Strategic Information System Report: National Australia Bank

This report provides a comprehensive analysis of the strategic information system (SIS) implemented by National Australia Bank (NAB). It begins with an introduction to SIS and its importance in gaining a competitive edge. The report then delves into a discussion of NAB, its history, and market position. A key section compares and contrasts issues and challenges faced in both private and public sectors, specifically within the context of strategic IT/IS management. The evaluation of NAB's IS strategy follows, highlighting areas such as system updates, personnel changes, and security. The report then explores approaches for developing innovative uses of SIS, including mandate creation, model adoption, and team diversification. A comparative analysis of outsourcing versus end-user computing is presented, arguing for the benefits of outsourcing for NAB. The report further examines how SIS adds value through IT/IS and concludes with a discussion of good internal control. The report references a variety of academic sources to support its arguments and analysis.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System: National Australia Bank
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
National Australia Bank.........................................................................................................3
1. Comparison and Contrast between Issues and Challenges................................................3
2. Critical Evaluation of IS Strategy......................................................................................5
3. Approaches for Developing Innovative Uses....................................................................6
4. Outsourcing vs End User Computing................................................................................7
5. Strategic Information adds Value by IT/ IS.....................................................................10
6. Critical Discussion on Good Internal Control..................................................................11
Conclusion................................................................................................................................11
References................................................................................................................................13

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Introduction
Strategic information system or simply SIS is specific types of information systems,
which are solely developed for responding to the initiative of a business. This strategic
information provides exclusive competitive advantages to any particular organization
(Galliers and Leidner 2014). Moreover, it helps in delivering any service or product, which is
of lower prices and it focuses on any specific segment of market. This is the most important
characteristic in information technology. It helps all the organizations and the businesses in
the categorization, storing, processing and transferring the confidential information that is
usually created or received (Haux et al. 2013). The strategic information system even offers
proper technologies for simply helping all the organizations for applying several analytical
tools and metrics to the repositories of information. This in case allows them in the
recognition of the opportunities of development and the ways of pinpoint for the
improvement of the efficiency of the operations.
The following report outlines a brief description on the strategic information system
on a popular Australian bank, known as the National Australia Bank. This report discusses
about the six major segments of the strategic information system (Boonstra 2013). The
segments include comparison and contrast between the issues and challenges that are faced
by the planners of strategic information systems, critical evaluation of the fact that whether
an information system strategy is helpful for achieving competitive advantage or not. The
other segments include the approaches for development of innovative utilizations of strategic
information system and the decision between outsourcing and the end user computing
(Laudon and Laudon 2016). The evaluation of the statement that whether strategic
information system adds value to any organization by IT or IS or not is also describes here.

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Moreover, the factor of good internal control in any complex business world is also discussed
in the report. The description of the above discussion is given below.
Discussion
National Australia Bank
National Australia Bank or NAB is one of the most popular banks in Australia and
New Zealand. It is considered as a financial institution in terms of customers, earnings and
market capitalisation. The ranking of this particular bank was 21 in the year 2014 and was
measured by the capitalization of market (Nab.com.au. 2018). National Australia Bank was
founded in the year 1982 with the name of National Commercial Banking Corporation
Banking of Australia Limited. Several offices were made in Chicago, Beijing, Athens, San
Francisco, Dallas, Houston, New Delhi, Kuala Lumpur, Seoul, Bangkok, Shanghai, Atlanta,
Frankfurt and Taipei. However, some of the above-mentioned branches are closed in today’s
world (Nab.com.au. 2018). The main Headquarters of this bank was in Melbourne, Australia.
This bank was founded by the merging of two popular banks, namely, National Bank of
Australia and Commercial Banking Company of Sydney. Apart from Australia and New
Zealand, this bank even served to Asia. Andrew Thorburn is the CEO of the bank and
Kenneth R Henry AC is the Chairman. The market shares of National Australia Bank have
always been on the higher side and thus they have experienced high profit due to this. In the
year 1992, the market shares of this particular bank were 26% more than all other banks
(Nab.com.au. 2018). This bank is popular for its innovative organizational strategies and
ideas. Enterprise Resource Planning or ERP is the best solution for their organizational
strategies.

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1. Comparison and Contrast between Issues and Challenges
The strategic information system has various issues and challenges within it. These
challenges and issues are compared and contrasted in the following paragraphs (Arvidsson,
Holmström and Lyytinen 2014). Two types of sectors, namely private and public face various
such issues or challenges when they try to manage the IT/ IS strategically.
i) Private Sector: Various issues and challenges are faced in a private sector bank.
The challenges or issues faced in the private sectors are as follows:
a) Risk Management: In private sectors, the main challenge or issue that an
organization face is the management of risk (Haux et al. 2013). The risk management is the
most significant issue in any private bank. Since, the private banks do not get the security like
government banks; there is always a major risk that the bank may suffer losses.
b) Involvement of Other Banks: The second challenge that a private banking sector
faces is the involvement of various other banks.
c) Launching of New Products: The third challenge is the launching of new and
innovative products (Peppard and Ward 2016). Since, there is always a chance of security in
private sectors, the new and innovative products or the new and existing customers of the
bank may not accept these services and the bank will suffer losses.
d) High Interest Rate: The fourth challenge that the private banking sector faces is due
to the high rate of interest, many customers are not able to afford the bank services.
These above mentioned challenges or issues are extremely common that the strategic
information systems planners face while managing the IT/ IS strategically.
ii) Public Sector: The public banking sector also faces several challenges and issues
in their strategy development (Pearlson, Saunders and Galletta 2016). The strategic

