Strategic Investment Prioritisation in Investment Banking IT division.

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Strategic Investment Prioritisation in Investment Banking IT division.

  1. 1. Post Graduate Diploma in Organizational Leadership Title of the project: Investment Strategy of Investment Banking Trading Information Technology Department Submission date: 24-Nov-2009 Word total: 9500 Examination candidate number: DOL0918 Investment Strategy of Investment Banking Trading Information Technology Department. Page 1 of 62
  2. 2. Diploma in Organizational Leadership: Own work Declaration Candidate Number: DOL0918 Title of Course: Post Graduate Diploma in Organizational Leadership Submission Date: 24-Nov-2009 Title of Work: Investment Strategy of Investment Banking Trading Information Technology Department. I confirm that all this work is my own except where indicated, and that I have: • Clearly referenced/listed all sources as appropriate • Referenced and put in inverted commas all quoted text (from books, web, etc) • Given the sources of all pictures, data etc that are not my own • Not made any use of the essay(s) of any other student(s) either past or present • Not sought or used the help of any external professional agencies for the work • Acknowledged in appropriate places any help that I have received from others (e.g. fellow students, statisticians, external sources) • Complied with any other plagiarism criteria specified in the course handbook I understand that any false claim for this work will be reported to the Proctors and will be penalized in accordance with the University regulations. SIGNED (insert candidate number) ______________________________________     Do not sign your name  Investment Strategy of Investment Banking Trading Information Technology Department. Page 2 of 62
  3. 3. ACKNOWLEDGEMENTS Bestowing adequate recognition to all those, who contributed to give shape to this dissertation is a tough task. At the risk of inadvertently omitting some, I wish to single out of few who have been directly associated with this work. I record my deep gratitude to my guides Prof. Chris Sauer of Said Business School, University of Oxford and the director of the investment bank for their valuable, relentless guidance and candid suggestions at every stage of this project. Last, but not the least, I am grateful to the other colleagues of the investment bank and Said Business School, University of Oxford for their necessary support. Investment Strategy of Investment Banking Trading Information Technology Department. Page 3 of 62
  4. 4. ABSTRACT This present work is based on critical strategic analysis of investment strategy of Investment Banking (IB) Trading (trading of various financial instruments) Information Technology (IT) department. The work has been carried-out at the premises of “Trading IT” department of an investment bank. IT management of the bank wishes to know the strategic options and direction available to achieve effective alignment between IT and business organization, better harmonization of similar functional systems across various business units regionally and globally, improve the awareness of common strategic goals and objectives across the overall organization so that, IT department can work with business about the future investment strategies fulfilling the overall strategic goal of the business and technology regionally and globally. To achieve these objectives more emphasis is required on IT investment prioritisation. A critical strategic analysis view has been taken by the author to analyse the current situation. Current issues, over-all system dynamics, and current approach have been considered along with various strategic models to identify the number of strategic gaps and challenges faced by the "Trading IT" department of an investment bank (IB). The project work has achieved to provide strategic solutions to mitigate those challenges and explained the investment requirement to act on it. Finally benefit analysis on proposed strategic IT investment direction has been carried-out over existing operational IT investment strategy and rational conclusion has been made. Investment Strategy of Investment Banking Trading Information Technology Department. Page 4 of 62
  5. 5. TABLE OF CONTENT 1.INTRODUCTION:.............................................................................................................................6 1.1OUTLINE OF THE PROJECT THESIS:............................................................................................................8 1.2OVERVIEW OF AN INVESTMENT BANK:.....................................................................................................8 1.3OVERVIEW OF TRADING DEPARTMENT:..................................................................................................10 1.4PROBLEM DEFINITION:........................................................................................................................11 1.5OBJECTIVES:......................................................................................................................................12 1.6SCOPE:.............................................................................................................................................12 2.LITERATURE REVIEW & IT STRATEGY:............................................................................................12 2.1WHAT IS STRATEGY? :.........................................................................................................................12 2.2CHARACTERISTICS OF STRATEGY:...........................................................................................................13 2.3STRATEGY & COMPETITIVE ADVANTAGE:................................................................................................17 2.4SUSTAINING COMPETITIVE ADVANTAGE:.................................................................................................22 2.5CORE COMPETENCIES ANALYSIS:...........................................................................................................24 2.6CREATING VALUE TO CUSTOMER:..........................................................................................................27 2.7IT GOVERNANCE:...............................................................................................................................28 2.8IT INNOVATION :...............................................................................................................................31 2.9IT SAVVY:.........................................................................................................................................33 2.10IT GROWTH PYRAMID:......................................................................................................................34 2.11EMERGING VIEW OF IT MANAGEMENT :...............................................................................................35 ..........................................................................................................................................................37 2.12SWOT ANALYSIS:............................................................................................................................37 2.13SCENARIO PLANNING:.......................................................................................................................38 3.CURRENT STRATEGIC METHODOLOGY & APPROACH:....................................................................39 3.1CURRENT METHODOLOGY & APPROACH:................................................................................................40 3.2CURRENT STRATEGIC CHALLENGES:........................................................................................................42 4.PROPOSED STRATEGIC DIRECTION:...............................................................................................45 4.1PROPOSED STRATEGY:.........................................................................................................................45 4.2BENEFITS OF THE PROPOSED STRATEGY:..................................................................................................51 4.3CONCLUSION: ...................................................................................................................................52 APPENDIX A:...................................................................................................................................54 APPENDIX B:...................................................................................................................................55 APPENDIX C:....................................................................................................................................56 APPENDIX D:...................................................................................................................................57 APPENDIX E:....................................................................................................................................58 APPENDIX F:....................................................................................................................................59 APPENDIX G:...................................................................................................................................60 APPENDIX H:...................................................................................................................................61 REFERENCES:...................................................................................................................................62 Investment Strategy of Investment Banking Trading Information Technology Department. 