Impact of Management Information System on Organizational Performance of HSBC
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Impact of Management Information System on Organizational Performance of HSBC
As of now, the world of business is facing different changes which affect their competitive advantage. Furthermore, the business industry is moving to information-based management. As a result, more and more companies are focusing on implementing information system or computerized system which process data or facts and produces information to be used in the decision-making process (Shim 2000, p.1). Furthermore, most of the businesses have realized the importance of Management Information System (MIS), a system or process that offer the information that are vital in order to manage a company in effective manner. It enables to improve communication among employees, distribute complex material throughout the institution, supply an objective system for recording and aggregating information, lessen expenses that are connected to labor-intensive manual activities and support the organization’s strategic goals and direction (Comptroller of the Currency n.d.). MIS is the combination of men; machine and procedures for the process of collecting significant information from the internal and external source of a firm, and then processes this information for the purpose of facilitating the process of making decision (Kumar n.d., p. 2). Therefore, MIS focus on supporting the decision making function in the organization and it s a computerized business processing system which help to generate information for the people in the organization to meet their information needs for the process of decision-making in order to achieve the objectives and goals of the entire organization (Kumar n.d., p. 2).
The Hong Kong and Shanghai Banking Corporation Limited (HSBC) was founded by Scot Thomas Sutherland in 1965. It is considered as the largest bank in Hong Kong with different offices in Asia-Pacific region with 312,000 employees. The company had been able to manage to become the leader among banking institutions and financial services organization, despite of the fact that the worldwide banking industry is exhibiting risks, high stakes as well as complexities. The company focuses on better customer services as well as empowering the performance of the people, together with their commitment for responsible management and long term success of maintainable relationships between their customers and other important stakeholders (HSBC n.d.).
In order to come up with the different goals and objectives of the company, HSBC focuses on applying different strategies that are connected with implementation of different technologies that are available. As a result, the company had become one of the well known names in the banking industry which uses modern management system (Rugman & Collinson 2006, p. 218).
Management Information System in HSBC
Hardware, Software and Data Sources
HSBC Group is one of the largest banking and financial service organizations in the world with 9,500 offices in 76 different countries and territories. It has an IT infrastructure that includes 300,000 desktops and 15,000 Windows®-based server computers. The company has a single global Active Directory forest, a single desktop management solution for all PCs running the new standard desktop image, and a single solution for monitoring the critical Windows services which support the environment. The main advantage of the said hardware is that
By implementing the Microsoft System Center solutions as an integral part of its Common Windows Desktop initiative, HSBC had been able to improve reliability and security of its global environment. Furthermore, it also helped the company to help the IT service group to provide improved service to internal customers at the same time, maximize the cost savings through the common desktop. This is because the users of the desktop will no longer have to wait for the technician in order to install and updates different software and applications, therefore increasing the productivity of the end user. Aside from that, the company also reported a total of 10% to 15% ($50 million to $75 million) savings in 2007 alone, due to the continued deployment of Common Windows Desktop environment to include 300,000 desktops (Microsoft Server Product Portfolio n.d.).
One of the most important MIS software of the company is the Global Payments and Cash Management. It helped the company to establish its name as a leading provider of cash management solutions to the local corporation, multinationals and other major financial institutions. It pertains on 4 important features: integrated receivables solutions (IRS), Integrated Payments Solutions (IPS), Liquidity Management Solutions and Integrated Delivery Channels or IDC (HSBC n.d.).
IRS pertains on the different software and application which focus on electronic collections, which enables the company to let their customers received funds via domestic and international fund transfer, direct debits and other related transactions. Aside from that, it also incorporates the function of National Network Collections (NNC) which offers the company to provide efficient check and paper collection services towards the customers. It also enables the company to offer Wholesale Lockbox (WLB) which provides warehousing, tracking and depositing services for post-dated checks. It also helps to keep track of outstanding, deposited s well as returned checks through the usage of management information reports. Above all, it also helps the company to handle receivable management system, which is the collections information management system which let the end user to view and download collection reports. All of the information captured through all collection channels is transmitted and consolidated into a centralized database, which offer Consolidated Reporting, Automated Accounts Receivable Reconciliation, System Integration as well as online transaction inquiry for all of the electronic and paper collections (HSBC, n.d.). In connection, the company is also implementing MIS which include Domestic RTGS, ACH, Payroll, E-Tax, Inter-account as well as International funds transfers. The company is also implementing Cheque Outsourcing Service (COS) which allows full outsourcing of check disbursement requirements and offers producing local and cross-border cashier’s orders and company checks (HSBC, n.d.).
In addition to that, the company is also implementing a system which focuses on marketing management system. It focuses on the integrated delivery channels or IDC. One of this is the Internet banking platform which offer secure, real-time access to both financial information and cash management solutions across multiple geographies. It enables the customer to log on to their Internet banking account and then access their online account 24 hours a day, anywhere in the world. Aside from that, the company is also offering a secure and safety host-to-host connection between your ERP system and the company. It is designed in order to enable the corporate and institutional clients to manage transmitting huge volumes of information and transaction instruction to the company (HSBC, n.d.). This is important because it enables the company to cater the ever changing environment of global banking. More and more people are becoming more and more dependent in using computer and connecting to the Internet. Thus, the application and installation of computer-based information systems, which include database marketing and Internet marketing, have vitally changed the way of traditional marketing (Joia 2002, p. 231).
All of the said system enables the company to gather information that is important in the decision-making process. The aspect of the different accounts receivable enables the company to analyze the different transactions that are commonly made by their customers. Furthermore, it can help them to focus on the famous services often transact by the customers; therefore, it enables them to have an important database of customers. As a result, the company will be able to maintain the quality of their service and enables them to become more connected to their customers. On the other hand, hardware and software were important factors in maintaining quality and security of their system, primarily those transactions that are being made online. As a result, the company will be able to maintain their company image which can help to improve customer satisfaction that will drive customer loyalty.
