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Strategic Management of Information Technology
Visa Ready Program for Internet of Things
University of Groningen
Faculty of Economic and Business
Submitted by:
Group: 25
Andrea Babuin S3268659
Mathieu Gonne-Victoria S3268772
Louise Nyman S3069591
Lori Spruijt S2325098

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1. Introduction
Information technology has become increasingly important the last 20 years. In fact, as of the
last few years, it has been commoditized and is not considered a competitive advantage
anymore (Carr, 2003). Information technology can be divided into product technologies and
administrative technologies; for the purpose of this case study, Visa’s administrative
technology ‘Visa Ready’ will be studied and assessed. The theory used in the report is derived
from the article ‘Digital Business Transformation’ by Wade (2015). Wade identifies a so-called
‘‘Digitization piano’, which is made up of seven distinct categories that are considered to “make
up the most important elements of an organizational value chain as it relates to digital
transformation” (Wade, 2015). This framework will be supported by other relevant concepts
and theories throughout the report.
The remainder of the report is structured as follows; first, a background of Visa and detailed
information on the Visa Ready program is provided. Thereafter a thorough analysis of the
Ready program is conducted with the ‘Digitization piano’ framework by Wade (2015) as a main
guide. Lastly, the report finishes with an overall conclusion and short discussion.
2. Background
Visa is ‘a global payments technology company working to enable consumers, businesses,
banks and governments to use digital currency’ (Visa, 2016). The company operates in over
200 countries worldwide, with 13,880 million dollars operational revenue in 2015 (Visa, 2016)
Visa claims that the payment industry is in the midst of the biggest and most exciting changes
it has ever seen and ‘they are transforming the company to embrace the opportunity that global
connectedness provides’. The innovations they are seeing today fall into two categories. The
first is primarily around ways to access existing payments networks and the second is around
the ability to create new payments networks themselves (Visa, 2016).
A practical example of an innovation of Visa is the “Visa Ready Program for Internet of
Things”, which enables device manufacturers to embed secure payments into their connected

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devices. This can be anything, from a watch, house, phone or car to initiate payments. Visa
claims that by 2020 there will be more than 50 billion devices connected to the internet.
This program is relevant to analyze since it captures the essence of Visa’s innovativeness. The
program enables them to look into the future and are proactive in adapting their business
according to the rapid changes in technology. As mentioned before, this case study will evaluate
and analyze the practices of information technology in supporting the innovation activities of
Visa and especially the “Visa Ready Program for Internet of Things”.
Information Technology
Since mobile devices became the norm, new innovations in technologies went more and more
mobile as well. As an example, Mobile payment (M-payment) defines all the transactions made
through smartphone. In 2007, this solution of payment began to appear but it was still rare in
the market. The huge increase in sales of smartphones made the M-payment a major solution
for payment for daily use. The wireless payment has been enabled thanks to Near Field
Communication technologies (NFC). The only requirement is a device featuring this
technology and an internet connection. This use of NFC payment shares a lot of information
about the transaction flows and gives a clear idea of consumption habits. This collection of data
can give a track of the transaction flows. It can be an asset for Visa to leverage this kind of data
about their clients.
The last solution for an improvement of M-payment by Visa is ‘Visa Ready Program’, which
is a partner program committed to ensuring that the next generation of third-party payment
solutions meets Visa’s security standards and specifications. The ‘Visa Ready Program’ makes
it easier for merchants to adopt new payment solutions that meet Visa’s standards and can help
drive revenue by expanding the use and acceptance of electronic payments. Visa’s goal is to
make purchases on mobile and connected devices as simple, convenient and secure as swiping
a plastic card. It especially let consumers pay whenever and wherever. Cloud-based payment
applications from Visa Ready partners help merchants capture new payment opportunities as
consumers increasingly turn to mobile devices (Added Value Visa mPOS Global Report, Sept.
2013).

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As a matter of fact, one of the advantages of M-payment solutions is security of payment.
Through such surveillance, one can assume that it would enhance the security. For instance, if
unusual activities are detected, Visa’s service would be able to warn the client that his/her
account could have been hacked and block the problem immediately. But except from security,
this new ‘customer experience’ is also a way to increase the quality of payment. Visa would be
able to know more about their clients’ needs. Consequently, even used through a connected
device such as a watch or a car, the data can be collected.
Through data mining analyses, Visa is able to tailor its offer to specific types of clients. With
the transaction processing system, some software can be implemented within the company’s IT
governance. The concept of ‘Business Intelligence’ is the use of this data mining analyses
through IT, in order to help managers taking better decisions for their clients. This kind of
information system is called operational because it can be used routinely within the firm. Visa
would for example, offer a personalised services to each type of clients. The variety of profiles
is huge, from the small start-up to an international firm, the needs in term of solutions are
different.
This technology is highly relevant for Visa for several reasons. First of all, Visa’s users have to
connect their account to the device of their choice. Once the banking account connected, the
‘token request’ has been fulfilled, which simply means that the authentication of one’s given
account to a device like a watch or a refrigerator and so on and so forth, succeeded. Visa’s role
during this processes is to validate the newly created account. With the Software Development
Kit (SDK) or SDK technology, mobile application and payment can be combined. As a matter
of fact, the 16 digital numbers of one’s bank account will be replaced with the token digital
numbers to make payments easier and faster for the customer. The Visa Paywave application
is the one responsible for the NFC type of payment mentioned above and is available on
Applestore, Android and Windows type of phones which make it accessible for an almost
unlimited target.

