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1、How Financial Firms Decide on Technology， 介绍国际大银行在打算对信息技术投资时的考虑要点和他们详细的实施过程；How Financial Firms 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 expenses on

2、 IT. A persistentfinding of research into the performance of financial institutions is that performance andefficiency vary widely across institutions. Nowhere is this variability more visible than in the outcomes of the IT investment decisions in these institutions. This paper presents the results o

3、f an empirical investigation of IT investment decision processes in the banking industry. The purposeof this investigation is to uncover what, if anything, can be learned from the IT investment practices of banks that would help in understanding the cause ofthis variability in performance along with

4、 pointing toward management practices that lead to better investment decisions. UsingPC banking and the development of corporate Internet sites as the case studies for this investigation, the paper reports on detailed field-based surveys of investment practices in several leading institutionsHow Fin

5、ancial Firms Decide on Technology(Part One )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讨论说明，不同的机构的效率和表现也不同；其打算的因素有以下一些其中的一个因素就是对投资的打算和治理； SBS 是一个失败的例子，但是胜利的公司也不少；本文注意解答以下的问题： .银行对投资的评估和治理过程？ .在对的治理过程中，理论和实际操作的结合如何？ .投资的治理和银行性能的关系如何？1.0 IntroductionInformation technology(IT)

6、is increasingly critical to the operations of financial services firms. Today banks spend as much as 15% of non-interest expense on information technology. It is estimated that the industry will spend at least $21.1 billion on IT in 1998, and financial institutions collectively account for the major

7、ity ofIT investment in the U.S. economy. In additon to being a large component of the cost structure, information technology has a strong influence on financial firms operatons and strategy. Few financial products and services exist that do not utilize computers at some point in the delivery process

8、, and a firmsinformation systems place strong constraints on the type of products offered, the degree of customization possible and the speed at which firms can respond to competitive opportunities or threats.A persistent finding of research into the performance of financial institutions is that per

9、formance and efficiency varies widely across institutions, even aftercontrolling for factors such as size(scale), product breadth(scope), branching behaviorand organizational form(e.g. stock versus mutual for insurers; banks versus saving & loans). Given the central role that technology plays in the

10、se institutions, at least some of this variation is likely to be due to variations in the use and effectiveness of IT investments. While some authors have argued that the value of IT investment has been insignificant, particularly in services, recent empirical work has suggested that IT investment,

11、on average, is a productive investment. Perhaps more importantly, there appears to be substantial variation across firms; some firms have very high investments but are poor performers, while otheres invest less but appear to be much more successful. Brynjolfsson and Hitt found that as much as half t

12、he returns to IT investment are due to firm specific factors.One potentially important driver of differences in IT value, and of firm performance more broadly, is likely to be the decision and management peocessed for IT investments. Horror stories of bad IT investment decisions abound. Consider the

13、 example of the new strategic banking system(SBS) at Banc One(American Banker 1997). Banc One Corp. and Electronic Data Systems Corp. agreed last year to end their joint development of this retail banking system after spending an estimated $175 million on it. As stated in the American Banker article

14、, SBSwas just sooverwhelming and so complete that by the time they were getting to market, it was going to take too long to install the whole thing, said Alan Riegler, principal in Ernst & Youngs financial services management consulting division. However, not all the stories are negative. New IT sys

15、tems are playing a vital role in reshaping the delivery of financial services. For example, new computer-telephony integration(CTI) technologies are transforming call center operations in financial institutions. By investing in technology, more and more institutions are moving operations fromhigh-co

16、st branch operations to the telephone channel,where the cost per transaction is one-tenth the cost of a teller interaction. This IT investment not only reduces the cost of serving existing customers, but also extends the reach of the institution beyond its traditional geographic boundaries.In this p

17、aper, we utilize detailed case studies of six retail banks to investigate several interrelated questions:.What processes do banks utilize to evaluate and manage IT investments. .How well do actual practices align with theoretical arguments about how IT investmentsshouldbe managed. .What impact does

18、that management of IT investments have on performance.How Financial Firms Decide on Technology(Part Two )For the first question, we develop a structured framework for cataloging IT investment practices and then populate this framework using a combination of surveys and semi-structured interviews. We

19、 then compare the results of this exercise with a synthesis of the literature on IT decision making to understanding how practices vary across firms and the extent to which this is consistent with best practices as described in previous literature. Finally, we will compare these processes to interna

20、l and external performance metrics to better understand which sets of practices appear to be most effective.To make these comparisons concrete, we examine both the general decision process as well as the specific processes used for two recent IT investment decisions :the adoption ofcomputer-based ho

21、me banking (PC banking), and the development of the corporate web site.These decisions were chosen because they were recent and are related but provide some contrast; in particular, PC banking is a fairly well defined product innovation, while the corporate web presence is more of an infrastructure

22、investment which is less well-defined in terms of objectives and business ownership.Overall, we find that while some aspects of the decision process are fairly similar across institutions and often conform to best practice as defined by previous literature, there are several areas where there is lar

23、ge variation in practice among the banks and between actual and theoretical best practice. Most banks have a strong and standardized project management for ongoing systemsprojects, and formal structures for insuring that line-managers and systems people are in contact at the initiation of technology

