Strategic Information System for Commonwealth Bank Analysis Report

This report provides a detailed analysis of the Strategic Information System (SIS) implemented by Commonwealth Bank (CBA). It begins by defining SIS and highlighting its role in gaining a competitive advantage within the banking sector. The report identifies and examines the critical success factors...Read More

STRATEGIC
INFORMATION SYSTEM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Critical success factor for company and primary objectives...................................................1
2. Formal organisational chart for Commonwealth Bank............................................................3
3. Analyse current system and identify specified control weakness that must be addressed......6
4. Primary features of new system and relevance of advanced technologies as MRP, MRPII
and EDI .......................................................................................................................................8
5. Technology platform, financial and non-financial data, management reports and potential
security risks..............................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
BIBLIOGRAPHY .........................................................................................................................15
APPENDIX....................................................................................................................................17

INTRODUCTION
Strategic information system (SIS) is that system which is developed within corporate
business initiative as it is intends to gain competitive advantages to company (Alamri, Ballahmar
and Zafar, 2016). The main aim of SIS is to provide all products and services at lower cost than
others in the market so that company can focus mainly on its marketing segment or the
innovations. There is also another feature within this which is Strategic Information Management
(SIM) that helps firm to include, store, collect, process and transfer the data which business is
either receiving or creating.
This report is based on analysing Strategic Information System which incorporate factor
for the success of Commonwealth Bank and Australia and New Zealand Banking Group (ANZ)
is also taken to compare both. Commonwealth Bank primary objectives along with the
organisational chart displaying the formal communication and role of each level of employees.
Further, the report will continue with analysing current system and identifying control
weaknesses that could be addressed by new and improved system. The primary feature of the
system will be explained with its best solution like that of MRP or MRPII and EDI as well.
MAIN BODY
1. Critical success factor for company and primary objectives
Commonwealth Bank of Australia (CBA) is the multinational bank within the banking
sector of Australia which is operating all across New Zealand, Asia, UK and USA. The bank
provides all type of financial and banking services like retail, fund management, insurance,
superannuation, institutional bank, investment and broking services (Company Overview-
Commonwealth Bank. 2018). Commonwealth Bank of Australia was founded in 1911 by the
Australian Government and then privatised in 1966 being among big four banks of country.
The main and critical success factor of Commonwealth Bank in market of Australia and
other parts of world will be their future strategy which is focusing on creating long term value
for their customers, shareholders and people. Some factors for success of Commonwealth Bank
of Australia:
Market share: It can be increased by firm with the current customers available in the
market that effective services will help them to attract towards business. The firm must be
service oriented while dealing with consumers (Torres, Mayo and Jiménez, 2018). Online
process improvement is also a way from which the firm is able to achieve fulfilment effectively.
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Customer value
The factor of success of bank is value which they are giving to their customers.
Innovative ideas in relation to their products and services and long term policy formulation as
well. Commonwealth Bank is very much customer focus as they continue to secure and enhance
financial wellbeing of the consumers so that they are giving outstanding experience to their
customers as well (Innovative Total Capital Solutions. 2018). Major strength of company is their
learning and growing during the time of financial crisis and making themselves stable all through
their tougher phase.
This help customer to believe into Commonwealth Bank that they will be able to secure
money and investing into some powerful investments as well. The bank is also having strong and
flexible balance sheet so that it could ensure long term customer support and employing right
resource and workforce to capitalize onto opportunities (Loebbecke and Picot, 2015).
Technology
Apart from this another factor for the success of bank is their use of technology and
innovation that help Commonwealth Bank to grow and grab their market on wider platform.
Company tend to apply world class technology so that they are able to meet growing and
changing need of customers, CBA is developing applications helping in leveraging real time
capabilities and so that they are able to communicate with clients.
The core banking system which is linking each branch and customers of bank to its
centralised technology and operating in better way is the future and present of banking sector of
world (Sarif, Yunus and Ab Rahman, 2018). Commonwealth Bank is delivering best and better
features for the customer’s convenience that help them to operate their bank account 24*7. So
the group is working as per their Core Banking System which is a project focusing on continuous
innovation with betterment in distributing good benefits to their clients all across.
Apart from this another factor for the success of bank is their use of technology and
innovation that help Commonwealth Bank to grow and grab their market on wider platform
(Commonwealth Bank OUR STRATEGY. 2018). Company tend to apply world class technology
so that they are able to meet growing and changing need of customers, CBA is developing
applications helping in leveraging real time capabilities and so that they are able to communicate
with clients.
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The mission statement of Commonwealth Bank is:
“To achieve significant long term growth, high employee engagement, a strong
experience for our customers, and ongoing total shareholder return and out performance for our
shareholders.” (Commonwealth Bank OUR STRATEGY. 2018) website of Commonwealth Bank
will be helpful in evaluating objective or mission statement which is stated in starting of the
research.
This is the aim or mission statement of bank which is helping them to achieve their goal
on timely bases so that their objective is evaluated and enabling them to link or connect with
customers on wider platform. The objectives of Commonwealth Bank will be:
 To achieve the overall long-term objective of stability of group with stronger
experience for their customers.
 To maximize total shareholders returns by determining long term plans.
With the strength which they are having which is their planning throughout financial crisis would
be making them stable in world market (Arvidsson, Holmström and Lyytinen, 2014). Then they
are working together with their staff members or clients so that their institutional customers as
well which will be completing their capital spectrum as well.
This also proves to be factor of success for bank which help them to provide tools and
financial solutions to their business customers so that they are able to maintain their competitive
edge. As Commonwealth Bank is having their global presence with about 1100 branch
worldwide so this would be helping company to produce tailor made products and services to
their clients with the capital service as well. The bank is giving special financial solution and
advice to business clients and other industries of country including government bodies as well. It
is termed to be the only bank of Australia providing complete capital solutions to the institutional
bodies (Commonwealth Bank OUR STRATEGY. 2018). Commonwealth Bank is having their
expert employees in field of equity, global, working capital and debt markets.
2. Formal organisational chart for Commonwealth Bank
Commonwealth banks of Australia is working in almost all across countries of world
which is focusing on continuously providing complete range of banking services with
positioning itself as the leading Wealth Management services provider (Commonwealth Bank,
2018). The company aim at expanding its operation with retail and SME so that they are then
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been able to provide custom made products to their customers in order to retain then for longer
period.
There are some changes announced by managing director of the company regarding
structure of CBA in order to create vertical integrated business. The structure aligns with the
development of services and product to consumer segment along with changes in leadership and
team responsibilities.
Retail banking services: This will help to meet customer financial requirements
regarding personal and small business who are seeking accessible and affordable banking. It
incorporates the customer service division and Australian financial services.
Premium financial services: These services will be responsible for bringing together the
proprietary of bank related to wealth management system to provide customised services and
products for consumers who have complex financial requirements (Löser, 2015).
Insurance and investment services: This will help to bring together fund management
along with the superannuation and insurance businesses and master fund. This includes, colonial
insurance and commonwealth investment management, financial advisors and risk and capital
management services.
Business and institutional services: It caters for the institution financial requirements
along with the middle market and corporate business consumers. More risk, capital and
traditional business services are offered to customers.
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The new business structure of CBA reflects both strategic position and business mix. The
structure helps to meet requirements of customers who are seeking complex wealth management
and transaction service’s needs. It will help the bank to focus on wealth management through
large institutional consumers. In addition to this, vertical integration will ensure effective
business decisions are responsive and also speedy.
Apart from this, Australia and New Zealand Banking Group is the third largest bank by
market capitalisation after Commonwealth Bank. The bank operates in 34 different nations. The
bank provides banking and financial products and services to small business, retail, corporate
and institutional customers effectively.
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Illustration 1: Organisational chart for Commonwealth Bank
Source: (Commonwealth Bank, 2018)

