Strategic Information System for Commonwealth Bank of Australia

This report discusses the strategic information system for Commonwealth Bank of Australia, including business background, environmental analysis, opportunities and threats, and tangible and intangible resources.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
[Name of the Student]
[Name of the University]
[Author note]

1STRATEGIC INFORMATION SYSTEM
Table of Contents
Introduction:...............................................................................................................................1
Discussion:.................................................................................................................................1
Part 1:.........................................................................................................................................1
Business background:.............................................................................................................1
General environmental analysis:............................................................................................2
Political:.............................................................................................................................2
Economic factors:...............................................................................................................3
Social Factors:....................................................................................................................3
Technological factors:........................................................................................................4
Legal factors:......................................................................................................................4
Industry Environment:...........................................................................................................5
Threat of New Entrants:.....................................................................................................5
Bargaining power of the customers:..................................................................................5
Rivalry amongst the existing competitors:.........................................................................5
Strategic Resources:...........................................................................................................6
Opportunities and Threats faced by the Commonwealth bank of Australia:.........................6
Opportunities:.....................................................................................................................6
Threats:...............................................................................................................................7
Part 2:.........................................................................................................................................7
Tangible and Intangible Resources:.......................................................................................7
Information system solution...................................................................................................8

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Evaluation of the system and recommendations:...................................................................8
References:...............................................................................................................................10

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Introduction:
The literature review would be discussing about the organization “Commonwealth
Bank of Australia. The review would also be including a discussion about the structure that
this organization is having along with discussing the various problems or challenges that are
faced by the organization. The discussion about the various problems mainly includes the
inefficiencies and the errors that are found in the flowchart of sales and shares in the
organization. This report consists of two section in which the second part discusses the
organization's resources which would be including the tangible as well as the intangible
resources. The identification of the capabilities is also done along with analyzing the core
competencies. Followed by this a suitable information system is proposed which would be
meeting the needs of the organization. Lastly, the report evaluates the system that has been
proposed and recommendations are also provided.
Discussion:
Part 1:
Business background:
Commonwealth Bank of Australia is considered to be the largest bank of Australia
which has its branches across Asia, U.K, and Fiji and in many other countries. This bank is
also associated with providing financial services of the various kind that mainly constitutes of
the “ management of the funds”, “ services related to providing of loans and making of
investments”, “retail banking”, “education loans”, “other types of the loan” and many more.
This bank has also been designated as the best bank of Australia by the ASE or the Australian
Securities Exchange in the year of 2015. The major operations of this organization started in
1911 by the Australian Government. This bank is also listed as one of the top four banks of

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Australia. In the early days, the bank was owned by the Australian government was later
converted to a private bank in the year of 1996. The organizational structure of the bank
consists of the corporate section along with the management section. Along with the presence
of the corporate section and the management section, in the structure of the organization,
there also exists the bodies associated with the management of the various activities and the
employees as well as the customers. In the figure provide below shows a better illustration of
the different sections of the organizational structure in which there is the board of
commissioners which are further classified into other sections.
General environmental analysis:
Political:
A significant role is played by the political factors while determining the factors that
can have a huge impact upon the Commonwealth Bank of Australia’s long term proftability
in a particular market or in a particular country. Commonwealth bank of australia is a
dynamic bank which can achive success by diversification of the systematic risks existing in
the political environment (Alshubaily & Altameem, 2017). The political analysis included the
various financial deregulations and privatisation. The change of the bank from “people’s
bank” to a private bank helped in increasing the returns to the shareholders and managers of
the bank along with making it free of nay kind of community responsibilities. Along with
remarking with immense rate of ill will for the convetional areas of the electrote it also
disconstinued most of the explicit promises. For the peoples of Australia the privatization and
the financial deregulations acted as a diastrous event. At the time of including the financial
deregulatiosn variuos kind of fees and charges were imposed along with cuting down of
services and utilization of various collaborative monopoly power (Upadhyay et al., 2017).
The bank also stoped providing of free insurance to the profit oriented bank along with they