24、 projects. At the same time, many banks have relatively weak processes(both formal and informal) for identifying new IT investment opportunities, allocating resources across organizational lines, and funding exploratory or infrastructure projects with long term or uncertain payoffs.The reminder of t

25、his paper is organized as follows. Section 2 describes the previous literature on performance of financial institutions and the effects of IT on performance. Section 3 describes the methods and data. Section 4 describes the current academic thinking on various components of the decision process and

26、compares that to actual practices at the banks we visited. Section 5 describes the results of our in-depth study of PC banking projects and the summary, Section 6 contains a similar analysis for the Corporate Web Site and discussion and conclusion appear in Section 7.How Financial Firms Decide on Te

27、chnology(Part Three )2.0 Previous Literature2.1 Performance of Financial InstitutionsThere have been a number of studies that have examined the efficiency of the banking industry andthe role of various factors such as corporate control structure (type of board, directors, insider stock holdings, etc

28、.), economies of scale (size), economies of scope (product breadth), and branching strategy; see Berger, Kashyup and Scalise (1995) and Harker 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

29、is one unambiguous result: that most of the (in) efficiency of banks is not explained by the factors that have been considered in prior work. 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 perform

30、ance. A similar story also appears in insurance where x-efficiency varies substantially across firms when size, scope, product mix, distribution strategy and other strategic variables are considered. It has been argued that one must get inside the black box of the bank ot consider the role of organi

31、zational, strategic and technological factors that may be missed in studies that rely heavily on public financial data.2.2 Information Technology and Business ValueEarly studies of the relationship between IT and productivity or other measures of performance were generally unable to determine the va

32、lue of IT conclusively. Loveman (1994) and Strassmann (1990) ,using different data and analytical methods both found that 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

33、some internal performance metrics such as inventory trunover, but could not tie these benefits to improvements in bottom line productivity. Although these studies had a number of disadvantages (small samples, noisy data ) which yielded imprecise measures of IT effects, this lack of evidence combined

34、 with equally equivocal macroeconomic ananlyses by Steven Roach (1987) implicitly formed the basis for the productivity paradox. As Robert Solow (1987) once remarked, you can see teh computer age everywhere except in the productivity statistics.More recent work has found that IT investment is a subs

35、tantial contributor to firmproductivity, productivity growth and stock market valuation in a sample that contains a wide range of industries. Brynjolfsson and Hitt (1994,1996) and Lichtenberg (1995) found that IT investment had a positive and statistically significant contribution to firm output . B

36、rynjolfsson and Yang (1997) found that the market valuation of IT capital was several times that of ordinary capital. Brynjolfsson and Hitt also found a strong relationship between IT and productivity growthand taht this relationship grows stronger as longer time periods are considered. Collectively

37、 ,these studies suggest that there is no productivity paradox, at least when the analysis is performed 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 (f

38、irm level rather than industry or economy level).Most previous sutdies have considered the effects of technology across firms in multipleindustries, although a few studies have considered the role of technology in specifically in the banking industry. Steiner and Teixiera surveyed the banking indust

39、ry and argued that while large investments in technology clearly had value,little of this value was being captured by the banks themselves; most of the benefits were being passed on to customers as a result of intense competition. Alpar and Kim examined the cost efficiency of banks overall and found

40、 that IT investment was associatied with greater cost efficiency although the effects were less evident when financial ratios were used as the outcome measure. Prasad and Harkere examined the relationship between technology investment and performance for 47 retail banks and found positive benefits o

41、f investments in IT staff.While these studies show a strong positive contribution of IT investment on average, they do not consider how this contribution (or level of investment )varies across firms. Brynjolfsson and Hitt found that firm effects can account for as much as half the contribution of IT

42、 found inthese earlier studies. Recent results suggest that at least part of these differences can be explainedby 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

43、for firms that have greater levels of skills and those that make greater investments in training andpre-employment screening for human capital . In addition, strategic factors also appear to affect the value of IT. Firms that invest in IT to create customer value (e.g. improve service, timeliness, c

44、onvenience, variety) have greater performance than firms that invest in IT to reduce costs.While these studies are begining to explore how the performance of IT investment variesacross firm, particularly due to organizational and strategic factors, little attention has been paid to the technology de

45、cision making process.How Financial Firms Decide on Technology( Part Four )2.3 IT Investment DecisionsWhile 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

46、understanding of the conventional wisdom.For the pruposes of discussion it is useful to subdivide the process of IT management intoseven discrete, but interrelated processes. The first six processes are oriented around the proposal, development and management of IT projects, while the last process i

47、s about maintaining the capabilities of the IT function and its interrelationships with the rest of the business:1. Identification of IT opportunities2. Evaluating opportunities 3.Approving IT projects 4.The make-buy decision 5.Managing IT projects 6.Evaluating IT projects7.Manage and Develop the IT

48、 FunctionThis subdivision loosely corresponds to many of the major issues in IT management such asoutsourcing, line management-IT alignment, software project management, and evaluating IT investments.In addition, this list loosely corresponds to frameworks for the management of IT. Theprimary differ

49、ence is that this list views the IT management process as managing a stream of projects rather than 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 business starategy, the c