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  6. 6. LIST OF FIGURES FIGURE PAGE NUMBER 1.0 10 1.1 14 1.2 19 1.3 23 1.4 25 1.5 27 1.6 29 1.7 32 1.8 35 1.9 39 2.0 42 2.1 47 2.2 48 2.3 50 LIST OF ABBREVIATIONS SHORT NAME FULL NAME IT Information Technology IB Investment Banking PB Private Banking REPO Repurchase Order OTC Over The Counter VAR Value At Risk P & L Profit and Loss STP Straight Through Processing FX Foreign Exchange PV Present Value R & D Research and Development EMEA Europe Middle East Africa APAC Asia Pacific Economic Cooperation NA North America 1. Introduction: Investment Strategy of Investment Banking Trading Information Technology Department. Page 6 of 62
  7. 7. This project has been carried-out on the subject of “Investment Strategy of Investment Banking IT Trading Department”. Detailed analysis has been carried out in business as well as IT arena of the trading department of an investment bank. Over the last two decades investment banking business has grown significantly all over the world. The business has crossed the boundary of the national geographic region and reached landscape of the international arena. From the end of 20th century the exceptional growing trend of business has been noticed in international trade & investment, international merger & acquisition, exploitation of the arbitrage conditions of different international market, the emergence of various complex investment instruments of investment. However, over last two years (2007 & 2008) all major investment banks have faced a huge decline in revenue because of credit crunch, triggered by sub-prime mortgage in America. It has eventually reduced the overall growth rate of the industry. Rapid development & innovation of Information Technology and strong emphasis of a medium to large-scale organizations on investment in Information Technology infra- structure from last two decades helped an organization to grow significantly beyond the national boundaries. Without the presence of Information Technology, it could have been the practically impossible task for an organization to reach the current level of growth and business innovation. Today we have noticed that Information Technology is a key factor for an organization’s growth and sustainability. Strategic investment in IT can put an organization on the edge of competitive advantage and can help an organization to Investment Strategy of Investment Banking Trading Information Technology Department. Page 7 of 62
  8. 8. evaluate more innovative ideas of business nationally and internationally. Today and coming future IT can and must play an important role in the organization’s business strategy. 1.1 Outline of the project thesis: The present thesis work highlights suitability of the aspects of strategic analysis, planning, modelling of strategic management. The first chapter of this thesis covers the brief overview, problem definition, objectives, scope etc. The second chapter deals with the literature survey on various strategic management aspects including analysis & planning, modelling, and strategic leadership, which are relevant to the IB IT trading department. The third chapter will provide detailed strategic analysis of the IB IT trading department using strategic models and identify current strategic challenges of the existing system. In the fourth and final chapter proposed strategic direction, benefit analysis and conclusion have been made. 1.2 Overview of an Investment Bank: An investment bank is a financial institution that raises capital from the market, trades in securities (equities, bond, repo, fixed income instruments, commodity, foreign exchange, money market instruments and many more), manages corporate mergers and Investment Strategy of Investment Banking Trading Information Technology Department. Page 8 of 62
  9. 9. acquisitions. Investment banks mainly transact with institutional clients, corporate clients and government sectors. An investment bank traditionally divided into three parts front, middle and back office. Large full-service investment banks offer all the lines of businesses, both sell side and buy side including sales, trading, market research, investment management etc. Front office of an investment bank directly involves with trading with another financial institutions, corporate clients, sales activities, market research, custody, private equity and merger & acquisition activities. Middle office is responsible for proper trade execution, financial control, reconciliation, risk analysis & control, controls & compliance, and legal activities. Back office of an investment bank mainly carries out trade settlement, claims, valuation, payment, and operational controls etc. Information Technology is used in all three parts of the investment banking and the key element for running successful investment banking business. Today, without IT, very minimum operation can be done in an Investment Bank starting from front, middle to back office. The project is concentrated on IT investment strategy of trading & sales department of Front office business area. HSBC, JP Morgan, Citigroup, Goldman Sachs, UBS, Deutsche Bank, Credit Suisse, and Royal Bank of Canada are few big names in the field of investment banking. Following figure shows the percentage of increase in share prices of major investment banks over 12 months. Investment Strategy of Investment Banking Trading Information Technology Department. Page 9 of 62
  10. 10. Figure 1.0 Source: http://www.nyse.com/ , Period: 03- Nov-2008 to 02-Nov-2009 1.3 Overview of Trading Department: Investment Banking trading department consists of institutional trading of various asset classes (Foreign Exchange, Money Market, Equity, Equity Options, OTC Derivatives, Exchange Traded Derivatives, Credit Default Swaps, Credit Default Options, Bank Notes, Commercial Papers, Term, REPO, Govt. & Corporate Bonds, Structured Products etc.). In each of the asset classes, there are several functions like Trade capture, Pricing, Market risk management (End of the day and Real time), VAR, P&L management, Profit Attribution Analysis, Straight Through Processing, Trade aggregation, Exposure / Position management, Risk control, Trade life cycle management, Reconciliation, Settlement etc. Investment Strategy of Investment Banking Trading Information Technology Department. Page 10 of 62
  11. 11. Robust and integrated IT architecture is required to support all the above functions and to enable the business to carryout competitive trading. 1.4 Problem Definition: Currently, the IB IT trading department is facing several challenges to enable them to support business unit more effective way, so that the business unit can get the edge of market competitiveness and state of the art IT infrastructure. Some of major challenges in the IB IT trading department are listed below. • Improvement of strategic analysis in the department for optimal IT investment prioritisation and allocation of IT budget strategically. • Better alignment of business strategy and IT strategy. • Fewer consensus among IT people about business values and benefits. • Harmonization of multiple systems with similar functionality within the national and international region. • Increase emphasis of strategic planning within IT line organization. • More re-usability of software and components, duplicate development effort. • Eliminate operational problems within current systems. • Address end of the life cycle issues. • More attention to secure people with the right skills. This project takes a strategic management approach to address these challenges. Investment Strategy of Investment Banking Trading Information Technology Department. Page 11 of 62
