Background Of Commonwealth Bank Of Australia Information Technology Essay

Report describes the changes of IS/IT in one Australian largest bank, commonwealth bank of Australia. The changes of IS/IT of commonwealth bank are introducing of mobile technology, upgrading old mainframe computer with UNIX system and integrate of personal loan system with home loan system. In this report describe that the commonwealth bank is the first Australian bank which has implemented fully function mobile banking service. By which commonwealth bank became a leading bank for mobile banking service even that service was firstly implemented by their competitors like ANZ and NAB. CBA has revealed that uses of mobile banking service are increasing tremendously from 2009. By which management team of CBA has decided to give continuity to improve mobile banking service with up-to-date technology in future. As a another changes of ISIT of commonwealth bank, this report describes the upgrading of mainframe windows based system with UNIX system has provided multiple benefits for CBA which are improvement in system performance, optimization of daily operation and improvement of productivity with decrease of system cost. As a result, CBA got the Excellency in customer satisfaction by providing good performance and quality of service that is providing by CBA. Similarly, this report explain how CBA has integrated their personal loan system with home loan system to make easy for customer to choose different loan service according to their needs, to decrease operational time and to automate some tasks like creating client reports. Finally, this report will clarify, how CBA will manage those IS/IT changes in future.

Introduction

Information technology/Information system has become one vital parts of any organisation in this world. As we can see in these days, any types of organisation (from very small to very large in size) are relying on information technology. The companies have realized that the technology can increase the business productivity by decreasing their expenditure. Adaptation of information system has become a requirement of any business to sustain. In order hand the daily advancement of technology has become the real challenge for those companies who have adopted the information technology to do their business. Today’s best and fast technology will be ancient and obsolete for tomorrow and weakness of obsolete technology can be a reason for the loss of business. So, it is very important for any organisation to be up-to-date with technology (Oren, n.d). In a terms of technology up-to-date, changes in IS/IT takes place in organisation. Commonwealth bank of Australia (CBA) can be one good example of such of organisation.

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This report aims is to discuss the changes of IS/IT in CBA, this report will describe how such changes have helped CBA to sustain their position among their competitors. And additionally, this report also describes the benefits of changes plus it also describes how such changes meet the needs of customers. And lastly, this report will clarify how the CBA manage such changes compare to other organisation and how will they continue this in future.

Background of Commonwealth Bank of Australia

CBA is one multinational financial institution which was established on early 19th century in Australia. Vision of bank is to be Australia’s finest financial services organisation through excelling in customer service and strategy of CBA is to recognise the significant opportunities within their business to develop more value for their customer, people and stakeholders. (Commonwealth Bank, 2011).

ISIT changes of Commonwealth Bank

As mention is their vision of CBA, this bank is very serious about the customer service. CBA is such a one good example of technology adopted bank which is giving excellent service for their customer by utilising the up-to-date technology. One of the successful technology changes of CBA is implementation of Mobile banking system.

CBA has launch full-functionality mobile internet banking service on 25th march 2009. So, the customer can do their banking from their internet ready mobile phone from any place (Commonwealth Bank launches mobile internet banking, 2009).

Similarly, another successful change is outsourcing with HP to Integration of personal (PLS) loan system with home loan system (HLS) and to move capital system from a mainframe to a UNIX platform and upgrading the DB2 database management system.

Benefits of IS/IT changes (for customer and bank itself)

Mobile banking

According to the Mr whitely, 2011 (executive general manager for CBA), mobile banking can be more secure than the pc internet banking because it is very easy to track a person using mobile for internet banking than computer because mobile uses SIM to connect with bank and additionally, current mobile banking application of CBA direct customer request to secure mobile version internet banking web browser which protect their customer from hacker. So, it adds the security level for their customer to get the bank service.

Integration of PLS with HLS

Before implementing this system, because the PLS user interface operated on a non-supported platform the bank have to manually enter data from internet applications into the PLS system in order to produce loan documentation. So, in order to reduce operational costs, optimize functionality and improve flexibility, CBA has integrated their personal loan system with Home loan system with the help of their IT partner, HP.

Success of the consolidated IT infrastructure made possible for CBA to launch a best-in-class personal loan product just after two month of implementation. And once again CBA became successful to excel their customer service by letting customers to apply for statements, choose between fixed or variable interest rates.

In near future by implementing this system, CBA expects to reap higher approval rates, faster decision-making and funding, and greater product differentiation. (HP case study, n.d)

Upgrade mainframe to a UNIX and DB2

Once again with the help of technology partner HP, CBA has updated their old windows-based mainframe to a UNIX and DB2. Being one expensive to maintain and could not support new business growth or products plus, being manual system and having web site bottleneck, CBA was desperate to upgrade mainframe to a UNIX and DB2.

