Management Information Systems in Banking Hubert Van de Vyver Kiev, 1-2 June 2006 This project is funded by the European Union and implemented by ING Institutional & Government Advisory Copyright © 2005 by ING Institutional & Government Advisory Services B. V. Introduction • Use and manage information systems to revitalize business process • Improve business decision making with information technologies • Gain competitive advantage on the market Management Information Systems in Banking – 1 Introduction
Key elements: • Internet technologies as platform for business and commerce • Collaboration processes among all business stakeholders in networked enterprises • Global markets and the international dimension Management Information Systems in Banking – 2 Subjects • Foundation Concepts • Decision support in Business and Banking • Information technologies and Banking applications • An approach to computing, systems and information channels • Developing business / IT solutions • The process of implementation of an MIS and the implementation challenges Management Information Systems in Banking – 3
Foundation Concepts Foundation of Information Systems in business • Conceptual systems components • Major types of Information Systems Competing with Information Technology • Competitive advantages • Major strategic applications Management Information Systems in Banking – 4 Foundation Concepts Foundation of Information Systems in business o Why Information Systems are important o Important business area o Key element in functioning of a bank o Important for managers o More than technology Management Information Systems in Banking – 5 Foundation Concepts
Foundation of Information Systems in business o The Real World of Information Systems o Finance/budget & cost/ROI o Update systems to Internet o Improve end users involvement o Higher management participation o Technology road map Management Information Systems in Banking – 6 Foundation Concepts Foundation of Information Systems in business • What you need to know o an IS framework for business professionals o an Information System o Information technologies o System concepts: a foundation o What is a system o Feed back and control o Other system caracteristics Management Information Systems in Banking – 7
Foundation Concepts Foundation of Information Systems in business o Information System activities o Input of data resources o Processing of data into information o Output of information products o Storage of data resources o Control of system performance Management Information Systems in Banking – 8 Foundation Concepts Foundation of Information Systems in business o Recognizing Information Systems o Identify : – Resources – Information products – System activities Management Information Systems in Banking – 9 Foundation Concepts
Competing with Information Technology Learning objectives Basic competitive strategies and use of information technology towards competitors Strategic uses of Information Technology and competitive advantages Business process reengineering and strategic use of Internet Technology Management Information Systems in Banking – 10 Foundation Concepts Competing with Information Technology Learning objectives Business value of Internet Technologies, total quality management, becoming an agile competitor or forming a virtual company Knowledge management systems to gain strategic advantages
Management Information Systems in Banking – 11 Foundation Concepts Competing with Information Technology o Strategic IT o IT not only support, also start strategy o e. g. STP in online banking Management Information Systems in Banking – 12 Foundation Concepts Competing with Information Technology o Competitive strategic concepts o Competitive forces o Competitive strategies o Strategic use of Information Technology o Examples of companies o Other competitive strategies Management Information Systems in Banking – 13 Foundation Concepts Competing with Information Technology o Strategic uses of IT o e. . link e- procurement system to suppliers o e. g. open access to e-store by clients (kiosks, website) Management Information Systems in Banking – 14 Foundation Concepts Competing with Information Technology o Building a Customer Focused Business o Customers’ loyalty >> processing and manufacturing o Quality, innovative products o Community with the bank o Online feed-back and follow up o CRM -> follow up of the clients o Integrate employees o Segmentation of clients o Contact center/ call center Management Information Systems in Banking – 15 Foundation Concepts
Competing with Information Technology o Reengineering Business Processes o Radical rethinking and redesigning o Risks and potentialities (e. g. ERP) o The role of Information Technology o Computerizing – webenabeling o Power of computer systems and communication networks Management Information Systems in Banking – 16 Foundation Concepts Competing with Information Technology o Improving Business Quality o Total quality management o Customer based o Becoming an Agile Company o Niche markets – individual services o Short lived – information rich o Ongoing exchange with customers
Management Information Systems in Banking – 17 Foundation Concepts Competing with Information Technology o Creating a virtual company o Organisation uses IT to link people, assets and ideas o Use know how and collaboration o Building a knowledge-creating company o Share knowledge and information o Organizational learning o Knowledge creation Management Information Systems in Banking – 18 Foundation Concepts Case study 1: Royal Caribbean International: – Why did the IT group at Royal Carribean have such poor performance and business status in the company ? What are the top three factors in Tom Murphy’s turnaround of the IT function at Royal Carribean ? Management Information Systems in Banking – 19 Foundation Concepts • Case study 2: Enron Corp. and Others: Lessons in the Strategic Business Use of IT › 1. Did mistakes in the use or management of IT play a part in the failure of Enron? Why or why not? › 2. What are several major lessons for the future use of Information Technology in business that you gained from this case? › 3.
