Impact of Knowledge Management and Information Technology Capability on Performance

Abstract

The improvement of company performance is closely linked to the enhancement of human resource quality and information technology capability. In the banking industry, knowledge management and information technology capability play a crucial role in driving organizational performance. This study aims to empirically examine the effect of knowledge management on company performance, with information technology capability as a mediating variable. This research employs a survey method with respondents comprising the Heads of the Accounting Department from 162 branches and sub-branches of one of Indonesia’s largest regional banks. Data was collected using a structured questionnaire and analyzed through structural equation modeling (SEM) to evaluate the relationships among variables. The findings indicate that knowledge management has a significant positive effect on information technology capability. Furthermore, both knowledge management and information technology capability significantly influence company performance. Information technology capability also acts as a partial mediator in the relationship between knowledge management and company performance. The implications of these findings highlight that implementing effective knowledge management practices and strengthening information technology infrastructure are essential strategies for improving banking performance. Therefore, organizations need to invest in knowledge management systems and IT infrastructure to optimize performance outcomes in a competitive banking environment.