  12. 12. 1.5 Objectives: Main objectives of this thesis work are given below. • To create the road map of strategic management of the IB IT trading department which will facilitate the better alignment of IT and the business, optimum utilization resource, cost, and time over long run. • To identify the missing basis for top-down IT investment prioritisation: risk that values of IT spend is sub-optimal. • To provide strategic solutions of challenges identified in previous section. 1.6 Scope: The scope of this project work is only limited to the overall strategic analysis of an Investment Banking IT department. It will not cover detailed strategic scrutiny of each application and IT function in the department. 2. Literature review & IT strategy: 2.1 What is strategy? : Investment Strategy of Investment Banking Trading Information Technology Department. Page 12 of 62
  13. 13. A strategy is the pattern or plan of actions, which is designed to integrate an organization’s various goals, objectives, major policies and plans to achieve a specific goal or effect. Strategy is different from tactics. Tactics are very much circumstance and situation oriented plan to achieve one specific measurable objective. In over all strategy of an organization, there could be many tactical plans as per situation, which will eventually meet the overall strategic goal and objective of the organization. Source: Contemporary Strategy Analysis, Sixth edition, by Robert M Grant, pp: 17 http://en.wikipedia.org/wiki/Strategy, 2.2 Characteristics of strategy: Source: Contemporary Strategy Analysis, Sixth edition, by Robert M Grant, pp: 7-12 Some common characteristics of a successful strategy of an organization are given below. Vision, Goals & Objectives: A strong strategy should have a clear vision which is an ideal picture of what the company could be in future associated with simple, consistent, and long term goals and objectives combining major organizational policies. In an investment banking IT organization, the strategy should have set of goals and objectives, which can be directly integrated with Investment Banking business goals and objectives. Investment Strategy of Investment Banking Trading Information Technology Department. Page 13 of 62
  14. 14. Source: Contemporary Strategy Analysis, Sixth edition, by Robert M Grant, pp: 7 Profound understanding of the competitive environment : Deep vein understanding of the surrounding competitive environment is the key fundamental to a successful strategy. The insightful appreciation of the arena can be used for strategic analysis and development of a strategic plan. In an investment banking IT organization, understanding of importance of IT for investment banking business and knowledge of Investment Strategy of Investment Banking Trading Information Technology Department. Page 14 of 62
  15. 15. available IT platform in the market which are used by competitors can be used for strategic analysis and planning. From last 7-8 years, focus on IT from business has been changed quite significantly. Business is not directly involved in tactical aspects of IT like (IT infrastructure scale, data security and back-up, disaster recovery etc.). For business, it is more important to grasp the new market, new business opportunity and IT should help business to gain those opportunities. Business expects that as IT industry is now matured, tactical aspects of IT will be taken care automatically, just as we expect the lights to go on when we flip on the switch. That’s where the non-core and non-differentiating functions of IT are getting “commoditized”. It has been observed by the author in two major investment banks. In the current highly competitive environment business organizations are becoming more and more agile, hence business changes need to be adopted quickly in the IT system. IT department should try to make their process more flexible and agile to cope-up with business demand. Today, IT department cannot go into seclusion and work on a project for few months at a given time. The hyper competitive environment will make your IT project irrelevant during that time. Source: http://itstrategyblog.com/ Objective appraisal of resources: An organization should develop the strategy by effective exploitation of its internal resource strengths, while improving areas of weakness. Some key tasks in an investment banking IT organization leading to objective appraisal of resources are given below.. Investment Strategy of Investment Banking Trading Information Technology Department. Page 15 of 62
  16. 16.  Development of teams with common goals and objectives.  Creation of attitude towards continuous learning, change adoptability, knowledge sharing, team working etc.  Placement of a right person with right skill for a right job.  Effective utilization of the existing IT infrastructure and platform.  Enhancement of existing trading and operational platform on line with the current market trend (In the investment banking trading arena; Straight Through Processing, Electronic trading, Risk and P&L aggregation across all asset classes, Common trading portals, Real time risk, Real time p&l, and Real time trade blotter are few examples of current market trend).  Decommissioning of age old platforms with old technologies and replace them with current market leading technological platform. Strategy analysis & planning: Strategy analysis & planning is a broad area in strategic management. Various strategic models used for strategy analysis & planning will be discussed later of this chapter. In a nutshell, strategy analysis is associated with detailed analysis of organization’s goals, objectives, values in association with internal resources, capabilities, structure, systems, competitors, customers, and suppliers. Detailed strategic plan is drawn based on the analysis results to create a well executed strategic fit. Effective implementation: The best-laid strategies are of little use without effective utilization. Effective execution, focused monitoring & controlling, formulation of a Investment Strategy of Investment Banking Trading Information Technology Department. Page 16 of 62
  17. 17. strategy team, and quick responses to changes in the competitive environment are critical to the success of a strategy plan. 2.3 Strategy & Competitive advantage: Source: Contemporary Strategy Analysis, Sixth edition, by Robert M Grant, Chapter: 5, 7 The basic definition of competitive advantage is “When two or more firms compete within the same market, one firm possesses a competitive advantage over its rivals when it earns (or has the potential to earn) a persistently higher rate of profit.” However, superior profitability is not the only competitive advantage. Competitive advantage can be achieved on specific business market share, technology, customer service & loyalty, employee hire & retention, executive perks, and robust & simplified process. As per http://www.bankingtech.com/content/ipi/bankingtech/pdf/BTAwards_2009.pdf, Deutsche Bank has a competitive advantage on STP technology, HSBC has a competitive advantage on Treasury / Cash management technology, Citi has a competitive advantage on Green IT initiatives. Similarly, one bank has a competitive advantage over others on their business processes, methods, practices and ability to attract bright and talented people from the market. There is another modern aspect of competitive advantage is the firm’s ability to respond to change on an external and internal impact. A quick turnaround against the impact will make the firm on the edge of competitive advantage. In today’s world Investment Strategy of Investment Banking Trading Information Technology Department. Page 17 of 62
  18. 18. where IT enables the business to take a new opportunity and respond to the change, it is very much necessary for the IT department to provide quick solutions to the business and reduce or simplify the process and bureaucratic obstacles. Adoption of agile development methodology and rapid development methodology in IT department will increase the software delivery frequency to the business. Source: http://agilemethodology.org/ , http://en.wikipedia.org/wiki/Rapid_application_development , http://www.mariosalexandrou.com/methodologies/rational-unified-process.asp World famous strategist Michael Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. Following figure displays the model suggested by Michael Porter. Investment Strategy of Investment Banking Trading Information Technology Department. Page 18 of 62
  19. 19. Source: http://tutor2u.net/business/strategy/competitive_advantage.htm The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow industry segment. Investment Strategy of Investment Banking Trading Information Technology Department. Page 19 of 62
