EXAMINING THE RELATIONSHIP BETWEEN IT PROJECT RISK MANAGEMENT AND BENEFITS REALIZED FROM IT PROJECT IMPLEMENTATION WITHIN THE PUBLIC SECTOR

Abstract

Information technology (IT) has become increasingly critical in today's digital world, supporting, sustaining, and driving growth in public organizations. The board of directors and senior management have traditionally delegated, disregarded, or avoided IT decisions. The majority of public sector organizations have realized that such a mindset is outdated and must be avoided. Being a foundation for effective enterprise governance, the IT risk management domain seeks to guarantee that a structure exists for identifying, analyzing, mitigating, monitoring and communicating an organization's IT risk to ensure successful IT project implementation. This research, therefore, sought to examine the relationship between risk management of IT projects and the hypothesized benefits from IT investments, namely Return on Investments (ROI), number of customers served and the level of customer service delivery. A total of 309 out of 517 public sector organizations in Kenya were sampled, and data were collected from heads of departments, including IT, Finance, HR, Audit, and Technical among others, through an online research tool. The correlation results revealed that IT risk management and ROI had a weak and negative correlation. The correlation between the management of IT risk and the number of customers served was equally found to be weak and negative. However, the correlation between IT risk management and customer service delivery was positive and significant. Results from the multivariate regression test revealed that risk management of IT projects significantly improved customer service delivery but had no significant effect on both ROI and number of customers. The study concluded that there was a significant effect of IT risk management on the customer service delivery. Therefore, senior management had a responsibility to ensure that IT risk management was incorporated in all major IT projects to ensure that improved customer service delivery benefit was realized.