Information Systems - Essay Example

E-BUSINESS Strategic IT Plan For ABC Bank Developed By February 27, 2007 A B C B A N K CONTENTS 3 2. PURPOSE OF THE REPORT 4 3. BACKGROUND 6 4. CURRENT ISSUES IN E-BUSINESS 7 5. RECOMMENDATIONS 9 5.1 Internal Bank Automation 9 5.1.1 Computerization of the Bank 9 5.1.2 Office Automation Software 9 5.1.3 Email 10 5.1.4 Intranet and Wide Area Network 10 5.1.5 Electronic Bulletin Board (EBB) 10 5.2 Enterprise Resource Planning (ERP) 11 5.3 Internet Banking 11 5.4 Automated Teller Machines (ATMs) 12 Credit Cards 12 5.6 Call Center 13 IT Security 13 6. CONCLUSION 14 WORKS CITED 15 1. ABSTRACT Information system and technology plays a vital role in today's information age. Successful e-business adoption is driven by a comprehensive corporate strategy that requires a vision and commitment from the top down (Comergent, 2006). This report focuses on the strategic implications of information technology for ABC Bank's business for the next 3 years. It provides an analysis of the current advancements of information technology in general and for the financial industry in particular; and details the strategic IT systems that are planned for the ABC bank in years to come. 2. PURPOSE OF THE REPORT ABC Bank is a new small bank with a network of 50 branches. The bank's mission is to provide value added services to its customers in an efficient, timely, robust and reliable manner. It strives to become the bank of choice for its customers around the country. In order to achieve its mission objectives the bank needs to implement information technology bases systems to upgrade its current manual system which is tardy, slow, non-responsive and unreliable. This report is developed with a view to establish a framework for strategic IT direction for the bank. In addition, the rationale, extent, and timelines for implementing the information systems and technology within the bank have been identified and discussed. The purpose of the report is to establish a strategic plan for IT for the bank, to apprise higher management with the benefits and the value addition that IT provides to the business, the contemporary approaches to implementing IT based systems in financial industry and to provide recommendations customized to ABC Bank's operations. The report begins with an introduction of E-Business, describing the key areas and applications that this term covers; it then provides an insight into the latest IT trends in businesses; specifically banks around the globe. It is then followed up with the current issues and strategies that the businesses are adopting and dealing with in order to provide state of the art services to stakeholders. Suitable e-business systems are identified for the bank and recommendations are provided for IT managers to develop, acquire and implement e-business solutions. A tentative timeline for each strategic proposed solution is also provided. 3. BACKGROUND E-Business or Electronic Business, a termed introduced by Lou Gerstner (CEO of IBM), is defined as a business process that relies on automated information systems to function (Wikipedia.org, 2007). E-business is not just e-commerce, a technique for establishing and maintaining relationships with customers and suppliers online and over the internet; rather an e-business system spans over the entire value chain of the organization. It integrates the internal and external processes of the business. E-business applications can be generally divided into three categories namely (Wikipedia.org, 2007): Internal business systems (customer relationship management, enterprise resource planning, document management system, and human resource management); Enterprise communication and collaboration (VoIP - Voice Over IP, content management system, email, voice mail, web conferencing); and Electronic commerce (online marketing, internet shop, open catalog, supply chain management) The use of e-business techniques and applications allow the organizations, an ability to track resources, log expenses and revenues for proper accounting treatment, develop and maintain relationships with customers, suppliers, employees, and other stake holders, establish lines of business, develop and implement marketing campaigns to spur sales, organize internal organizational processes and procedures, and establish an integrated and coherent set of policies and guidelines that can be used to bring the organization on the path to success. 4. CURRENT ISSUES IN E-BUSINESS In today's world of information technology, e-business is playing a vital role towards the way organizations perform their functions. As quoted by Bill Gates, Chief Executive Officer of Microsoft Corporation: 'Information technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without talking about the other.' (Bill Gates) IT has evolved from being an 'add-on' to the existing business processes, to an essential and mandatory ingredient and a key enabler for the organizations' products and services portfolio. Several types of e-business initiative are taken by financial industry worldwide. In addition, various risks and new threats have also been discovered with the use of information technology for doing businesses. A brief appraisal is provided below: Use of Enterprise Resource Planning (ERP) systems have allowed the organizations to not only provide services to customers through a Business-to-Consumer