Beruflich Dokumente
Kultur Dokumente
1
IT Investment is a term that applies to investing in equipment, applications, servers and
basic technologies. According to Weill and Olson IT Investment are the expenses associated
with acquiring computers, communications, software, networks and personnel to manage and
operate a management information system.
There are several methodologies that are used in the case of IT Investment Decision makings.
The methods have both advantages and disadvantages, but they are frequently used by an
organization to take the right decision in terms of IT Investment. Some of the Methodologies
are:
Analytical Hierarchy Process: The process calculates the overall score of decision-makers
pair wise comparisons.
Balanced Scorecard: This method evaluate investment from the users, business value,
efficiency, and innovation/learning perspectives.
Critical Success Factors: This method obtains, compare and rank factors critical to business
success and based on these rankings, deduce investment priorities.
Accounting Rate of Return: This method compare average after-tax profits with initial cost.
Delphi Method: This method Obtain consensus of experts opinion concerning the best
alternative investment.
Game Theory: This method Calculate payoff of investment based on actions of the
competition, mathematics and economic theory.
Payback Period: This method calculates time required to recoup initial cost.
Satisfaction and Priority Surveys: Survey and compare user and MIS professionals
opinions on the effectiveness and importance of installed systems.
It is important to know where IT investment and decision-making methodologies fit into the
general planning framework of an organization. To understand their role there is a basic MIS
hierarchical planning stage which helps to form a well understood strategy to go ahead for an
IT Investment. There are three basic stages of planning in all organizations and in all
functional areas.
2
After the strategic planning stage there comes the implementation stage. In this case there are
several implementation strategies. Some of them are:
Direct Conversion: If there is only capacity or space allowed for one system to operate at a
time or that the existing system is too costly, or dysfunctional to ongoing operations.
Parallel Conversion: If the cost of shutting down the existing system in prohibitive.
Phased Conversion: If the architecture of the existing system will permit the gradual updating
of new modules or the costs of a completely new system are beyond the resources of the firm.
Pilot Conversion: If the system has features that need to be examined in use or the risk of
converting entire system is too risky or expensive.
The Implementation Stage is mainly done in order to check against the goals and objectives
set at all the strategic, tactical and operational planning stages. It is a final check to make that
the cost and benefits observed in step 6 and 7 and expected in the new system benefits are
achieved in the end that was developed over all nine steps in the MIS planning process.
Besides all of these there are also some qualitative and qualtitive measurements are used to
evaluate and measure the IT Investment performances. Some of them are:
Profitability Measures:
Return on Assets: Measures profitability and how efficiency assets were utilized.
Return on Investment: Measures profitability based on total investment, both debt and
equity.
Efficiency measures:
Sales by Total Assets: Measures how efficiently assets were used to generate sales.
Inventory Turnover: Measures the liquidity of inventory and how fast it is sold.
3
IT Investment Decision Making in EXIM Bank:
EXIM Bank- Export Import Bank of Bangladesh Ltd. was named at first as BEXIM Bank
BEXIM stands for Bengal Export Import of Bangladesh. This commercial Bank was opened in
August 03, 1999 with some new innovative visions in customer services. The Bank received
the certificate of incorporate no.C-37864 (2164)/99 under the commencement of the business
on the same day by the section 150(2) under companies Act. A part from the head office in
Dilkusha C/A, it started its first local branch in Motijheel C/A simultaneously in order to
provide all kinds of Banking support to the clients. On December 02, 1999 the second
branches both in Dhaka City and other cities. Slogan of the EXIM Bank: Local Bank Global
Network
Vision:
The gist of the banks vision is Together towards Tomorrow. Export Import Bank of
Bangladesh Limited believes in togetherness with its customers, in its march on the road to
growth and progress with service. To achieve the desired goal, there will be pursuit of
excellence at all stages with climate of continuous improvement, because, in Exim Bank, the
line of excellence is never ending. Banks strategic plans and networking will strengthen its
competitive edge over others in rapidly changing competitive environment. Its personalized
quality services to the customers with trend of constant improvement will be the cornerstone
to achieve our operational success.