  20. 20. Strategy – Differentiation: This strategy involves selecting one or more criteria used by investment banking business, positioning the IT organization and platform uniquely to meet those criteria. This strategy is usually associated with high cost and an extra value-added feature provided for the business. It also provides business customers clear reasons to prefer the product over other, less differentiated products. As example, Cross Currency Basis Swaps, FX Options, Inflation Linked Bond, Structured Bond, Bond Options Futures are some investment banking products, where more specialized and complicated pricing and risk models are required. Strategy - Cost Leadership: With this strategy, the objective is to become the lowest- cost producer in the industry. Many (perhaps all) market segments in the industry are supplied with the emphasis placed minimizing costs. This is not different for IT organization. In IT organization, this can be achieved by utilizing the arbitrage opportunities of low cost IT professional in emerging markets via vendor, using standardize IT infrastructure and IT platform from the market and aggregating IT platform globally. But, this strategy will provide little to moderate differentiation and competitive advantage over rivals. However, there is nothing wrong with this strategy as it will serve all basic purpose to sustain in the market and most importantly reduce the cost. This strategy is very useful for standardized asset classes in an investment bank like vanilla Interest Rate Derivatives, FX, standard Money Market products, Futures, Equities, and Options. Investment Strategy of Investment Banking Trading Information Technology Department. Page 20 of 62
  21. 21. Strategy - Differentiation Focus: In the differentiation focus strategy, a business aims to differentiate within just one or a small number of target market segments. The special customer needs of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers. The important issue for any business adopting this strategy is to ensure that customers really do have different needs and wants - in other words, that there is a valid basis for differentiation - and that existing competitor products are not meeting those needs and wants. If any part of investment banking business goes for above strategic model, IT organization also has to adopt a similar model by focusing on development of customized IT platform to support the business organization to achieve its goal. However, it will incur more costs due to customizations of IT platform to meet the specific need. In an investment bank Complex, Hybrid, Structured and Exotic products are few examples where the above strategy will be very useful. Strategy - Cost Focus: Here a business seeks a lower-cost advantage in just one or a small number of market segments. The product will be basic - perhaps a similar product to the higher-priced and featured market leader, but acceptable to sufficient consumers. Such products are often called "me-too's". To achieve this objective in IT organization, externally or internally available standard IT platform can be used or simplified IT platform can be developed to support the basic features of the product. As an example, an investment bank wants to start a business in Bahrain, it makes sense Investment Strategy of Investment Banking Trading Information Technology Department. Page 21 of 62
  22. 22. for them to deploy existing IT platform from other locations of the bank or outsourcing non-core processes to India and China. Adoption of any of these above mentioned strategies depends on organization’s vision and goal, the revenue growth, capital ratio, the present market conditions etc. After 2007-2008 credit crunch, many organizations have opted cost leadership strategy to get the competitive advantage. 2.4 Sustaining Competitive advantage: Source: Contemporary Strategy Analysis, Sixth edition, by Robert M Grant, Chapter: 5, 7 Once it established, competitive advantage is subject to erosion by competition. The speed with which competitive advantage is undermined depends on the ability of competitors to challenge either by imitation or innovation. Imitation is the most direct form of competition; thus, for competitive advantage to be sustained over time, barriers to imitation must exist. “Isolating Mechanisms” by Richard Rumelt, a professor of strategy at UCLA's Anderson School of Management can be used to sustain competitive advantage on a long run. To identify the sources of isolating mechanisms, we need to examine the process of competitive imitation. For one firm successfully to imitate the strategy of another, it must meet four conditions, which are described below. Investment Strategy of Investment Banking Trading Information Technology Department. Page 22 of 62
  23. 23. Figure 1.3  Identification: The firm must be able to identify that a rival process a competitive advantage.  Incentive: Having identified that a rival process is a competitive advantage, the firm must believe that by investing in imitation, it too can earn superior returns.  Diagnosis: The firm must be able to diagnose the features of its rival’s strategy that give rise to competitive advantage.  Resource acquisition: The firm must be able to acquire through transfer or replication the resources and capabilities necessary for imitating the strategy of the advantaged firm. In investment banking industry, it is very difficult to create a strong barriers on imitation as new product features are available to rivals through over the counter and internal process, pricing & risk modeling, systems, structure can be easily identified by human resource acquisition. However, an investment bank which is a first mover in terms of optimizing process, innovation of pricing & risk models, development or Investment Strategy of Investment Banking Trading Information Technology Department. Page 23 of 62
  24. 24. enhancement of market leading IT platform always will have a more sustained competitive advantage for a longer period irrespective of imitation. On the other hand, an IT organization of an investment bank can use imitation to create innovation, which can create another level of competitive advantage. So, the investment banking IT organization should have a strategy which will support innovation, creativity, simple & straight forward process, recognition, task oriented project team and reduced hierarchical control, which will in turn create the competitive advantage. 2.5 Core Competencies analysis: Core Competencies are those internal and external capabilities that are critical to a business achieving competitive advantage. The idea of Core Competencies was developed by famous strategist C K Prahalad and G Hamel (1990) through a series of articles in the Harvard Business Review followed by a best-selling book - Competing for the Future. Their central idea is that over time companies may develop key areas of expertise, which are distinctive to that company and critical to the company's long term growth. 'In the 1990s managers will be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible - indeed, they'll have to rethink the concept of the corporation itself.' C K Prahalad and G Hamel 1990. Source: http://tutor2u.net/business/strategy/core_competencies.htm Investment Strategy of Investment Banking Trading Information Technology Department. Page 24 of 62
  25. 25. Figure 1.4 These areas of expertise may be in any area but are most likely to develop in the critical, central areas of the company where the most value is added to its products. For example, for software company key skills may be in the overall simplicity and utility of the program for users or alternatively in the high quality of software code writing they have achieved. Also, it can be a unique and robust business requirement analysis process and transformation process of business requirements into functional requirements so that functionally reached IT systems can be developed or capability to attract highly talented and skilful individuals by creating challenging working environment and market leading compensation. Core Competencies are not seen as being fixed. Core Competencies should change in response to changes in the organization’s environment. They are flexible and evolved over time. As a business evolves and adapts to new circumstances and opportunities, so its Core Competencies will have to adapt and change. Investment Strategy of Investment Banking Trading Information Technology Department. Page 25 of 62
