IS Strategy, Management & Acquisition

This case study discusses the IS/IT strategy changes implemented by the Commonwealth Bank of Australia, including mobile banking, system integration, and upgradation. It highlights the advantages of these changes and compares the bank's management to its competitors. The report also explores the future management of these IS/IT changes.

Running Head: IS STRATEGY, MANAGEMENT & ACQUISITION
IS Strategy, Management & Acquisition
Student’s Name
University Name
Author’s Note

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Table of Contents
1. Introduction..............................................................................................................................3
2. Rational for selection of these IS/IT strategic changes............................................................3
3. Discussion................................................................................................................................4
3.1 background information of the Commonwealth Bank of Australia..................................4
3.1.1 IS/IT changes implemented by the Commonwealth Bank........................................5
3.2 Advantages of the IS/IT systemic changes.......................................................................5
3.2.1 3.2.1 Mobile banking.................................................................................................5
3.2.2 Integration of PLS with HLS.....................................................................................6
3.2.3 Upgrading mainframe computing to UNIX and DB2...............................................7
3.3 Management of changes in comparison to the competitors..............................................7
3.3.1 Mobile banking..........................................................................................................7
3.3.2 integrating PLS with HLS and upgrading mainframe to UNIX and DB2.................8
3.4 Future management of the IS/IT changes.........................................................................9
3.4.1 Management of mobile banking strategies................................................................9
3.4.2 Integrating the personal loan software with the home loan software and upgrading
the mainframe computing to UNIX support and DB2...........................................................11
4. Conclusion..............................................................................................................................12
5. Reference List.........................................................................................................................14

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1. Introduction
In this case study based report, the alterations of the IS/IT strategy of the largest Banking and
Finance organisation of Australia, the Commonwealth Bank will be discussed. The changes
regardingIS/IT strategy implementation will include the introduction of mobile technology,
upgradation of the previously employed mainframe computing system with the UNIX system
integration of the personal loan system with that of the home loan system. This report
emphasizes on the fact that the Commonwealth Bank of Australia is the first bank in the country
which implemented the fully functional service of mobile banking. The significant development
of the mobile banking software of the Commonwealth Bank allowed their competitors like a
ANZ to use their Technology. Does Teddy popularity and growth of the mobile banking service
was observed by the managerial team of the Commonwealth Bank of Australia since 2009. This
prompted the team of strategy development of the Commonwealth Bank to continuously strive
towards the improvement of mobile banking service with the use of most recent Technology.
Upgradation of Mainframe Windows based system with that of the UNIX system has also
delivered the major advantages to the banking corporation. Firstly significant system
performance improvement has been observed around with optimisation of the daily
performances as well as increased productivity along with reduction of system cost. These
advantages allowed the organisation to develop excellence in customer satisfaction by means of
performance, quality as well as service. Along with the implication of the development of these
IS/IT strategies, how the organisation is going to manage as well as develop these strategic
changes in the future.
2. Rational for selection of these IS/IT strategic changes

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Information system or information technology is in any company, one of the key factors of
success. The organisations around the world have you realise that Technology can shape the
future of their business productivity by reducing their cost to the company and daily operational
expenses. This is why adaptation towardsIS/IT has become a necessity for organisations in
context to their future sustenance (Worthington 2016). On the contrary, the adaptation to
information system technology has also thrown real challenges to the database companies like
the Commonwealth Bank of Australia. This is because; the best and finest technology of today is
going to become obsolete for tomorrow. That is why constant replacement and up gradation of
IS/IT is of utmost importance.
Based on the refurbishment of IS/IT strategies of the Commonwealth Bank, this report will
analyse how these changes are supposed to help the company to gain a sustainable position in the
competitive market (Senadheera, Warren and Leitch 2017). This report further describes how in
the Commonwealth Bank manages such IS/IT change as compared to the other companies and
how they will project this changes in their future activities.
3. Discussion
3.1 background information of the Commonwealth Bank of Australia
The Commonwealth Bank is a multinational Finance Corporation established in the early years
of 19thcentury. The primary mission of the institution is to become the top most Finance Service
Organisation in terms of service quality and customer reputation in Australia. As per Willcocks
and Reynolds (2015), the primary business strategies adopted by the Commonwealth Bank is the
recognition of significant opportunities of development in business, day to day and thereby
generate more value towards the customers, people as well as stakeholders.

