Key to Success: Cases and Practical Solutions

Finding The Root Causes: Key Techniques

To investigate strategic and managerial issues associated with e-banking in order to develop practical solutions, many approaches could be used, such as Key Indicator System, SWOT Analysis and Cost/Benefit Analysis. These approaches are briefly covered below (for more detail see the referenced texts).

Key Indicator System

Rockart (1979) presented this system as a substitute to critical success factors for investigating strategic issues and providing executives with the information they require. The approach is based on three concepts. The first concept is the determination of a set of key indicators concerning the general health of the business. Information is collected on each of these indicators. The second concept is exception reporting, regarding the availability of information to executives on areas where organizational performance is different from predetermined criteria. The third concept is based on expanding the availability of better, cheaper and more flexible visual display techniques to help executives digest vast quantities of information.

This technique is useful in e-banking, as implementation and operations related to it are very information intensive. It could be used to conduct detailed analysis of the information needs of e-banking managers, as well as to conduct detailed evaluation of the business as a whole, in order to determine what changes can be made in business model, structure or other aspects of management to facilitate the growth of e-banking.

SWOT Analysis

Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis has been a useful tool for many business related problems. The purpose of SWOT analysis is to isolate key issues and to facilitate a strategic approach. The process of using the SWOT approach requires an internal survey of strengths and weaknesses of the program and an external survey of opportunities and threats (Balamuralikrishna & Dugger, 1995).

SWOTs can be performed by individual managers or by groups. Group techniques are particularly effective in providing structure, objectivity, clarity and focus to discussions about strategy which might otherwise tend to wander or else be strongly influenced by politics and personalities (Glass, 1991). Groups dynamics can also be affected by these factors if the process is not managed carefully.

In e-banking, SWOTs can be used to determine internal strengths such as flat organizational structures and relevant in-house skills, or weaknesses such as lack of integrated back end systems and employees’ resistance to change. External opportunities such as increase in market share or image enhancement as well as threats such as potential new entrants and negative publicity if things go wrong can also be identified. Although examples given here may sound obvious and superficial, a detailed application of this approach often throws up surprises for even the most experienced managers.

Cost /Benefit Analysis

This is one of the most commonly used techniques. Cost/benefit analysis is used to analyze feasible alternatives in terms of the major costs involved together with the major benefits that are expected to accrue. There are a number of assumptions behind cost/benefit analysis:

• 1.

  All feasible alternatives have been examined;

• 2.

  All costs and benefits can be identified and measured and

• 3.

  The costs and benefits can be expressed in common (usually financial) units.

In practice, these assumptions rarely hold true and managerial judgement is required in order to incorporate all elements of the analysis into the decision making process. One common difficulty in applying this technique in technology led initiatives such as e-banking is that many benefits such as enhancement in image are difficult to quantify. Some costs are also well hidden and sometimes the true costs of a project become apparent only several years after completion.