3. Analyse current system and identify specified control weakness that must be addressed.
Accounting information system is used by bank and also classified as “hybrid” system.
They include basic accounting operations, decision support software and offline banking services
as financial and insurance planning system.
General ledger system: General ledger is a core accounting processing in information
system in banking. It is the record accessed in order to perform various accounting transactions.
The system records transactions that interfaces with a designation of account. The ledger used by
banks is slightly different from industry ledgers because of compliances rules set by FRB
(Federal Reserve Bank).
Loan accounting application: Loan and investments are option for banks as their
majority to make money (Grover and Lyytinen, 2015). Bank is able to process forms and
paperwork in order to make decisions on consumer credit standing with the help of loan
accounting software. Managers are also able to access data to examine bank loan portfolio to
generate compliance check for auditor.
Mortgage banking application: Banks in mortgage industry, this application creates and
maintain information according to mortgage loan provided by bank to consumers. The
information system generates tax and customer statements for state tax and federal offices. In
other ledger, bank accounts consist of several sub accounts such as taxes and actual value of
mortgage and other variables.
Customer account application: The application provides unique primary key to link
consumer information to an account number assigned by information system. Account of
customer is managed on the system and referenced by account number in ledger. It is a link for
consumer to interact online and offline with banking system application. It is also a basis for
transaction exception reporting for different consumer account problems.
Weakness which need to be addressed
The specific control weaknesses are such as failure to segregate duties within application
and also failure to set up new account and terminate old ones in timely manner effectively. The
banks face situations such as learning the system, loss of information and re-evaluation. Learning
the information system is time consuming and also difficult sometimes because of some
technical issues and different knowledge regarding tools. Training is required and this may be a
disadvantage for CBA in terms of manpower and time. System are computerised and complex
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that some may find them hard to use. In addition, computerised system always has a risk of
losing data and information through system crashes and power outages.
In this modern world, technology is changing and getting more easy and effective.
Accounting information system is also now improved that it is now designed with a data
processing system using software in order to create backup of the information. It is a precaution
that in case of system crashed, software will help to recover the old data from system. AIS also
have experienced vast changes in several decades to improve completely in terms of journals,
ledgers, systems etc. Moreover, the information system is also improved with integrated system
of performance to address various issues.
Internet banking application: The evaluation in banking system are based on web
application that supports internet banking. This is a point of access website associated with
information system which helps customers to perform actions. The application is used for online
marketing and as internet banking application. This is the new improved information system
used by banks to provide their services to customers effectively.
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Illustration 2: Document Flowchart

