World Applied Sciences Journal 35 (9): 1936-1945, 2017 ISSN 1818-4952 © IDOSI Publications, 2017 DOI: 10.5829/idosi.wasj.2017.1936.1945 Corresponding Author: Ahmad Shukri Yazid, Faculty of Economics and Management Sciences, Universiti Sultan Zainal Abidin, Kuala Terengganu, Malaysia. 1936 Strategic Information Systems Sophistication and Strategic Performances of Islamic Banks: The Role of User Information Systems Expertise Ahmad Shukri Yazid, Farouk Umar Kofarnaisa, Zainudin Awang, Mohammed Sani Abdullahi, 1 2 1 3 Wan Norhayate Wan Daud, Fakhrul Anwar Zainol and Fauzilah Salleh 1 1 1 Faculty of Economics and Management Sciences, 1 Universiti Sultan Zainal Abidin, Kuala Terengganu, Malaysia Research Institute for Islamic Products and Civilization (INSPIRE), 2 Universiti Sultan Zainal Abidin, Kuala Terengganu, Malaysia Department of Business Administration and Management, 3 School of Management Studies, Kano State Polytechnic, Nigeria Abstract: To date, the Islamic banking industry is very competitive. As a result many banks are using strategic tools such as information systems to reduce cost. The purpose of this paper are two folds: a) to determine whether strategic information systems sophistication leads to multiple strategic performances in terms of cost reduction and flexibility of operations in the case of Islamic Banks and b) to examine the mediating effect of user information systems expertise (UISE) on the relationship between strategic information system sophistication (SSIS) and strategic performance (SP). The study used self-administered questionnaires to the randomly selected executives of the Islamic banks in Terengganu, Malaysia. The study employed the Structural Equation Modeling (SEM) in AMOS 21.0. The study found the strategic information systems sophistication (SISS) has a positive effect on strategic performance of Islamic banks especially in terms of flexibility and cost reduction. The results also revealed that user information system expertise (UISE) has partial mediating effect in the relationship between strategic information system sophistication (SSIS) and strategic performance (SP). The research revealed that Islamic bank managers and stakeholders must understand the importance of strategic information systems sophistication (SISS) and its impact on strategic performance. Key words: Sophisticated strategic information systems User information systems expertise Contingency theory Strategic performance INTRODUCTION their performances [2]. However, one of the problems Information systems in organizations provides closely related to the managements inability to fully numerous evidences of benefits for both organizations understand the benefits of its adoption and the and employees working for them [1]. These benefits expertise of its usage in relation to strategic performances include improved profitability and improved [3]. organizational performance, as well as efficient and Most organizations find the sophisticated strategic effective business processes or working routines on an information system as a significant support for the human individual level [1]. Organizations adopt sophisticated resource (employee) in order to improve operations and information systems, which provide managers and other performances [4]. Therefore, this study is conducted an executive staff with the requisite range of information to empirical analyses of the relationship between strategic achieve multiple strategic performances, although information systems sophistication and strategic organizations differ in the extent to which they improve performances in the Malaysian Islamic banks. of information systems adoption by Islamic banks is