  26. 26. To identify Core Competencies, Prahalad and Hamel suggest three factors, which are described below.  Core Competencies are the factors that enable the organization to create innovative products and processes. In IT organization, the presence of strong R&D wing can be a core competence.  Core competencies are the skills that enable an organization to deliver a fundamental customer benefit. In IT organization, a fundamental customer benefit can be achieved by keeping production system up and running 99% of time, providing system with required functionality, and delivering the reliable system always within the time with reasonable cost tolerance.  A core competence should be "competitively unique": In many industries, most skills can be considered a prerequisite for participation and do not provide any significant competitor differentiation. To qualify as "core", a competence should be something that other competitors wish they had within their own organization. Presence of people with strong knowledge both in business engineering and IT can create real differentiation in an IT organization. Source: http://tutor2u.net/business/strategy/core_competencies.htm, http://www.mindtools.com/pages/article/newTMC_94.htm Investment Strategy of Investment Banking Trading Information Technology Department. Page 26 of 62
  27. 27. 2.6 Creating value to customer: To gain the competitive advantage, creating the value to customer is very much essential. If the customer does not understand the value of the solution, it will be practically impossible to gain the confidence and satisfaction of the customer. IMD, Switzerland has carried-out research on this topic, which is explained below. Figure 1.5 Source: Presentation by Dr. Stefan Michel of IMD, Switzerland There are six main areas, which can add value to customer resulting in superior competitive advantage. Provide solutions: When we think about providing a solution to the customer, we think about providing product with various functionalities or attributes. We rarely think about whether these functionalities will be benefited to customer or not. Recent research from IMD, Switzerland clearly shows that by providing desired solution to the customer, we can add value to customer rather than various attributes. Investment Strategy of Investment Banking Trading Information Technology Department. Page 27 of 62
  28. 28. Partnership with customer: To understand the desired customer solution, we need to create close partnerships with customer. This will help us to identify various benefits customers are looking from our solution. In IT, regular meeting with business, involving business with IT planning and solution design, prioritising the work slate together with business are few good examples of developing healthy partnership with customer. Understand customer benefits: Understanding of what really benefit to the customer is one of the most important tasks. Clear understanding of customer benefit will help to build the most desirable solution for the customer. Create value with customer: It is a very new concept. To add a customer value, realization of the value from customer prospective is very important. This can be achieved when value analysis will be done together with customer. Value constellation: Key values will be categorized from various aspects once value analysis is performed along with customer. Each category will have values grouped together. Customer solution should address each value category. Consistency and reliability: Delivering a solution to customer with consistency and reliability is most important factor. It is a great value to the customer because without it the best solutions will have little meaning to the customer. 2.7 IT Governance: Effective IT governance becomes part of the firm's DNA and is a source of competitive advantage rather than perceived as a burden and bureaucracy. It can put Investment Strategy of Investment Banking Trading Information Technology Department. Page 28 of 62
  29. 29. the maximum value to the business and can be directly linked to financial results. Overlay IT governance onto "what-ever makes the company great" is a vital factor. IT governance should be carried-on from senior management level to program level and to project level. The IT governance body of a project or program should consist of at least IT program or Project Manager, Business Manager, Major Sponsor, Architect, Business Senior Management etc. Following figure shows roles of the effective IT governance model. Figure 1.6 Source: My own derived model from “Maturing Your IT Governance – An Update” by Dr. Peter Weill of MIT Sloan Centre for Information Systems Research Forum, http://cisr.mit.edu/members/index.php Define business and IT strategy: In the meeting of an IT governance body, business strategy should be discussed explicitly along with how business and IT can work together in a partnership to improve the business process, innovate the business, and Investment Strategy of Investment Banking Trading Information Technology Department. Page 29 of 62
  30. 30. make business and IT strategy aligned. There should be clear visibility of business strategy in IT strategy. The body should evaluate the go vs. no go decisions, tactical vs. strategic decision. Define business and IT objectives: Obvious business objective should be drawn in- conjunction with IT objectives to accomplish the strategic goal once strategy alignment is complete. These objectives should support overall business and IT strategy. Again visibility and tractability between business objectives and IT objectives is a very important factor. Establish accountability: Clear accountability from business and technology side to execute a program or project is very much important. The governance body will ensure that accountability has been established and agreed. Create IT framework & architecture: IT program or project managers along with IT architects will draw the plan about how existing IT framework can be utilized, what are new initiatives should be considered in the current architectural frame-work, and how overall architecture will be changed to achieve a specific objective. The governance body should ensure that best practices are followed, integration (leveraging on another internal IT platform), standardization, and innovation are considered in the IT framework and architecture model. Decide investment & priority: IT Governance body should decide how the investment should be made to achieve a specific business objective, how prioritizations will be done among various business objectives, how IT cost can be transparent to business value. Effective investment strategy linked to business goals and objectives can bring an organization on the edge of competitive advantage. Investment Strategy of Investment Banking Trading Information Technology Department. Page 30 of 62
  31. 31. Establish communication: The objective of IT governance body and decisions should be communicated to project team level, so that common goal and objectives can be established across the team. The body should encourage working closely with the business as a team, to work towards shared vision, interest, and knowledge, and to carry-out lesson learnt exercise at the end of the project. Effective communication of an IT governance body is a vital factor to change the culture of the IT organization and integrate the IT organization with business. Define reward system: The governance body is responsible for creating effective reward system to provide reward to an individual or a team by financial means or other means like team dinner, letter of accomplishment, recognition in company magazine or news letter etc. This reward system will increase individuals’ or teams’ motivational level and encourage other team or people to work similar way and finally improve the efficiency of overall IT organization. 2.8 IT Innovation : Innovation is very much essential to get the success and competitive advantage. In an organization, IT innovation can add massive value to the business. However, innovation does not just happen. It needs dedicated effort, leadership and most importantly funding. The IT organization of a firm can have a small R & D department who will work at various innovations in IT, which can add direct values to the business. Few examples of IT innovation are creation and measurement of value of re-usable components across the organization, creation of a common repository of commonly used functions or components, exploration of usage of cloud computing in an enterprise environment, and many more. A success of an innovation project depends on certain factors, which are shown in the following figure. Investment Strategy of Investment Banking Trading Information Technology Department. Page 31 of 62
  32. 32. Figure 1.7 Source: “Building an Effective IT Innovation Capability” by George Westerman of MIT Sloan Centre for Information Systems Research Forum, http://cisr.mit.edu/members/index.php The description of the above figure is given below. Separate: The innovation team should be separate with full time people. The leader of the team can build the right culture, skill, common objectives, and complete focus on innovation. The team should interact very closely with IT architects in the organization. Systematic: Clear but flexible criteria and methods to gather and filter ideas, plan and conduct experiments should be in place. This improves the team productivity and measurement; improves credibility to rest of the business. Small: The team size should not exceed eight including a strong leader. This will help on co-ordination, idea generation, and increased focus. Sponsored: Strong investment support from business senior management is required to protect the team so that the fund can-not be the obstacle in the research work. Investment Strategy of Investment Banking Trading Information Technology Department. Page 32 of 62
