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Impact of Information Technology on Financial Performance of Banking Sector

Showing newest posts with label Banking Sector. Show older posts
Showing newest posts with label Banking Sector. Show older posts
Impact of Information Technology on Financial Performance of Banking Sector
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1.0 Introduction

As an emerged business trend, the vast applications of information technology (IT) on economic
organizations are immense and immeasurable. Organizational systems and functions are now
considered effortless and unproblematic because of IT. IT also expanded the opportunities
concerning product development processes or innovations that provide organizations with cost
and competitive advantages. In a much broader sense, information technology strengthens the
business value of every organization. The parameters of using IT for internal affairs have
profound impact specifically for core management responsibilities (Gunasekaran, et al, 2002).

According to Land (2004), Information Systems "are systems whose ultimate purpose is to store
and manage information". In other definitions, they are basic infrastructures of the modern
business organization; they coordinate the resources and activities of the input, process and
output sub-systems of the organization, thus monitoring and ensuring internal efficiency.
Simply, the information system gathers and stores all the needed information of the
organization. After all, to plan effectively, an organization needs to know its present position, its
strengths and weaknesses, those of its competitors, market trends, etc. These can all be
organized with the used of an information system.

Establishment of information systems is one of the primary techniques that businesses adapt
nowadays. The success in the management of information systems development project impacts
three key issues: quality, usefulness and usability. Generally, it is not known how information
technology affects the financial performance of the banking sector and these three key issues,
likewise, are not yet explored in the banking industry. This study proposes to investigate the
impact of IT and specifically the use of information systems on the financial performance of
banks.

2.0 Brief Literature Review

Frei, Hunter and Harker (2001) noted that technology now plays a key role in the performance
of banks. Automation may mean the integration of an Information System that employees can
check regularly. Information system, which is a form of back office automation, can be helpful
in teaching an employee to have a single view on customers. Seifert and Wimmer (2001) stated
some impact of functional economics to retail banks. One is the increased need for banks to
improve their monitoring functions, mainly to fulfill the task of assessing and controlling risks,
that primarily arising from lending relationships. Aside from the challenges brought by
ecommerce, there are also challenges of storing information of customers to databases. That is,
most of the bank's financial information is held in the form of reports.

3.0 Research Problem

The key question that the study will seek to answer is - how does IT impact the financial
performance of the banks? Other research questions are:

1) Do retail banks perceive IT as strategic and source of competitive advantage as it boost

optimum financial performance?

2) Which among the types of information systems - operational, high potential or support -
maximises financial performance of the banks?

3) How do information systems contribute in the achieving high financial performance for the
banks?

4.0 General Objective

The main aim of this study is to investigate the impact of IT and information systems on banks'
financial performance. In lieu with this, the research objectives are:

• To determine which among the type of information systems support banking businesses
leading to high financial performance of the banks

• Evaluate in what specific ways and to what extent do information systems could eventually
lead to high financial performance

5.0 Methodology (stratified sampling)

The study will explore the problem in an interpretative view, using a descriptive approach which
uses observation and surveys. To illustrate the descriptive type of research, Creswell (1994) will
guide the researcher when he stated: Descriptive method of research is to gather information
about the present existing condition. The purpose of employing this method is to describe the
nature of a situation, as it exists at the time of the study and to explore the cause/s of particular
phenomena. The researcher opted to use this kind of research considering the desire of the
researcher to obtain first hand data from the respondents so as to formulate rational and sound
conclusions and recommendations for the study.

Primary and secondary research will be integrated. The reason for this is to be able to provide
adequate discussion for the readers that will help them understand more about the issue and the
different variables that involve with it. In the primary research, public managers will be
surveyed. A structured questionnaire will be developed and it will be used as the survey tool for
the study. On the other hand, sources in secondary research will include previous research
reports, newspaper, magazine and journal content. Existing findings on journals and existing
knowledge on books will be used as secondary research. The interpretation will be conducted
which can account as qualitative in nature.
The study will sample 100 banking representatives working in banks that operate technically
hence using information systems in their business conduct. The sample will be stratified
sampling. The survey strategy will be used for data collection. A structured questionnaire will
be constructed for the survey and will be distributed to the respondents through email.
Participation of the respondents will be treated with utmost confidentiality. Data will be
analyzed using the latest SPSS software. The analysis will look for the percentage and weighted
mean of responses on each items.