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they also started working as a saving bank by means of spinning their insurances and other
activities.
Economic factors:
Economic factors of Australia are used by the bank which would be including the rate
of growth, spending’s made by the consumers and many more for the purpose of forecasting
the growth trajectory of the sector name along with the organization as well.as measured by
the RAC the capital position of the bank is neutral (Hoque, Hossin & Khan, 2016). For this
reason the bank is associated with strengthening their level of capital under the Basel III
regulatory capital framework. This would be having a stronger impact upon the banks neutral
capital savings or would be having a better outcome of the banks individual capital
management philosophies.
Social Factors:
The culture of the society as well as the ways by which things are done have a great
impact upon the culture of the organization in an environment. Besides this the shared beliefs
and the attitudes of the population is associated with playing a vital in understanding the
ways by which the marketers at the Commonwealth bank of Australia would be associated
with understanding the customers of a particular market and the ways how the marketing
messages are to be provided by banks for their customers (Yoshikuni et al., 2018). The bank
played a vital role in supporting the community by making offers related to the financial
literacy programs and by addition as well as collaboration with various community
organizations as well. Besides this it also provided opportunities for their employees by
allowing them to engage with various local communities which initially helped them in
promoting the cultures across boarder communities. Along with this for the indigenous youth
and adults the bank provided a greater rate of access to different education facilities mainly
for the financial literacy (Galliers et al., 2017). For this there existed a positive impact which

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is the continuation of strengthen and extending of the bond between the commonwealth bank
and the other community organizations.
Technological factors:
This is the first bank of Australia that is associated with offering the customers with
real time settlement and banking as well. The bank was also associated with providing a 24
hour access to the banking services by making use of the EFTOS, ATM and telephone
banking. This is one of the famous online broker providing facility (Wu, Song, & Kang,
2016). Various other type of innovations helped in improving the frontline customer
interfaces of the bank. So the investments made by the bank on the technological processes
helped in simplification of the processes and also helped in driving the productivity as well.
This initially led to the operational efficiencies from the productivity initiatives in the form of
tangible benefits along with having a positive impact upon the expense base as well.
Legal factors:
Commonwealth bank of Australia was associated with starting an OAR or Open
Advice Program for its customers. The major legal responsibilities of the OAR included the
making of negotiations with the ICAs and the other independent parties. For all this reason
the specialist teams were associated with conducting an OAR assessment which initially lead
to the availability of checks and balances for eth purpose of enriching the rightfulness of the
outcomes for the customers who were affected (Wang & Li, 2016). This mainly included the
ICA or the Independent Customer advocate groups which consisted of the three major
customary advocacy firms which are selected by the customers in order assess them
regarding their scrutiny of the assessment outcomes. There also exists independent review
panel who were associated with surveying the offers provided to the customers along with
helping in making of estimations where the customers are not capable of reaching an

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agreement with the bank The OAR program was also associated with bringing up of various
challenges (Song, Sun, & Jin, 2017).
Industry Environment:
Threat of New Entrants:
In today’s word it is observed that the digitalized financial systems are reaching
maturity and the other four major bank of Australia is associated with the usage of various
channels of entrants for the purpose of capturing the market shares. In a similar way there
exists high threats from the other competitors as well which are situated overseas or are
domestic (Grünig & Morschett, 2017). The competitors might be associated with eth usage of
the technology so as to offer some virtual or physical financials services in the Australian
financial market. This would eventually lead to various kind of challenges for the growth of
this bank in the long run. But despite of all this the bank has been a major incumbent for the
financial industry and is responsible for capturing most of the market shares.
Bargaining power of the customers:
The bargaining power of the customers of Australia is relatively high as the
Australian major big banks have been associated with bringing similar kind of financial
packages associate with competitive rates in order to expand their market shares in the market
which is totally concentrated. Due to the reason that the Australian market is associated with
favouring the customers to bargain on the best rate and for that reason the bank has also been
associated with dynamically influencing the bargaining the power of the market (Indiatsy et
al., 2014). This is done by making offers which includes the providing of aggressive rate for
the customers by means of dropping the five year fixed home loan rate and many more.

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Rivalry amongst the existing competitors:
In today’s world it is seen that the financial market of Australia has reached a certain
level of maturity. According to some authors the financial industry of Australia has been
developing with an annual growth rate of 13% over last few decades and has also been listed
as one of the most profitable bank of Australia. The financial industry of Australia is also
known as the Red Ocean because of the reason that the four banks of Australia are capable of
facing more mortgage competition amongst each other to have a concentrated market share
(Rothaermel, 2015). Therefore it can be stated that if the market leader that is the
Commonwealth bank of Australia fails to maintain its current competitiveness in the
aggressive market then the market shares would be missed out and the competitors would be
capturing the market.
Strategic Resources:
According to some authors the combination of the tangible and the intangible assets
which are controlled by the bank can be stated as the key resources which are responsible for
the execution of the strategic capabilities. This resources mainly includes the teamwork
amongst the managers and the past or present chief executive officers, reputation of the firm
amongst the customers and the strong balance sheet has been associate with helping the bank
to attain premium price of the share over the competitors (Schlagwein, Thorogood, &
Willcocks, 2014). Due to the possession of the strategic resources ahead of the competitors
has been associate with favouring the long-term survival along with an alleviated rate of
competitive advantage.
Opportunities and Threats faced by the Commonwealth bank of Australia:
Opportunities:
 The major opportunities of the Commonwealth bank of Australia has been listed below:

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 The bank might be associated with the implementation of the various innovative
technology into its core banking activities. This would be initially helping the bank in
increasing the service quality as well as its reach.
 Various type of initiatives like the “OneCommbank”, is associated with helping the bank
in building up a better relation with the customers which is very necessary for the purpose
of having a sustainable growth (Ellis, 2018).
 Thinking about expansion in other emerging countries like Asia can help the bank in
having a long term growth.
Threats:
The major threats faced by the bank has been listed below:
 The confidence of the investors upon the global economy have a huge impact upon the
bank activities and the profits. Besides this the weak economy outlook would also be
leading to the stagnation of decline in the growth of the organization.
 The changes in foreign exchange rate would also be leading to the bank face various type
of risks because the bank has various operations which are dependent upon the various
geographies (Murray et al., 2014).
 Default risks might also be faced by the bank due to counter party which would initially
be responsible for making the not capable of meeting the obligations influx.
Part 2:
Tangible and Intangible Resources:
Tangible assets mainly refers to the assets which are measurable and are physical in
nature. This is generally needed so as to use the in the various operations of the bank. some of
the tangible and intangible assets have been listed below which has been categorized
accordingly:

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Current assets: This are the assets which generally involves the inventory, cash and the
marketable securities. This type of items are generally used for the purpose of getting
financial help in cases of emergency.
Fixed assets: This are the assets which are used by the organization on a daily basis. This are
the assets which needs to be recorded by making use of the balance sheets like the property,
equipment’s and many more. This are the assets which are associated with the generation of
money which are used by the other tangible assets and are recorded in the statements.
Intangible assets are those assets which are non-physical and are used for a long
term period. This are also considered to be intellectual assets where assigning of the values is
a difficult task due to the uncertain nature, the major intangible assets includes the Band
equity (Willcocks & Reynolds, 2015). This is categorized as the intangible asset due to the
reason that the band value is not a physical asset and is generally determined by taking into
account the perception that the customers are having.
Information system solution
The proposed information system is an e-CRM which would be aiming at creation of
human interactions which would be supported by the internet. For this reason a predictive
analysis of the e-CRM processes is to be done that would be associated with providing
information related to the process which is needed for restructuring of the customer
interactions (Williams, 2016). This is to be done by integration of the gathered data with the
behaviours of the Customers associated with predictive algorithms.
Evaluation of the system and recommendations:
Some of the exiting processes also to be used along with the e-CRM. This would be
including the customer routing engine, management of the web content, configuration of the
web, procedures related to customer analysis and many more. Besides this there is also a need

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of upgrading the customer routing engines by making use of the automotive interactive
machines. This would be initially resulting in the providing of an effective platform for
creating a line of communication between the customers and the bank. This would not only
help in winning the trust of the customers but would also be associated with boosting up of
their confidence while using the e-CRM so as to make transactions. The bank should also
think of improving their e-CRM platform content so as to make sure that all the concerns of
the customers are addressed by making use of minimum cost and within the possible shortest
time (Lovelock & Patterson, 2015). Along with this there is also a need of improving the
content categorization so as to make sure that grouping of all the related matters are done in a
proper way.
Implementation of personal monitors as well alerts in the system is to be done so as to
notify the customers regarding the specific issues contents or the conditions. This could be
done by means of automated email notice or by making use of SMS. This type of proactive
response would be helping in increasing the value that the e-CRM is having along with
providing some strategic opportunity which would help the bank in building a long lasting
relationship with its customers.
The bank needs to understand as well as realize the importance that the e-CRM would
be having. Some of the important aspects which needs special attention mainly includes the
interaction and satisfaction of the customers, convenience and speed of processing the
transactions and many more, it is recommended that the bank should always remain a step
ahead so as to meet the needs of the customers (Schlagwein, Thorogood, & Willcocks, 2014).
The role as well as the new e-CRM needs to be put forward with clear definition of each and
every level of the bank.

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Ellis, H. (2018). Men of Science: The British Association, Masculinity and the First World
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Galliers, R. D., Newell, S., Shanks, G., & Topi, H. (2017). Datification and its human,
organizational and societal effects: The strategic opportunities and challenges of
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Grünig, R., & Morschett, D. (2017). Determining the Target Markets. In Developing
International Strategies (pp. 85-104). Springer, Berlin, Heidelberg.
Hoque, M. R., Hossin, M. E., & Khan, W. (2016). Strategic Information Systems Planning
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