Apart from this, The Australia and New Zealand Banking Group Limited, commonly
called ANZ, is the third largest bank by market capitalization in Australia, after the
Commonwealth Bank. The system is also similar to Commonwealth Bank and services are
divided into retail and other commercial sectors effectively. The improvised accounting
information system of Commonwealth Bank is developed in accordance with financial services
of ANZ.
4. Primary features of new system and relevance of advanced technologies as MRP, MRPII and
EDI
Online banking such as internet banking application is one of the simplest, effective and
convenient way of managing money and other information related to account. Customers are
able to save their time by managing banking activities day to day from their personal computer
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Illustration 3: Data Flow Diagram

of mobile phones with the internet access. This will help to have a complete control of funds.
There are a lot of features of new and improved information system which are discussed below:
 This will help in checking account balance, access account history, reviewing activity and
setting up alerts.
 Customers will be able to transfer their funds between accounts or to any other consumer
account.
 Funds can be transfer to an external checking, savings and money market saving account
at any other domestic financial institution effectively.
 Set up future dated and recurring transfers.
 This will also help clients view images, records and pay bills.
 From online banking application and services, customers will be able to receive e-bills
and reminders with the help of Bill pay.
 Modifications are also possible such as changing password, user ID, security phrase and
image, challenge question and answer for the banking services online. Reset challenge question, retrieve user ID and online banking guarantee.
The Best solution for client to pursue
Apart from this, customers will also able be to access to their 25 months of personal
deposit account statements. In addition to this, some more effective features of information
system such as, completeness, accuracy, security, clarity, understanding ability, timely,
reliability, comparability and verifiability. Thus, it can be said that online banking application as
a new and improved information system is the best solution for banks to provide effective
services to their customers will help to increase market share as well as satisfaction. This will
definitely take business to the next level towards growth and development.
In addition to this, some advanced technologies such as MRP, MRPII and EDI as
information system option is also available.
Material requirement planning: MRP is a production, scheduling and inventory control
and management system used to manage and control manufacturing procedures. In addition to
this, the system is also used as software in terms of advanced technological is software but it is
also possible to measure MRPmanually. MRP as information system is designed to centralize,
integrate and process information for effective decision making in scheduling, design
engineering, inventory management.
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Manufacturing resource planning: It is defined as a method for the effective planning of
resources of a manufacturing business in order to manage and control them effectively. The
method is used to address operational planning in unit, financial planning and also has simulation
capability to answer "what-if" questions and extension of closed-loop MRP. The system is
relevant for the calculation of resources required within firm including integration of additional
data and financial needs.
Electronic Data Interchange: EDI is an electronic interchange of company information
using a form that is standardised. It is a procedure which allows business to send data and
information to any other firm electronically rather than with paper. Thus, the businesses
conducting their activities electronically are known as trading partners. EDI is important as well
as useful for banking application to support information exchange. Electronic Data Interchange,
enables the exchange of standardised that allows different information systems to interact
directly with each other.
5. Technology platform, financial and non-financial data, management reports and potential
security risks
Technology platform for the system
Technology platform is a group of technologies used as base upon which other
procedures, applications and technologies are developed effectively. In personal computing, a
platform is the basic hardware such as computer and software is operating system on which
software applications can be run easily. The platform conforms to a set of standards that helps to
enable software developer to create software application for the platform. This is also the same
standard that allows managers and owners to buy appropriate hardware and software. For an
example, modern laptop running Windows as an operating system or Apple computer running
the Mac OS X operating system (Intezari and Gressel, 2017). In addition to this, the concept of
information technology related to platform is broad and cover phenomena ranging from the
operating system to internet effectively.
In addition to this, technology platform for the internet banking application such as
server, Mobincube, Appery, Bizness Apps, Appy Pie, GoodBarber, Appsmakerstore and Swiftic
could be used to increase effectiveness of application as technology platform to improve
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services. Further, EDI is also an effective platform for the online banking application in order to
transfer information of user to any other bank or user for the transfer purpose.
ER Diagram
User views
The four users are customers, managers, auditors and employees who can view the
documentation and management reports. They will be having the authority to view the reports
that are related to financial activities of bank. They can view reports by getting access into
database by logging in with their authorised accounts.
Here, non-accounting user will be customers that will have view of source documents and
reports. The customers can view it in effective way.
Potential security risks of Internet banking
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Illustration 4: ER Diagram

