北大MBA原文案例库

1、How FinancialFirmsDecide on Technology ，介绍国际大银行在决定对信息技术投资时的考虑要点和他们具体的实施过程。How FinancialFirms Decide on Technology( Abstract )The financial services industry is the major investor in information technology(IT) in the U.S. economy; the typical bank spends as much as 15% of non-intereste expenseson IT.

2、 A persistent finding of researchinto the performance of financial institutions is that performance and efficiency vary widely acrossinstitutions. Nowhere is this variability more visible than in the outcomes of the IT investment decisions in these institutions. This paper presentsthe results of an

3、empirical investigation of IT investment decision processesin the banking industry. The purpose of this investigation is to uncover what, if anything, can be learned from the IT investment practices of banks that would help in understanding the causeof this variability in performance along with poin

4、ting toward management practices that lead to better investment decisions. Using PC banking and the development of corporate Internet sites as the casestudies for this investigation, the paper reports on detailed field-based surveys of investment practices in several leading institutionsHow Financia

5、lFirms Decide on Technology( PartOne)信息技术对金融服务业的影响正在增加，不仅仅表现在银行的15%无息开支上，而且对金融服务业的运做和战略也有很强的影响。一个对金融机构的长期研究表明，不同的机构的效率和表现也不同。其决定的因素有以下一些其中的一个因素就是对投资的决定和管理。 SBS 是一个失败的例子，但是成功的公司也不少。本文注重解答以下的问题：.银行对投资的评估和管理过程？ .在对的管理过程中，理论和实际操作的结合如何？.投资的管理和银行性能的关系如何？1.0 IntroductionInformation technology(IT) is increa

6、singly critical to the operationsof financial servicesfirms. Today banksspendasmuch as15% of non-interestexpenseoninformation technology.It is estimatedthat the industry will spendat least $21.1 billion on IT in 1998, andfinancial institutions collectively account for the majority of IT investmentin

7、 the U.S. economy.In additon to being a large componentof thecost structure,information technology hasa stronginfluence on financial firms operatons and strategy.Few financial productsand servicesexist that do not utilize computersat somepoint in the delivery process,and a firms'information syst

8、emsplacestrong constraintson the type of productsoffered, the degreeof customization possibleand the speedat which firms canrespondto competitive opportunities or threats.A persistentfinding of researchinto the performanceof financial institutions is that performanceand efficiency varies widely acro

9、ssinstitutions, evenafter controlling for factors such assize(scale),product breadth(scope),branchingbehavior and organizationalform(e.g. stock versusmutual for insurers;banksversussaving & loans). Given the centralrole that technology plays in theseinstitutions, at least some of this variation

10、is likely to bedueto variationsin the useand effectivenessof IT investments.While someauthorshavearguedthat the value of IT investmenthas beeninsignificant, particularly in services,recentempirical work hassuggestedthat IT investment,on average,is a productiveinvestment. Perhapsmore importantly, the

11、reappearsto besubstantialvariation acrossfirms; somefirms havevery high investmentsbut are poor performers,while otheresinvestless but appearto bemuch more successful.Brynjolfsson andHitt found that asmuch ashalf the returnsto IT investmentaredueto firm specific factors.One potentially important dri

12、ver of differencesin IT value, and of firm performancemore broadly, is likely to be the decision andmanagementpeocessedfor IT investments.Horror storiesof badIT investmentdecisionsabound.Considerthe exampleof the new strategicbanking system(SBS)at Banc One(AmericanBanker 1997). Banc OneCorp. andElec

13、tronic DataSystemsCorp. agreedlast yearto end their joint developmentof this retail banking systemafter spendingan estimated$175 million on it. As statedin the American Banker article, SBS"was just so overwhelming andso completethat by the time they were getting to market, it was going to taket

14、oo long to install the whole thing," saidAlan Riegler, principal in Ernst& Young'sfinancial servicesmanagementconsulting division. However,not all the storiesare negative.New IT systemsareplaying a vital role in reshapingthe delivery of financial services.For example,new computer-teleph

15、onyintegration(CTI)technologiesaretransforming call centeroperationsin financial institutions. By investing in technology,more andmore institutions are moving operationsfrom high-cost branchoperationsto the telephonechannel,wherethe costper transactionis one-tenth the cost of a teller interaction. T

16、his IT investmentnot only reducesthe costof serving existing customers,but alsoextendsthe reachof the institution beyond its traditional geographicboundaries.In this paper,we utilize detailed casestudiesof six retail banksto investigate severalinterrelated questions: .What processesdo banks utilize

17、to evaluate and manage IT investments? .How well do actual practices align with theoretical arguments about how IT investmentsshouldbe managed? .What impact does that managementof IT investments have on performance?How FinancialFirms Decide on Technology( PartTwo)For the first question, we develop a