Applying MIS in the company, it is important to use IS to communicate effectively, which can help to improve competitive advantage (Ulrich & Lake n.d., p. 271). Furthermore, it is also important to focus on the different managerial issues inside the company because it has a great impact on the success of the information system. The company is implementing integrated management system, which enables the company to adopt quality management in order to avoid duplicating the different efforts of the company, at the same time, having conflicting objectives. The main benefits of the said communication networking or management system is that it helps managers to become better leader, reduce cost and increase competitiveness. Aside from that, it also smooths the progress of different management priorities and strategies, at the same time, removing conflicting systems. Furthermore, it removes different doubts about the responsibility which enables complementary performance measures. Above all, because it can help to create, establish and recognize linkages between different activities, an informed and complete decision-making will be in existence and objectives, thus the targets will be achieved by consensus-building by removing duplication and documentation efforts, at the same time, improving customer perception (HSBC 2005).
In order to support the said internal policies and organizational culture and behavior, technologies were also applied in order to ensure real-time communication of different departments and units of the company, despite of the geographic differences. The company is using dial-by-name, click-to-video, click-to-conference and other applications that are available on desktops, laptops as well as mobile phones of the employees which enable the management team to work together in more efficient manner. Aside from that, the company also enables hot desking, home working, travel working. This is part of the unified communication of the company which aimed at joining up the important entities in the decision-making process of the company, which enables them to control and personalized their communication environment. Application of voice, video and text communication for the user is considered as the key to operating as one HSBC, thus increase the competitive advantage of the company on transnational scale. Because of the fact that HSBC unified communication solution provide the end users the present capability, and enables them to see if the person that they need to contact is available in immediate manner, they will be able to click-to-call from their desktop. Aside from that, the solution also enables the said capabilities to be directly connected from the business applications, therefore enables a person to determine if he or she can contact another person in suitable manner. Above all, unified communications portfolio also delivered return on investment (ROI) of up to 178% with 30% savings on the mobile communications (Evans 2008).
As a support to the stated software and hardware, it can be said that the unified communication enables the different units of the company to be connected anytime. This is important because problems in the company cannot always be anticipated, and there are some inevitable things which happen. The said technology enables all of the decision-maker to be connected anytime, especially when they are greatly needed.
Aside from that, the unified communication is also applicable to the current structure and situation of the company, where in it operates in different parts of the globe. Thus, communication is considered as vital. Like what stated, it can also help the organization’s member to have clear understanding regarding the objectives and goals which must be achieved in a given period of time. Furthermore, the employees, particularly the higher management, will be able to talk about the current performance of the company, clarify things with other units, which are considered as connected. Therefore, the data gathered and process by the software or applications can be used by the upper management in the process of the decision-making by using the technologies of unified communication.
Organizational structure is important in any company because it enables the employees to know their position, responsibility and role inside the company. Therefore, it enables them to become aware of their accountability in making sure that the entire company achieves their goals and objectives. This is important, especially in implementing MIS in any company, because it enables them to know the level of authorization in using the entire system which contributes to the safety or security of the entire system.
The organizational structure of the company is divided on different factors or units primarily the aspect such as: personal financial services, commercial banking, global banking and markets, private banking. The company also focuses on the different geographic regions such as Europe, Hong Kong, Asia Pacific, North America and Latin America. As a result of the said effort, the company had been able to focus on different activities which enable them to reshape its business by the process of investing in the faster growing and emerging markets, particularly in developed market which enables the company to have international connectivity and enables them to focus on their financial strength and continue to focus on investing activities in the business.
In connection with the MIS of the company, particularly in the aspect of receivables, it enables the company to categorize their receivables and the transactions of their employees, thus provide the company with the detailed information about the transactions. In addition, it also enables the company to focus on the details of MIS which enables the decision makers to focus on the performance of the company based on the said categories, particularly in the aspect of geographies. As a result, they will be able to focus on implementing new strategies which enables them to meet the demands, needs and preferences of their customers based on the data gathered from the different systems.
Comptroller of the Currency, Management Information System, Administration of National Bank, viewed 18 April 2009, <http://www.occ.treas.gov/handbook/mis.pdf>
Evans S 2008, HSBC Banks on Nortel for Unified Communications Portfolio, viewed 18 April 2009, < http://unified.cbronline.com/news/hsbc_banks_on_nortel_for_unified_comms>
HSBC, Global Payments and Cash Management, viewed 18 April 2009, < http://www.hsbc.com.ph/1/2/corporate/cashmanagement>
HSBC 2005, Implementing Management Systems, viewed 18 April 2009, < http://www.banking.hsbc.com.hk/hk/commercial/livingbusiness/imp_ems/default.htm >
Joia, L A 2002, IT-Based Management: Challenges and Solutions, Idea Group Inc
Kumar, N V K, Management Information System, Anmol Publications PVT Limited
Microsoft Server Product Portfolio, HSBC Improves Reliability, Security and Cost Savings for Desktop Standardization Effort, viewed 18 April 2009, < http://download.microsoft.com/download/8/4/c/84c9f6ff-af8b-4c39-8789-7dc50f0e0ee1/HSBC.doc>
Rugman, A, Collinson, S & Hodgetts, R 2006, International Business, Prentice Hall/Financial Times
Shim, J 2000, Information Systems and Technology for the Noninformation Systems Executive: An Integrated Resource Management Guide for the 21st Century,CRC Press
Ulrich, D & Lake, D, Competing from the Inside Out: Leveraging Your Organization’s Capability, John Wiley and Sons