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3.1.1 IS/IT changes implemented by the Commonwealth Bank
As highlighted earlier, the mission of the bank is providing the best customer service in terms
of quality. This bank is one of the finest examples of Technology adopted finance institution
who have been providing excellent service to meet the requirements of the customers by
making use of most updated Technology. Analysing the strategic information system changes
adopted by the organisation, it can be commented that one of the most successful changes in
technology implementation by the bank is the development of the mobile banking system.
The Commonwealth Bank of Australia launched there completely functional mobile banking
service based on mobile internet data on the 25th of March in 2009 (Hirschheim 2015). This
allowed to the customers to use their mobile network to use banking services from their
smartphones. Another similar strategic implementation by the organisation includes the
successful change brought UP board by Outsourcing there computing to HP for the
development of an integrated personal loan system as well as home loan system. Last
significant IT change is to shift from a mainframe to an Unix platform and up gradation to
the DB2 database management system.
3.2 Advantages of the IS/IT systemic changes.
3.2.1 3.2.1 Mobile banking
As highlighted by Pearson (2017), mobile internet banking is supposed to be more secured
compared to PC banking. This is because tracking a person who is using mobile internet data is
quite easy compared to doing the same with a person using banking facility on computer. The
use of SIM card in mobile allows the device to be connected directly with the bank. On top of
that, the recent banking application developed by the Commonwealth Bank allows the customer

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handling team to send direct request to customers for securing the mobile server that we are
using for internet banking of Commonwealth Bank. This promptness for security protects the
bank customers from penetration of hackers (Worthington 2016). Interest security level,
enhances the customer loyalty towards the services provided by the Commonwealth Bank of
Australia.
3.2.2 Integration of PLS with HLS
The PLS user interface of the bank operated on a non supported platform. That is why before the
implementation of the system, the bank officers had to make manual data entry from internet
applications to the PLS network for the production of loan documents. Therefore, as per
Willcocks and Reynolds (2015), in order to diminish operational costs, increase the Optimisation
level of day to day functions as well as improvement of flexibility, the organisation integrated
their system of personal loan with that of the home loan bike elaborating with their IT partner
HP.
Significant integration of the PLS with HLS made it possible for the Commonwealth Bank to
launch most advanced personal loan product within 60 days of implementation of this IT
infrastructure (Stanford, Hardy and Stewart 2018). This is how the organisation was successful
in developing excellent customer service opportunity. Now the customers of the bank who
applied for statements as well as select their favourable fixed or variable rate of interest. It can be
promptly mentioned that at the time when the Commonwealth Bank implemented the last
customer benefit, no other bank of the Asia Pacific region including their greatest rival the ANZ
Bank was able to utilise or implement this strategy for the customers.

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The implementation of this system will allow the Commonwealth Bank to generate higher
approval rates, facilitate faster funding as well as decision making along with high rate of
product differentiation in the near future.
3.2.3 Upgrading mainframe computing to UNIX and DB2
The technology partner of the Commonwealth Bank, HP is helping them once again for updating
the previously used Windows based Mainframe computer network, by introducing changes like
UNIX and the DB2 (Aulich, Jones and Head 2018).
After upgradation of the computing system, the bank will be able to enjoy several advantages
which include higher efficiency as well as reduction in costs. This IS/IT solution will also allow
the bank to develop automation in their system, monitoring, security, support along with greater
processing reliability brought about by enhancement of system speed as well as predictability. In
analysis, it can be commented that the Commonwealth Bank of Australia is increasing their
capability as well as reducing operation in first with their new midrange platform.
3.3 Management of changes in comparison to the competitors
3.3.1 Mobile banking
Analysing from the empirical research of Ferreira (2016), it can be derived that implementation
of mobile technology was not innovative change for the people of Australia. Rather, the credit
goes to the Commonwealth Bank in becoming the first successful banking corporation who
invented the fully functional mobile banking service and developed free mobile application
available in the application stores of iPhone, Google play store as well as other mobile platforms.
Along with that former mobile banking services are free of charge for Commonwealth Bank of
Australia. Compared to the latest technology, other financial corporations who are Rivals to the

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CBA like the ANZ Bank or Westpac have also developed Technologies for mobile banking prior
to the CBA. However, their applications were limited to platforms like iPhone this implies that
only iPhone customers can use their fully functional mobile banking services. Other native
Australian competitors like NAB are lagging behind all major financial corporations in terms of
technological implementation and are able to provide very less scope for mobile banking to the
customers (Apergis and Cooray 2015). In fact very most banks are charging significance rates to
customers for using their mobile technology, CBA brought about Revolutionary change by
allowing free of charge mobile banking facility for more than one mobile platform.
Since their initial implementation of the internet based mobile banking service, the
Commonwealth Bank of Australia has been continuously managing as well as maintaining their
banking service over mobile phones by making it more efficient as well as convenient so that
customers can access the service from any kind of mobile software and any kind of server
Technology in their mobile phones (Dawson 2017). This is a significant step towards digital
disruption to expand the target customer base much ahead of the major competitors in the
financial market of Australia and New Zealand.
3.3.2 integrating PLS with HLS and upgrading mainframe to UNIX and DB2
Both the projects including the integration of the personal loan scheme with the home loan
scheme as well as upgradation of the mainframe computing system into UNIX system was
outsourced to to HP. HP successfully worked on both projects meeting all requisite criteria the
Commonwealth Bank of Australia. As an outcome, the Commonwealth Bank was able to
provide which management as well as support responsibilities to HP. Empirical research
conducted by authors like Authority (2018), Shows that the market drivers of Commonwealth