18、 structured framework for cataloging IT investment practices and then populate this framework using a combination of surveys and semi-structured interviews. We then compare the results of this exercise with a synthesis of the literature on IT decision making to understanding how practices vary acros

19、sfirms and the extent to which this is consistent with "best practices" as described in previous literature. Finally, we will compare these processes to internal and external performance metrics to better understand which sets of practices appearto be most effective.To make thesecomparison

20、s concrete, we examine both the general decision processas well asthe specific processesused for two recent IT investment decisions :the adoption of computer-basedhome banking (PC banking), and the development of the corporate web site. These decisions were chosen becausethey were recent and are rel

21、ated but provide some contrast; in particular, PC banking is a fairly well defined product innovation, while the corporate web presenceis more of an infrastructure investment which is less well-defined in terms of objectives and businessownership.Overall, we find that while some aspectsof the decisi

22、on process are fairly similar acrossinstitutions and often conform to "best practice" as defined by previous literature, there are several areaswhere there is large variation in practice among the banks and between actual and theoretical best practice. Most banks have a strong and standard

23、ized project management for ongoing systems projects, and formal structures for insuring that line-managers and systems people are in contact at the initiation of technology projects. At the same time, many banks have relatively weak processes(bothformal and informal) for identifying new IT investme

24、nt opportunities, allocating resourcesacrossorganizational lines, and funding exploratory or infrastructure projects with long term or uncertain payoffs.The reminder of this paper is organized as follows. Section 2 describes the previous literature on performance of financial institutions and the ef

25、fects of IT on performance. Section 3 describes the methods and data. Section 4 describesthe current academic thinking on various components of the decision process and compares that to actual practices at the banks we visited. Section 5 describesthe results of our in-depth study of PC banking proje

26、cts and the summary, Section 6 contains a similar analysis for the Corporate Web Site and discussion and conclusion appearin Section 7.How FinancialFirms Decide on Technology( PartThree)2.0Previous Literature2.1Performance of Financial InstitutionsThere have been a number of studies that have examin

27、ed the efficiency of the bankingindustry and the role of various factors such as corporate control structure (type of board, directors, insider stock holdings, etc.), economies of scale (size), economies of scope (product breadth), and branching strategy; seeBerger, Kashyup and Scalise (1995) and Ha

28、rker and Zenios (forthcoming) for a review of the banking efficiency literature. While there is substantial debate as to the role of these various factors, there is one unambiguous result: that most of the (in) efficiency of banks is not explained by the factors that have beenconsidered in prior wor

29、k. For example, Berger and Mester (1997) estimate that as much as 65-90% of the x-inefficiency remains unexplained after controlling for known drivers of performance. A similar story also appearsininsurance where "x-efficiency" varies substantially acrossfirms when size, scope, product mix

30、, distribution strategy and other strategic variables are considered. It has beenargued that one must get "inside the black box" of the bank ot consider the role of organizational, strategic and technological factors that may be missed in studies that rely heavily on public financial data.

31、2.2Information Technology and Business ValueEarly studies of the relationship between IT and productivity or other measuresof performance were generally unable to determine the value of IT conclusively. Loveman (1994) and Strassmann (1990) ,using different data and analytical methods both found that

32、 the performance effects of computers were not statistically significant. Barus, Kriebel and Mukadopadhyay (1995), using the same data as Loveman, found evidence that IT improved some internal performance metrics such as inventory trunover, but could not tie thesebenefits to improvements in bottom l

33、ine productivity. Although these studies had a number of disadvantages (small samples, noisy data ) which yielded imprecise measuresof IT effects, this lack of evidence combined with equally equivocal macroeconomic ananlyses by Steven Roach (1987) implicitly formed the basis for the "productivi

34、ty paradox". As Robert Solow (1987) once remarked, "you can seeteh computer age everywhere except in the productivity statistics."More recent work has found that IT investment is a substantial contributor to firm productivity, productivity growth and stock market valuation in a sample

35、 that contains a wide range of industries. Brynjolfsson and Hitt (1994,1996) and Lichtenberg (1995) found that ITinvestment had a positive and statistically significant contribution to firm output . Brynjolfsson and Yang (1997) found that the market valuation of IT capital was several times that of

36、ordinarycapital. Brynjolfsson and Hitt also found a strong relationship between IT and productivity growth and taht this relationship grows stronger as longer time periods are considered. Collectively ,thesestudies suggestthat there is no productivity paradox, at least when the analysis is performed

37、 across industries using firm-level data. The differences between these results and earlier studies is probably due to the use of data taht was recent , more comprehensice ,and more disaggregated (firm level rather than industry or economy level).Most previous sutdies have considered the effects of

38、technology acrossfirms in multiple industries, although a few studies have considered the role of technology in specifically in the banking industry. Steiner and Teixiera surveyed the banking industry and argued that while large investments in technology clearly had value,little of this value was be