After upgrading the system, bank enjoys many benefits including greater efficiencies and reduced costs plus that solution also offers bank to improve in automation of system, monitoring, support and security, as well as greater processing reliability with greater system speed and predictability. As a result this bank increases its capabilities and reduces costs with new midrange platform (HP case study, n.d)

Management of changes compare to competitor

Mobile banking

Research reveals although the implantation of mobile technology was not a new technology for Australian people, CBA is the first bank which became one successful bank to implement fully function mobile banking service by providing free application for iPhone and other mobiles plus mobile banking is free in change in CBA. Other banks like ANZ and Westpac have also implemented mobile banking before CBA but it is just limited to iphone for full functionality and other competitor NAB is lagging behind all other banks with limited service for mobile banking and it is costly for customer to use that service (Rose, 2009).

Since the first implementation of mobile banking service, CBA has continually managing and maintaining that service by making more efficient and convenient for any internet usable mobile.

Integration of PLS with HLS and Upgrade mainframe to a UNIX and DB2

Both the integration of PLS with HLS and upgrade of mainframe to UNIX system project was outsource for HP Company. And HP was successful to meet all the requirements of CBA while doing those projects. As a result CBA gave all the management and support responsibilities for HP. Research reveal that competitor of this CBA like NAB, St George and Westpac are outsourcing their information technology support and management with IT companies like IBM, Fujitsu and HP.

As other competitor, CBA had mitigated their risk and problem related to that updated system to HP Enterprise. So, HP Enterprise is solely responsible for management and maintenance of integration HLS system and UNIX system.

Future management of changes

Mobile banking

On 27, august 2009 commonwealth reveal that the total regular user of mobile banking is 180,000 and figure of users are expected to exceed 750,000 within 2011(Media release, 2009). Being one successful service to attract the customer, commonwealth bank is improving their mobile banking service by making that service more and more flexible for any mobile user. As an example, commonwealth bank has released their mobile banking application for android smartphone on 28 February 2011. (Media release 2011). According to commonwealth bank executive general manager direct channels, Quentin Boyes, 2009, the bank has seen a tremendous growth in the popularity of NetBank mobile banking so, in order to meet the customer demand of this service commonwealth bank will give the continuity to improve mobile banking service with up-to-date technology in future.

Integration of PLS with HLS and Upgrade mainframe to a UNIX and DB2

By outsourcing the information Technology to HP, all the information system of CBA will be managed by HP. All the maintenance and further upgrade of system will be done by HP. And HP is agreed to help CBA to be up-to-date with technology by developing required application and by proving excellent IT support service to sustain their excellent customer service in near future.

Conclusion

This report concludes that the Commonwealth Bank is very serious about the efficiency of their services to customer. Report clarified that the up-to-date of IS/IT can bring large amount of positive benefit for company like CBA to provide efficient and smooth service for their customer which will establish the good relationship with customer. The report also clarified that the implementing of fully functioning technology can help to sustain the achievement of any company. And lastly, this report describes how commonwealth bank has reaped their benefit by outsourcing their technology for HP Enterprise Service.

Reference

Oren, M (n.d). Technology can byte my arse. Retrieved on March 27, 2011. From

http://thecheers.org/Cheers/article_867_Technology-can-byte-my-arse.html

Our Company, 2011. Commonwealth Bank. Retrieved on March 27, 2011 from http://www.commbank.com.au/about-us/strategy/default.aspx

Rose, Samantha, 25th March 2009, Commonwealth Bank launches mobile internet banking. Retrieved on March 27, 2011 from http://apcmag.com/commonwealth-bank-has-launched-iphone-and-other-mobile-phone-internet-banking.htm

Mobile banking more secure than PC: CBA, 11th March 2011. Retrieved on March 27, 2011 from http://www.zdnet.com.au/mobile-banking-more-secure-than-pc-cba-339311191

HP case study, n.d. Australia’s leading bank invests in technology to boost market share. Retrieved on March 27, 2011 from http://h20195.www2.hp.com/v2/GetPDF.aspx/4AA2-8951ENW.pdf

HP case study, n.d. The Bank required next-generation technology. Retrieved on March 27, 2011 from http://h20195.www2.hp.com/v2/GetPDF.aspx/4AA2-8950ENW.pdf

Media release 2009. Commonwealth Bank. Retrieved on March 27,2011 from http://www.commbank.com.au/about-us/news/media-release/2009/default.aspx.

Media release 2011. NetBank Mobile now available for Android smartphone from http://www.commbank.com.au/about-us/news/media-release/2011/28011-netbank-mobile-now-available-for-android.aspx.

