IT Expenditure/ Investment, Productivity, Competitive Advantage

IT Expenditure/ Investment, Productivity, Competitive Advantage & Bottom line performance

People’s bank has heavily investing in IT development during reason past in view of achieving higher productivity, gaining competitive advantages and to bubble with bottom line performances in the banking industry. Mainly increasing the productivity among the staff, to face the rival competitiveness successfully with inclusion of latest IT infrastructures in view of  achieving competitive  advantages and increasing  market share portfolio and finally to maximize its bottom line performances.

So far this journey was successful and the steps taken have given green light signal to further move forward. Bank didn’t try any labor reduction at first with this IT infusion but wanted the productivity level of the employees at a highest level. Further banking industry in Sri Lanka highly competitive and retaining the market share is not an easy task and meanwhile to gain growth need to increase the business volume, portfolio and market share to strengthen the bottom line performances.

IT investment has become vital elements in application of corporate strategies to enhance the shareholder value. In the banking industry, IT strategy and performance measurement are important factors in Balance Scorecard approach. Investment cost in IT is very high, it is time consuming too and has to face lot of hurdles to overcome the obstacles.

Balance scorecard concentrated Financial, Customer, Internal business and Innovation & learning perspective. People’ bank has successfully identifying the above factors well and address them by giving more weigh on those. Financial perspective is the base for all these developments and everything aligned to strengthen the bank profitability by the way of increasing customer base, business growth and market share. According to BASL-111 implementation by 2019/20 all the banks have to meet new capital adequacy structure. Our owner is Govt. and they not in a position to infuse fresh capital. Options available are privatization of few segments of the bank. Exg. Security, cash transport and selling shares at share market. To overcome bank need to increase profit at large level in 2018, 2019 and 2020.

 On the other way to  attract the core subject “customers” eye catching color system, Logo changing, entire banks physical evidence changing, and Vision /Mission statement changing  everything have been done simultaneously in  the bank without keeping any room to imitate by the competitors easily  and they have become shocked/surprised  after seeing the sudden massive level changes.

Internal business process also self banking units (SBU) bank wanted to utilize the staff for more business promotion activities to increase market share. Internally by centralizing some processes, focused the staff towards more on customer side from internal back office functioning. Unnecessary internal processes were changed and more weight given on business development area.

After introducing SBU, CDM and WAVE app bank without stopping at that point concentrated more on     Research and development (R&D) side too. Bank continuously introduces new facilities to customer. Exg. Express banking, which was paperless account opening system and does not need single paper documentation. While people’s wave solving lot of requirements of the customers, other side new features gradually added through the R & D.  Professionally qualified people from universities are hired for the R & D on pre and post basis of the new developments.

Though the financial cost was very high bank managed well and within one tear achieved the milestone target by establishing of 100 self-servicing units all over the Island. Not only invested, but also bank concentrated on innovation & learning perspective too continuously went on to introduced new banking features like Digitalize banking, Express banking, People’s Wave app and corporate customer package.

While engaging such a large project always there will be barriers and challenges.Accordingly this change   was taken Media, parliament and become politicians talkative topic at that time.  Special committee was appointed to inquire about the tender procedures. Internal pressure group- unions also become panic, whether it will become threat for employees and staff also worried about their future. However, the fear of them is cleared and all are functioning smoothly.

If we look into the advantages, banks image has been heavily popularized   with this rapid changes existing customer segments and non-customer segments are unbelievable at a point. This it development made the customers convenience to enjoy banking themselves at any time (CDM/ATM/KIOSK). Bank was able to use the extra employees created from the automation to use for marketing, business mobilization and business promotion activities in view of achieving the market share.

Though bank has successfully managed all the threats and challenges there are some disadvantages in the process. Bank was lacked in the pre evaluation process, it pave path for some early breakdowns. CDM machines are produced for sophisticated currencies and not like the currencies what used in our country. Due to that frequent cash jamming reported. Further all machines are on hired basis and huge rentals have been paid. Actually bank would have purchased the machines outright as why annual rental was enough for the cost of the machines.

Further, without any survey, SBUs are opened everywhere to meet the target. Here what we saw personal agenda was placed first. Exg. We have Galle Rd, Col-6, Col-4, Col-3 and Col-2 Bank would have avoided Col-4which didn’t have much transactions.  While we are developing digitalization banking business, we have to reduce the brick and motor systems.

Anyhow as per to BSC application, the perspectives are properly addressed   by the bank. Bank without limiting the BSC to performance appraisal, applied the BSC norms perfectly for strategic implementation in the bank.