Impact of IT on Business: Commonwealth Bank of Australia

This report explores the impact of information technology on the Commonwealth Bank of Australia (CBA), including the need for IT, its importance for business survival, requirements for implementation, advantages and benefits in the banking sector, risks, and procedures for maintenance and monitoring.

Running head: IMPACT OF IT ON BUSINESS
Impact of IT on Business: Commonwealth Bank of Australia
Name of the Student
Name of the University
Author’s Note:

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Abstract
The major objective of the report is to know about the effect of IT in CBA. Various
subsequent and important impacts of information technology are present for any particular
organization such as information flow, supporting major business related decisions,
transaction processing, data management, executive support as well as several others. IT is
majorly responsible to effectively and efficiently provide each and every business with core
and significant scope for data analysis and also planning of numerous strategies of business
properly. This report has identified a security breach of CBA last year and requirement of IT
for this purpose is stated. Moreover, process to utilize IT and risks related to IT are also
provided in this report.

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Table of Contents
1. Introduction............................................................................................................................3
2. Discussion..............................................................................................................................3
2.1 Need of Information Technology within Commonwealth Bank of Australia..................3
2.2 Importance of Information Technology for Survival of Business...................................3
2.3 Requirements to apply IT in Commonwealth Bank of Australia.....................................4
2.4 Procedure to use IT in CBA.............................................................................................4
2.5 Advantages and Benefits of Information Technology in Banking Sector.......................5
2.6 Types of Risks in Information Technology for CBA.......................................................6
2.7 Procedure to maintain and monitor Information Technology by CBA............................7
3. Conclusion and Recommendation..........................................................................................8
References................................................................................................................................10
Appendix..................................................................................................................................12

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1. Introduction
Information technology systems are used by several companies to properly perform
any type of task (Tiwana, Konsynski and Venkatraman 2013). This report will be providing a
detailed description on effect of IT over a famous and noteworthy banks within Australia,
Commonwealth Bank of Australia or CBA. Several distinctive details like IT importance,
application of this information technology within the business, notable advantages and threats
of IT, requirement to implement IT would be mentioned in the report effectively.
2. Discussion
2.1 Need of Information Technology within Commonwealth Bank of Australia
IT is needed in CBA so that they do not similar incident faced last year. In the year of
2018, the respective banking official in this particular bank eventually confirmed that over 20
million customers’ accounts and financial data have been lost, although they even insisted on
the fact that they did not compromise on account security under any circumstance
(ABC.net.au. 2018). The various transaction details, personal details of customers during the
tenure of the years from 2000 until 2016 were being destroyed. These significant details were
stored within two magnetic tapes and these were destroyed by Fuji Xerox sub contractors
(See Appendix). This specific breach in data privacy and security focused on the fact they
subsequently require information technology within their business so that they are able to
reduce data related issues and problems effectively.
2.2 Importance of Information Technology for Survival of Business
IT would be extremely effective for survival of business so that information could be
effectively stored, retrieved and sent. The business operations are well executed with IT and
hence vulnerabilities or risks could be lowered in an effective manner. A proper information
transfer is only possible to make all kinds of decisions and even to ensure that information

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flow is perfect so that business growth is being determined (Jiao and Onwuegbuzie 2017).
Every business owner need effective communication with their clients within time and thus
they need to complete communication with respective organizational investors or business
partners regularly. Better communication is also possible with IT and hence CBA would be
able to gain more profits as well as competitive benefits.
2.3 Requirements to apply IT in Commonwealth Bank of Australia
As CBA has faced data security breach, they need to implement IT in their business.
However, there are few requirements for applying IT in a business and these are provided in
the following paragraphs:
a) Better Planning and Cost: This is the first as well as the foremost requirement to
apply information technology in a business (D'Arcy et al. 2014). A proper planning and cost
budgeting is required in this case.
b) Design and Install Equipment: The second requirement is to design as well as
install proper equipment for applying IT within the business.
c) Effective Training: A proper training is needed for all the staff within CBA so that
they are able to eradicate all kinds of issues faced due to any type of issue in software and
hardware.
2.4 Procedure to use IT in CBA
Commonwealth Bank of Australia will be subsequently using this IT with the help of
few useful and proper methodologies and hence making each and every business operation or
process more effective and error free (Hills 2018). One of the most proper methodology or
technique is to use Intranet Network and Sharepoint to maintain efficiency within the
business. The information related to finance could be easily and promptly shared with other
staff after having communication through electronic mails via Intranet. The respective bank