How would you apply one of these lessons in your present job situation or future business career? Give a specific example to illustrate your proposal. Management Information Systems in Banking – 20 Decision support in Business and Banking Learning objectives: o Changes in form and use of Business Decisions Systems o Role and reporting alternatives of MIS o Key information needs for managers from analytical processing o Difference between Decision Support Systems and traditional Management Information Systems Management Information Systems in Banking – 21
Decision support in Business and Banking Learning objectives: – Support of information needs of executives and managers with : o Executive Information Systems o Enterprise Information Portals o Knowledge Management Systems Management Information Systems in Banking – 22 Decision support in Business and Banking Business and Decision Support Information, decisions and management Information quality Decision structure Decision support trends Management Information Systems in Banking – 23 Decision support in Business and Banking
Management Information Systems Support to management decision making Management reporting activities Online analytical processing (OLAP) Much more detailed information Interactive analysis of lots of data Management Information Systems in Banking – 24 Decision support in Business and Banking Decision Support Systems Computer based information system Support managers for decision making Models (relations) and modelling makes the difference e. g. Risk advisor (software) for Insurance Management Information Systems in Banking – 25
Decision support in Business and Banking Using Decision Support Systems What-if analysis Sensitivity analysis Goal seeking analysis Optimization analysis Data-mining for decision support Management Information Systems in Banking – 26 Decision support in Business and Banking Executive Information systems Sum of MI systems, DS Systems, electronic mail, groupware and expert system Allow highly summarized information, but also drill down and graphical presentations Management Information Systems in Banking – 27 Decision support in Business and Banking
Enterprise portal and decision support For everyone Difference with Intranet Knowledge management systems Gather —Organize -business knowledge Share —Use in call center Management Information Systems in Banking – 28 Decision support in Business and Banking • Knowledge Management: Improving Competitive Advantage Management Information Systems in Banking – 29 Information techologies and Banking applications Learning objectives: Major developments and trends of telecommunications and Internet technologies Business value of Internet, Intranet and Extranet applications
Management Information Systems in Banking – 30 Information techologies and Banking applications Networking the Entreprise Sum of computing and communications leads to network Trends in telecommunication Industry trends Technology trends Business trends Management Information Systems in Banking – 31 Information techologies and Banking applications The business value of telecommunication networks Overcome barriers to business success The Internet revolution Information superhighway Internet applications Management Information Systems in Banking – 32 Information techologies and Banking applications
Business use of the Internet Collaboration Marketing, sales, CRM Engineering, manufacturing Human ressources , accounting Business use of the Internet e. g. customers’ cost using internet banking vs. customers banking by phone Management Information Systems in Banking – 33 Information techologies and Banking applications The role of the Intranets Communication and collaboration Web publishing Business operations and management Intranet portal management The role of the Extranets Internet technology Link Intranets Business value of Intranets Strategic relationships Management Information Systems in Banking – 34
Information techologies and Banking applications THE INTERNET AND THE NEW INFORMATION TECHNOLOGY INFRASTRUCTURE Management Information Systems in Banking – 35 Information techologies and Banking applications Case study : FedEx versus UPS: playing catch-up in Telecommunications Innovation Why does telecommunications play such a key role in the competition between Fed Ex and UPS ? Why does « information about the package » have such a strategic business value in the express delivery business ? Management Information Systems in Banking – 36
An approach to computing, systems and information channels Electronic commerce systems o Essential e-commerce processes o Access control and security o Profiling and personalizing o Search management o Content management o Workflow management o Event notification o Collaboration and trading Management Information Systems in Banking – 37 An approach to computing, systems and information channels Electronic commerce systems o Electronic payment systems o Web payment process o Electronic funds transfers o Secure electronic payments
