33 Impact of GIS on a Global Bank Finally the scale and scope of the system

33 impact of gis on a global bank finally the scale

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Impact of GIS on a Global Bank Finally, the scale and scope of the system provide substantial barriers to entry, potentially allowing HSBC to earn exceptional returns. When we looked at HSBC’s firm level performance, in terms of measures related to HSBC’s apparent performance impacts, we found that it is consistent with these conclusions. The results suggest that HSBC’s worldwide corporate assets, including its staff, its offices, and its domestic IT infrastructure, are complementary to Hexagon and create together more value for customers than would be created by each separately. Hexagon's extensive portfolio of services, together with HSBC’s worldwide operations, creates value that is not available to customers of other banks. At the same time Hexagon creates strong incentives for corporate customers to become customers of other HSBC banks in order to take full advantage of Hexagon’s international features. Limitations None of the analysis that we have presented, qualitative and quantitative, nor all of it together, proves that Hexagon positively affected HSBC’s performance. Firm level performance is affected by many factors, while our analysis focused on one broad product line, albeit the centerpiece of HSBC’s global IT strategy. Quantitative firm level performance data that more precisely measures the performance impacts of Hexagon’s features was not available to us. Consequently, the connection between the qualitative functional impacts on within-firm performance, observed by HSBC managers, and firm level effects is not directly observable in terms of precisely targeted measures. Nonetheless, since the results of analyses that we are able to present are very strong, we believe that they are quite persuasive. In any case, our intent here is to understand how one firm used an innovative global IS, along with its business and IT strategies and a global network of business assets, to achieve its business strategy and obtain superior performance, rather than to provide empirical proof that the impacts were actually realized. We think that the analysis contributes much to our understanding of Hexagon’s impacts, as well as providing us with insights about the use of global IS to create value for the firm and its customers. Implications for Managers For firms in the global financial services industry, this is further evidence of the extreme importance of IT infrastructure to their business. Customers will continue to demand faster transaction speeds, more transparent interfaces, lower transaction costs, and geographic scope. Only highly integrated global systems, which are, themselves, well integrated with back office processes, can hope to compete on this level. There are thousands of financial services firms in the world, but not many firms can compete in this manner. Of course, not every customer needs global systems. Contrast Hexagon’s complex infrastructure with that of another bank that operates from a single location in Hong Kong and focuses on financing bilateral trade with other provinces in China. Its services are delivered entirely at one physical location and without substantial IT support. Its
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