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manager of Commonwealth Bank of Australia can hence draft any message before sending it
to his staff by taking the help of intranet networks. He also enables his staff to use this same
network so that they are able to share confidential information in the bank. This particular
information thus is secured and helps in facilitation of effective flow of information (Wang,
Chen and Benitez-Amado 2015). Moreover, utilization of technology is even increased by
involvement of email based communication in CBA, hence enhancing over communication
efficiency majorly.
2.5 Advantages and Benefits of Information Technology in Banking Sector
Some of the most effective and efficient advantages of information technology for the
banking environment of CBA are provided in the following paragraphs:
a) Revenue Increment: One of the major and important benefit of IT within banking
sector of Australia is proper increment in revenue. A business can easily gain profit if the
organizational revenue is being incremented properly (Ye and Wang 2013). CBA can
measure their revenue and check the return on investment with the help of this technology.
b) High Flexibility: IT is responsible for providing high flexibility and scalability to
the respective organization of CBA and even ensure that each and every business process or
operation is running in an effective manner and without any type of issue. This is highly
required for removing the in built complexities in the most effective and efficient manner
(Wagner, Vollmar and Wagner 2014). This type of flexibility even helps to provide a better
execution of business strategies.
c) Gaining Data Value as well as Quality: Information technology would be
providing major data value and high quality to the data so that there remains no issue
regarding efficiency and effectiveness of data. CBA would be able to serve their customers
with more priority after gaining a subsequent value of data and also by improving its quality.

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d) Cost Effectiveness: Another effective benefit of IT for this Commonwealth Bank
of Australia is its cost effectiveness (Tafti, Mithas and Krishnan 2013). In spite of the fact
that IT implementation is expensive, this particular technology can provide cost effectiveness
to the company for increasing data security by simply allowing better execution of business
strategies and helping to undertake proper decisions in business. Being the part of the
Australian banking sector, CBA should focus on decision making process by streamlining the
operational and managerial processes, hence allowing them to obtain data value.
e) Information Security: The fifth important advantage of information technology
within CBA is that it provides information security (Roztocki and Weistroffer 2015). CIA or
confidentiality, integrity and availability of data are being maintained effectively without
much complexities. An effective storage and preservation of information is possible with the
successful implementation of information technology so that they are able to safeguard or
store the financial data or transactional data long time period. It even ensures security
breaches are avoided on top priority.
f) Communication Streamlining: The sixth benefit of IT in CBA is communication
streamlining (Vaishnavi and Kuechler 2015). This type of effective communication is
extremely important to make the entire process of company successful within a connected
and dispersed business landscape, leveraging or retaining of staff and also recruitment of staff
so that collaboration is being enhanced. The internal as well as external communication
within the business is effectively streamlined so that all types of issues and problems that are
associated with security of data are removed in the most efficient manner.
2.6 Types of Risks in Information Technology for CBA
Few important and noteworthy types of threats or risks within the subsequent
information technology of CBA are provided in the following paragraphs:

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a) Security Risks: This is the first as well as the most significant kind of risk within
the information technology in Commonwealth Bank of Australia. This specific kind of risk
can also turn on respective strategic threats such as major potential to cause high damage to
brand loyalty as well as reputation (Madon and Krishna 2018). The subsequent information
security is extremely helpful for subsequent requirement that businesses can execute through
assessment of security risks. Since, CBA has already confronted major security breaches,
eradication of these types of issues is highly recommended for them.
b) Privacy Risks: The next important and vital kind of risk in the IT of CBA would be
privacy risk. Such privacy risks consist of few significant consequences and the data might
lose its privacy. As CBA is a bank, it is highly required to maintain their data privacy on top
most priority so that no issues occur due to data theft under any circumstance (Dedrick,
Kraemer and Shih 2013). The major privacy related harms are eventually perceived and
hence CBA must effectively consider such privacy related risks.
c) Confidentiality Risks: The third important and specific kind of risk that is quite
common due to the use of information technology within a bank is confidentiality risk. As
soon as the confidential data eventually loses its confidentiality, it could be stated that the
confidential or sensitive data may suffer from information access restriction and hence not
allowing any other individual to get any type of financial data access under any circumstance
(Alreemy et al. 2016). Hence, Commonwealth Bank of Australia must undertake required
actions in respect to save this data confidentiality efficiently.
2.7 Procedure to maintain and monitor Information Technology by CBA
This Commonwealth Bank of Australia could easily maintain as well as monitor the
information technology by proper implementation of some of the core significant activities

