Strategic use of information technology : a case of electronic banking | |
| Author | Manandhar, Raman |
| Call Number | AIT RSPR no. SM-98-30 |
| Subject(s) | Information technology Banks and banking--Automation |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration in the Management of Technology, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | Information technology (IT) has been argued to give competitive advantage to banks. The way IT is used, rather than the technology itself, provides competitive advantage. Organizations need to undergo various changes before it can successfully use IT as a strategic tool. Particularly, alignment among various decisions which are choices related to product market, IT market, administrative infrastructure, IT infrastructure, and business and IT processes is required. This study illustrates these organizational and IT requirements for successful use of IT as a strategic weapon through case studies of electronic banking services in Merita Bank Ltd. from Finland and Thai Farmer's Bank PCL from Thailand. The research study argues that Electronic Banking System (EBS), in the context of the two banks, has not provided sustainable competitive advantage; rather it has become a strategic necessity. However, EBS has made it possible for the banks to gain first mover advantages- in enhancing their image and creating market share when new EBS services are introduced. These advantages are enabled by alignment among the banks' business strategy, technology strategy, administrative infrastructure and processes, and IT infrastructure and processes. Merita bank's business aim of being a leader in EBS services is enabled by technological leadership in IT. And the leadership in EBS services is seen as being able to market new EBS services faster than competitors. The access to the state-of-the-art IT capabilities is made possible through a strategic alliance with an IT vendor. The IT strategy is supported internally by technology visioning, assigning IT development responsibilities in a way that is conducive to innovation, product development in cross functional teams, suitable IT installations and IT skills. The administrative processes and structure have supported the business strategy by marketing EBS services aggressively to create brand identification and supporting new product development. The business processes, while supporting the business strategy, also supplements IT infrastructure and processes in the implementation of the IT strategy through specialized marketing ofEBS services, retraining of employees and training of customers. Thai Farmer's bank has used EBS to improve its image and to sustain leadership in electronic banking services. Its EBS usage has been enabled by IT which is implemented as a part of the bank 're-engineering' program. The re-engineering program involved restructuring of the organization- its strategy, structure, processes and roles besides IT itself. |
| Year | 1998 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Kim, Sanghoon; |
| Examination Committee(s) | Tang, John C. S. ;Buchel, Bettine; |
| Scholarship Donor(s) | The Government of Austria ; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1998 |