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information planners often undergo various situations, where they are bound to face these
challenges. The challenges are as follows:
a) Poor Capital Base: The first challenge that a public sector bank faces is the poor
capital base. The capital base is the capital that is obtained while an initial public offering and
any type of retained earnings (Abdelhak, Grostick and Hanken 2014). This capital base is
extremely low in case of public banking sector. This scenario is not different for National
Australia Bank. There is always a chance that this bank will face poor capital bases.
b) Less Branches: The second challenge that the bank faces is loss of bank branches
(Amrollahi, Ghapanchi and Talaei-Khoei 2013). As these are nationalised banks, very few
branches are present, in comparison to private banks.
c) Technology Gap: The third challenge is the gap in technology. These banks are
utilizing technologies that are being used since the bank was established and these
technologies may be obsolete now.
d) Poor Service Quality: The fourth challenge that the bank faces is the poor service
quality (Lin and Wang 2012). These banks often are blamed for their poor quality in services.
The above mentioned challenges are extremely common for the public sector banks.
2. Critical Evaluation of IS Strategy
The critical evaluation of the information system strategy for the National Australia
Bank is as follows:
i) Updating all Existing Systems: All the existing systems should be updated and this
is one of the most important strategies of National Australia Bank.

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ii) Hiring New People: The existing management of this particular bank should be
changed and new and innovative people should be hired (Prajogo and Olhager 2012). This
would be extremely good for the bank, as new people will be bringing new and fresh ideas to
the organization.
iii) Regular Maintenance of the Systems: The daily or regular maintenance of the
existing systems is another important strategy for the National Australia Bank.
iv) Maintaining Security: The security of the information should be maintained with
utmost care and thus cannot be compromised at any cost.
3. Approaches for Developing Innovative Uses
National Australia Bank could adopt various strategies or approaches when they will
be developing various innovative utilizations of strategic information system. Various
approaches could be easily undertaken by this particular bank (Willcocks 2013). The seven
most utilized and active approaches for the development of innovative uses of strategic
information system are as follows:
i) Creation of a Mandate: This is the most effective approach for any type of change
in the organization and bringing remarkable changes. A mandate is a direction or guidance
that is provided for bringing certain changes to the organization (Amrollahi, Ghapanchi and
Talaei-Khoei 2014). This mandate is created for the existing alterations in the organization.
This is always backed by any particular strategy, which eventually embraces the entire idea
of innovation. The top management level is responsible for the creation of mandate in any
organization (Von Krogh 2012). The top management level mainly shares the passion for
innovative utilizations and even collectively approaches to those people, who are responsible
for the mandate creation.

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ii) Be any Model: Be any typical model of any particular organization is one of the
most important criteria for becoming innovative. All the senior leaders should be involved for
getting into the strategies to work successfully (Whittington 2014). The business thinking and
the innovative thinking should be made a priority for the National Australia Bank.
iii) Communication with Issues in Strategies: All the problems and issues should be
communicated properly so that there exists no loophole in the problem solving and decision
making techniques (Bernus, Mertins and Schmidt 2013). Each and every employee of the
organization should be given a chance for solving the problems and thus many solutions
would be coming out from them. Finally, the best solution will be selected from all those
ideas.
iv) Creation of Highly Diversified Teams: All the problems in strategies should be
addressed by creating highly diversified or expanded teams (Bajdor and Grabara 2014).
These issues or problems are responsible for proper solution. When individuals will work in
teams, more innovative ideas will be coming out from them.
v) Access to People: Since a bank mainly deals with people and customers, relevant
access should be given to them and their feedback will be extremely important for the bank
(Gholami et al. 2013). This feedback will help the bank in accessing their problems
eventually and rationally.
vi) Designing and Building Systems: This is the sixth innovative approach for the
development of the innovative utilization in the bank. The change or the alteration in the
existing systems is another important criterion for bringing innovation to the organization
(Allan et al. 2012). The existing systems should be designed and rebuilt and the new systems
should be built in such a cost effective way that it brings innovative uses to the organization.

