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What Is The Significance Of Master Net?

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What Is The Significance Of Master Net?
BANK OF AMERICA’S MASTERNET SYSTEM: A CASE STUDY IN RISK ASSESSMENT
By Jeffery G. Szilagyi Abstract In 1982, Bank of America initiated the development of the Master Net trust accounting system. After $78 million in losses on the project, the bank announced in 1988 that its trust business was being given to a subsidiary because it could no longer handle the operational requirements. MasterNet quickly became known within the information system industry as a classic case of a system that had fallen far short of expectations. The failure was particularly difficult for Bank of America with its rich history of technological successes. While information system successes have received substantial trade press and academic coverage, system failures have drawn significantly less attention. Only recently has academia started examining the causes of information system development failure. Clemons has developed a five risk framework for assessing the total risk of a project in an attempt to understand the possible sources of failure. This thesis will examine the MasterNet project using Clemons' five risk framework as a basis of analysis. This analysis will demonstrate that Bank of America did very little to manage the total project risk spanning the five dimensions. Consequently, the project was a likely candidate for failure. Bank of America’s Master Net Story This section will provide brief coverage of Bank of America’s 1970s history and then proceed through the 1980s with a closer examination of the MasterNet story. A. Tom Clausen's Reign of Neglect On January 1, 1970, Tom Clausen took the reins as Bank of America's president. At the time, Bank of America- tended a stable and profitable retail business that served two and a half million customers. 18 The decentralized retail business proved very easy to -run for the bank's corporate management because an effective set of controls had been established. Thus Clausen's two predecessors -- S. Clark Beise and Rudolph Peterson --

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