39、ing captured by the banks themselves; most of the benefits were being passedon to customers as a result of intense competition. Alpar and Kim examined the cost efficiency of banks overall and found that ITinvestment was associatied with greater cost efficiency although the effects were less evident

40、when financial ratios were used as the outcome measure.Prasadand Harkere examined the relationship between technology investment and performance for 47 retail banks and found positive benefits of investments in IT staff.While these studies show a strong positive contribution of IT investment on aver

41、age,they donot consider how this contribution (or level of investment )varies acrossfirms. Brynjolfsson and Hitt found that "firm effects" can account for as much as half the contribution of IT found in these earlier studies. Recent results suggest that at least part of these differences c

42、an be explained by differences in organizational and strategic factors. Brynjolfsson and Hitt found that firms that use greater overall IT benefits. Bresnehan, Brynjolfsson and Hitt found a similar result for firms that have greater levels of skills and those that make greater investments in trainin

43、g and pre-employment screening for human capital . In addition, strategic factors also appearto affect the value of IT. Firms that invest in IT to create customer value (e.g. improve service, timeliness, convenience, variety) have greater performance than firms that invest in IT to reduce costs.Whil

44、e these studies are begining to explore how the performance of IT investment varies acrossfirm, particularly due to organizational and strategic factors, little attention hasbeen paid to the technology decision making process.How FinancialFirms Decide on Technology( Part Four)2.3IT Investment Decisi

45、onsWhile there is no concise definition of "best practice" in IT investment decisions, there are a number of consistent arguments advanced in the IT management literature that can be synthesized into an understanding of the conventional wisdom.For the pruposes of discussion it is useful to

46、 subdivide the process of IT management into seven discrete, but interrelated processes.The first six processesareoriented around the proposal, development and managementof IT projects, while the last process is about maintaining the capabilities of the IT function and its interrelationships with th

47、e rest of the business:1.Identification of IT opportunities2.Evaluating opportunities3.Approving IT projects4.The make-buy decision5.Managing IT projects6.Evaluating IT projects7.Manage and Develop the IT FunctionThis subdivision loosely corresponds to many of the major issuesin IT management such a

48、s outsourcing, line management-IT alignment, software project management, and evaluating IT investments.In addition, this list loosely corresponds to frameworks for the managementof IT. The primary difference is that this list views the IT management processas managing a stream of projects rather th

49、an focusing on the function of the IT department overall or the role of the CIO, the typical perspective in the previous literature. For example, a common framework used to align IT to businessstarategy, the critical successfactors(CSF) method, include three workshops: the first to identify and focu

50、s objectives, the secondto decide and prioritize on systems investment, and the third to develop, deploy and reevaluate prototype systems. Boynton, Jacobsand Zmud(1992) identify five critical IT management processes:setting strategic direction, establishing infrastructure systems, scanning technolog

51、y, transferring technology and developing systems. Rockart, Earl and Ross(1996) propose eight imperatives for the IT organization which can be grouped into managing the IT-business relationship, building and managing systems and infrastructure, managing vendors, and creating a high performance IT or

52、ganization. Thus, while previous work has subdivided the process in different ways, collectively the studies cover all the seven processeswe examine.We will discuss eachof the individual points in detail below.Identificant of OpportunitiesHistorically, the IT function was primarily reactive, respond

53、ing to requestsby businessunits. A businessunit. A businessunit managerwould identify a needfor a new system or a repair/enhancement to an existing system and communicate this needto the IT function. The IT personnel would then evaluate the idea for technical feasibility and develop a project propos

54、al include an initial determination of resourceneeds,cost, and delivery time. While this makes effective use of IT personnel in evaluating particular ideas, it provides only a limited role for IT personnel to aid in the identification of technology-based business opportunities.For that reason, some

55、authors have suggestedthat the IT function should play a larger role in the identification of technological opportunities. For example, Davenport and Short (1990) emphasizethat IT capabilities should inform businessneeds as well as the businessunits placingdemandson the IT function. Fockart, Earl an

56、d Ross and Boynton, Jacobsand Zmud identify the role of "technology scanning" and "technology education" as an important component of acentralized IT department; they argue that information systems specialists should be reponsible for evalusting new technologies for businessappli

57、cability since businessunits will generally lack the resourcesor the technological capability to perform these evaluations themselves. Moreover,central IT is best positioned to educate the end usesto make them good "custmers" of the central IT group.In the banking industry, IT may be able

58、to play an additional role in coordinating technology. Becausebanks and other financial firms are often managedwith largely autonomous business units (for example, banks are often divided into product lines -cash management,investment-or along customer segments-wholesale, commercial, retail) only the central IT function will have a perspective over the porfolio of systems projects and capabilities. One critical role in this respect is the provision and