INFORMATION TECHNOLOGY MANAGEMENT

CASE STUDY

Case study: Plutus

Christian is the IT manager of Plutus, a fairly new bank with a business model based on the customer and the customers' experience of the bank branch. The bank's business strategy, therefore, prioritises face-to-face, branch-based dealings, customer convenience, and transparency to create value.

Christian has been the bank's IT manager for the past three years. The IT department has played a significant role in implementing and maintaining the IT infrastructure and software required for effective banking operations. In the bank's first year, the IT department succeeded in developing a secure and accessible online banking system, allowing customers tomonitor theiraccounts,perform transactions,andinteract withthebanking stafftoaskfor technicalorfinancial advice.Thiswassuccessfulandalignedclosely withthebusiness strategy of ensuring convenience and transparency.

However,thegrowth ofthecompanyhasresulted inlesstimeforwell-thought-outinnovation andcarefulimplementationoftechnologythatwillenhance customervalueandoptimisethe cost of operations. Christian recently read about the benefits of contactless debit and credit cards,andwantedtorolloutthisinitiativeatPlutus.Hefailedtoevaluatethedemandforthis product and did not run any trials for the initiative or collect any evidence to inform this decision.Subsequently,therewaslimited demandforthenewbankcards,ascustomerswere happy with their existing cards, only swapping over when cards expired or were misplaced. This resulted in unnecessary printing - and now storing - of contactless cards.

Another initiative that was not well researched was the request of the executive committee (ExCo), namelythatChristian buy andoverseetheimplementationof abiometrics system,in ordertoimprovetheprocessofregisteringandsecuringtheinformationofPlutus'customers. Unfortunately,thissystemhasbeendelayed, anditslengthyimplementationhasbeencostly. Additionally, misalignment between the bank's other departments and the marketing team meansthatcustomerswereassuredthatPlutushadthetechnologytoverifytheir identifyand eliminate fraud prior to the integration of the biometrics system with the bank's software. This has resulted in banking delays and customer frustration.

This is particularly ironic as the biometrics system was implemented, partially, in an attempt to expediate the current time-consuming process of opening an account with Plutus. Customers joining the bank are required to complete a written form containing all of their personal information, and this information is then confirmed and entered into the internal bankingdatabasebythebankteller.Thisprocessisnecessary,asitallowsthebanktoensure that all the information, provided by identification documentation, is correct. It also allows the bank to focus on its business strategy, prioritising the branch experience over online forms.

Not only is the process time-consuming, the current organisational process requires that, following each registration, the IT technicians log every customer's details in an additional database. Plutus uses software that is connected to an internal database to record and store thepersonal detailsofallcustomers.Additionally,corebankingsoftware isusedtodocument and manage all transactions made by the customers, but this software is managed by the IT department. Both banking software systems are costly, and maintaining and managing both systems requires a large percentage of the bank's operational budget.

The two processes have traditionally been kept separate due to the limited communication channels within the organisation and have been insourced because the ExCo are concerned outsourcing may impact the bank's compliance and privacy policies. The duplication of this process is time-consuming, especially for the IT department, meaning that staff members have to focus on processing data rather than core business tasks.

IntheITdepartment,ifthestaff donotcompletethesenon-essentialbusinesstasksalongside successfully maintaining the IT infrastructure and providing technical support, they are expectedtoworkovertime. Christianisconcerned,asthishascreateddissatisfactionandlow morale.Thisnegativeculture isfurtherexacerbatedbythefailure torecogniseandutilisethe expertise of the IT team.

When creating the IT budget for the year, Christian used the baseline budgeting method, focusing on investing in the same resources that the IT department had always prioritised, because this approach had previously worked. He had failed to take into account that the IT team had grown from just himself and one other staff member to a team of 20, and he had notfully accountedforthisgrowthinthebudget. Therefore,trainingandmentoringsessions werenotincludedinthebudget, andnoplatformshavebeenprovidedwheretheITteamcan develop their skills and suggest or pilot initiatives that can improve operational efficiency.

WithintheITdepartment,there hasbeenalackofconsensusaround thebudgetaryapproach that should be taken to optimise costs and banking services. Many team members have suggested that the budgetary process is outdated and no longer caters to the operational needs of the bank. In drawing up the IT budget, Christian failed to look at the value stream andconsider howITresourcescanbeutilisedandstreamlinedtoaddvalue tothelifecycleof the banking services Plutus is providing.

Mismanaged and misaligned budgetary decisions and time-intensive, non-essential organisationaloperationshaveresultedinthefailure oftheITdepartmenttodeliverthevalue expectedbytheExCo.Similarly,customerexpectationsarenotbeingmet,andthesesetbacks have resulted in low morale in the IT department.

Duringameeting withPlutusExecoandtheheadsofdepartments,different sourcingoptions arediscussed todevelopanefficientdatabase tocaptureandmanagecustomer information. TheCEOhasexploredtheFORTframework andsuggestsusing thismethodtoassesswhichof the sourcing options would best fit the bank's budgeting and operational needs. While no sourcing decision was made in this meeting, the necessary requirements of an external sourcing model were collated. The sourcing model would need to reduce organisational expenditure, manage specific, time-consuming, and cost-heavy operations, and provide Plutus with access to current technology and technical services.

Questions

Question 1

What are the five main sources of waste in Plutus bank?

(Max. 200 words)

Question 2

Describe how a Lean approach could assist Plutus with cost optimisation and mention the five Lean principles they would need to follow.

(Max. 200 words)

Question 3

Imagine you are the IT manager for Plutus, and the CEO has asked you to determine which sourcing approach should be used by following the FORT framework. Examine each FORT framework relationship category to determine the sourcing strategy Plutus should implement. Consider the relationship between Plutus and its providers, and the type of sourcing approach that could manage the requirements of the Plutus customer data base. Ensure that you explain the reasoning behind your response.

(Max. 400 words)

PLEASE RESEARCH AND ANSWER CORRECTLY.