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3. Analysis:
Business Model
According to Wade (2015), your business model is all about how you, as a company, make
money. The Visa Ready Program makes money due to the rise of the Internet of Things, also
called Internet of Everything (Wade, 2015).
Nowadays, more devices than ever are connected to the internet and allow the customer to make
purchases with those devices. No matter whether that is a refrigerator, watch, mobile phone or
car, all types and sorts of devices allow for electronic payments. For Visa, this is a huge
opportunity, as they can provide the actual paying process. The Visa Ready Program is the
program that provides a path to embed secure payments into the connected devices that
manufacturers produce. This means that the companies that produce the connected devices, are
the customers of The Visa Ready Program for Internet of Things. Visa most certainly makes
money by every single transaction that is done on a connected device where Visa enabled this
transaction, even though facts about this do not appear on the corporate website of Visa.
Structure
Structure, according to Wade (2015), is all about how your company is organized. Visa is very
strict in the provision of information to outsiders, and therefore information on this part of the
Digitization piano (Wade, 2015) has not been derived, as the corporate website does not give
any information on this.
However, to perform well in the highly and quickly adapting technology industry, a company’s
structure needs to be adjusted to this as well. Such a company structure would be flat, allowing
to make quick decisions. This is contrary to a hierarchical structure, where a lot of steps need
to be taken before a decision finally is made. Furthermore, the structure should allow for
employees to step up with innovative ideas they have and if that is found to be an excellent
idea, to initiate this innovation.
In order to decide on the direction for your company to go to, it is important that those corporate
strategies are decided upon in the global headquarters. Decisions on corporate level thus are
made in the global offices. Local decisions include how to execute the global strategies that
were defined, locally. However, as stated before, the structure should allow for every single

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employee to somehow step up and propose an idea, whether this relates to a local or a global
decision.
All in all, for Visa it is really important to adjust the company structure to the highly and quickly
adapting industry it is in.
People
The ‘people’ part of the Digitization piano is all about the people who work for you (Wade,
2015). Information on this part also is not provided on the website nor have we derived this
information from one of the employees. However, it is evident what kind of people should be
in your organization that is in the technology industry, as Visa is.
The Visa Ready Program is a program focused on digitization and more specifically, on the
Internet of Things. Due to the rise of digital business transformation, especially in the
technology industry, business models have changed substantially and this gave room for the
Visa Ready Program. Therefore, your employees working on this program should be very
digitally savvy. Not only the people executing this project should be digitally savvy, but also
the managers should be this. Due to the turbulence of the technology industry nowadays, the
people within your company should be able to see opportunities quickly, come up with new
ideas and innovations and, very importantly, be able to look through the eye of the customer.
Besides this, they should also be able to recognize when the business is about to perform less
well than expected and translate this into action that should be taken. Due to the turbulence of
this industry, your employee should encompass a lot of different skills that all relate to the
ability to think and move quick.
Processes
Processes, as defined by Wade (2015), is all about how things are done. As concerns processes’
transformation, Visa is supposed to help to accelerate adoption of new technology by merchants
and financial institutions thanks to the Visa Ready program. The automatization and digitization
resulting from the expected innovation will lead to an unprecedented opportunity to transform
the payment system, giving to Visa a sustainable competitive advantage and creating some entry
barriers based also on the collaboration between Visa and its partners. Indeed, Visa Ready is a
partnership program committed to ensuring that the next generation of third-party payment
solutions meets Visa’s security standards and specifications (Usa.visa.com, 2016).

