Strategic Information System: A Case Study On Commonwealth Bank Of Australia Essay.

1. Identification and discussion of the chosen company’s structure, products and services under consideration

2. Operations and functionality: Identify and discuss

a. The current processes
b. Any gaps and what is not working properly
c. Which specific issues that the new system will fix
d. Criteria that will be used to prove the proposed system meets requirements

3. Discuss what constitutes an Information Systems (IS) Strategy and explain why such strategy is needed as part of the overall organisational strategy.

4. Discuss why the organisation may experience difficulties in developing an Information Systems Strategy. As part of your answer you should suggest solutions to the difficulties you discuss.

5. With reference to your studies on Information Systems failures:

a. Analyse the typical problems that might be expected to arise within Information Systems projects.

b. Illustrate your answer with reference to literature and any relevant examples.

c. Suggest remedies to the problems you have identified.

Strategic information systems or SIS is the information systems that are developed for the business initiative of an organization (Mir and Pinnington 2014). This strategic information system mainly provides competitive advantages to all the organizations and delivers all types of services and products in lower cost. It even focuses  on any particular segment of a market (Pearlson, Saunders and Galletta 2016). The strategic information management or SIM is the most important characteristic in information technology. It even helps the organizations and the businesses for categorizing, storing, processing and transferring the confidential information that are sent or received (Wise and Debons 2012). The strategic information system further offers specific analytical tools to the repositories of information and this allows them in the recognition of opportunities for the growth and approaches for the improvement of the operational efficiency.

The following literature review outlines a brief description on the strategic information system of the most popular and recognized multi national bank of Australia and New Zealand, the Commonwealth Bank of Australia (Boonstra 2013). The review provides a brief discussion on the Commonwealth Bank of Australia. The literature review also gives the organizational structure, organizational products and services of the Commonwealth Bank of Australia (Petter, DeLone and McLean 2013). The operations and the functionality of this particular organization are also given in this literature review. The review also comprises of information systems strategy and the probable problems and solutions with this strategy (Rainer et al. 2013). The causes or the reasons for the failure of the information systems strategy of this organization are also given here.

Started in the year 1911, Commonwealth Bank of Australia is one of most popular multinational banks in Australia (Commbank.com.au, 2017). The businesses of this particular bank come across Asia, Fiji, the United States, the United Kingdom and New Zealand. The Commonwealth Bank of Australia gives a variety of financial services like business banking, funds management, superannuation, investment, loan services, insurance, broking services and many more (Commbank.com.au, 2017). In August 2015, the Commonwealth Bank of Australia was listed as the largest bank according to Australian Securities Exchange (Galliers and Leidner 2014). There were numerous other banks listed in that list, which includes ASB Bank of New Zealand, Colonial First State Investments Limited and Commonwealth Securities Limited or CommSec (Commbank.com.au, 2017). The other three banks apart from Commonwealth Bank are ANZ or Australia and New Zealand Banking Group, Westpac and NAB or National Australia Bank. These are considered as the Big Four Banks of Australia and New Zealand. Commonwealth Bank of Australia started its journey as the government bank and it became completely privatised in the year 1996 (Commbank.com.au, 2017). The main unique selling proposition or USP of this particular Australian bank is the great and innovative strategies that make this bank different from others.

i) Organizational Structure: The organizational structure of Commonwealth Bank of Australia has the entire corporate and management structures of the bank and this includes every managing body and employee of the organization (Rainer et al. 2013).                                                                                                                                                     

Commonwealth Bank of Australia

                                                       Figure 1: Organizational Structure of Commonwealth Bank of Australia

                                                                               (Source: Commbank.com.au, 2017)

The above figure comprises of the entire organizational structure of Commonwealth Bank of Australia (Petter, DeLone and McLean, 2013). The top management level, the middle management level and the lower management level of Commonwealth Bank of Australia are also given in the figure. The top management of this particular bank is the Board of Commissioners.

ii) Products and Services: The major services or the products of this particular bank are those that are given to the customers (Arvidsson, Holmström and Lyytinen 2014). Any bank becomes successful when the customers or the clients of the bank become satisfied with them. There are various and several products and services of this bank (Venkatesh, Brown and Bala 2013). The major products and services of the bank are as follows:

a) Business Credit Cards: The credit cards are the most significant services of this particular bank, Commonwealth Bank of Australia. Almost all the clients of the bank utilize these. The services of credit card help all the clients and customers in the personal expenses such as paying bills, shopping and many more (Peppard and Ward 2016). The interest rate of the credit card service of this particular bank is lower than the other banks and affordable. 

b) Loans: Business loans are the second type of products and services of the Commonwealth Bank of Australia (Cassidy 2016). The rate of interest of the loans of this particular bank is extremely reasonable and affordable by all and thus this is well accepted by all the clients.

