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IT Strategies - Similarities

Expansion for global reach.

Investment in technology.
Efficient Employment and Human Relations policies. Satisfaction of all the shareholders of the company, by sharing responsibilities within the organization. Invested aggressively in e-commerce.

IT Strategies - Differences
HSBC Holdings Plc Positioned itself to be Worlds Local Bank by following strategies like Managing for Value and Managing for Growth. Devised a plan with eight strategic imperatives. Adopted a Decentralized approach wherein all the regional technology services consisting of various departments met the local technology needs. Citigroup Positioned itself as a diversified Financial Services Company.

Divided the business into three groups. Adopted a Centralized approach, providing a common technological platform which integrated all its services.

Expanded itself through offshoring and Expanded itself through Mergers and strategic alliances. Acquisitions

How to assess the value of IT investments?


An IT investment can be assessed using various techniques and a few of them are listed below:

Longitudinal analyses - useful for examining over a period of time

and can be used for examining the impact of IT investments on organizational performance metrics. A cross-sectional analysis - useful in examining a specific type IT investment across firms or industries. Cost-benefit analysis used to estimate payoffs for a one-time IT investment. Regression analysis used to test relationships between investment in IT and productivity. Production function analysis used to estimate the value of an IT investment on the firms operation. The real options technique It provides a foundation for undertaking future business opportunity.

Which is the cleverer bank and Why?

IT Expenditure vs Net Profit


20000
15000 10000 HSBC

5.00
4.00 3.00 2.00 1.00 0.00

IT Expenditure Net Profit Profit per expenditure unit

5000
0 1997199819992000200120022003200420052006 25000 20000 15000 10000 5000 0
Citigroup

8.00 6.00 4.00 2.00

Net Profit IT Expenditure

0.00
1997199819992000200120022003200420052006

Profit per expenditure unit

HSBC vs Citigroup
8.00 6.00

4.00
2.00 0.00 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

HSBC Citigroup

The above chart shows the comparison between the Net profit earned per unit of IT Expenditure for HSBC and Citigroup. The above comparative graph shows that Citigroup has been earning more net profit per unit of its IT Expenditure than HSBC

Regression Analysis
20000

15000
10000 5000 0 0 30000 20000 10000 0 0

HSBC - Net Profit


Net Profit

2000

4000

6000

Citigroup - Net Profit


Net Profit

1000

2000

3000

4000

5000

Thank you!