Information systems can be utilized to gain competitive advantage at the industry level by engaging with other companies to make standards for sharing business transactions electronically or sharing of information which will market actors to implement same standards.
I identified Standard chartered bank as my case study and realized that the company uses a value chain structure in determining areas where information systems can be used to improve banking processes.
IS Strategy and IT Management Structures
The data needed to support business approach and the establishment of data systems appropriate to supplying such information requires to be planned and implemented with each other. This positioning of business approach with information system yields information systems strategy. It is a constant process that enhance the information system support design to progressively remain significant for any business strategic aims and objectives. (Deutch & Milo, 2012).
Standard chartered bank has a cogent approach for information system, that deliver information that is of high strategic value. All the systems and technology in the organization are conformed to a larger strategic vision therefore enhancing performance in a synchronized manner. Compatibility is the rule rather than the exclusion. As such business objectives and goals are largely impacted by such information system strategies. Opportunities are grasped. The bank possesses an information system that has a calculated focus. It is closely lined up with business approach and is driven by business requirements rather than technological prospects. It is joined with the organizational approach to hand over information that assist the management to outrival competition and thereby using information system as a device for competitive benefits. Information system therefore, delivers anticipated awareness into business issues. (Draheim, 2010).
Nature of the Business
Standard chartered bank is a system that offers cash management assistance for clients, recording the execution of their accounts and portfolios of the day, exchange goods and services with financial and bank's financial equipment, provide change of currency and distribute distinct type of capital. It provides various expertness and opportunities to their clients. It offers security of money and commodities and offer credit, loans, and payment aid, like inquiring on money orders, accounts, and cashier's checks. It also provides insurance and investment goods. The following are some of the activities that standard chartered bank undertakes;
Receiving deposits and granting loans as financial equipment – apart from receiving deposits and giving loans, the bank offers transaction accounts. Accounts are normally opened for small and medium customers, the retail clients, and for the enterprise clients. Funds deposited by the deponents in the bank is used for distribution and generation of financial instruments and other loan. This institution offers and possess liquidity supportable flow for financial and non-financial organizations.
The banks are dealing with humans- the major participants in the standard chartered bank include: non-financial organizations, retail divisions, other banks, small and medium firms, conglomerate companies, big companies, insurance firms, multinational companies, security, international companies, among others. The upholder of each mentioned organization is a person. Human beings are the connection to all financial projects.
Different types of clients, manners and behaviors- the bank handles different customer behavior, personality, cultures and manners. This is because clients possess different tastes, opportunities, social traits, financial might, egos, among others. As such the bank differentiate its’ client and position them accordance to the requirements and interest. The bank therefore provides its’ goods and services in accordance to the position given. (Weske, 2007).
Different culture and religion- Clients view their world based on their cultural belief. Believes, culture, values and religion aim act as highway to particular behavior direction and culture. As such the bank grants freedom to its client for the choice of the preferred good and services that will meet their needs.
Unlimited wants with limited resources by its customer- resources become scarce due to individuals’ ability and competence to make money and have enough for the particular limitation. Inadequacy guide client on use of funds wisely to meet their needs and forego their wants.
Generation of profit through client operations and provision of different services- standard chartered bank act as intermediary in receiving deposits and channeling those deposits into lending operations, either through loans or capital markets. It links clients with capital shortage with those with surplus capital. It acts as disbursement agents by analyzing present accounts for clients, handing over checks withdrawn by clients on the bank, and gathering checks lend to clients' present accounts. It also enhances client payments through other payment ways like the automated clearing house, EFTPOS, telegraphic transfer, and automated teller machine. The bank take money for temporary use through issuance of debt securities like bonds, acceptance of deposited funds on present accounts, term deposit. However, it lends money through production of advances to clients on present accounts, and installment. Some of the channel the bank uses for allocation are: internet banking, Automated Teller Machines, offices, video banking, call center, telephone banking, mail, relationship managers, mobile banking, agents, sales forces, among others. (Brotby, 2008).
The Board of Directors
It is composed of the chairman, four executive directors, and ten independent non-executive directors whose role is to see the flourishment of the company. Shareholder has to conduct and election to appoint their directors. Their roles and responsibilities include; It’s the mandate of the board to review and determine the strategy of the company, overseeing the compliance of the Group with regulatory and statutory commitment, handling of concerns pertaining to the Company’s capital, manages company’s operational areas and structures, makes sure that internal control system is running smoothly, and conducts appointments to the b
Independent Non-Executive Directors
They are selected for a term of three years. They are normally appointed because of their vast experience, have unique individual qualities and appropriate caliber. Furthermore, they may have some expert knowledge that will aid the management board with valuable inputs. Their Roles include: Monitoring performance banks performance, determining executive directors level of Remuneration, help n marketing the bank services and connecting it to potentially useful companies, and to make sure that bank’s capital is a true and fair reflection of its performance. (Laan, 2013).