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Given the evident inclination to change and innovation by Visa, they are accelerating the
introduction of innovative payment solutions globally, enabling a trusted and easier method of
commerce and unleashing unlimited payment possibilities.
The challenge of transforming and improving its own payments’ processes in order to guarantee
a safer and easier experience for its consumers is symptomatic of the hyperawareness that
characterizes Visa in its choices, as an organisation which recognizes future trends that will
impact an organization (Wade, 2015).
IT Capability
The IT Capability of an organization is about how you collect and manage information (Wade,
2015). The digital ambitions of Visa are supported by an IT infrastructure which is able to
support the challenge of the innovation. The distinctive features of Visa will, thanks to the
database and networks provided in years of experience, reinforce its role as a leader in the
market.
By including Internet of Things in its Visa Ready certification program, Visa is exploiting its
features and effectively facing IT as it should by including companies such as manufacturers of
wearables, automobiles, appliances and clothing so that secure payments can be added to a
wider range of connected devices.
The Visa Ready seal of approval puts the innovations of tomorrow on the fast track to global
acceptance, and doing so it is supposed to guarantee a first-move advantage for Visa.
The IT capabilities of Visa are evident and are the result of a broader and consistent policy of
innovation, which, via the continue collaboration with its partners, gives the opportunity to Visa
to continually improve in its capabilities, resulting unreachable for its competitors.
In support to its innovations and changes, the customer relationship management service of
Visa gives further opportunity to the organisation, by the value of co-creation with its
customers, as we will see in the Engagement model.
Another important feature in this challenging innovation by Visa is represented by the
possibility of using and improving its data to provide the best result for its customers. Indeed,
thanks to its data mining, Visa is able to tailor its service on the needs of its costumer, by
adapting its offer to the request and the experiences of the clientele.
Unfortunately, we did not have any information from Visa about the alignment between their
IT strategy and corporate strategy, but the efficiency and early-timing of the recent innovations,

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always ready to keep up with times, give the idea of an organisation perfectly aligned to provide
the best opportunity and to reach the most efficient results.
Offerings
About the offerings’ transformation, by the Visa Ready Program, Visa is going to digitalize
almost every step of its payment’s business by bringing secure payments to the Internet of
Things. Visa will help bring secure payment functionality to the Internet of Things, beginning
with wearables and cars, digitally enabling its services.
Replacing card account number with a token, indeed, will allow Visa to offer payment-enabled
mobile device experiences, extending tokenization connected devices through to its trusted
strategic partners.
Any payment solution implemented through the Visa Ready Program must meet Visa’s
functional and security standards, helping to give IoT device manufacturers peace of mind
(Usa.Visa.com, 2015).
By offering a wider range of opportunities and customized products for its customers, Visa also
proves its fast execution, combining speed and implementation. Both are critical to achieving
successful digital business transformation (Wade, 2015).
Furthermore, another capability of Visa able to provide a sustainable competitive advantage
over its competitors, is the ability to move resources quickly and efficiently to where they are
most needed, like in this case about the Visa Ready program.
Engagement model
In this transformation category, it will be analyzed how Visa engages with external
stakeholders, as well as which role the Visa Ready program takes in this category. As mentioned
earlier, this program enables partners of Visa to simplify their relationships with their
customers, as well as increases their touchpoints with Visa since the program introduces a new
category of services. When considering this in terms of competitive advantage, it can be seen
that since Visa is innovative they can reap so-called ‘first-mover advantages’, which means that
since they are among the first on the market, there will be a monopoly at first before competitors
catch up. The increase in touchpoints also creates an opportunity to create customer lock-in; a
value appropriating activity that not only delivers unique products but also develops a system
that does not facilitate a switch in product or brand (Sorescu et al., 2011). Moreover, a second

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perspective ought to be added to the analysis: the value of co-creation. For the Visa Ready
program, Visa initiated a partnership with prominent electronic and innovative companies such
as Samsung, Fit Pay and Accenture (Usa.visa.com, 2016). This aspect provides competitive
advantages due to two main reasons: First, it is known that co-creating new knowledge with
partners is beneficial since companies that have invested more in IT creates more new
knowledge (Dong, 2016). It is also proven that if a company is more central in the knowledge
network it is able to access more information (Dong and Wu, 2015). Thus, through the Visa
Ready program, the company will generate competitive advantages on several aspects; increase
in touchpoints, first-mover advantage, customer lock-in, in addition to co-creating new
knowledge and increased access to knowledge.
Digital business agility
Wade (2015) puts emphasis on the great importance of digital business agility, which is made
up by the three parts; hyperawareness, informed decision making and fast execution. It can be
seen that Visa have both hyperawareness (ability to sense industry trends, capturing ideas from
stakeholders) and fast execution (among the most innovative in the industry), lastly there is not
enough information to assess Visa’s performance on informed decision making. However it is
believed that because of their innovativeness and access to big data, they should be able to score
high on informed decision making as well, which indicates that digital business agility also
serves as (probably the most important) competitive advantage.
Limitations
In order to gather first-hand data, a survey for executives of Visa was prepared. This would
have enabled an overview of what Visa’s managers think about making business in such a
context of NICTs (New Information and Communication Technology). Unfortunately, Visa is
a large and global company and even though we reached out to many different countries and
individuals, they did not prioritize to give us proper feedback. The optimal report would have
included these insights in order to develop a final conclusion. Therefore, the the lack of first-
hand data is considered a limitation in this report, however the questions we intended to ask
were put in the appendix. The questions are, alike major parts of the report, inspired by Wade’s
article. In his ‘Digital Business Transformation’. From his framework, the questions that were