Question 2

Management involvement with IS/IT has grown through the use of methodologies such as strategic planning, project management, outsourcing and corporate governance. As a consultant you are required to prepare a briefing for a client that will convince them of the general need for organisations to introduce three of the methodologies listed above. You should also recommend the knowledge and skills the client will need to develop in the managers who will be involved in IS/IT is some way in the future.

Executive Summary

Report describes the success of organisation is equally improving as the advancement of information system. Report explains the management of information system is very important work of any organisation to get desire result from information system. Information system can become problem for organisation due to poor management. Moreover, report clarifies using the methodologies such as strategic planning, project management and outsourcing is very beneficial if organisation have proper planning and management strategy to implement those methodologies. Strategic planning can help organisation to run their operation smoothly with dealing with any changes in organisation. While, project management helps to save organisation from loss of investment that is invested to achieve unique product or service. Meanwhile, outsourcing influence organisation to improve their core operation and also help to acquire the benefit of new technology with less cost. As benefits, there are many disadvantages and dangers behind using of those methodologies. Unsuccessful implementation can result the organisation to loss their business so once again managing and planning became critical part of any organisation. Lastly, a report explains that the Manager is a key person who is responsible to coordinate management jobs. Success and unsuccessful of those above methodologies will directly depends upon the person who works to manage the management part of organisation. So, manager should have all the skills like business skill, technical skill and communication skill to manage and cope with any problem that can rise in organisation.

Introduction

It is well known fact that the technology is changing its shape day by day by increasing its capabilities to make the human life easier in this modern world. The collection of meaning full data which is known as information has become valuable treasure in this information age and in order to collects, processes, stores, analyses and disseminated information for a specific purpose, information system (IS) has been using, which is the collection of hardware, software, application, procedures, user and data (Turban &Volonino, 2009). It is true that those components work together to provide information but in order get one meaningful, needed and valuable information from that system to solve the business problems of organisation, management of system is also equally important like other components. In addition, according to the Kelly (In management information system, 2009), information system management is a mixture of human and computer based resource that helps for the collection, retrieval, , communication, storage and use of data for the purpose of efficient management of operations and for business planning.

On other hand, a IS manager is a key person of any organisation who is responsible for the management of IS to guide organisation toward their goal. According to Reynolds (2010) IS manager need to have three important responsibilities when adopting information system which are determining IT opportunities, manage the environment to make the implementation smooth and mitigate the possible risks associated with IS. So, in order to deal with those responsibilities and make a successful alignment of organisation strategy with technology it is very important for IS manager to have both business skills and technical skills. Additionally, to be one successful IS manager, it is equally important for manager have a knowledge about some areas which involves in a management of information systemsinformation technology. Those key areas are strategic planning, Project management, out sourcing and co-operate governance.

This report intend to describe those key areas and the benefit of adopting those key areas in organisation plus this report aims to clarify the skills and knowledge that need to be developed in IS manager.

Strategic Planning

According to Goodstein, Nolan and Preiffer (n.d) Strategic Planning is define as “the process by which the guiding members of an organisation envision its future and develop the necessary procedures and operations to achieve that future”. In other word, strategy planning is process of visualize the future state or future objectives of organisation and make a feasible plans to achieve those objectives by utilizing all the available resources and capabilities (Reynolds, 2010). In addition, Bryson (2009) describe strategy planning in his own word, it is a disciplined effort and action to produce important decisions and to gives the shape and guide for organisation. Strategic planning is both leadership tool and management tool. Leadership tools help to encourage the organisation to review the question “Are we doing the right thing?” whereas management tools focuses on whether organisation doing right thing(Allison & Kaye, 2005)

According to the Bryson (2009) there are numbers of benefits for organisation by implementing strategic planning. Firstly, strategic planning help organisation to manage and organize any change processes by which organisation will be able to figure out what to change plus how to keeps the best with change. Secondly, strategy planning will help for organisation to improved their decision making process. As a result of those two benefits, enhancement of organisational effectiveness will be emerging as a third benefit of strategic planning which will help organisation to be well managed. And finally, strategic planning can also directly benefit the people involved to improving their teamwork and expertise. Thus the key benefit of strategy planning is it is highly cost effect tool to make practical decision and to guide an organisation to make a feasible plan to achieve their reasonable goal.

Bryson(2009) also added that although, the strategic planning can provide benefits for organisation, there is no guarantee that the any organisation can reap those benefits because actually, strategic planning is simple one set of concepts, procedures and tools which will give the result according to the way that user use it. Thus, the managers, leaders, and planner need to involve in strategic planning very carefully and success also depend upon the way they tailor the process to their situation. So, it is very important for manager to have knowledge about strategic planning in any organisation.