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Bank like NAB, St George and Westpac have also been Outsourcing their information
technology support and management projects 2 IT companies like Fujitsu, HP, IBM and others.
Compared to the other computers, explain the risk as well as problems associated with the old
version of the mainframe computers or the separate handling of the HLS and PLS. This helps HP
to design the operating systems in the most relevant manager so that the Enterprise can make the
best advantages of that (Lees, Winchester and De Silva 2016). Again, has shifted to other It
Enterprises like IBM or other reputed brands from HP. HP is absolutely responsible for
managing as well as maintaining of the HLS software as well as the latest employed UNIX
system. by working exclusively with a single IT operator, HP, in the company has been able to
integrate there information strategy and information system needs with the service that is
delivered by HP.
3.4 Future management of the IS/IT changes
3.4.1 Management of mobile banking strategies
In the August of 2009, the Commonwealth Bank of Australia revealed that the number of regular
users who have been utilising the mobile banking facility of the Commonwealth Bank
throughout Australia and the entire Pan Pacific region of Australia is 180000. In a recent
meeting, does the CSO of the Commonwealth Bank of Australia revealed that he expects the
number of customers to use the mobile banking facility will exceed up to1250000 by the end of
the financial year 2020. Berg (2016), identify that the mobile banking software that allows the
customers to avail all the banking facilities provided by the Commonwealth Bank is one of the
most successful digital financial services provided to attract customers. However, the
Commonwealth Bank is aiming to improve their facilities of mobile banking service further by

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making the application for Android and iPhone users more and more flexible. On top of that they
are also planning to provide faster processing of the mobile banking application by utilising
minimum internet data. As an example, it can be cited that the Commonwealth Bank of Australia
develop their mobile banking application for Android smartphone in the year 2011. By that time
all the major banks which have been providing the mobile banking facilities needed the
customers to login to their official banking websites to avail the facility of mobile banking,
which implied that using a third party server to access the bank website included much risks of
digital thread like hacking of banking passwords, mobile pin code, or other banking data (Yin et
al. 2015). As advocated by the executive General Manager of direct channels of the
Commonwealth Bank of Australia, in an interview, the rate of new customer acquisition has
observed a tremendous growth with the growing popularity of the NetBank, the mobile banking
official software of the Commonwealth Bank of Australia. According to him, this popularity and
the aligned growth in customers, prove that the property supported by the mobile application of
the Commonwealth Bank has been able to meet the most essential banking needs of the
customers. This is why; the Commonwealth Bank has to work on this new mobile application so
that I can bring about continuous improvement in the application in terms of several digital
aspects. Firstly, they have to make their mobile version off the net banking application available
in all the software platforms like Android, Microsoft, iPhone and Symbian (Brown and
Karpavičius 2017). On top of that thereafter ensure that all smartphones having Android version
4.0 able to access the mobile application and can directly download the application from the
mobile app store. The availability of of all essential account related data, personal security
information related to the bank account, money debit or credit balance related information as
well as the expenditure list from the concert account are all all available with the net banking.

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Standing on the current date having all this features in a mobile banking application is not a great
deal. However, the Commonwealth Bank of Australia was able to features for their customers in
the year 2011, which was a time when none of the major banks of Asia or Asia Pacific able to
offer a concrete banking application to the customers. The customers of almost all major banks
other than the Commonwealth Bank have to rely on third party internet surfing browsers to
access the website of the bank if they wanted to make any transaction over internet banking
(Carnegie 2016).
As advocated by the CSO, as a part of their future planning for the time span of 2020 to 2025,
the organisation is planning to use the feature of augmented reality and artificial intelligence to
provide mobile banking solutions to the customers. This feature will utilise the personal banking
data of the customers to determine if they need instant money transaction for any instance. Based
on the customer transactions, the organisation will be able to draught a line of most important
customers who will be favoured with the most beneficial offers and discounts from the end of the
bank (Williams 2016).
3.4.2 Integrating the personal loan software with the home loan software and
upgrading the mainframe computing to UNIX support and DB2
In this context, the most advantageous step that has been taken by the organisation is to
outsource these developments to the information technology giant, HP. They have access to
essential information system which involves customer’s data to HP. As an outcome, HP food
analyse the factor and in which the Commonwealth Bank of Australia gives importance to their
customers. Based on the nature of their preference, they could determine how to link the data of
the customers with the database of the bank with the use of the DB2 software (Bank 2015).
Hence in this regard it can be concluded that allocating the management of all big data databases