c) Online Banking: This is the next most helpful and vital service of Commonwealth Bank of Australia (Stair and Reynolds 2013). Customers do not have to visit bank premises for any type of banking transactions. Rather, they can do everything online.

d) Investments: Commonwealth Bank of Australia is extremely famous for the great investments. The clients of the bank normally invest the assets or money in the bank and this brings profit to the bank.

e) Business Insurance: The money that is invested in the bank, are extremely safe and secured as this is a multinational bank (Claver-Cortés et al. 2012).

f) Superannuation: The services of superannuation are other most significant services of Commonwealth Bank of Australia (Pearlson, Saunders and Galletta 2016). The daily or the regular payment is made into a specific fund by the employees towards its future pension is known as superannuation.

i) Identification of the Current Processes: The current processes of this particular bank usually include the exclusive technique or tool of involvement of the several clients. This type of inclusion of the clients helps in the maintenance of the entire willing power of the work and the inclusion is in return helping the bank in obtaining the organizational objectives and goals. There are three kinds of processes of this bank (Sakas, Vlachos and Nasiopoulos 2014). The three types of organizational processes are the behavioural processes, work processes and change processes.

1. Structure, Products and Services of Commonwealth Bank of Australia

ii) Identification of the gaps: The gaps of the bank are those that are recognized on a regular basis in the Commonwealth Bank of Australia. The main cause for the degradation of the bank is its absurd strategies. Various strategies are taken by this particular bank for eradicating these gaps and for the improvement in the bank shares (Claver-Cortés et al. 2012). Almost all of these strategies were incorrect for the constant alterations in the trends of the market. The next challenge that the bank was going through was that it was not being able to please the existing customers. The bank was even unable to provide loans to the customers (Stair and Reynolds 2013). The next main cause for the problem in the organization was the downfall of interest of the clients was the excessive elevated interest rate of this particular bank.

                                                                         Figure 2: Downfall of shares in Commonwealth Bank

                                                                                (Source: Commbank.com.au, 2017)

iii) Specific issues that should be fixed by the new system: The new system that should be able to fix the specific problems or issues (Commbank.com.au, 2017). The major problem or issue of Commonwealth Bank of Australia mainly includes money-laundering issue. This particular incident first came into count in the year 2009 (Nambisan 2013). This new system is designed in such a way that it will fix all the problems swiftly. The bank should keep in count that these types of problems or issues that can be a big challenge for them and if they do not fix the problems, they will face huge losses and will not be able to overcome them.

iv) Criteria for proving that the proposed system meets requirements: The most important criteria for verifying that the new proposed system meets all the requirements that are the validation and verification of the information system (Dutta et al. 2012). The software of the system should be validated and verified so that there is no gap for reaching the needs in a safe manner.

Information systems strategy is a type of strategic decision that is usually taken by any particular business or organization for the welfare of their business (Galliers and Leidner 2014). This particular kind of strategy normally deals with the organizational information system. Information systems strategy is absolutely vital for all the organizations as it solves all the important problems of information system of the organization (Claver-Cortés et al. 2012). Commonwealth Bank of Australia is famous for its feasible and innovative strategy of information system.

2. Operations and Functionality

In spite of having various benefits or advantages, strategy of information systems does have most of the main issues (Willcocks 2013). The most significant issues of strategy of information systems in Commonwealth Bank of Australia are as follows:

i) System Failure: This is the most significant and important issue for the information systems. The system has the huge danger of failing. The technical faults are the main reason for this.

ii) Maintenance: This is again one of the most vital issues. Maintenance is always needed for the information systems.

iii) Costly: This kind of information systems is extremely costly and most of the smaller organizations are not able to have enough money for this type of strategy.

Following are the difficulties that Commonwealth Bank of Australia might face while developing an IS strategy:

a) Management challenges: The successful implementation of Information System strategy will be easily possible if and only if the top management level supports the decision of the strategy. In many cases, it is observed that the top managing bodies are not able to recognize the requirement of the Information System strategy (Wise and Debons 2012). The major problem lies in the alignment of the specific business strategies with the Information System strategy. The major and the most important problem for this particular strategy is the communication gap that is present internally. This particular problem often weakens the entire support system from the senior managers and the backbone is broken.

b) Human challenges: The employees of the Commonwealth Bank of Australia are considered to be the most important and valuable asset of the bank. The deficit of the technical resources and the well trained human resources usually affects in the process of implementation and this creates major problem in developing the strategy of information system (Galliers and Leidner 2014). The employees of the organization should be proficient in their computer skills for the prevention of the significant problems in the organization. It is evident that when the employees will have less knowledge about the computer and will have no computer skills, the organization will be having major problems in the stage of development. Few employees of the Commonwealth Bank of Australia or CBA might have serious problem in the information system strategy and is not flexible with the entire idea of the strategy, however they can be controlled with proper motivational classes (Whittington 2014). The most important and significant factors that has the high chance of harming the implementation strategy of information system are the wrong alignment of the organizational resources, diversified organizational culture and bad coordination amongst the employees of the bank.

c) Technical and time challenges: The problems that are related to the software and hardware usually affect in the development of the information system strategy in Commonwealth Bank of Australia (Kirchmer 2012). Another most important and significant challenge in the development the of the information systems strategy is the migration of the system of legacy to the system that is more advanced (Cecez-Kecmanovic, Kautz and Abrahall 2014). The most significant problem is the deficit of the proper analysis of time.

