ANALYSIS OF ICT COST EFFICIENCY AND CORPORATE PERFORMANCE: A CASE STUDY OF BUSINESS UNITS OF UNIVERSITIES IN SOUTH WEST NIGERIA

Abstract

Information and Communications Technology (ICT) is the fastest growing technology in the world today. The role of ICT in both the public and private sectors of the world economy has been widely discussed in the literature. The capital investment on ICTprojects in both the public and private sectors of the world economy has been on the increase in the last ten years. However, most studies in this regard has been focused so extensively on assessment of influence of ICT on performance of manufacturing firms while a good number also focused on impact of ICT on performance of the service industry sub-sector. Very little attention has been devoted to the ICT cost efficiency and corporate performance with specific reference to business units of Universities in South West Nigeria. Hence, this study was undertaken to address this gap. Secondary data was used for this study. The entire population of Universities in South Western Nigeria comprising of seven Federal, ten state and twenty private Universities were sampled for the study. The secondary data were derived from the annual reports of each of the Universities covered by the study. The variables of interest from the secondary data were: ICT Investment (ICT Inv.), Return on Capital employed (ROCE), Net Profit Margin (NPM), and ICT Cost Efficiency (ICTCE). Multiple Regression analysis employing the use of model estimation revealed that ICT cost efficiency is weak for the three types of Universities covered with State Universities being the worst. This result indicated that ICT has not been optimally utilized by the Universities studied. The study recommends that, concerned Universities should endeavour to match their strategy with their structure to ensure optimal ICT cost efficiency.