Management Information Systems in Banking – 38 An approach to computing, systems and information channels E-commerce Applications and Issues E-commerce application trends E-commerce trends E-commerce sectors Business to consumer e-commerce E-commerce success factors Web store requirements Developing a webstore Serving your customers Managing a web store Management Information Systems in Banking – 39 An approach to computing, systems and information channels
E-commerce Applications and Issues Business to business e-commerce Catalog systems – electronic transactions Auctions – supply chain management Customers relationship management (CRM) – Intranet/Extranet Management Information Systems in Banking – 40 An approach to computing, systems and information channels E-commerce Applications and Issues E-commerce marketplace B2B web portal Content management server Market generator server Post trade market history server Clicks & Bricks in e-commerce E-commerce integration Other clicks and bricks strategies E-commerce channel choices Management Information Systems in Banking – 41
An approach to computing, systems and information channels E-commerce , by the E-commerce Institute Management Information Systems in Banking – 42 An approach to computing, systems and information channels Case study: Yahoo! Inc striving for success in ecommerce Is Yahoo making the right moves toward continuing ecommerce profitability? Why or why not ? What could make Yahoo more successful? Explain the business value of your proposals. Management Information Systems in Banking – 43 Developing business / IT solutions
Learning objectives: Steps of the Information Systems development cycle to develop and implement a business information system Prototyping as improvement of systems development for end users and IS specialists Management Information Systems in Banking – 44 Developing business / IT solutions Learning objectives: Steps of the Information Systems development cycle to develop and implement a business information system Prototyping as improvement of systems development for end users and IS specialists Management Information Systems in Banking – 45
Developing business / IT solutions Developing business systems The systems approach Recognize and define problems Develop and evaluate solutions Select best system solution Design system solution Implement and evaluate Management Information Systems in Banking – 46 Developing business / IT solutions Developing business systems Systems information development cycle Investigation Analysis Design Implementation Maintenance Management Information Systems in Banking – 47 Developing business / IT solutions
Developing business systems Prototyping Fast and short development Simplifies the design Prototyping process Starting the systems development process Feasability study Cost/benefit analysis (tangible/intangible) Management Information Systems in Banking – 48 The process of implementation of an MIS and the implementation challenges Learning objectives: • Step by step process for developing and implementing a new MIS • Four phases: conceptualisation, assesment and design, development and implementation, maintenance
Management Information Systems in Banking – 49 The process of implementation of an MIS and the implementation challenges Phase 1: Conceptualisation – Forming the task force – Defining needs – Defining what is feasible – Assessing the alternatives – Preparing the MIS needs assesment report Phase 2: Detailed assessment and design – Performing a detailed assessment of software – Completing the design – Finalising the MIS plan Management Information Systems in Banking – 50
The process of implementation of an MIS and the implementation challenges Phase 3: System development and implementation – Developing the software – Setting up the hardware – Preparing and revising documentation – Configuring the system – Testing – Transfering the data – Training – Running parallel operations Management Information Systems in Banking – 51 The process of implementation of an MIS and the implementation challenges Phase 4: System maintenance and MIS audits – System’s stability and reliability – Systems functioning continuity Management Information Systems in Banking – 52
The process of implementation of an MIS and the implementation challenges Case study: Developing and implementing a Management Information System – Read through and comment the following boxes: 5. 2 Ademi 5. 3 Prodem – 5. 4 Compartamos – What are the main realisations of each company and what problems do they still have ? Management Information Systems in Banking – 53 The process of implementation of an MIS and the implementation challenges Case study: Fidelity Investments and Others, evaluating usability in Website design Is a usability lab like Fidelity’s necessary or are there other alternatives for testing usability in website design ?
Which is the better approach? Why ? Evaluate the suggestions for good website design shared by the companies in this case. Which are the most important for you ? Explain your choices. Management Information Systems in Banking – 54 Additional documents and interesting sources to conclude • Executive information management at the state bank http://www. audit. sa. gov. au/sbsa93/chapter22. html • Website for more information about MIS in banking • Contact through e-mail for additional questions Thank you for your attention Management Information Systems in Banking – 55