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as well as information system handling to HP was a major strategic step that has been taken by
the Commonwealth Bank of Australia. In fact, as constructed by the government bank of
Australia, will be liable for all maintenance as well as for the upgrading of the information
system of the bank. HP is also agreed to help the Commonwealth Bank to be able to up to date
their services as well as other data driven Technologies by developing required applications and
provide excellent Technical Support for IT services (Niblock 2017). This will help the bank to
sustain their advantage and reputation for excellent customer service in the near future.
4. Conclusion
Analyse the basic arguments in this report, it can be concluded that the Commonwealth Bank of
Australia gives enough prominence to the efficiency with which they are delivering their services
to the customers. This is emphatic Elite true for the context of the big data handling as an
information system and information technology related aspects. So forthand so long, the
Commonwealth Bank of Australia have been maintaining the latest information system
strategies. The amount of koustav anything that has been derived by the organisation against the
maintenance of latest information system and information technology are multifold. they have
been able to attract a large number of young and stable customers with high disposable income.
This is the biggest customer base who will a large number of digital banking services. Since the
organisation has been able to entice this particular place of customers since the year 2010 and
2011, the time when Technology started to emerge and financial services over software and
internet to begin to become a trend, at the current moment, almost the major section of this
category of customers in Australia and the entire Pan Pacific region have become loyal
customers of the Commonwealth Bank of Australia. Besides developing latest technology form
of the organisation has always on providing Big Data Services at high speed and least internet

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data consumption. This initiatives have helped the bank to establish well framed relationship
with the customers. This report also clarified that implementation of fully functioning
Technology at an early stage of global digitalization has helped the bank to sustain the
achievement of a large customer base. This success prompted the personal loan software and the
home loan software so that around with net banking services they could also provide these two
services under a single platform, digitally. Lastly, the argumentation and analysis done in this
report can be used to conclude that the Commonwealth Bank has been able to join maximum
benefit of information system strategies Outsourcing their Technology for HP enterprise service.

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5. Reference List
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Australia: New evidence from selected individual banks. Journal of Macroeconomics, 45,
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Aulich, C., Jones, S. and Head, B., 2018. DIVESTMENT OF COMMONWEALTH PUBLIC
ENTERPRISES IN AUSTRALIA: THE CUPBOARD IS BARE 1. Annals of Public and
Cooperative Economics, 89(3), pp.475-490.
Authority, A.P.R., 2018. Prudential Inquiry into the Commonwealth Bank of Australia (CBA)
Final Report. Australian Prudential Regulation Authority, Sydney, April.
Bank, C., 2015. Commonwealth Bank of Australia Environment Policy.
Berg, C., 2016. Safety and soundness: an economic history of prudential bank regulation in
Australia, 1893-2008.
Brown, A. and Karpavičius, S., 2017. The Reaction of the Australian Stock Market to Monetary
Policy Announcements from the Reserve Bank of Australia. Economic Record, 93(300), pp.20-
41.
Carnegie, G.D., 2016. The accounting professional project and bank failures: The case of the
early 1890s Australian banking crisis. Journal of Management History, 22(4), pp.389-412.
Dawson, R., 2017. The Commonwealth Bank jobs and skills of the future report.
Ferreira, R.R., 2016. Stepping stones to an exclusionary model of home ownership in Australia.
Journal of Australian Political Economy, The, (77), p.83.

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Hirschheim, R., 2015. Information Systems Outsourcing. Wiley Encyclopedia of Management,
pp.1-4.
Lees, G., Winchester, M. and De Silva, S., 2016. Demographic product segmentation in financial
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Niblock, S.J., 2017. Flight of the condors: evidence on the performance of condor option spreads
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Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law and
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Stanford, J., Hardy, T. and Stewart, A., 2018. Australia we have a problem. The wages crisis in
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outsourcing to the cloud part 1: perennial challenges amidst turbulent technology. Journal of
Information Technology Teaching Cases, 4(2), pp.86-98.
Willcocks, L. and Reynolds, P., 2015. The Commonwealth Bank of Australia–strategizing from
outsourcing to the cloud part 1: perennial challenges amidst turbulent technology. Journal of
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Williams, B., 2016. The impact of non-interest income on bank risk in Australia. Journal of
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Worthington, A.C., 2016. Financial literacy and financial literacy programmes in Australia. In
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