Report on the Dilemma of Using Software Methodologies and the Implications

for Object-Oriented Software Projects

Showing newest posts with label Software Research Proposals. Show older posts
Showing newest posts with label Software Research Proposals. Show older posts
Report on the Dilemma of Using Software Methodologies and the Implications for Object-
Oriented Software Projects
0 comments

I. Introduction

Software is an indispensable and crucial provider for the new economy as well as science. It
helps to create new markets as well as new directions for more dependable, elastic and vigorous
society. Though, more often than not, software falls short behind the expectorations of the users,
the customers as well as the fixed business rule of the company or the organizations. Although
there are many software methodologies, tools as well as techniques that are already available
and used, most of it are expensive and not yet that reliable for those highly changeable and
evolutionary market. More often than not, software methodologies or approach are only proven
in case-by-case oriented methods (Fujita & Mejri 2006, p. v).
In every project, those inexperience developers are already thinking about the different ways
that they can handle in order to deal with their stock knowledge and skills as well as the steps
that they can follow. On the other hand, those inexperienced developers will first look forward
on how to commence the project. They need some good guidelines as well as proven works and
studies that have been applied in real world. However, there have been many critics and
questions that are arising from different IT professionals as well as those new in the business
about the necessity of methodology (Cairo & Barreiro 1999, p. 324). Cairo & Barreiro (1999)
said that making program is fun for many people; someone can enjoy it by making things or
features of his or her own designs and ideas in a faster and cheaper manner than having a large
team, without following any methodology (p. 324).
Using a methodology doesn’t ensure success of the overall project but it serves as a sign of
competency that will help to provide different means or ways to lessen risks (Cairo & Barreiro
1999, p. 328).

II. Concept and Background of the Study

As of today, there have been many software methodologies that are available to be used and
applied in the real world of IT. Each and every types represent a specific situation or business
rules that will fit the needs and demands of the current system. Due to this reason, there have
been many methodologies that are facing discussion as well as debate with regards to its
efficiency and use, from the waterfall up to the agile as well as those other types in between
(Grady 2007).
Software methodologies are considered as working models. It follows a continuous path of
evolution. Selecting the best or the suited software methodologies will depend or based on the
situation of the business or organization, the actors or the different entities that are involved in
the software and the product or project itself (Grady 2007).
The reason for the creation and implementation of different methodologies is due to the fact that
the IT sector or aspect of the world had faced a software crisis during the past few years due to
the main problem: the software production does not satisfy the customers in terms of quality and
the delivery times; and the fact that the past methodologies doesn’t have the ability to handle
different problems about delayed because of those methodologies are heavy and rigid (Marchesi
& Succi 2003, p. 447).
All of the said reasons are the primary focus of those professionals and new members of the IT
professional’s world in debating and opposing the efficiency of the software methodologies in
helping to improve the process of developing different programs as well as helping to prevent
future error or dilemma in the duration of software development. Some professional says that
the presence of various types of software methodologies doesn’t really help the project manager
or the developer, especially those amateur, but more often than not, it can cause confusion. This
is due to the reason that not all of the methodologies are applicable or useful for a particular
situation or business rules, there are many things and features that must be considered in order
to meet the desired outcome. Another thing is that the use of software methodologies doesn’t
follow that the developing system will be successful. This makes those who are against the
methodologies because although the developer will have to exert money and all, there is still a
big chance for them to fail.

III. The Current Situation

There are many problems or dilemma of software methodologies that are connected to the
object-oriented software projects. Montlick (1999), states that object oriented software is all
about object. It can be characterized as a black box that receives and sends different messages.
The black box contains different code and data. Object-oriented programming has its primary or
golden rule and this is to avoid or prevent from peeking inside the box. Everything inside the
object must not be seen and even must not be modify or change rather than the creator or the
developer of the source code or of the application.
The said situation will be very hard since all of the methodologies that are available today are
dependent in communication. This is due to the fact that communications among the team
members are impossible during any systems or software developments due to their pride,
positions and sometimes due to some inevitable things such as stress, time pressure and
reluctance. The process of implementing and doing object-oriented software project is in great
need of communications due to the fact that each and every part of the software or application is
connected to one another. As well as the idea of one member must be connected to another
member of the team.
Another thing is that, the source code of the object-oriented cannot be changed without the
permission of the author because it might cause chaos and error. That is why; it will be hard to
manage the overall operation of the software development.

A. Industry/ Academic Consideration

The dilemma about the use of different software methodology and its impact to the object-
oriented software projects can help the industry or the firm of Information Technology to
enhance or to continue the development of many methodologies that will handle the dilemma or
the disadvantage of software methodologies in different areas of software development. This
can help the students to be more familiar with the different methodologies that are available to
be used as well as the right time or situation on when, where and how to use it.
This can help the recent study about the Globacom to enhance their system. By analyzing the
different dilemma of the different system methodologies with relation to the object-oriented
software, it will be easy to look forward or to plan the strategies or the different approach that
the company will be using in order to prevent those dilemmas that might cause a bigger one.
It can also help to be more focus about the different impact and applications of the software
methodologies to the business industry.