model (B to C), but also integrate its operations with suppliers and partners through Business-to-Business model (B to B). Oracle Corporation is the most prominent ERP solution provider though other players also operate in the market. ATMs have revolutionized the concept of self banking by providing an easy to use system through which costumers can withdraw funds, print statement of account and perform other services. Similarly, internet banking offers 24x7 services to customers who can connect to bank's system anytime to perform desired activities. An innovative concept in service industry is that of a call center, where customers can call to obtain a one window facility to all their banking needs. In addition, credit and debit cards provide plastic money as a substitute of conventional currency that can be used at a number of merchants and stores to make payments. This provides security and ease of use. IT security has been an emerging concern, especially for the financial sector. As new technology arrives, it is followed by a number of security vulnerabilities and risks to the loss of data, money and reputation. Risks like hacking, identity thefts, wire tapping, and unauthorized access have increased with the increasing use of information technology based systems. Some remedies to reduce the risks of IT based exposure, include biometrics access controls for physical access, antivirus and other software to protect against malicious code that destroys and harm computer systems and the data residing into it, and backup and contingency plans to resume business operations in case of disaster or interruption in normal business functions. 5. RECOMMENDATIONS The business model recommended for ABC Bank for the next three years consists of a multitude of strategic IT initiatives. The proposed strategy is outlined below: 1. Computerization of the Bank 2. Implementation of Enterprise Resource Planning (ERP) system 3. Implementation of internet and online banking services 4. Installation of Automated Teller Machines (ATMs) in all branches 5. Credit Cards 6. Information System Security A detailed description of each strategy is provided below: 5.1 Internal Bank Automation As part of the bank automation project, following key activities and tasks will be undertaken to implement systems, procure hardware and software and to streamline current business processes. 5.1.1 Computerization of the Bank All the 50 branches and the head office of the bank will be computerized in next six months. This includes providing workstations to all the employees of the bank. It is estimated that approximately 1500 workstations and systems will be procured and installed. 5.1.2 Office Automation Software In order to produce reliable and accurate office documents quickly and efficiently, the bank will purchase enterprise wide licenses of the office automation software like Microsoft Office suite; which contains MS Word for documents generation and reporting, MS Excel for financial spreadsheets and numerical analysis, MS Power Point for presentation development etc. 5.1.3 Email ABC Bank has a high volume of inter-office correspondence. An intranet email facility can eliminate most paper based communication. The system will provide instantaneous delivery, significantly reducing the time and manual record keeping overhead costs. 5.1.4 Intranet and Wide Area Network To provide the necessary infrastructure for internal office correspondence, and email facility, the bank will implement a Local Area Network (LAN) in head office and a Wide Area Network (WAN) through which all the branches will be interconnected and will also be connected to the head office. The development of intranets and extranets is a part of e-business which can be said to include e-service, the provision of services and tasks online (Nelson, 2001). At the ABC Bank, LAN will provide workstation access to servers to permit bank employees to perform activities like preparing financial statements, maintaining human resource records, and managing internal operations of the bank. 5.1.5 Electronic Bulletin Board (EBB) EBB helps to share information, provide training opportunities, share views, update staff with new policies and procedures and to provide general information about business and its functions. ABC Bank will have an electronic bulletin board setup across the bank network to provide and share information of interest with employees. 5.2 Enterprise Resource Planning (ERP) In order to establish a framework to document and account for all the transactions that take place at various branches, it is envisioned that ABC Bank should acquire and implement an ERP system. An ERP is a software system that attempts to integrate all departments and functions across a company on a single computer system that can serve all those departments' particular needs (Koch, 2006). Oracle Financials Application has been chosen as the ERP for ABC Bank based on its comprehensiveness and ease of use, reliability and accuracy of recording transactions and generating result, effective security and internal controls, and worldwide acceptability and use by major banks and companies in the financial sector. The tentative timeline for the implementation of ERP is approximately 1 6 months to 1 year depending upon the scalability and customization needs in the software and also in the current processes. Once, ERP is implemented, ABC Bank will be able to provide electronic banking facilities to its customers, by having a centralize server where all the accounts and data will be maintained for customers. Customers will be able to go to any branch and do transactions there, instead of the current manual system where a transaction can only be done at the specific branch where the customer account is being maintained. 