The Role of Information Technology in Business Success: HSBC Analysis

This report examines the crucial role of Information Technology (IT) in business operations, using HSBC Holdings Plc as a focal point. It delves into how IT influences the success or failure of an organization, exploring various networking technologies such as LAN and WLAN, and the importance of the internet and intranet for business functions. The report addresses ethical and social issues pertinent to running a business, including privacy and security concerns. It also outlines the different stages of the System Development Life Cycle (SDLC), from planning to evaluation, and analyzes the advantages and disadvantages of IT systems within HSBC. Furthermore, the report discusses the social and ethical challenges faced by banks, such as privacy violations and data security, providing a comprehensive overview of IT's impact on the financial sector.

Information Technology

ABSTRACT
Information Technology has got various application within the various services industries
and has become the modern requirement for carrying out business operations. It can serve for
many benefits in any industry which can help the company to achieve its objectives and gain
higher profitability. IT can help the organisation in achieving the success or failure of business
and what are the ethical and social issues for running a business. There are different types of
networking technologies which can be used by organisation in order to improve its business
operations. For any business to operate it has to face various ethical and social issues. Also, IT
can have both positive and negative impact on the business and its investment can bring both
potential benefit and drawbacks for the company.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................1
Role of IT in success or failure of organization:..........................................................................1
Ethical and social issues that pertain to running businesses:.......................................................2
Different types of networking technologies.................................................................................2
Importance of internet and intranet in business...........................................................................3
Different stages of system development life cycle......................................................................3
ANALYSIS AND DISCUSSION...................................................................................................4
Role of IT System........................................................................................................................4
Social and ethical faced by banks in running business................................................................5
Networking Technologies and there types...................................................................................5
Business importance of intranet and internet...............................................................................6
System Development life cycle stages.........................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Information technology can be referred as the use or study of systems particularly
telecommunication and computers in order to collect, store, retrieve as well send information. It
includes the use of computers, networking, storage physical devices, process to create, store
process, secure and exchange the various forms of data. Nowadays, IT forms an important part of
any service sector in order to provide effective services to their customers. In this report, HSBC
Holdings Plc is taken as service organization, which is a British multinational investment bank as
well as financial holding company. Present report discusses role of IT in success or failure of
organization, the social and ethical issues which pertain to operations of business. This report
also differentiates different types of networking technologies and also includes the different
stages of system development life cycle.
LITERATURE REVIEW.
Role of IT in success or failure of organization:
As per the views of Keil, Friedrich and Doppelfeld, (2018), Information technology plays
an important role in the functioning of the banking industry. For improving the experience of the
customers in banking, information technology develops the software and applications of the
bank. Information technology manages the infrastructure of the bank and also supports the bank.
Banking industry organize various transformation programmes by using information technology.
Use of technology makes banking easier, faster and better because they wanted to keep
customer's money safe and secure their data. Information technology plays an important role in
the success of the business because it gives facility of internet, world wide web and web browser
which connects the company with their customer across the world.
Ethical and social issues that pertain to running businesses
As elucidated by Nicholls and Paul, (2015), ethics are the rules of right and wrong
depends on the behaviour of the people most of the organization uses code of ethics it says that
the individuals is responsible and accountable for their course of action. In present time every
company wanted to balance the issue of technology with right to privacy, information and
security. All businesses face various ethical issues like file sharing, information security,
maintain the privacy of employees with the monitoring employees. Information technology have
very intense effect on increasing various new ethical and social issues which effect the social,
moral and political levels. When ethics of technology is measured towards the computer science,
1

