Hsbs and Citigroup

As per requirement of Managing Information module, the authors are asked to complete a case study assignment on “Does IT Payoff ? : Strategies of Two Banking Giants ” answering three particular questions. Some have argued that companies should spend less on information technology (IT) and wait longer to invest in more matured technologies because IT is a commodity and brings little competitive advantage. In this assignment, the authors are required to critically examine the validity of this view and determine how the two banks could justify their multi-billion dollar annual investments in IT. It is also necessary to critically analyse the IT investment strategies of HSBS and Citigroup. Finally the authors will analyse how companies should go about assessing the value of their IT investments and determine in their opinion, which of the two banks in clever in its IT investment.
Carr (2003) stated that as information technology 's power and ubiquity have grown, its strategic importance has diminished. His article “IT doesn’t matter” created huge controversy within information technology circles. He stated that in order to make a resource truly strategic and to gain sustained competitive advantage then the resource should not be omnipresent but in short supply. He believed in order to achieve and maintain a long term strategic advantage from IT, proprietary technology needed to remain protected. Regarding infrastructural technologies, more value could be gained when these were shared rather than used in isolation. The clear advantage is having a superior insight into the use of new technology. As IT systems are now incorporated within the majority of business functions a large proportion of corporate spending could be incurred on IT. Unfortunately to remain competitive and on par with their rivals a majority of companies will require large IT investment just to remain in business. It is essential for organisations to separate the essential element of IT

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