Project Management

Another important methodology for an organisation is project management. Kloppenborg(2010) define the term project as “it is temporary endeavour which is undertaken to create a unique product, service, or result in organisation”. Similarly, he defines project management as “project management is the application of knowledge, tool, technique and skill for project activities to meet project requirements”. According to Kloppenborg, project management have nine knowledge areas which need to be reviewed and document properly to make the project successful. Those nine knowledge areas are scope management, quality management, cost management, human resources management, procurement management, schedule management, communication management, risk management and integration management. Problem occur in any of those area can be the consequences of project failure.

Research revealed that, before two years the success rate of IT project was only 19% but according to Reynolds (2010) the success rate of IT project is 34% which is improving but need to improve more. So, I believe that the project management has become very important for IT industries. Apart from important of project management, skills of project manager plays vital role in success of project. Although, success of project depends upon other factor as well, it is true that bad leadership will definitely end up with unsuccessful. And project manager is solely person who should coordinate and lead other team member to go through all those knowledge area to make the project successful. According to Elearn(2006), project manager roles involve motivates the team, produce detail plan of action, maintain communication between stakeholders and monitor the progress of project. So, it is clear that project manager should have those skills like communication skill, management skill, business skills and technical skill plus project manage should have knowledge of those nine knowledge area of project management.

Outsourcing

Chittenden (2010) define outsourcing as outsource as one long-term, results-oriented business relationship with a specialized service provider. According to Reynolds (2010) outsourcing takes place in organisation for three main reasons which are to cut or stabilize cost, to improve focus on core part of business and to upgrade capabilities and service. And Reynolds said that outsourcing can be defined by word offshore outsourcing when company located in one country is working for company located into another country.

Chittenden(2010) has quoted number of benefit for organisation from outsourcing. Firstly, outsourcing reduces the operational cost of organisation. Secondly, outsourcing allow organisation to focus only on core parts of operations which improve the organisation ability to leverage its most valuable capabilities. Thirdly, it helps to achieve a more variable cost structure. So, any required changes can be done with less cost in future. As a forth benefit, outsourcing allow access to skills that is not available to the organization internally so even the size of organisation is very small they would be able to provide get quality service for their customer by getting help from specialized outsourcing company. Additionally, outsourcing help organisation to create a higher potential for greater productivity in the process. And as a final benefit it help organisation to eliminate need for capital and other investments to provide extra service for their customer.

Reynolds (2010) has cited that benefits of outsourcing will come with future danger of an organisation. Outsourcing can bring problems like quality problems, legal issues, and negative impact on customer relationships and satisfaction. And he has added that the only 50% of outsourcing efforts are successful where other half has changed into disaster. Additionally, he has mentioned that the company who has done careful plan and executed their outsourcing by following the multistep process only got the success in outsourcing efforts. So, it is very important for any company to have skilful managers who can decide effectively and who also can develop effective plan and outsourcing strategy to get desirable outcomes for organisation from outsourcing.

Case study

Commonwealth bank

Commonwealth bank was upgrading their information system like upgrading old cumbersome mainframe computer with UNIX system and integration of their personal loan system with home loan system with the help of their technical partner HP Enterprise Service as outsourcing efforts of commonwealth bank. (HP case study)

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According to Williamson (as cited kloppenborg, 2010), in previous years this company has identified and started many projects but most of them ended with resource conflicts, and many projects didn’t complete or were projects are completed late. Due to which Williamson set up a system to do efficient strategic planning to select and prioritize projects, As a result, fewer project start at one time and much higher percentage of projects are completed on time. So, strategic planning and effective project management are key factor of project success.

Conclusion and recommendation

This report conclude that the adopting the methodologies like strategic planning, outsourcing and project management can helps for organisation to solve different problems in this competitive world. Strategic can help organisation in many areas like making important and feasible decision and to give clear vision of current situation of organisation which give a chance for organisation to improve their any weakness. Similarly, Project management plays critical role in organisation to achieve unique goals. While, outsourcing can give lots of benefits organisation to maximizing the service of organisation for their customer with minimum cost and capabilities. The report also concludes there is no guarantee about the success of those methodologies failure in implementation can bring the disaster in organisation. So, it is very important for organisation to do clear and effective planning before implementation. Additionally, report also concludes that manager is a key person who coordinates those methodologies in organisation so success of implementation will also depend upon ability of manager. Manager should have a skill to deal with all the circumstances that can occur in the organisation. Failure to have good and skilful manager means failure to bring improves in organisation.