engineering, law, and many more studies, it gives less attention towards the organization and
their managers. There are some ethical challenges of information technology which affect the
business operation they are security, privacy, copyright and crimes related to the computers. In
security, hackers will found the easiest way to get the IP addresses of the user's computers and
take the personal data of the user and misuses them. Online banking is also not safe because
hackers can easily interrupt the transfer of money, and they transfer all the money in their
personal account this will affect both the bank and their customer if they are using this
technology.
Different types of networking technologies
As elucidated by Kaiwartya and et.al., (2016), there are different types of networking
technologies which can be used by service sector and the most common form of networking
technology which is used by service organization is Local Area Network (LAN) which is one of
the simplest networks. It allows to connect a group of computers or low voltage devices together
in a shorter range like for a building or group of 2 to three buildings which are in close proximity
for sharing information and resources. Another form of networking technologies which can be
used in banking sector is Wireless Local Area Network (WLAN), which used wireless network
technology for example WiFi. By using this technology, it does not require devices to depend on
physical cable in order to get connected to the network. As per the views of Wong, (2017) both
the networking technologies are totally different from each other like LAN is deployed in the
area with a few computer to be connected. Also, WLAN gives freedom to move around which
LAN can not give. But on the other hand, LAN is much faster than WLAN and also WLAN are
vulnerable to attacks i.e. these networks are not much secure to use.
Importance of internet and intranet in business
As illustrated by Ronchi, (2018) internet can serve various forms of businesses by
developing various opportunities like effective communication, better networking, retrieving
information, increase in sales and marketing. HSBC can use internet for selling their service to
distant customers and can also gather the information from them and store and retrieve at any
point. Also, bank with the help of internet can communicate with their clients and other members
of the industry.
As illustrated by Hopkins and Markham, (2018), intranets can help HSBC to serve its
digital communication needs and also provide the secure space for accessing, storing as well as
2

developing various electronic materials. With the help of intranets, banks can replace their older
business solutions with new one in order to produce big profits by increasing their efficiency and
also speeds up their work-flow and minimizing the errors. There are various intranet applications
such as network folders in which large number of employees of the bank can access the same
file, the digital reference database which can be used for facts and figures. It also provides the
internal email system for banking services with instant messaging software which can help the
organisation in improving its banking efficiency to higher level in order to provide the effective
banking service to customers.
Different stages of system development life cycle
As illustrated by Ali, (2017), system development life cycle (SDLC) is also considered as
application development life cycle. It is a type of concept which can be applied to range of
software and hardware configurations as a particular system can be composed of software only
or hardware only or may be the combination of both. In the SDLC, there normally exists a six
stages of development cycle which are as planning, analysis, design, development,
implementation, documentation and the last stage is evaluation. SDLC starts with a preliminary
analysis which involves the discovering the organizational objectives, the scope and nature of the
problem. After knowing the business problem various solutions are being discovered and even
alternative proposals can be made. Finally, in the analysis stage cost benefit analysis is made and
also the feasibility study is made for the project. In the third stage which is a system design,
which comes after the better understanding of banking customer requirements, in this stage
various elements of the system, security level, components, architecture, modules and the
number of interfaces as well as data goes through the system is defined. Then comes the stage of
implementation and deployment, which involves development of software or the application
after a company has proper and illustrated design for the chosen system. This is the stage where
software development process takes place as per the needs and requirements of the customer, it is
the most crucial stage in the SDLC. When the system is developed, then it also becomes ready
for being deployed as well as installed in customer's premises and is also ready to run. After the
system is developed, it goes for testing and integration which is the most important stage in order
to ensure the customer's satisfaction which also requires hardware configuration, knowledge
coding.
3

As elucidated by Notarnicola and et.al., (2017), after system testing and integration,
SDLC moves to another stage of maintaining the system, within this stage periodic maintenance
of the entire is carried out. Also, the system developers have to make sure the system is working
properly and effectively and it does not become obsolete. This phase also includes replacement
of old system with new one in order to achieve the objectives which are being set by the banking
organization in order to improve its banking service for customers. In this stage, it is also equally
important for the organization to keep on evaluating the system on continuous basis in order to
ensure the effective performance of the system. It may also include providing the updates for the
system continuously and also company has to make sure that it meets the right standards of the
business and the latest technology in order to achieve the competitive advantage and meets the
existing and potential security threats faced by the business. So, these are the main six stages of
SDLC which is an iterative process for each and every project. During the cycles, it is really
important to have effective planning of the organization and has to set an effective
communication within the organization and develop a system which can support the
organizational objectives.
ANALYSIS AND DISCUSSION
Role of IT System
The advantages of the IT system in HSBC bank are providing right information to the
right people at the right time. Effective use of information technology and system increase the
profitability of the HSBC bank. Information technology improves the communication system of
the HSBC bank by providing fast and easy services to the customer and it also reduces the cost
of communication across the world. This system gives flexibility in the bank accounts of the
HSBC bank branches around the world. With help of information technology HSBC bank can
organize the various strategic transformation programmes to increase the business of the bank
and to provide better facility to the customer.
There are many disadvantages of the HSBC bank which affect the success and
profitability of the HSBC bank. HSBC banks keeps the personal information and data of the
people in their system software which are private like their names, addresses, phone numbers and
social security numbers. These personal information of the people are stolen by the hackers and
misuses them. Hackers may hack the bank accounts and takes the loans and credit cards on their
names through the technology system. Communication is important in every business and
4