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Major steps for this type of maintenance and monitoring of information technology are
provided below:
a) Implementation of Technology: The information technology is to be implemented
in the first phase of the core procedure to maintain as well as monitor in an effective manner
(Roztocki and Weistroffer 2015). A proper implementation is required to ensure that the
business operations are effective for the business.
b) Analysis of Problem and Identification of Modifications: The second phase is to
analyse the problem and understand why maintenance and modification is required. Such
modifications can be made after understanding requirement of IT. For this case of CBA, the
main issue is security breach.
c) Implementation of Identified Modifications: The next phase in this process of
maintaining as well as monitoring of IT is to properly implement the respective identified
modifications (Jiao and Onwuegbuzie 2017). Regular up gradations are required for this
purpose.
d) Review and Acceptance of Maintenance: The final phase or step within this
process of maintaining as well as monitoring of IT is to review and accept the maintenance.
This acceptance is required from the senior authority of CBA.
3. Conclusion and Recommendation
Hence, conclusion can be drawn that IT eventually consists of few important or vital
impacts over businesses. Respective working and living conditions of individuals are
substantially changes for this type of impact. The above given report has properly provided a
brief description on few vital impacts over CBA with subsequent details. An effective
recommendation for this particular bank of Commonwealth Bank of Australia is

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implementation of information technology within their respective business to effectively
eradicate any kind of complexity or issue associated to the security breach.

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References
ABC.net.au. 2018. [online]. Accessed from
https://www.abc.net.au/news/2018-05-02/commonwealth-bank-confirms-loss-financial-
records-20m-customers/9720928 [Accessed on 13 May 2019].
Alreemy, Z., Chang, V., Walters, R. and Wills, G., 2016. Critical success factors (CSFs) for
information technology governance (ITG). International Journal of Information
Management, 36(6), pp.907-916.
D'Arcy, J., Gupta, A., Tarafdar, M. and Turel, O., 2014. Reflecting on the" Dark Side" of
Information Technology Use. CAIS, 35, p.5.
Dedrick, J., Kraemer, K.L. and Shih, E., 2013. Information technology and productivity in
developed and developing countries. Journal of Management Information Systems, 30(1),
pp.97-122.
Hills, J., 2018. Information technology and industrial policy. Routledge.
Jiao, Q.G. and Onwuegbuzie, A.J., 2017. The impact of information technology on library
anxiety: The role of computer attitudes. Information technology and libraries, 23(4), pp.138-
144.
Madon, S. and Krishna, S., 2018. The Digital Challenge: Information Technology in the
Development Context: Information Technology in the Development Context. Routledge.
Roztocki, N. and Weistroffer, H.R., 2015. Information and communication technology in
transition economies: An assessment of research trends. Information Technology for
Development, 21(3), pp.330-364.

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Tafti, A., Mithas, S. and Krishnan, M.S., 2013. The effect of information technology–enabled
flexibility on formation and market value of alliances. Management Science, 59(1), pp.207-
225.
Tiwana, A., Konsynski, B. and Venkatraman, N., 2013. Information technology and
organizational governance: The IT governance cube. Journal of Management Information
Systems, 30(3), pp.7-12.
Vaishnavi, V.K. and Kuechler, W., 2015. Design science research methods and patterns:
innovating information and communication technology. Crc Press.
Wagner, D., Vollmar, G. and Wagner, H.T., 2014. The impact of information technology on
knowledge creation: An affordance approach to social media. Journal of Enterprise
Information Management, 27(1), pp.31-44.
Wang, Y., Chen, Y. and Benitez-Amado, J., 2015. How information technology influences
environmental performance: Empirical evidence from China. International Journal of
Information Management, 35(2), pp.160-170.
Ye, F. and Wang, Z., 2013. Effects of information technology alignment and information
sharing on supply chain operational performance. Computers & Industrial
Engineering, 65(3), pp.370-377.

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Appendix
Security Breach