Constitutes of four committees with defined delegated duties. They include: Remuneration Committee, Nomination Committee, the Sustainability and Responsibility Committee and the Audit and Risk Committee.
These committees take independent expert opinions and advices where necessary at the bank’s expense. Details of these committees and their members are given below.
Audit and Risk Committee
This committee is made up of independent non-executive directors. Each member is considered to poses vast experience and knowledge of financial reporting to the deliberations of the committee. The Committee’s responsibilities with regards to internal audit functions include: assessing and monitoring efficiency of the internal audit functions, considering the selection, termination or discharge of the Internal Audit head, making and considering suggestions and recommendations to the Board on the selection, re-selection, discharge of the external auditor; applauding the terms of contract, scope and nature of the audit;
Board Nomination Committee
The responsibilities of this committee include: in case Board vacancies come up, the assess the knowledge, skill and experience needed to fill the position available, maintaining directors and other senior executive succession plans under review to make sure the firm go on to compete in the market place effectively and coming up with substantial suggestions to the Board.
Board Remuneration Committee
This committee decides the salary and favors of the bank’s chairperson, chief executive officer and other directors. It also reassesses and accept the remuneration of other specific senior management employees.
Sustainability and Responsibility Committee
This Committee acknowledges issues to do with how Standard Chartered can build a feasible business through deliberation of economic development, social investment, environmental protection, and other sustainability factors responsible for the firm’s long-term shareholder value. The Committee's roles include: making sure that the banks business activities are in order, reciprocating to external arising issues in regulation, stakeholder guidance, reporting and legislation. Assessing new banks policies to make sure that adjustments are in order with sustainability conventions and echo emerging trends and advancement. (Greuning & Brajovic, 2009).
A process is a designed set of operations that yield outcome. Repetition of processes ca be done severally and are often structured carefully and optimized to influence efficiency and productivity. Some of the processes that the standard chartered bank undertakes include;
Administration- This is the process of onboarding fresh employees with guidelines like provision of an employee identity card.
Banking- After a stock exchange a bank's settlement operation delivers securities.
Operations- this are activities that involves acceptance of an order, service deliverance and billing the client.
Procurement- this involves the guidelines needed to ensure security of parts and materials like, accounts payable ,receiving, purchasing and invoice reconciliation.
Sales & Operations Planning- this process involves the procedure needed to scheme inventory levels on the basis of factors like client demand and production dimensions.
Information Technology-A different process of management accredits business group to comply with requests of change for systems. Every change is prioritized, reviewed, evaluated, implemented, and developed,
Information Security- this analyzes the state of exposure in systems for instance, access control lists such as unused permissions.
Customer Service-this process investigates client discontent and decides if clients deserves a compensation. The process also influences improvement to the company as setbacks may be recorded as challenges and mended.
Infrastructure- this process carries out engineering evaluation of all bridges in a land annually recognizes risks .
Asset Management- A data center carries out product inventory process annually that justifies all devices in the store.
Performance Management- The process facilitates performance goal setup at the beginning of the year and performance evaluation at the end of the year
Marketing- this process involves utilizing everything needed to establish and open new product to market.
Sales-it includes guidelines needed to purchase to a customer, such as billing, orders, proposals, quotes and delivery.
The following are some of the policies that guides standard chartered bank;
Position descriptions of the employee – this includes; definition of the role and responsibility of an employee, amount of power possessed for making decision, overall objectives and particular duties and creation of methods for accessing performance and building workers through training.
Personnel Policies – this includes; clear outlined business hours, retirement, condition of employment, sick leave, salary, insurance and health advantages, and paid versus unpaid holiday days.
Organizational Structure –this includes; creation of charts outlining each person’s identity, that is, name and title showing everyone’s fitness in the organization structure.
Disciplinary action – this include; approaches on issues of safety, honesty, misconduct, and performance and measures and disciplines taken upon violation of organization policy and rules.
Retaliation – retaliation policy should be avoided to safeguard employees and the organization.
Safety – this includes; Usage of best industry practices, and federal, local and state laws as steps for creation of rules entailing best behavior mechanism at work, usage of safe equipment, and ways of reporting safety hazards.
Technology – this include; establishment of legal and illegal usage of social media, internet and email for personal reasons at work.
Policies for clients working with the organization include;
Privacy – this involves; protection of employees, the organization and clients through establishment of a policy that promotes trust and transparency with the clients.
Credit – this include; decision on the terms of account opening and development of good credit with the organization, settlement on the allowed amount of time for payment, establishment on effects of late or overdue payments.
Confidentiality – this entails; protection of sensitive information, and of relationships using clients, suppliers and vendors.
The above governance structure and policies of standard chartered bank meet the following regulatory requirements; duty clarity, prevention of undue influence and trust maintenance, decision establishment and governance of body design for independent regulators, transparency and accountability, engagement, funding and evaluation on performance
Risk identification- risks may appear from several channels like servicing, sales, mortgage, product structure, debt collection, and client service. The bank identifies risks and documents them, then evaluation methodologies are defined to assess these risks in a guarded manner. It aligns these uncertainties with crucial decision-making guideline that assist in ensuring that all organization decisions are established for the well-being of customers while meeting the needed regulations.