There are a lot of benefits of internet banking to customers but some potential risks and
hazards are also associated with this such as the major risk of internet banking is the online theft
of consumer access ID, user ID and password which can cause unauthorised removal of funds
from the consumer accounts. In order to manage such risks, CBA has implemented various
security safeguards such as server authentication and session encryption. CBA use secure sockets
layer in order to protect the transmission of information that is submitted by consumer when they
use secure online form effectively. Apart from this, hacker also gain access to account
information which is also a threat.
In addition, data breaches have also some risks such as different types of data can come
from own employees, from suppliers and consultants who have access can easily gain access to
data and inside network. Through mobile banking application they can access accounts personal
information and data.
CONCLUSION
It can be concluded from the above report that information system has a vital role in
banking sector in order to provide quality services to customers and effective management of
operations. In addition to this, Commonwealth Bank is very much customer focus as they
continue to secure and enhance financial well-being of the consumers. It is analysed that the new
business structure of CBA will help to focus on wealth management through large institutional
consumers. Apart from this, online banking will also help to have a complete control on account
of customer.
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REFERENCES
Books and Journals:
Alamri, S., Ballahmar, H. and Zafar, A., 2016. Strategic information system planning: A case
study of a service delivery company. International Advanced Research Journal in Science,
Engineering and Technology. 3(5). pp.78-84.
Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy
practice: A multi-dimensional view of strategic information system implementation and
use. The Journal of Strategic Information Systems. 23(1). pp.45-61.
Grover, V. and Lyytinen, K., 2015. New State of Play in Information Systems Research: The
Push to the Edges. Mis Quarterly 39(2) pp.271-296.
Intezari, A. and Gressel, S., 2017. Information and reformation in KM systems: big data and
strategic decision-making. Journal of Knowledge Management 21(1) pp.71-91.
Loebbecke, C. and Picot, A., 2015. Reflections on societal and business model transformation
arising from digitization and big data analytics: A research agenda. The Journal of Strategic
Information Systems 24(3) pp.149-157.
Löser, F., 2015. Strategic information systems management for environmental sustainability:
enhancing firm competitiveness with Green IS (Vol. 6). Universitätsverlag der TU Berlin.
Sarif, S.M., Yunus, S.Y.M. and Ab Rahman, N.A., 2018, March. Strategic Information System
Planning (SISP) Success: A Case Study. In International Conference on Kansei Engineering
& Emotion Research (pp. 692-703). Springer, Singapore.
Torres, F.R., Mayo, A.R.P. and Jiménez, H.G., 2018. Subsidies to the agricultural sector for the
search for food sovereignty. A funding option for a strategic sector of the national economy.
Case: Mexico.
Online:
Commonwealth Bank OUR STRATEGY. 2018. [Online]. Accessed through:
<https://www.commbank.com.au/content/dam/commbank/microsite/2013shareholderreview/
downloads/CBA-OurStrategy-2013.pdf >.
Company Overview- Commonwealth Bank. 2018. [Online]. Accessed through:
<https://www.commbank.co.id/upublic/mod_home/default_content.aspx?code=CBI_sekilas>
Innovative Total Capital Solutions. 2018. [Online]. Accessed through:
<https://www.commbank.com.au/corporate/can/our-philosophy.html>.
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Commonwealth Bank. 2018. Organisational chart for Commonwealth Bank [Online]. Accessed
through: <https://www.theofficialboard.com/org-chart/commonwealth-bank>
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BIBLIOGRAPHY
<https://www.commbank.com.au/content/dam/commbank/microsite/2013shareholderreview/
downloads/CBA-OurStrategy-2013.pdf >.
<https://www.commbank.co.id/upublic/mod_home/default_content.aspx?code=CBI_sekilas>
<https://www.commbank.com.au/corporate/can/our-philosophy.html>
<https://www.theofficialboard.com/org-chart/commonwealth-bank>
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APPENDIX
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