  33. 33. Shared: The team should work across all functional areas of the business and technology to gather the shared ideas, and identify the common problem. Seen: The team should be visible to other teams and business in the organization. The team should regularly publish their innovation journals, show prototypes, provide brown bag talk etc to technology and business teams. 2.9 IT Savvy: Source: “Rethinking IT Investments as a Portfolio & IT Savvy” by Dr. Peter Weill of MIT Sloan Centre for Information Systems Research Forum, http://cisr.mit.edu/members/index.php An IT Savvy company generates maximum value of IT at its business success. IT Savvy is reflected in a firm's ability to use IT to consistently elevate firm performance. An IT Savvy company considers IT as a strategic asset rather than liability. Following test will reveal how IT Savvy your firm is. Can you: respond to new customer demands in a timely manner ? reproduce business success in new a location within a reasonable timeframe ? integrate the new acquisitions quickly ? ensure that managers and decision makers simultaneously do what is best for your company and customer? present a single face to global customers? An IT Savvy company is more often able to answer yes to these questions. Their systems support strategic business priorities. In contrast, non IT Savvy firms often Investment Strategy of Investment Banking Trading Information Technology Department. Page 33 of 62
  34. 34. have some good systems but those systems were built to support isolated business needs. They do not work together to meet business needs. To become IT Savvy first, it requires clear vision, strategic development of digitized platform, and a significant change management effort. To achieve this, it needs strong leadership in business and IT across the organization and more investment in IT integration, aggregation, product innovation, and architecture should be made. IT Savvy is a journey, it can-not be done in one day. Firms should learn how to implement their vision and strategy in IT arena to get the measurable value. 2.10 IT Growth pyramid: Following figure has been derived from the concept of McKinsey’s growth pyramid. Source: http://tutor2u.net/business/strategy/mckinsey_pyramid.htm Figure 1.8 Investment Strategy of Investment Banking Trading Information Technology Department. Page 34 of 62
  35. 35. It shows that how competitive advantage can be achieved through IT & Business strategy alignment, IT governance model and IT cross-functional team. It also shows that increasing investment is required in IT to achieve the competitive advantage. 2.11 Emerging view of IT management : Source: “What Makes IT Leaders (and Their Units) Effective: IT OVERSIGHT” by Dr. Peter Weill of MIT Sloan Centre for Information Systems Research Forum, http://cisr.mit.edu/members/index.php Through-out the last two decades of 20th century and beginning of 21st centuries, IT has been evolved dramatically and become an integral part of any organization’s success. Managing IT in the organization also has been passed through various challenges over the year and has been matured. Role of IT management has been changed dramatically on current years. Delivering system using traditional SDLC (Software Development Life Cycle), maintaining and supporting IT systems, carry-out business as usual enhancement work, people management, project management & execution, testing, quality & risk control, disaster recovery test, off-shoring to India and China are become more regular tasks of IT management, which need to be carried- out anyway. Current IT management role is more focused on adding value to business by integration, innovation, simplification, aggregation and effective communication. Few emerging IT management roles in the IT organization are given below. -- Work more with non-IT colleagues (like business, customer). -- Re-engineering of a business process before implementing the system. -- Innovative IT solution in synchronization with business process re-engineering. -- High focus on transformation of business strategy into IT strategy. -- Cross-functional (horizontal) integration across the organization. Investment Strategy of Investment Banking Trading Information Technology Department. Page 35 of 62
  36. 36. -- Product integration and innovation. -- Free up internal IT department to work on projects and applications that will create and sustain competitive advantage for the company and outsource business as usual work, infrastructure management to a third party in cost advantage locations. -- More emphasis on IT governance at a program & project level. -- Rational IT investment fulfilling overall business strategic objectives. -- Facilitate open discussion about certain issue or matter. -- Communicate explicitly to employees about business goals, objectives and importance of customer satisfaction. -- Timeliness of delivery with reasonable cost and quality. -- Encouragement of more usage of agile methodology of system development and diverting from traditional SDLC. -- Strong accountability on project delivery and process implementation. -- Reduction of bureaucracy, internal politics and egoism inside the organization. -- Allow business goal and objective transparent in all levels of the IT organization. -- Assist on creation of a team with common goals and objectives. -- Focus on “lessons learned” mechanism after post project review. -- Keep best people in the organization by adjusting compensation or using other motivational factors of each individual. -- Attract best people from the market to the organization by providing challenging working environment. Investment Strategy of Investment Banking Trading Information Technology Department. Page 36 of 62
  37. 37. 2.12 SWOT analysis: SWOT analysis is an important tool for auditing the overall strategic position of an organization and its environment. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. This tool is widely used in the industry and provides a very quick measure of positive and negative aspects of a particular scenario. Following figure shows the SWOT matrix. Investment Strategy of Investment Banking Trading Information Technology Department. Page 37 of 62
  38. 38. 2.13 Scenario planning: Scenario planning [or scenario thinking or scenario analysis] is a strategic planning method that some organizations use to make flexible long-term plans. Scenario planning is not about predicting the future. It is about exploring the future. If you are aware of what could happen, you are better able to prepare for what will happen. Oddly, organizations play out the ‘bad’ situation only after that situation has happened Investment Strategy of Investment Banking Trading Information Technology Department. Page 38 of 62
  39. 39. and once a ‘normal’ condition is back, organization throws their scenario planning tool out. Though it is impossible to identify all the future events that can impact the business, but ‘how’ it may impact is an important component that can be easily integrated into scenario planning. Preparing responses to imagined changes in conditions, allows organizations to educate themselves about the probable risks. As an example, in an IT organization, disaster recovery testing and business continuity testing are part of scenario planning. More scenario planning can be done in the organization during business and IT strategic alignment (like how fast IT can provide a solution if the business wants to provide a new product to customer or how IT budget will be impacted if the business makes a loss in the future or how IT can work on reduced budget in a difficult market condition by providing maximum value to business or how IT can work seamlessly irrespective of favorable or difficult market conditions. ) Source: http://en.wikipedia.org/wiki/Scenario_planning, http://itstrategyblog.com/ 3. Current strategic methodology & approach: Investment Strategy of Investment Banking Trading Information Technology Department. Page 39 of 62