B. Global Consideration

Application of different IT and other computer related applications and technologies are now a
must or inevitable in most of the enterprise, sectors, businesses and organizations in all part of
the globe. It has become one of the best weapon that can be used in order to acquire their
competitive advantage as well as to meet the demand of their customers or client that can help
them to be more productive and reliable. Globacom is a telecommunication company, which
means that their company is connected to other local as well as international telecommunication
company in their country and other part of the globe. This means that having a successful
software development process and activities can help the company to be more well-known or
famous to their subscribers in terms of their reliable services and products.
It can also prepare them to be more selective or choosy about the path that they are going to take
in order to meet the demands and the needs of the company’s business rules and their aims and
objectives. It can also help to make the world more connected and make this small world,
smaller.

C. National Consideration

Although the company is connected to other telecommunication company in some part of the
globe, Globacom, still focus on its local operations. This is due to the fact that their main
customers or consumers are located in their local or mother country. The system or software
development plan of the company will be helpful for them to be more connected or friendlier to
their customers or clients. That is why a good, well-planned, well-implemented as well as well-
maintained software development activity must be created and it starts with selecting the proper
or the suited methodology. If the software development plan and implementation will turn out
good, then the overall performance or the overall systems of the company will be connected and
it can help to improve the performance of their country. This is due to the fact that there are
other companies or businesses that are dependent or connected to the Globacom, since it is
offering communication services.

IV Conclusion

There are many reasons why software development fails such as lack of time and details in
planning, lack of information between the developing team, the users and the owners and lack of
communication inside the developing team. Software methodologies are just guidelines or
strategies that can be used or follow in order to prevent different future problems or dilemma
that the developers can encounter during the system or software development. However, due to
the fact that those methodologies are just considered as guides or rules, it will not ensure
successful implementation of system development and are limited for a specific use or situation.
Different methodologies can also help to create a future development that can help the
developers or the developing team to allot a space or a room for future development that can
help them to ready the system or the software for future enhancement or growth. This will
enable the system to be more versatile and adaptable.

V. Recommendation

Although there are many disadvantages that can be found in using the different system
methodologies, there are also many activities or task which can be done in order to prevent the
hazardous effects of mismanagement in the overall performance of the developing or already
developed system or software.
The first thing that has to do is to connect or to related the different business rules, detailed
needs as well as the schedule of different entities and other important events that are related to
the overall development of a specific system or software. It will also be important to gather
different information from the different perspective of different entities of the system such as
the owner, the end-users and the perspective of the customers. This can help to target the logical
and physical design needs of the software or system.
As of the situation of the Globacom, it will be necessary to consider the needs, demands and
preferences of their customers as a whole in order for them to connect their system to their
customers or client. Communication is also one of the most important, if not the most important
aspect in any activities or task with accordance to system or software development. This is due
to the fact that there are many parties or entities who are involved in the overall system and it
must handle each and every needs of each and every participant of the system. Gathering of
information is also a necessity; this is due to the fact that a system or software is only the mirror
or the reflection of the current system, thus all of the flow of data and information must follow
the business rule of the company together with the updated data flow.
Proper implementation and application of system methodologies together with the object-
oriented software can help to improve the management of the information and data flow inside
the business or organization. It can also help to be more connected to the outside related entities
such as the customers, the suppliers, inventors and other important stakeholders.

Bibliography

Cairo, O, Barreiro, J & Solsona, F 1999, ’Software Methodologies at Risk’, in Fensel (ed.) &
Studer (ed.) 1999, Knowledge Acquisition, Modeling and Management: 11th European
Workshop, EKAW ’99 Dagstuhl Castle, Germany, May 1999 Proceedings (pp. 323 - 336),
Springer

Fujita, H (ed.) & Mejri, M (ed.) 2006, New Trends in Software Methodologies, Tools and
Techniques: Proceedings of the fifth SoMeT_06, IOS Press

Grady, R 2007, With a Plethora of Software Methodologies, Pick the right one for the job,
robgrandy.com, viewed 08 January 2008,
Marchesi, M (ed.) & Succi, G (ed.) 2003, Extreme Programming and Agile Processes in
Software Engineering: 4th International Conference, XP 2003 Genova, Italy, May 2003
Proceedings, Springer