Bank of Giant

The second issue we will be talking about is how HSBC and Citigroup use their IT investment strategies.

The case given describes the IT investments made by the two banks and with this information we would like to analyze whether these events are primarily strategic or operational

The two types of IT investment strategies are strategic and operational

Strategic investments involves innovation to IT to achieve differentiation. An example will be citigroup is the first to offer online and mobile banking.

Operational strategies aim at cutting cost to achieve productivity. An example will be ATM machines.

However, it must be noted that as time progresses, strategic use of IT will eventually become operational. Overtime, as competitors begin to imitate a particular technology adopted by the first company, the former loses its competitive advantage and what is previously strategic investment will now become just for operational purpose.

Now lets move on to look at the IT strategies of HSBC.

To do so, we would first be analyzing the investment strategy HSBC uses and then study the IT investments that they have made over the corresponding years

The 1999 Annual Report of HSBC notes that: Our information technology strategy is based on harnessing the power of new technology to provide new and better services for our customers and improving our own operating efficiency

This stand is further supported by Ken Harvey(CIO for HSBC, 2006) who says "(the) technology strategy is pivotal to dropping the overall cost base of the business

These are the operational IT investments that HSBC made over the period from 1996 to 2007.

These investments were made to increase the operational efficiency of the bank