5.3 Internet Banking To reap the benefits of internet technologies and to counter the continuous threat from the competitors, ABC Bank will initiate internet banking facility in one year's time. For that to happen, the bank requires the service of an outside consultant as the internal IT resources do not have the requisite expertise and skills to develop and implement a secure internet banking solution. Bank will develop a Request For Proposal (RFP) through which quotations will be invited from vendors and consultants for the project. Once, a suitable vendor is identified and contract is made, a comprehensive project plan will be developed to identify the timelines and schedules of the extent of services to be provided over the internet. However, it is proposed that the bank should provide online account creation, statement checking and printing, funds transfer and other value added services to the customers. 5.4 Automated Teller Machines (ATMs) ABC Bank will install ATMs in all the 50 branches of the bank for the customers. In addition, ATM kiosks will also be installed at commercial places like super markets etc. so that the customers can get money when required from these terminals. The Electronic Funds Transfer (EFT) facility will be provided in an encrypted form to secure against unauthorized access to the customer information. The suitable hardware and software will be procured for this project. The tentative timeline for the completion of the project is from 1 year to 1.5 years. Credit Cards In today's world, no bank can survive without providing credit card facility to its customers. ABC Bank will also introduce credit cards in a couple of years. The cards will be chip based and will be issued based on the Visa or Master Card systems that provide standardize support, and security. As part of the credit card support systems, point of sale devices will be provided to selected merchants and retailers across the country. 5.6 Call Center To provide value added services to our customers, the bank has decided to implement a call center with Customer Relationship Management (CRM) solution. The bank has identified Siebel CRM system as the optimal alternative for development of the call center although Oracle CRM is also under consideration. The project timeline is around 2-3 years during which detailed feasibility analysis will be conducted to identify the appropriate solution and to implement that solution. IT Security In order to appropriately secure the bank's IT facilities, systems and components, a comprehensive IT Security Policy will be developed that will highlight the security requirements for critical IT systems, will provide guidelines and recommendations to ensure that no compromise of confidentiality, integrity and reliability of information takes place, and will also provide a broad description of procedures to adopt to prevent against IT mishaps. These include implementing a firewall to restrict unauthorized access to bank's network and data; implementing an Intrusion Detection System (IDS) and Intrusion Prevention System (IPS) to safeguard against intruder attacks; acquiring and installing appropriate antivirus software on all systems and workstations to detect and remove malicious software; having periodic backups of critical data and applications and setting up a disaster recovery site to resume operations in case an unforeseen event strikes and render the routine operations unusable; and to perform periodic information systems audit to ensure that all IT systems are functioning as desired and IT risks are minimized. 6. CONCLUSION The above report provides general guidelines and strategies that can be implemented in ABC Bank to improve its reporting system, to enhance its integration of branches and head office, to improve the utilization of resources, to enhance customer care, to provide round the clock support and services to customers, to integrate with suppliers and partners and to provide a comprehensive set of reports to management, owners, shareholders, and the regulators. Since information technology undergoes rapid changes, hence the identified strategies are to be pursued in a time frame of approximately three years. The strategy may need to be revised afterwards to align the bank's systems with the latest and new technology at all times; in order to minimize expenses, increase productivity and throughput and to appropriately safeguard the bank's resources against security threats and vulnerabilities related to information technology. WORKS CITED 1. "Internet Banking". Cavion. 27 February 2007 . 2. "Electronic Business." Wikipedia: The Free Encyclopedia. 20 February 2007. 26 February 2007 . 3. "Executive Guide to Enterprise eBusiness Success." Comergent. 2006. 27 February 2007 . 4. Koch, C. "The ABCs of ERP: Getting Started With Enterprise Resource Planning." CIO.com. 10 January 2006. 27 February 2007 . 5. Nelson, D. T. "e-business". TechTarget: SearchCIO.com. 26 July 2001. 25 February 2007 . Read More