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vii) Networking With Peers: The colleagues or the peers should discuss amongst each
other and their networking will be bringing innovative ideas (Sun 2012). The employees,
working in the bank should be given a scope so that they discuss amongst each other for the
existing problems in the bank.
4. Outsourcing vs End User Computing
Outsourcing is any typical approach through which any company
or organization agreements the most important functions to all the efficient and specialized
providers of service, who eventually becomes proper and experiences partners in business
(Ali and Green 2012). Moreover, in some of the cases, this approach of outsourcing mainly
includes the employee transfer from any particular organization to the organization, where
outsourcing is occurring.
EUC or the end user computing solely is referred to the systems where all the non
programmers can make several working applications (Baskerville, Spagnoletti and Kim
2014). The end user computing is a collection of approaches to the computing, which point to
better integration of end users into the environment of computing.
Outsourcing is considered as the best option of strategies for this typical organization,
National Australia Bank. Outsourcing has several advantages. The Director of the IT/ IS
should consider all the advantages while managing outsourcing in the National Australia
bank (Uçaktürk and Villard 2013). The advantages that are to be considered by the Director
of the bank are as follows:
i) Focusing On Basic Actions: The operations of back office of any particular
organization will increase in the fast development periods. This increment may begin for
consuming two types of resources like financial and human at the cost of all the basic actions,
which will make the organization successful (Peppard, Galliers and Thorogood

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2014). Outsourcing of these activities will eventually enable refocusing on those specific
activities of business, which are extremely important lacking the sacrifice of service or
quality in the back office.
ii) Savings of Expenses and Efficiency: The National Australia Bank should opt for
outsourcing, as it is responsible for the savings of expenses and efficiency. Outsourcing helps
to save the expenses of the bank and even the efficiency of the bank (Li et al. 2012). The
savings of expenses and efficiency will be extremely beneficial for the bank, as it will bring
profit to the organization.
iii) Reduced Overhead: The cost of the overhead for performing any specific function
of back-office is tremendously high (Gholami et al. 2013). Outsourcing helps in reducing the
overhead costs and thus is extremely advantageous for the bank.
iv) Control in Operations: The operations, where the significant costs are always
going out of control should be taken into consideration for the sake of outsourcing. Any
typical department, which have developed over time into the poorly controlled and even
uncontrolled regions are the main motivators of outsourcing (Pearlson, Saunders and Galletta
2016). Moreover, a company, which is outsourcing can significantly fetch the best skills of
management to that particular organization than what should be available. The bank has
various operations within it and outsourcing will be extremely helpful for them.
v) Staffing Flexibility: Management of all the operations often become extremely
problematic for any organization. The flexibility in staffing is another important feature of
outsourcing (Baskerville, Spagnoletti and Kim 2014). All the operations from different
departments can be easily managed with the help of outsourcing.

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vi) Risk Management: Risk management is the most important factor in all banks.
Outsourcing helps in easy management of risk. If risk management is not done properly, there
is a chance that the organization will be in major problems (Galliers and Leidner 2014). With
the help of outsourcing, managing risks becomes easy and no further cost in involved.
vii) Develop Internal Staff: Any large project becomes successful if all the staffs and
employees work properly. For this particular purpose, the internal staffs should be developed
properly. Outsourcing is responsible for the development of internal staffs or employees.
Various skills can easily come out from this particular development.
5. Strategic Information adds Value by IT/ IS
i) Establishment of the Strategic Information Role: This is the best approach for
adding value to the IT/ IS strategies in any organization (Galliers and Leidner 2014). This
particular strategic information is established in the organization so that it eventually adds
business value to the organization. This process comprise of two stages. They are as follows:
a) The first stage is the investigation and researching phase, which provides the
organization proper and relevant information that is required for the organization. The first
stage needs a proper assessment of the proper behaviour and attitudes of the top management
level. This stage also involves the expenses that are to be paid (Gholami et al. 2013). There is
a direct link between the investment done in the business and the line in the bottom that
delivers a good lesson to the top management level on the basis of the intelligence of
competitors.
b) The second stage is the articulation of strategies and mission (Lin and Wang 2012).
It is observed that most of the decisions of strategies whose proper results always are
dependent on the proper accessibility of information mainly involve the following:

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i) Selection and targeting of market
ii) New investments
iii) Location of offices and factories
iv) Development and launching of new products
v) Promotion and Pricing
ii) Identify Users Real Needs: The users with real needs or requirements should be
identified (Baskerville, Spagnoletti and Kim 2014). This identification of users is one of the
most important strategic information for any business, especially for banks. This also adds
business value to the IT/ IS strategies.
iii) Segmentation of Market: Market segmentation is the most important factor for
any business. This is the most important strategy for any marketing strategy. This
segmentation groups the customers of the business into certain segments with similar
requirement sets (Pearlson, Saunders and Galletta 2016). The National Australia Bank should
segment their departments, lines, processes and operations into proper segments. This
strategic information adds business value to the IT/ IS strategies.
6. Critical Discussion on Good Internal Control
Good internal control is the most important factor for any organization. The
procedures of control are performed by all the individuals present in management level for
producing good internal control for all organizations (Lin and Wang 2012). The procedures
of control comprise of all the controls of entity level and even activity level. For the National
Australia Bank, the designing of the procedures of control must aim initially on the entity
level, which is the top-down approach since the controls in activity level can be ineffective
for the lack of duty segregation (Galliers and Leidner 2014). The controls of entity level are