  40. 40. 3.1 Current methodology & approach: Business strategy has been taken into consideration along with IT strategy to identify areas of investment in the IB IT trading department. Following strategic methodology and approach have been used to evaluate the strategic investment direction. Business strategy and value of IT analysis: In this section detailed business strategies of a trading department and its sub-department have been considered and how IT can add value to it has been identified. Please follow Appendix A for the sample analysis. Application characteristic analysis: Based on above business strategy, detailed strategic analysis has been done in the IB IT trading department. Characteristics of various applications in the department and its sub-department have been identified. Please follow Appendix B for the sample analysis. Application source analysis: In this section source of major applications (In-house or Vendor) have been identified in the IB IT trading department. Please follow Appendix C for the sample analysis. Analysis of project and current investment trend: In this step, objective/benefit analysis, current and near future budget allocation of all major ongoing projects of the IB IT trading department have been considered. Please follow Appendix D for the sample analysis. Current situation analysis (Fitness check): In this section, “Fit for future vs. Fit for purpose” matrix has been created to identify which applications in the trading Investment Strategy of Investment Banking Trading Information Technology Department. Page 40 of 62
  41. 41. department need more and immediate investment. This analysis has made it clear that which applications need immediate investment consideration to fit for the future. Figure 2.0 Current situation analysis (Competitive positioning): In this section critical analysis has been done to evaluate the competitive positioning of various applications or application groups in the trading department. Three measures (Base, Differentiating and Competitive) have been considered for the competitive analysis. The standard is applications should be at least competitive, anything below competitive need investment. Please follow the Appendix E for the sample analysis. Investment Strategy of Investment Banking Trading Information Technology Department. Page 41 of 62
  42. 42. Current situation analysis (Life cycle analysis): Application life cycle analysis is one of the main tools to identify which applications are in an initiation state, operating state, matured state and retired state. Applications which are in an initiation (test) state need more investment than applications, which are already in operating state or retirement state. Also, it identifies when a particular application will be in a retirement state and how long the operating state will continue. Please follow the Appendix F for the sample analysis. Current situation analysis (Challenges & Actions): In this section major current challenges of a trading department have been listed and proposed high level action plans have been drawn to meet those challenges. Please follow the Appendix G for the sample analysis. Proposed initiatives and investment: In this final section, proposed future initiatives along with benefits/objectives and investment plan have been drawn based on current situation analysis. Please follow Appendix H for the sample analysis. Finally various programs have been created in the IB IT trading department to address proposed initiatives. 3.2 Current strategic challenges: Investment Strategy of Investment Banking Trading Information Technology Department. Page 42 of 62
  43. 43. The current strategic methodology and approach meet the overall objectives on some extend, but it has some challenges, which need to be looked at to gain the competitive advantage. Following section details some strategic challenges, which should be considered. 1) Establish the clear link between a global business goals, regional business goal and technological goal and how investment should be made to achieve each of these goals. 2) Map business objectives directly with technological objectives. There should be clear, visible and traceable mappings between business and technology objectives not only at higher level but also at the operational level. 3) Creation of a cross-functional group to implement strategic analysis & changes. Investment needed for cross-functional strategic analysis in business and technology together regionally and globally. 4) In investment banking IT organization, separate sub-department should be formed to carry-out strategic management covering strategy analysis and planning, strategy execution, controlling & monitoring and strategy implementation. 5) Absence of a strategic plan to identify duplicated systems (functionally) across various regions nationally and internationally. No investment decision has been made to carry-out the exercise. Investment Strategy of Investment Banking Trading Information Technology Department. Page 43 of 62
  44. 44. 6) Similar asset classes are traded in different systems. No strategic direction has been followed to identify those systems. 7) Clear strategic investment plan to be drawn to incorporate IB trading platform into Private Banking department to boost the investment of private banking customers. More robust strategic investment plan for the trading IT department needs to be created to bring investment and private banking together. Investment Strategy of Investment Banking Trading Information Technology Department. Page 44 of 62
  45. 45. 4. Proposed strategic direction: 4.1 Proposed strategy: This section is aimed to provide probable strategic direction along with existing strategic methodology. This can be followed to meet the challenges identified in the previous section. Goal integration and alignment: Knowing and understanding of organizations’ vision is a very important factor to identify goals of each business unit. Each business unit must identify their goals globally, which will relate to the organization’s overall vision. These business specific goals will be further analysed regionally and each region will have its own goals, which are linked with global business goals along with its own regional goals. As the IB IT trading department of a region supports various business areas of investment banking, they have to align with regional business goals. At the same time, they have to align vertically with global IB IT trading goals. It will increase the focus on horizontal goal integration across different regions. The overall goal alignment is not an easy task, it needs massive amount of co-ordination, co- operation, and communication across different business and technology groups. Strong support and investment are needed to carry-out this exercise. Following figure shows the example of a vertical and horizontal goal integration and alignment process. Investment Strategy of Investment Banking Trading Information Technology Department. Page 45 of 62
  46. 46. Figure 2.1 Objective Synchronization: In Investment Banking IB IT department, each business objective should be mapped clearly with a technological objective. It should detail what each business objective means and how IT can help to achieve those objectives. IT people should understand business values and benefits of IT solution to business. Following figure shows how IT should work to understand business values and benefits. Once understanding of business values and benefits are clear, it will be much easier to map business objectives and technology objectives. Investment Strategy of Investment Banking Trading Information Technology Department. Page 46 of 62
  47. 47. Figure 2.2 Detailed analysis also required on a level of innovation needed in IT to achieve the target solution, the time limit to provide the target solution to business, and how Investment Strategy of Investment Banking Trading Information Technology Department. Page 47 of 62
  48. 48. similar objectives are handled globally and across different regions (through horizontal alignment). Again investment is needed to carry-out this exercise. Formation of Cross-functional group: Cross-functional development teams have proven to be a highly effective mechanism for integrating the different functional capabilities required to develop a solution and for developing co-operation and communication across different business segments and regions. This team can work across different business segments regionally and globally. The primary objective of this team is to integrate common goals and objectives in trading IT, provide strategic IT solution suggestions, carry-out gap analysis between similar systems across geographical regions, analyse on internal resources & capabilities, establish core competences to full-fill the overall business objective, facilitate the communication between different groups, come-up with a strategic implementation plan, communicate the message across different line organizations and reduce the cultural indifferences between different groups. Following figure shows how a cross-functional group in an IT organization can enable the strategic direction. Investment Strategy of Investment Banking Trading Information Technology Department. Page 48 of 62
