This chapter focuses on the sector’s response to the challenges faced as it affects the management of the IT function in the UK financial services sector. It begins by describing key features of the growth of the centralised DP department from 1970 to 1990. Analysis of the findings of the 1993 (IT2) survey identified five interrelated trends which summarise developments in the retail financial services sector. These trends, which characterise reorganisation of the IT function, match those described by Galliers and Sutherland (1991) in their ‘revised stages of growth model’. It concludes with an analysis of the current situation in 1997 based on research in the banking sector and current consultancy and teaching experience across the retail financial services sector.
The development of IT systems in the organisation has taken place in a period of monopoly markets for IT-based services and skilled labour shortages (Friedman, 1989).
Suppliers of the early computer systems not only employed the skilled staff required to install them, but also employed and supplied staff to train the operators, to provide on-going support and to maintain the systems within the user-organisations. Their support was crucial since the early mainframes were unreliable, requiring frequent maintenance of hardware components. Programs too required maintenance in the form of amendments and adjustments to meet user needs. Usually, only those who had designed the systems had sufficient expertise to do this kind of work.
As the demand for computer-based systems grew, the availability of support for systems development in the organisation became increasingly scarce and expensive. Consultants filled the gap for a time, but user-organisations soon