There is a flexible structure to describe the company’s appetite with developed key metrics like key risk, key performance, and key control indicators for conduct risks. To ensure transparency, the bank factors the conduct risks into the organization strategy, and key metrics as well as risk appetites are aligned with the decision-making processes and equivalent risks and controls. Some of the key metrics include; tracking transparency, client satisfaction score, post-sales servicing, and issue resolution. (Salem, 2013).
Control and mitigation management: once conduct risks are evaluated, the bank defines and assess suitable control requirements in at the right time to enhance their effectiveness. The organization describes aggressively as well as measuring controls
Remediation and issue management: issues should be unlimited to control inadequacy and should be stated from any sector like product structure, client complaint, sale of a financial goods, among others. The bank records and route the issues through an orderly investigation and remediation method along with automatic alerts for following issues and action designs all through their lifecycle.
Complaints Management: the bank possesses an open and modernized approach to investigate, record and remediate clients and internal discontent about an employees and company’s conduct. Complaints are recorded either through risk evaluation surveys, emails or via mobile calls, or online portals, and handled equivalently as an issue.
Survey Management: the bank uses questionnaires and surveys to evaluate staff behavior with clients and recognize any fundamental issues and abide with the regulations.
The following are some of the possible improvements that the organization should focus on; Business realignment- The basic argument of business realignment is to move out business areas that costly and that have small margins and progress into areas that are more economical and profitable. The bank should identify a robust way to necessary planning, evaluating the minimum usage of assets required to compete in a specific area of business and recognize opportunities to make a distinction of themselves from competitors. This means moving into nontraditional businesses, like payment processing and specialty financing as long as their evaluations shows that they can contest efficiently and effectively. (Berghahn, 2013).
Channel optimization- the aim of channel optimization is to evaluate the several ways client communicates with a bank to enhance creation of an economical combination that is suitable to each bank’s particular client base. This process encourages some fairly bold buying and selling of branches as banks adapt to their geographic occupancy. The bank should reconfigure roles and accountabilities within the branches and adopt fresh metrics for evaluating branch value and performance and value. Other approach include improving the functioning hours and technical abilities of call centers to see through client varying expectations.
The no one-size-fits-all approach-Some banks aggressively advocate opening of electronic account, deposit capture that are out of the way through smart devices, and accounts that are structured to be basically paperless. Other banks however, usually those with large commercial clients follow a basically different way, aiming on individual service with a relationship administrator and support group appointed to each certified account. The evaluation of such organizations has acknowledged that the high-worth business developed by this way can more than offset the added expenses. (Andersen, 2007).
Process costs- the chance to enhance process costs often is under acknowledged in financial firms. The objective is to minimize the unit expense-to-value ratio of each operations or transaction, for instance the expense of opening an account, generating a loan document bundle, or managing a particular type of transaction. development in this line include constant performance management and often arise as a result of analyzing, benchmarking, eventually rethinking and mapping back-office processes.
Staff productivity- besides reducing process expense, automation tools can assist in improving employee productivity, allowing banks to address more activities and greater capacity of transactions with the same number of individuals. Work rate improvement does not rely on technology alone. Some of the most important opportunities include using developed performance management method, like well described expectations and scorecards, enhanced rewards and motivation systems, and good supervision and training. (Lane, 2010).
Other useful accessory involves visible metrics and output charts together with some line-of-intuitiveness incentives like bonuses that are given according individual performance and training, not just organization work rate. Many organizations also discover achievement in redefining work duties, testing with more bendable job structures, and outsourcing more specific functions.
Technology and automation- the utilization of technology and automation also benefits individual concentration as part of the general effectiveness improvement effort. The overarching objective is bi-fold: first is to utilize technology to minimize the time spent in discovering data and secondly is to utilize automated business guidelines to progress work around the organization faster and effectively. (Tricker, 2015).
Vendor relationships- upgraded vendor management does not necessarily mean putting pressure vendors to minimize their prices. Rather, it is structured to define the greatest possible worth from a vendor relationship. Significant tools involve utilizing service-level alliance and vendor scorecards to manager accomplishment issues, like availability of system, response times, and direct consumption. Such gadgets assist in provision of a more complete design of the vendor relationship.
Other fundamental expense-cutting method involves measuring expenses and consolidating vendors against similar services in the market.
Information systems can bear impacts of infusion and diffusion in a company. Data systems will be employed only in silos for information processing if infusion and diffusion are low.in cases where infusion is low and diffusion is high there will be an information system that is decentralized. In addition, if diffusion is low and infusion is high, there will be an information system that is crucial to activities only. Nevertheless, if both infusion and diffusion are high, the organizations’ information system will contribute to a calculated and competitive benefits.
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