through the technology system it changes the way of communicating with the customer and in
the organization like text messages, video conferences and internet reduces the face to face
interaction of the people in working organization.
Social and ethical issues faced by banks in running business:
There are various social and ethical issues like file sharing, privacy, information security ,
customer expectation, regulatory pressure, less communication with the customer across the
world, international fees which affect the business of the HSBC bank. These issues are explained
below:
PRIVACY: private information of the customer should be secure by the bank and disadvantages
is Sometimes HSBC bank faces crimes like stolen of personal information of employees by the
hackers and missuses them. Hackers get the IP address of the user's computer and get the account
number of the customer and transfer the amount into their desired account.
CUSTOMER EXPECTATION: HSBC gives services which sometimes cannot fulfil the
expectation of the customer, so they have to know what their customer wants from the services
of the bank this can improve the satisfaction of the customer. HSBC made different policies for
maintaining and improving the relation of employees and improves the working condition by
solving grievances, giving feedback, and through two-way communication.
INTERNATIONAL FEES: HSBC charges an international fees on the use of HSBC debit card
across the world.
COMMUNICATION: In HSBC bank, customer could not interact directly with the banking
employees because all the business and transaction is done through internet so this leads to less
communication in the bank.
NATURAL ISSUES: HSBC bank trying to achieve the sustainable development through
providing social banking, rural banking green banking, agricultural banking, etc. HSBC is
investing in nature programmes through the information technology so it is promoting
sustainable fishing and making efforts to reduce the pollution. HSBC give more focuses on
minimum use of natural resources through the information technology.
Networking Technologies and there types
HSBC can have various potential benefits from using different networking technologies
for improving its business operations and there are range of options which are available for the
company. Based on the analysis, the two best option for the bank is Local Area Network (LAN)
5

and Wireless Local Area Network (WLAN). Both the networking technologies can benefit the
company as both of these technologies are totally different for each other and has some
advantages and disadvantages. For the proximity like for single building, HSBC can use LAN for
sharing information and resources within the single building. So, this type of technology is suited
for its single department where small number of computer can be connected. On the other hand
one potential drawback of using LAN technology for HSBC is that it have to into consideration
of jumble of wires which is required to install a LAN in the company which may be a
complicated or hectic for the bank. This may decrease it business operations to lower levels. But
on the other hand another option which is available for the company is WLAN which can benefit
the company. Installing WLAN in the Bank can provide the network coverage for the wide range
like the different departments of HSBC. This technology will give an employee an opportunity to
move freely in the office and serve wide range of customer at same time. With the help of this
technology HSBC can improve its scope of banking services to higher level. The potential
drawback which WLAN can have on Bank is that it involves connection of various system and
department which may become much slower than LAN. Another potential drawback is that there
is an issue of security which a Bank may have to face. So, taking these things in to consideration,
it can be interpreted the out of two networking systems which can be used by HSBC is WLAN.
As HSBC is a huge company with number of departments in a single building, so this
networking technology can serve best for the company. But company has to ensure the security
level of WLAN as it is exposed to risk of being attacked or hacked HSBC need to make it much
secure in order to carry out the banking operations effectively.
Business importance of intranet and internet
Internet and intranet can have a potential benefits for HSBC in carrying out its banking
operations. By using the internet in the organisation, internet can help the organisation to get
connected to entire world where they can out various banking activities like provide effective
banking service. Also, HSBC can communicate with the customers across the world, company
can also increase its network base and can solve the banking problems and issues instantly which
can help the company to increase its sales to higher level. Also, organisation can gather a huge
amount of information and store safely and retrieve them instantly. So, internet forms a huge
advantage for the company which can result in making its banking service effective which give
rise to profitability for the company in the long term. There are also some potential drawbacks of
6

