Académique Documents
Professionnel Documents
Culture Documents
To avoid those drawbacks, I have decided to use secondary data for my research.
Sources in secondary research will include annual reports, previous research reports,
newspaper, magazine and journal content. Therefore it is efficient using current year
financial statements and highlights for quarterly and annual and other reports as a
secondary data. It is more reliable than survey. As well as it provide two or three year
comparison of balance sheet, income statement and operating income, revenue and
earnings per share of the banks. My research period will be 2003 to 2009 and to get
present condition information current year will be surveyed. . Data will be analyzed
using the latest SPSS software.
Model 1
Since the norms for IT investment and Banks financial performances data vary from
bank to bank , proir to conducting statitical analysis, each ratio will be standardized
by subtracting its mean from the ratio itself and and then deviding the result by
standard deviation. For avoid varinces of datas it will effective to mesure
mean,Standard deviation and range for IT investment and financial performance of
the banks.
Budgeted IT investment ratio = Budgeted IT investment *100
Total RevenueTo mesure a bank's IT invetment, the present research uses five ratios,
including IT budget as a percentage of revenue, value of a bank's IT as a percentage
of revenue, percentage of IT budget spent on staff, percentage of IT budget spent on
the training of IT staff and number of PCs and terminals as a percentage of total
employee. The first ratio reveals how much a bank is spending on IT relative to its
compititors. It can be calculate
Value of IT investment ratio = IT value *100
Total RevenueThe IT value ratio reflect to current position of a bank's technology, IT
value figures are estimates of the current market value for all IT equipments,it can be
calculate
The staff spending cirterion reflects the bank's relative investment in IT staff. It can
be calculate
Budgeted IT spend for staff = Budgeted IT spend on staff *100
Number of IT staff
As well as information system managers must keep their employee well trained. The
trining ratio used to mesure the relative amount spent by bank for this purpose. It
can be calculate
Budgeted IT investment on training staff = Budgeted IT spend on training staff *100
No of training Staff
The last ratio mesures the extent to which the bank has made IT availabe to banks
users. This ratio can be calculate
IT usability ratio = No of PCs and terminals *100
Total employees
Using above ratios I will find out mean and standard deviation of those ratios.
Standard deviation is a measure of how far apart the data are from the average of the
data. If all the observations are close to their average then the standard deviation will
be small.
Based on review of previous research, five direct measures of financial performance
will be selected for this study. Return on investment (ROI), Return on equity (ROE),
Return on assets (ROA), Earnings per share (EPS) and Net profit margin (NPM)
ROI = Gain from investment-Cost of investment
Cost of investment Return on investment can be measured using following ratio,
Hypotheses Development
The main Hypotheses is There is no statistically significant impact on the use of
information technology to improve the financial performance in Sri Lankan banks.
H01: There is no statistically significant impact on the use of IT in Sri Lankan banks
in the ROE
H02: There is no statistically significant impact on the use of IT in Sri Lankan banks
in the NPM
H03: There is no statistically significant impact on the use of IT in Sri Lankan banks
in the EPS
H04: There is no statistically significant impact on the use of IT in Sri Lankan banks
in the ROI
Hypothesis Testing
First I am going to examine the reliability of statistical analysis for the data by
identifying how this data is close to normal distribution, if the data will not have
normal distribution, then it should be a subject to necessary treatment . If it will
close to the normal distribution I can use it correctly to test the hypothesis. After that
I will be use regression model to identify effect of many independent variables on
dependent variable. Regression analysis includes techniques for modeling and
analyzing several variables, when the focus is on the relationship between a
dependent variable and one or more independent variables. More specifically,
regression analysis helps to understand how the typical value of the dependent
variable changes when any one of the independent variables is varied, while the other
independent variables are held fixed.