  49. 49. Figure 2.3 Source: Course material of ‘The Strategic Leader by Dr. David Pendleton’ module of PGDOL, Said Business School, University of Oxford. From the above figure, it is very much clear that the cross-functional group will be very much active to  enable a strategic direction across the organization along with enabling leadership and team work.  inspire and reinforcement of creating alignment and building sustainable relationships.  provide a strong focus on the strategic planning, organization, implementation and delivering results. Investment Strategy of Investment Banking Trading Information Technology Department. Page 49 of 62
  50. 50. The out-come of strategic planning is number of programs and projects, which will be finally implemented. During the whole process, the group will continuously learn and improve the path-way of strategic implementation. The work of the cross-functional team is not only limited to setting-up strategic direction & planning but also carry-out strategic gap analysis of similar function systems, identification of inefficient systems, provide strategic solutions to overcome inefficiency of systems and create the marriage (shared values, systems, structure, skills, strategy, style and staff) between the IB and PB IT trading department by deploying IB IT trading environment in PB area. Currently there is no existence of a cross-functional group in the IB IT trading department who can carry-out the above exercise. Investment needed to form this group for the purpose of long-term sustainable success of the organization and deep roots in solid ground. Outsourcing of non-core processes: The trend of a business process outsourcing to cost effective locations has been increased rapidly over last 10 years. IB IT trading department has to identify core and non-core processes. Non-core, matured, and business as usual processes can be outsourced to offshore on a fixed price contract basis. This can reduce the overall IT operating cost dramatically. This cost saving on non-core processes can be utilized on core processes for the purpose of innovation. Investment Strategy of Investment Banking Trading Information Technology Department. Page 50 of 62
  51. 51. 4.2 Benefits of the proposed strategy: Benefit highlights of the proposed strategic direction are given below.  Overall organization’s vision and goal can be drilled down to the IB IT operational level.  Clear picture, the road-map, and the impact of IB IT on business visible to everyone. The cross-functional team will be accountable for establishing the visibility.  Due to top down business strategy alignment with IT strategy, better meaningful investment strategy can be formulated and more customer satisfaction can be achieved.  The result of IT investment will be clearly visible to customers (IB business).  Communication and alignment between different functional areas regionally and globally will improve, which can trigger internal resource movement regionally and globally.  Integration of IT systems regionally and globally can bring competitive advantage and can lead to further innovation of more intelligent IT solution.  Decommissioning of redundant systems will increase the operating efficiency and reduce the maintenance cost and support cost.  Cultural indifferences across regions will be reduced and more diversified work force and team will be created with common goal and vision. Investment Strategy of Investment Banking Trading Information Technology Department. Page 51 of 62
  52. 52.  More end customer satisfaction will be achieved and overall organization will get the competitive advantage due to a high level of alignment and integration between business & IT. 4.3 Conclusion: Strategic management process is a dynamic process which enables the transformation of organization’s vision, mission, and objectives into reality. It is an ongoing process that evaluates and controls the organization’s growth, stability, and integrity. The result of strategic management is implementation of a number of programs and projects, which will meet organization’s overall strategy. In this work, it has been seen that, strong alignment is required between business and IT to get best benefits of IT in the Investment Banking organization. Investment prioritizations based on business strategy and objectives can improve organization’s accountability on IT. Presence of a cross-functional group can help IT organization to integrate vertically and horizontally across geographical regions, which can eventually boost the business performance and bring the competitive advantage for the overall organizations. On 21st centuries, business processes are defined based on functionality of IT system. Investment is required in R & D to innovate IT platform, which can help to draw the most optimal business process and enable business to take correct decisions in the competitive market place. Today, innovation in IT is happening at a higher speed than earlier days and effective use of IT will do open-up new business opportunities, which were not seen before in a full scale. In this project work, various challenges related to business & IT alignment, integration of IB with PB, harmonization of various IT systems with similar functionality across geographical regions, and life cycle issues have been addressed. Various strategic Investment Strategy of Investment Banking Trading Information Technology Department. Page 52 of 62
  53. 53. methodologies like creation of a cross-functional group, formulation of program and project level governing bodies, an existence of a strategic team inside trading IT organization, goal & objective synchronization, IT investment prioritizations on line with business objectives, and benefit analysis are considered to meet above challenges. This is the main achievement of this project. Finally, it can be concluded that strong and robust partnership and alignment between business & IT will be the key to success for an Investment Bank on coming future. Investment Strategy of Investment Banking Trading Information Technology Department. Page 53 of 62
  54. 54. Appendix A: Investment Strategy of Investment Banking Trading Information Technology Department. Page 54 of 62
  55. 55. Appendix B: Investment Strategy of Investment Banking Trading Information Technology Department. Page 55 of 62
  56. 56. Appendix C: Investment Strategy of Investment Banking Trading Information Technology Department. Page 56 of 62
  57. 57. Appendix D: Investment Strategy of Investment Banking Trading Information Technology Department. Page 57 of 62
  58. 58. Appendix E: Investment Strategy of Investment Banking Trading Information Technology Department. Page 58 of 62
  59. 59. Appendix F: Investment Strategy of Investment Banking Trading Information Technology Department. Page 59 of 62
  60. 60. Appendix G: Investment Strategy of Investment Banking Trading Information Technology Department. Page 60 of 62
  61. 61. Appendix H: Investment Strategy of Investment Banking Trading Information Technology Department. Page 61 of 62
  62. 62. References: 1… Grant, Robert M., Contemporary Strategy Analysis, Sixth edition 2… Michel, Stefan., Presentation on Service Strategy, IMD,Switzerland 3… Pendleton, David., Course material of ‘The Strategic Leader’ module of PGDOL, Said Business School, University of Oxford. 4… Weill, Peter., W.Ross, Jane., C.Robertson, David., Enterprise Architecture As Strategy, Harvard Business School Press 5… Weill, Peter., What Makes IT Leaders (and Their Units) Effective: IT OVERSIGHT, MIT Sloan Centre for Information Systems Research Forum 6… Weill, Peter., Maturing Your IT Governance – An Update, MIT Sloan Centre for Information Systems Research Forum 7… Weill, Peter., Rethinking IT Investments as a Portfolio & IT Savvy, MIT Sloan Centre for Information Systems Research Forum 8… Westerman, George., Building an Effective IT Innovation Capability, MIT Sloan Centre for Information Systems Research Forum 9… http://agilemethodology.org/ 10… http://cisr.mit.edu/members/index.php 11… http://en.wikipedia.org/wiki/Rapid_application_development 12… http://en.wikipedia.org/wiki/Scenario_planning 13… http://en.wikipedia.org/wiki/Strategy 14… http://itstrategyblog.com/ 15… http://tutor2u.net/business/strategy/competitive_advantage.htm 16… http://tutor2u.net/business/strategy/core_competencies.htm 17… http://www.mindtools.com/pages/article/newTMC_94.htm 18… http://www.mariosalexandrou.com/methodologies/rational-unified-process.asp 19… http://www.nyse.com/ Investment Strategy of Investment Banking Trading Information Technology Department. Page 62 of 62

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