Accounting Competitive strategy

Case Study: Does IT Payoff? Strategies of Two Banking Giants (Ali Farhoomand Minyi Huang)

Topic(s): Accounting Competitive strategy General managers IT management Information systems International business; Industry: Banking IT The IT productivity paradox debate has been going on for more than two decades but the controversy has been exacerbated by a 2003 Harvard Business Review article by Nicolas Carr who argues that IT doesnt matter. This case sheds light on the major drivers of IT investment: those investments targeted at improving operational efficiencies and those focused on entrenching a firms strategic position. It does this by looking at the IT investment strategies of two of the worlds largest financial institutions HSBC and Citigroup. Of particular interest are how HSBC and Citigroup spend on IT projects what drives their investments and the viability of measuring the efficacy of their investments in terms of improving operational efficiency or strategic position. By comparing the IT investment strategies of both banks students will learn about the IT valuation process the role of IT as a strategic necessity and ITs potential role in sustaining a firms competitive advantage. Suggested case study questions (from within the case): ï‚· Some have argued that companies should spend less on IT and wait longer to invest in more matured technologies because IT is a commodity and brings little competitive advantage. If this is the case how could these two banks justify their multi-billion-dollar annual investment in IT? ï‚· How would you assess IT investment strategies at HSBC and Citigroup? Do they invest in IT primarily as a way of cutting costs and improving their operational efficiencies or do they invest strategically with a view to entrenching their competitive positions? ï‚· In general how should companies go about assessing the value of their IT investments? In your assessment which of the two banks is cleverer in its IT investments? – An independent cover page contains the topic – Answering all the case questions including main and minor points in a sufficient clear and organized manner. – Providing the right answers and information. – The capability of analyzing interpreting demonstrating and supporting the answers and opinions with logical reasoning. – Coherence of writing with smooth logical and well-organized points ideas explanation and clarification. – Illustrating the answers with tables and charts if necessary. – Excellent writing language with no grammar mistakes or typing errors. – Layout & Design:

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