北大MBA原文案例库.doc

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1、How Financial Firms Decide 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 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 I

2、T. A persistent finding of research into the performance of financial institutions is that performance and efficiency 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 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 cause of this variability in performance along wi

4、th pointing toward management practices that lead to better investment decisions. Using PC 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

5、Financial 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

6、(IT) 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

7、majority of IT 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 p

8、rocess, 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 th

9、at performance and efficiency varies widely across institutions, even after controlling for factors such as size(scale), product breadth(scope), branching behavior and organizational form(e.g. stock versus mutual for insurers; banks versus saving some firms have very high investments but are poor pe

10、rformers, while otheres invest less but appear to be much more successful. Brynjolfsson and Hitt found that as much as half the 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

11、 the decision and management peocessed for IT investments. Horror stories of bad IT investment decisions abound. Consider the 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 devel

12、opment of this retail banking system after spending an estimated $175 million on it. As stated in the American Banker article, SBS“was just so overwhelming 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, prin

13、cipal in Ernst in particular, PC banking is a fairly well defined product innovation, while the corporate web presence is more of an infrastructure 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

14、 fairly similar across institutions and often conform to “best practice“ as defined by previous literature, there are several areas where there is large variation in practice among the banks and between actual and theoretical best practice. Most banks have a strong and standardized project managemen

15、t 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(both formal and informal) for identifying new IT investment opportunities, all

16、ocating resources across organizational 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 effects of IT on perf

17、ormance. Section 3 describes the methods and data. Section 4 describes the current academic thinking on various components of the decision process and 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 summa

18、ry, Section 6 contains a similar analysis for the Corporate Web Site and discussion and conclusion appear in Section 7. How Financial Firms Decide on Technology(Part Three) 2.0 Previous Literature2.1 Performance of Financial InstitutionsThere have been a number of studies that have examined the effi

19、ciency of the banking industry 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; see Berger, Kashyup and Scalise (1995) and Harker and

20、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 been considered in prior work. For e

21、xample, 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 appears in insurance where “x-efficiency“ varies substantially across firms when size, scope, product mix, distribution

22、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 organizational, strategic and technological factors that may be missed in studies that rely heavily on public financial data.2.2 Information Technolo

23、gy and Business ValueEarly studies of the relationship between IT and productivity or other measures of 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 the performance effec

24、ts 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 these benefits to improvements in bottom line productivity. Alt

25、hough these studies had a number of disadvantages (small samples, noisy data ) which yielded imprecise measures of IT effects, this lack of evidence combined with equally equivocal macroeconomic ananlyses by Steven Roach (1987) implicitly formed the basis for the “productivity paradox“. As Robert So

26、low (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 substantial contributor to firm productivity, productivity growth and stock market valuation in a sample that contains a wide range of industri

27、es. Brynjolfsson and Hitt (1994,1996) and Lichtenberg (1995) found that IT investment 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 ordinary capital. Brynjolfsson and Hit

28、t also found a strong relationship between IT and productivity growth and taht this relationship grows stronger as longer time periods are considered. Collectively ,these studies suggest that there is no productivity paradox, at least when the analysis is performed across industries using firm-level

29、 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 technology across firms in multipl

30、e 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 being captured by the banks themsel

31、ves; 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 that IT investment was associatied with greater cost efficiency although the effects were less evident when financial ratios were used

32、 as the outcome measure. Prasad and 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 average, they do not consider how

33、 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 found in these earlier studies. Recent results suggest that at least part of these differences can be explained by differences in or

34、ganizational 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 training and pre-employment screening for h

35、uman 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, convenience, variety) have greater performance than firms that invest in IT to reduce costs.While these studies are begining to exp

36、lore how the performance of IT investment varies across firm, particularly due to organizational and strategic factors, little attention has been paid to the technology decision making process.How Financial Firms Decide on Technology(Part Four) 2.3 IT Investment DecisionsWhile there is no concise de

37、finition 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 subdivide the process of IT management i

38、nto seven discrete, but interrelated processes. The first six processes are oriented around the proposal, development and management of IT projects, while the last process is about maintaining the capabilities of the IT function and its interrelationships with the rest of the business:1.Identificati

39、on 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 issues in IT management such as outsourcing, line management-IT al

40、ignment, software project management, and evaluating IT investments.In addition, this list loosely corresponds to frameworks for the management of IT. The primary difference is that this list views the IT management process as managing a stream of projects rather than focusing on the function of the

41、 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 critical success factors(CSF) method, include three workshops: the first to identify and focus objectives, the second to deci

42、de and prioritize on systems investment, and the third to develop, deploy and reevaluate prototype systems. Boynton, Jacobs and Zmud(1992) identify five critical IT management processes: setting strategic direction, establishing infrastructure systems, scanning technology, transferring technology an

43、d 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 organization. Thus, while previ

44、ous work has subdivided the process in different ways, collectively the studies cover all the seven processes we examine.We will discuss each of the individual points in detail below.2.3.1 Identificant of Opportunities Historically, the IT function was primarily reactive, responding to requests by b

45、usiness units. A business unit. A business unit manager would identify a need for a new system or a repair/enhancement to an existing system and communicate this need to the IT function. The IT personnel would then evaluate the idea for technical feasibility and develop a project proposal include an

46、 initial determination of resource needs, 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 authors ha

47、ve suggested that the IT function should play a larger role in the identification of technological opportunities. For example, Davenport and Short (1990) emphasize that IT capabilities should inform business needs as well as the business units placing demandson the IT function. Fockart, Earl and Ros

48、s and Boynton, Jacobs and Zmud identify the role of “technology scanning“ and “technology education“ as an important component of a centralized IT department; they argue that information systems specialists should be reponsible for evalusting new technologies for business applicability since busines

49、s units will generally lack the resources or the technological capability to perform these evaluations themselves. Moreover, central IT is best positioned to educate the end uses to make them good “custmers“ of the central IT group. In the banking industry, IT may be able to play an additional role in coordinating technology. Because banks and other financial firms are often managed with largely autonomous business units (for example, banks are often divided into product lines -cash management, investment-or along customer segments-wholesal