An Assessment of the Role of Risk Management Practices in Core Banking Software Project Success: A Case of Commercial Banks in Kenya

Core Banking Software Change project in a bank is a project that is very costly and very delicate such that its success emerges the top most priority for the organization that is undergoing the change. There is need for business continuity, data integrity and customer service value addition from the product of the project.
This study sought to establish the role of risk management practices towards enhancing project success in commercial banks in Kenya during Core Banking Software Change. Given its complexity, therefore, it would be paramount to establish the existing risk management practices in the local banking sector. This study sought to assess these practices with regard to risk identification, risk analysis and risk response and control.
The researcher used survey research design and the target population was 14 banks that have changed their Core Banking Software in the last five years (2007-2013) based in Nairobi, Kenya’s capital city. A sample size of 7 banks was taken consisting of Project Managers, System Owner and Super Users as respondents. Data was the analyzed qualitatively using statistical representations such as percentages and graphs.
The study revealed that most commercial banks in Kenya employ risk management practices during Core Banking Software Project implementation and most respondents believed that Risk Management is a major contributor to project success. Project success is the outcome of a personal, individual evaluation of project characteristics by each stakeholder. This may include objectively measurable characteristics such as time, money and requirements, but may also include other characteristics such as stakeholder satisfaction and the future potential of the project result (Koningsveld & Mertens, 1992).
This study recommends that banks need to adopt an integrated project risk management tool to be used by the project team during the whole project cycle. This research also recommends the introduction of a prototype risk decision support tool which banks can use in decision making during the implementation of a project. These recommendations are expected to enhance project success through delivery in time, within the established budgets and at the expected quality.