthly

Quarterly

Other (specify)

Website

Telephone

Fax

Email

Walk In

Other (Specify)

2.2

2.3

How long have you used the banks services

3. UNDERSTANDING E-COMMERCE What do you understand by the term E-Commerce? Please tick the most appropriate; Facilitation of commercial transactions online Complete set of processes that support commercial/ business activities on a network

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Buying & selling of goods & services over an electronic system Using the internet to trade Dont know 4. GENERAL FEELINGS ABOUT THE SERVICE QUALITY AND E- COMMERCE The following set of statements relate to the general understanding of what ECommerce is all about and also feelings about the service at Premier Bank. For each statement, please show the extent to which you believe the bank has the feature described by the statement. Ticking in the 1 box means you strongly agree that the hotel has this feature and ticking in the 7 box means that you strongly disagree. You may tick any of the boxes in the middle that show how strong your feelings are. There are no rights or wrong answers the interest is in the number that best shows your perceptions.
Strongl y Agree 1 Strongly Disagree 7

4.1 4.2

The quality of service performance at PBC is exceptional I am happy with the current level of e commerce at PBC The level of e-commerce influences my decision in choosing my banker

4.3

5. For what services do you engage e-commerce in accessing the banks services?

Funds Transfer Balance enquiry Cash withdrawal Other (specify

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6.

Do you find e-commerce; (Please tick 1)

Vital for day to day work Relatively important Not necessary at all

7. What are the e-commerce channels currently not available with the PBC that you would like to use? . .. .. ..

8. On average, how often do you use the following to process transactions with the bank?

Daily

Weekly

Monthly

No consistent

Never

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Pattern ATM SMS banking Internet Banking Email Telephone Fax

9. How do you rate the level of E-Commerce at PBC? Poor Average Good Excellent

10.

What do you regard as the most important technical / management aspect that PBC should take into consideration to successfully implement e-commerce?

Having a competent team with good and sound IT strategy Providing an easy and secured way for customers to effect transactions Providing an attractive website Constructing a commercially sound business 11. What are the benefits of e-commerce to you? Reduced transactions Speed and timeliness in service delivery Time savings Other (specify)

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.. ..

12. What are the problems you have encountered with E Commerce System Failure Additional Costs Difficulty in use Become a victim of organized crime Other (Specify)

13. Do

you think PBC has the adequate resources to fully embrace ecommerce?

Yes No Dont know 14. What challenges (if any) are you facing due to limited availability of ecommerce at PBC?

Information is not readily available Information flow is slow Transaction takes time to be effected None Other (specify) .

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Thank you for the time you have spent in completing this questionnaire. The results will help me understand your perception of the level of e-commerce at PBC and their impact on your overall satisfaction with the bank.

APPENDIX B QUESTIONNAIRE LIST OF REFERENCES

Alexander, (2000): Management Information Systems. New Jersey, Prentice Hall. Bahra V, (2001): Trusted BSD Security Policy Implementation through the MAC Framework. Deep Knowledge Network Security Conference. Bhasin, TM. (2003): E-commerce in Indian Banking. New Delhi, Authorspress. Bodnar, G.H & Hopwood, W.S (1998): Accounting Information Systems 7th Edition. Upper Saddle River, New Jersey, Prentice Hall. Chaffey Dave, 2007: E-business and e-commerce management. 3rd edition. Prentice Hall. Cotton B. (2002): E-Innovation. Oxford Capstone Publishing.

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EmcMillan (2004):http://www.emmacmillan.com/Acessed 15 October 2004. Grooves, R.M Biener, P.P. Lyberg, L.E. Massey, J. T. Nicholls, W.L. II and Hagel J. III. (1997): Orchestrating Business Process- Harnessing the value of the web technology. Keogh, E. (1999): How to conduct a survey. Statistics Department, University of Zimbabwe. Laudon, K.C and Laudon J.P (1998). 5th Edition. Management Information Systems: New Approaches to Organisation Technology. New Jersey: Prentice Hall Inc. Leedy, P.D. (1992): Practical Research: Planning & Design. New York Macmillan. May P. (2000): The business of commerce: From corporate strategy to technology. Cambridge University Press. Norris. M (2001) E-Business Essentials: Technology & Network Requirements for Mobile & Online Markets: John Niley & Sons. Proctor, S (1998): Linking philosophy and methods in the research process. London, Pitman Publishing. Sarmento M. (2000): Internet and New Economy: E-Commerce for the Services Industry. Page 1-11, 4th International Conference on Technology, Policy & Innovation Curitiba Brazil. Saunders. M (N.K) Lewis. P. Thornhill. A. (1997): Research Methods for business students: London Prentice Hall. UNCTAD, (2004), http://unctad.org. Accessed 17 October 2004. Vuksic, V.B & Strugar, I (2001): On-line Banking in Croatia. Whitely. D (2000) E-Commerce, London: Mcgran Hill Page 20 (Emcmillan (2004) http://www.emcmillan.com/ accessed 15 October 2004.

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