However, these above mentioned issues have appropriate solutions for them. The solutions for these issues are as follows:

i) For the Failure of the system: Daily maintenance of the system is the only way for solving this issue (Peppard and Ward 2016).

ii) For the Maintenance: The system can be easily maintained when the organization will hire a specialist for information system (Willcocks 2013).

iii) For the Expenses: The bank can reduce the expenses by simply opting for low costly systems, however they should not negotiate in the quality.

The information systems of the Commonwealth bank of Australia have suffered major problems and failures. These problems and failures are as follows:

i) Analysis of the problems within Information Systems projects: There are various kinds of issues, which are expected to arise within the projects of information systems. These problems mostly involve the failure of the information system, daily maintenance and cost effectiveness (Alhawari et al. 2012). These issues often create huge losses to those projects and these projects either are not completed with perfection or are not completed on time.

ii) Recommended remedies for the identified problems: These above-mentioned recognized issues do have solutions. These recommended solutions for the recognized issues are as follows:

i)For the Failure of System: It is recommended that the bank should go for daily maintenance. This will save the information system.

ii) For the Maintenance: It is recommended that the bank should appoint a specialist for information system for their existing information system.

iii) For the Expenses: It is recommended that the bank should select less expensive system, though, with good quality.

These above mentioned recommendations would help the organization to attain the organizational goals and objectives and remove all the problems of the organizations.

Conclusion

Therefore, from the above discussion it can be concluded that, strategic information system SIS is the information systems that are developed for the business proposal of any particular organization. This strategic information system mostly gives various competitive advantages to all the organizations and further delivers all kinds of products and services in much lower cost. It even highlights on any specific segment of a market. The strategic information management or SIM is the most significant feature in information technology. It even helps the businesses and the organizations for the categorization, storing, processing and the transfer of the confidential information that are received or sent. The strategic information system even offers distinct tools of analysis to the repositories of information and these tools allow them in the identification of the opportunities for the development and ways for the improvement of the operational efficiency. The above literature review outlines a brief description on the strategic information system of the most recognized and popular multi national bank of New Zealand  and Australia, the Commonwealth Bank of Australia. The review provides a brief discussion on the Commonwealth Bank of Australia. The literature review also gives the organizational structure, organizational products and services of the Commonwealth Bank of Australia. The operations and the functionality of this particular organization are also given in this literature review. The review also comprises of information systems strategy and the probable problems and solutions with this strategy. The reasons or the causes for the breakdown of the information systems strategy of this organization are also provided in this review.

References

Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, 23(1), pp.45-61.

Boonstra, A., 2013. How do top managers support strategic information system projects and why do they sometimes withhold this support?. International Journal of Project Management, 31(4), pp.498-512.

Commbank.com.au. (2017). Personal banking including accounts, credit cards and home loans - CommBank. [online] Available at: https://www.commbank.com.au/ [Accessed 13 Dec. 2017].

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Kirchmer, M., 2012. Business process oriented implementation of standard software: how to achieve competitive advantage efficiently and effectively. Springer Science & Business Media.

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Nambisan, S., 2013. Information technology and product/service innovation: A brief assessment and some suggestions for future research. Journal of the Association for Information Systems, 14(4), p.215.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

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Rainer, R.K., Cegielski, C.G., Splettstoesser-Hogeterp, I. and Sanchez-Rodriguez, C., 2013. Introduction to information systems. John Wiley & Sons.

Sakas, D., Vlachos, D. and Nasiopoulos, D., 2014. Modelling strategic management for the development of competitive advantage, based on technology. Journal of Systems and Information Technology, 16(3), pp.187-209.

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Stair, R. and Reynolds, G., 2013. Principles of information systems. Cengage Learning.

Venkatesh, V., Brown, S.A. and Bala, H., 2013. Bridging the qualitative-quantitative divide: Guidelines for conducting mixed methods research in information systems. MIS quarterly, 37(1).

Whittington, R., 2014. Information systems strategy and strategy-as-practice: a joint agenda. The Journal of Strategic Information Systems, 23(1), pp.87-91.

Wise, J.A. and Debons, A. eds., 2012. Information systems: failure analysis (Vol. 32). Springer Science & Business Media.