GlobalIS.doc - Impact of GIS on a Global Bank Expectations and Impacts of a Global Information System The Case of a Global Bank from Hong Kong

GlobalIS.doc - Impact of GIS on a Global Bank Expectations...

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Impact of GIS on a Global Bank Expectations and Impacts of a Global Information System: The Case of a Global Bank from Hong Kong Authors : Ken Peffers Rutgers University, New Jersey Virpi Kristiina Tuunainen Helsinki School of Economics, Finland ABSTRACT Information system (IS) research suggests that the use of innovative information technology (IT), deployed globally with the right mix of organizational assets, may help firm performance by increasing scale and scope economies, customer value, operational efficiency and organizational effectiveness, and by providing opportunities for competitive advantage. This interpretive case study investigates the business value created by a combination of firm and IT strategy, global assets, and the use of an innovative IS to deliver products in the international trade finance and cash management business. Hexagon, a proprietary on-line banking application that supports the international management of financial assets, was developed by HSBC Holdings, plc. HSBC has used Hexagon to leverage a presence in 79 countries to create value for the customers and marketing advantage for itself. Quantitative and qualitative analysis reveal Hexagon's impacts on HSBC in terms of performance impacts anticipated in the IS literature and in terms of firm level business objectives. INTRODUCTION Firms have been forced in the 1990s, as never before, to view markets and competition globally. The rapid expansion of international trade, reduced trade barriers, and political developments in Eastern Europe and China have resulted in strategic opportunities and threats for many firms. In industry after industry, multinational firms are under pressure to seek global economies of scale, to build world products, and to tailor products to customers in diverse markets (Ives & Jarvenpaa, 1992). The banking industry plays a major role in supporting increased global trade and investment activity (Holland, Lockett, Richard & Blackman, 1994). Globally distributed manufacturing and marketing requires that firms finance these activities across national boundaries. In addition, they must manage the flow of cash among operating units in different continents with different currencies. Consequently, firms in the banking industry might be able to reap benefits from business globalization. Indeed, the globalization of competition together with deregulation of financial markets, the availability of relatively cheap IT, and the shift towards a global outlook by large industrial organizations have led to dramatic changes in the strategy and structure of the banking industry (Holland & Lockett, 1995). To take advantage of the new scale and scope of international trade finance and international banking may require firms to build extensive networks of assets and alliances (Engardio, 1993), as well as well- designed global IT infrastructures (Cusack, 1990). This combination of assets may be impossible for all but a handful of the industry’s members to assemble. Here we investigate the use of a global IS to produce
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