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found most relevant was included, as well as some additional questions to complete it and align
more closely with Visa’s new technology.
4. Conclusions:
Many implications arise from the analysis of the Visa Ready Program for Internet of Things.
First of all, Visa is clearly going through the right path to implement the digital innovations that
is trying to include in its business model. The analysis of the different necessary transformations
highlighted by Wade (2015), from the structure to the engagement model, indicate that Visa
owns the three components (hyperawareness, informed decision making and fast execution)
which, in Wade’s view, give digital business agility to an organisation, needed to properly
operate the digital business transformations necessary to implement a new project like the one
Visa is working on.
Visa, by implementing the Visa Ready program for Internet of Things, meets a competitive
necessity peculiar of its sector, and can also obtain a sustainable competitive advantage over its
competitors thank to the distinctive characteristics required to achieve such a technological
innovation.
References
About Visa https://usa.visa.com/about-visa.html
Added Value Visa mPOS Global Report, Sept. 2013
Carr, Nicholas G. "IT doesn't matter." Educause Review 38 (2003): 24-38.
Dong, J. Q., & Wu, W. (2015). Business value of social media technologies: Evidence from
online user innovation communities. The Journal of Strategic Information Systems, 24(2), 113-
127.
Sorescu, A., Frambach, R. T., Singh, J., Rangaswamy, A., & Bridges, C. (2011). Innovations
in retail business models. Journal of Retailing, 87, S3-S16.
Usa.visa.com. (2016). Visa brings secure payment solutions to the Internet of Things. [online]
Available at: https://usa.visa.com/visa-everywhere/innovation/visa-brings-secure-payments-
to-internet-of-things.html [Accessed 19 Dec. 2016].
Visa (2016). Annual Report 2015
Wade, M. (2015). Digital Business Transformation - a Conceptual Framework. Global Center
for Digital Business Transformation: Lausanne, Switzerland.

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Appendix
Our inquiry:
Dear …..,
I am …., MSc student at University of Groningen, in the Netherlands. Currently I am following
the course ‘Strategic Management of Information Technology’. For this course we are doing a
project on the supporting role of Information Technology in innovation activities. We chose
Visa as a company, and your ‘Visa Ready Program for Internet of Things’ as project, because
we think that the role of information technology is very important in this project. As some
questions about the information technology have arised while working on the project, we were
wondering whether you would be keen to answer some of our questions that have arised. This
would really help us out.
I hope to hearing from you.
Yours faithfully,
….
Answer from Enquiries.Europe@visa.com
Thank you for contacting Visa Europe.
For all publicly available information, please visit our Visa website at:
http://www.visaeurope.com or http://usa.visa.com/about-visa/index.jsp.
Any information not listed on our websites is considered confidential and proprietary, and we
would not be at liberty to provide further details.
Thank you for writing,
Consumer Support | Visa Europe | www.visaeurope.com
Answer from stefania.biagini@cohnwolfe.com
Good evening Andrea,
thank you for having contacted Visa’s press office. Matteo Giordano, responsible for
Innovation and Strategic Partnership of Visa Italia, who is reading in copy, will be glad to
support you answering to your questions.

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You and your group can directly write him via mail sending your questions in English. Matteo
will answer you in some days.
Thank you again and good luck for your challenging project.
Stefania
Press Office Visa Italia @ Cohn & Wolfe
Questions for the interview (Sent to giordanm@visa.com):
-Business Model
What is your main costumer segment and would you need to change/differentiate it?
What would you identify as your competitive advantages?
In the long run, do you think that the development of 'Visa Ready Program for Internet of
Things' will lead to a reduction of your internal costs/increase in your revenues?
What do you think are your weaknesses?
Why did you feel the need to develop the project 'Visa Ready Program for Internet of Things'?
-Structure
What kind of organisation structure do you have?
Where does the different aspects of digital innovation sit in your organisation, and is it effective
as it is?
How much does your implementations cost?
Will you need to change your IT Structure because of the development of your new projects?
-People
Is it easy for your employees to use the new technologies? How much digital are your leaders
within the organisation? Are any new capabilities required?
Is it supposed to improve your productivity? And if so, how do you measure it?
-Process
To what extent your processes are automated and adaptable to change?
How are your processes supposed to change to face the new 'Visa Ready Program for Internet
of Things'?
-IT Capability

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Do you have a precise IT strategy linked with the corporate strategy?
Do you use Business Intelligence data to recognise your clients' need and improve your services
even more?
Does 'Visa Ready Program for Internet of Things' require any switch in your IT structure?
-Engagement model
How often do you communicate with your costumers?
How loyal are they?