This chapter describes the shift from the automating to informating uses of IT in the organisation through the 1980s to the 1990s, and the importance of integration in providing a platform for business transformation. It traces key shifts in IT/IS and organisational thinking and its influence on the strategies that organisations adopt to keep in step with rapidly changing conditions. It states the research questions and identifies the contribution of the research to the wider debate on IT for transformation. The treatment is not exhaustive but it is hoped that it is sufficient to give a taste of the key changes and to provide the context in which business transformation in the retail financial services sector is considered in the chapters that follow.
In the early 1990s research reports in journals such as Business Week and the Harvard Business Review (Scott-Morton, 1991; Keen, 1991; Roach, 1991) focused on the disappointing results of the massive investments in IT in the services sector. Spending on technology had tripled between 1970 and 1990, yet white collar and office productivity in US businesses and organisations remained flat. Roach (1991) argued that the maintenance of current outdated IT infrastructures was adding to the burden of increasing costs in the services sector and that, for the majority of firms, the potential of IT had still to be realised. He advocated a strategic focus based on an efficient delivery system, a high quality product, and a flexible cost structure to ensure continued growth and global market presence. He stressed that the challenge was primarily managerial; that more effective ways of measuring and evaluating white collar productivity, quality, and IT were needed; and that outsourcing arrangements or strategic alliances would allow for economies of scale by sharing the costs of certain resource-hungry in-house functions.
Whilst making it clear that ‘economic efficiencies’ and radical change were necessary, Roach also warned that ‘overzealous cost cutting’ would ‘hollow out the sector’, affecting abilities to innovate, respond to customers, or provide quality service over the long-term.