Mission:
Corporate Culture:
4
ICT Policy of Exim Bank:
Information & Communication Technology (ICT) plays a vital role in achieving the business
objectives of any organization in this turbulent and ever volatile business environment. For
this reason, many organizations have already automated their business processes fully to
provide cost effective sophisticated electronic services to their customers. It enhances
customer satisfaction with the ultimate result of increased number of more loyal and trusted
customers at lower cost.
Science banks play with different kinds of information, ICT has bought a major change in the
banking industry. Instead of providing the service through bank counter, customers are
encouraged to enjoy the service through various electronic delivery channels like ATM, POS,
Internet, cell phone etc. All information are collected, processed, stored, and propagated through
ICT enabled devices. This paperless banking system enables the bank personnel to use computer
and other digital devices to complete their day-to-day work where systematic procedure and
policies are very much important to guide the users of the system to achieve the mission and
vision of the bank and to ensure proper usage of customer information along with the proper
protection of the Information System assets.
For these major reasons Exim Bank has made a serious step towards achieving its goals and
objectives by investing in the IT.
Computerization Strategy:
Currently Exim Bank is maintaining a wide area network (WAN) using the network of
Metronet Bangladesh and the network of Advance Data Networks. All branches of Dhaka city
are connected with Head Office through Metronets optical fiber network and all the branches
outside of Dhaka are connected with Head Office through ANDs VSAT network. The
centralization of banking software is going on. After implementing this centralization project,
the bank will be able compete with its competitor more favorably. Gradually the bank will
move towards paperless banking transactions. All the information will be collected, processed,
stored and disseminated electronically. There will be no manual register or books for
information processing and storage in the long run.
5
ICT Infrastructure:
The bank is now using a centralized Core Banking system where all the branches are
connecting to the banking software through Wide Area Network (WAN). Head office divisions
are also using the same core banking software. Each branch and Head Office is using Local
Area Network (LAN) for internal connection. These LANs are connected with each other
rd
using CISCO routers through 3 party networks. The branches are now conducting all sorts of
any branch banking services. The banking software is using Oracle database. The IT division
has developed a number of support software using Oracle database some of which are
running individually in the branch (CL/CIB, IPO Collection etc) and Head Office (CL/CIB,
Inventory, etc) and others are running centrally in the Head Office (Payroll, LC Reporting
system etc).
The bank has taken a comprehensive automation plan where all the where all the branches will
be connected through a Data Center (DC) and a Disaster Recovery Center (DRC) through at
least two telecommunication lines. These DC and DC will be the central storage and
processing house of all information of the bank. The communication infrastructure will consist
of internet technology. All the modern electronic delivery channels like Internet, Mobile banking,
ATM/POS service etc. will be provided from these DC &DRC.
In order to complete the ICT policy of Exim Bank following policies have been developed to
effectively maintaining the ICT system of Exim Bank:
6
ICT Management Policy:
In order to attain the goals and objectives of Exim Bank the ICT Policy of Exim bank has
given the following guide lines:
In order to properly manage the ICT system of Exim Bank, the IT division should be divided
into the following departments segregating the duties and responsibilities of the personnel of
the division:
Helpdesk management department
Hardware department
Software Development & Database Administration department
Banking Software Solutions department
Network and Communications department
IT Security Management department
1. Effective risk management system shall be in place for any new processes and systems
as well as a post-launch review.
7
2. Use of software and programs for security risk assessment analysis shall be
restricted and controlled.
3. The risk management function shall ensure awareness of and compliance with the itand
IT security policy and to provide support for investigation of any IT related frauds and
incidents.
IT Security policy:
This portion describes the Information Technology security Policy of Export Import Bank of
Bangladesh Limited. All concerned either in the branches or in the Head Office divisions of
the bank shall observe and follow the guidelines provided in this document.