using internet as there is a risk of cyber crime as people using the internet have increased in the
number and is very easy for professionals to obtain the personal information of the customers
which can negatively effect the reputation of HSBC which can result in the cyber crime. This in
one of then negative effect of using internet in the Bank.
On the other hand intranet can potentially benefit HSBC in various ways like it can help
in achieving its various objectives like serving its digital communication needs which is really
important for the banking companies in current business scenario. It can allow HSBC to make its
banking services much more digital and develop various electronic material in order to support
its services. Also, by using the intranet company can provide better and effective solution to its
business problems which can increase its efficiency to higher level. With the help of intranet
company can increase the speed of its work flows which can be the best advantage for the
company, as banks have always got busy working hours so, intranet can speed-up its work-flow
and can also minimise the possibilities of making errors. So, it can be interpreted that intranet
and internet can serve of a great importance of HSBC and can provide huge benefits for the
company in achieving its goals and making its services best in the industry. One the major
drawback of using intranet is that risk of security to corporate information as intranet exposes the
corporate information resources which may result in the loss of privacy as well as unauthorized
alteration which negatively impact the business.
System Development life cycle stages
In order to develop a new system. HSBC has to go through six different stage of system
development. If HSBC wants to develop a new application software for its banking service there
are six stage involved in it. First stage is the planning stage where company have to define its
objectives and the resources, personal and the cost required. In this phase company has to pose
various alternatives where it can meet the needs of the clients and customers. After making the
proper analysis of data company has got three choice such as develop a new system, improve the
existing system and keep on updating the new system. In the second stage system developers of
the company have to document the expectation of the system and what will be its performance.
In this stage the feasibility of the system have to be checked whether a system is feasible such as
technological feasibility, economic feasibility, social feasibility, etc. In this stage company has to
maintain the strong communication system in the organisation in order to develop a clear vision
of finished system. Having developed a good understanding of the customer requirements, then
7

involves designing of the system like how a system will look like and how will it function and
then detailed as well expanded design has to be produced. System should be designed in such a
way that it has the capability of meeting the technical requirements and various functions
physically and logically. In the fourth stage which comes the actual construction process after
having developing a complete design for a system. Also, the configuration of the system will be
done and making live and productive. In fifth stage of SDLC, here a system is being tested
whether it meets the needs of HSBC i.e. appropriate outputs are obtained. This stage also form
an import stage as it will allow the developers to minimise the flaws in the system and mitigate
the errors. When the system is finally tested then system can be used for banking operations and
system has to be maintained by the company on regular basis. HSBC has to make sure the
system is up-to-date and meets changing requirement like technological changes, social changes
and is entirely secure from any sorts of threats.
HSBC can face various potential bener level, storing and retrieving of huge of amount of
data instantly. It can also prove to be cost effective for the company in a long-run and can also
improve the communication process of overall bank with their employees and with their
customers and client across the world. Investing in IT can also bring various drawbacks for the
company like getting a new IT system in the organisation requires lots of time and money and
also requires additional employee for training in order to make effective use of it in the future.
Major potential drawback which is attached to it is that there is always a security risk attached to
IT as most of IT system are moving towards the cloud based system where employee can retrieve
data form anywhere. With this convenience come a big risk of security. fits in investing in the IT
one of the major benefit is that it can help the Bank in improving the decision-making process
which can help the company in gaining the competitive advantage, which is really important for
the company in present business scenario. Another benefits is that it will improving the
operational efficiency of HSBC like improving its customer services to higher level, storing and
retrieving of huge of amount of data instantly. It can also prove to be cost effective for the
company in a long-run and can also improve the communication process of overall bank with
their employees and with their customers and client across the world. Investing in IT can also
bring various drawbacks for the company like getting a new IT system in the organisation
requires lots of time and money and also requires additional employee for training in order to
make effective use of it in the future. Major potential drawback which is attached to it is that
8

there is always a security risk attached to IT as most of IT system are moving towards the cloud
based system where employee can retrieve data form anywhere. With this convenience come a
big risk of security.
CONCLUSION
From the above summary, it can conclude that information technology plays an important
role in the success and failure of the banking industry. It improves the customer relation by
providing better services of banking through use of information technology. The above statement
states that technology makes the banking easier, faster and better by improving the customer
base in the company. Information technology helps in addressing the ethical and social issues to
run the business smoothly. There are various types of networking technologies like LAN (Local
Area Networks) and WLAN (Wireless Local Area Networks) which are used in banking
industry. Internet and Intranet can connect people across the world working at different places.
There are seven stages of system development life cycle which leads to the success and growth
of the business.
9