The policy statements are developed for all levels of users acting in different roles in the ICT
system of the bank including general users of different software used in the bank, all officers
and executives of IT division responsible for maintaining the system, and the members of the
top management of the bank. In order to quickly identify the responsibility of different group
of roles for each policy statement, a tag is attached to the end of each policy statement (section
6 to section 13) for ease of identification. Multiple tags can be attached to a single policy
statement if that statement is applicable to multiple roles.
Bank deals with the sensitive customer information along with other business information.
Availability, integrity, confidentiality and ethical use of the information depends on the habit
of the users of the ICT system of the bank through which electronic banking services are
provided to the customers.
Since ICT leverages each individuals ability to access and process information from remote
sources, users must be careful about the sensitive customer information, other business
information, maintaining healthy information infrastructure of the bank. This Usage Policy
codifies what is considered appropriate usage of computers, networks, wireless device and
other related digital devices used in corporate Intranet of Exim Bank. The purpose of this
Policy is to help ensure a healthy information infrastructure that supports trouble free
electronic banking services to the customers.
8
Antivirus Policy:
All Windows computers (clients and servers) connected to Exim Banks network (herein referred
to as "the network") or networked resources shall have anti-virus software (preferably the most
current version) correctly installed, configured, activated, and updated with the latest version of
virus definitions before or immediately upon connecting to the network. If deemed necessary to
prevent viral propagation to other networked devices or detrimental effects to the network,
computers infected with viruses or other forms of malicious code (herein collectively referred to
as "virus" or "viruses") shall be disconnected from the network until the infection has been
removed.
If a Windows computer does not have anti-virus software installed, it shall be installed according
to one of the two following methods:
If the installation source is a CD-ROM, the anti-virus software shall be installed before
establishing any connection to the network. Upon establishing the initial network connection, the
virus definitions shall be updated to the most current version immediately and before loading or
installing any other software or data.
If the installation source is a banks server, the computer shall be connected to the network for
the sole purpose of installing anti-virus software from that server. The installation shall be
performed immediately upon establishing the initial network connection and virus updates
downloaded and installed before loading or installing any other software or data.
Mainly these are the main policies that influences the IT Investment Decision Making activity in
Exim Bank.
Defining Problem
Compare Alternatives
Perform Sensitivity
Analysis
10
Cost/benefit analysis involves the estimation and evaluation of the net benefits associated with
alternative courses of action. This technique often entails comparing the present value of benefits
associated with an investment to the present value of the costs if the same investment.
Exim Bank generally goes through the following steps to make an IT Investment decision:
Defining Problem:
Defining problem is extremely important in any type of decision making including IT investment
decision-making. Exim Banks process of problem definition involves generating all possible
alternatives and then if necessary narrowing this list down by eliminating unacceptable
alternatives.
A cost is any expenditure that must be incurred to procure, Install and maintain an IT. For IT
Investment decision-making costs have traditionally been viewed as both tangible and directly
attributed to the system. Exim Bank , on the other hand see intangible costs which dont show
any direct affect rather show an indirect one.
In this step EXIM Bank generally find out some of the tangible and intangible expenses some of
them are:
Tangible Expenses:
Intangible Expenses:
11
Quantification of Cost and Benefits:
In this step Exim Bank generally goes for the quantification of intangible costs. In this regard
Exim Bank generally follows either of these 2 approaches:
If the bank follows the first criteria then they indentify the cost benefit ratio of the alternatives
they like to invest. After finding the ratios the alternative with highest one gets selected.
In the second criteria the bank fins the NPV of the alternatives and then selects the most eligible
one from the alternatives.
Exim bank hardly uses the IRR techniques but uses the shortest payback period technique.
Sensitivity Analysis:
After taking the decision EXIM Bank do a sensitivity analysis to find out the reliability of the
decision generated from cost/benefit analysis.
At last it can be said that making the right decision in the field of IT Investment is not an easy
task for an organization. This comment also applies for Exim Bank. By following Cost/Benefit
analysis Exim Bank takes the decision about their any of the IT Investment projects. With this
decision making pattern Exim Bank feels comfortable.
12