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Information Systems and Application Contexts Essay

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Updated: Sep 20th, 2021

The Service Provider

LectroBank International is a New York based firm which provided financial solutions to other firms. The company had had operations related to managing financial products and providing baking services. The structure of the company was such that the operations for the entire bank had a single reporting line to its own policy-level senior executive. In the hierarchy Greg Paley and two other division heads were responsible for handling the operations and reporting back to the EVP. The department basically had about 300 officers and clerical staff who were responsible for transaction processing activities pertaining to the delivery of credit and cash letter delivery services and loans.

The business process was such that funds transfer was activated when the customers request for a transfer was delivered to the customer’s account officer. This could arrive by mail, phone or any other communication medium. The communication into the business could take up to eight level of recorded and unrecorded communication before it could reach the order processing unit, which was dealt with Paley’s department, and therefore had a tendency for harboring errors in communication due to noise. Once the request was formally logged and communicated to the department the prepare clerk was responsible for typing out the about eight data elements onto a multi-part form, aided in the case of any standard transfers by the ability to pick up certain fixed information like the beneficiary address or any special instruction that the order might carry. The forms for the order processing were there prepared and checked by a member of the staff who was assigned the sole role of checking the papers for any irregularities and missing data. The orders were then processed n a batch format where they waited for the cutoff time in order get authorization from the execution by an officer. The different forms of the order were then sent to the different departments of the company where the payers account was debited and the beneficiary was credited with amount.

The Customer

The customers of the business were mostly corporations which even included some of the most prestigious corporations in the United States of America. The customer list of the company also included the general public, small medium enterprises as well as prominent figures of the social and corporate sectors. The predominantly high status and profile of the customer made them very sensitive to any issues that might arose relevant to the service they were receiving or the decline of quality and efficiency with which their accounts wee being dealt with.

The Problem

The problems being faced by the company were that the customers of the business were very high profile with surmountable status and connections. As a result if they felt that their account was being mishandled or that they were being provided inferior quality of products and services then they did not used to hesitate in writing up a formal complain and lodging it to the president of the company. This made the employees and the managers in the company very prone to rectification and scrutiny as the president’s staff expected specific resolutions to be provided to the customer and tight time schedules

Another thing was that although the LectroBank and the Morton were involved in providing the same services to the customers, the customers shared different views regarding these two entities. They regarded Morton as the most prestigious organization for corporate banking while LectroBank despite being larger in size to Morton was regarded as an inefficient institution which dealt with operations in an aggressive and brash manner which should not be characteristic of institutions providing corporate finance services to other corporations in the business context. The other view shared by the customers that they expected Morton’s performance to be flawless and LectroBank to be ragged – and, consequently, that is how comparative evaluations often came out, regardless of the facts

The main problem however was not the reputation of the company, but its operations. The adverse reputation of the company in the eyes of the customers was mostly due to the operations of the company being inefficient and lacking the standard quality and accountability that is required in the profession. This was inherent basically in the fund transfer business here there was a existent ambiguity as to whether the customer or the bank was responsible for the origin for certain errors. It was common for a customer to deny that he had given wrong information in initiating a transfer by telephone, which resulted in the production of a perverse situation in which a transfer that the bank executed perfectly produced was regarded as a bank error instead of being a error on part of the customer themselves. The marketing department was not in the favor of handling these situations in a strict manner as they wanted to keep the customers happy and as a result the bank was mostly to blame even for the problems that were caused by the customers or were resultant of the customers providing incomplete, insufficient or incorrect information.

The problem is actually in customer request acquisition where there are too many channels and levels between the request for a transfer being places by the customer and the order processing department getting hold of the customer’s request and processing it. The problem lies with the customer account officers who are there to satisfy the customers but in their eagerness to provide highly customized services to the customers they tend to make communication and record keeping mistakes. Moreover due to the nature of their job they are not able to strongly comment to the customers that their requests might be unjustified or might need to be adjusted to allow for efficient processing. This also because of the fact that the account officers play a customer representative role and are not aware of the operations of the business on the ground level.

The inadequate role of the account officers being played regarding the advice provision to the customers is what is basically killing the reputation of the business and the company in the eyes of the customers. it is also explicitly stated in the case that the company runs into problems when they argue with the customer or when the customer calls to lodge a formal complaint. The company/ account officers tend to usually admit that the error must have taken place in the operation function of the company. In certain cases the company does take up to three days to acknowledge the complaint, and then eight more to agree that something is actually wrong. After settling the issue in about two weeks to two months time the company then again tends to negotiate over the penalty interest which keeps on growing with the increase in the time spent with dealing with the issue.

The employees of the company themselves stated that the account officers harbor a second class citizen approach and perception regarding the employees in the operations department of the business thinking them to be inferior to themselves. Their regard of the operations’ people being low grade workers makes them less communicative to the personnel in the operations department which results in the operations department being handed down unclear and incomplete information for the processing of the orders. Moreover this attitude of the also results in the account officers being less aware of the business at the ground level and how the order processing function effects the customers make them inefficient when they provide any kind of advice to the customer regarding their corporate accounts and orders or transactions.

The Proposed Solutions

Paley’s Solution

As depicted in the Cashtrack case the employee by the name of Paley is aware of the issues that are being reported against the company and the problems that are actually being faced by the company at the different levels of management in company. He was also aware of the customers’ perception of the company and how they actually relate to the operations of the business. IN his solution he justified his actions by backing it up with customer responses to different actions that were executed by other similar corporate solution providers.

Paley defined the identified problem in two different ways. He stated that the original problem that is leading to all the misconception and the increasing number of complaints relate to the increasing level of transactions processing errors that are being faced by the company. Additionally he also specified that the speed of speed of correction of and attitude towards the level of transaction processing errors was particularly important and not just the level of the errors. Secondly he also made a point of stating that the company Lectrobank’s is facing just about the same kind and type of errors that are being experienced by the competitors. The level of the errors is just about the same as well but the decrease in the reputation of the company in relation to these errors is mostly due to the improper personal relation (PR) execution of the company. In the structure of the company the account officers are mostly responsible for dealing with the clients and it is their lack of competence in relationship management and building which is resulting in the decreasing reputation of the business.

The solution provided by Paley for this problem focuses on reducing the nunber of interactions and levels between the customer and the operations of the company. As previously the customer request was passed down on an average of eight levels the prolems wre also arisng due to the noise in the communication process. To eradicate this Paley proposd that a computer based technology should be placed at customer premises with which the customer would be directly able to record and sned their requests on to the operations department. In this way any communicat5ion erreor would be regarded as an error on the part of the customer and can be backed by a computer file as evidence as well. this will reduce the amount of responsibility and blame put on the company. Additionally he also stated that this option lets the customer now that they are in control of their actions which the company a more attractive entity for the customer

As can be seen the solution proposed by Paley is a simple and relatively cheap solution and as one of the company’s most prominent client Globex is threatening to terminate a 40-year relationship this quick action would be a good idea. However the disadvantages of this solution are that the by placing the terminals in the customer premises might give the customers the impression that they are being asked to work for getting their own orders and requests processed which might cause resentment amongst them. Moreover the by using a non-standard operating system the company might not be able to upgrade or update the system and might face some problems relating to the compatibility of the system with the other systems in place in the company.

Dever’s Solution

Dever provided the same solution to for the problems of the company as did Paley. However the difference came in when the choice of the system to set was in question. Dever was in favour of formally carrying out the steps outlines in the project lifecycle of any system/ business activity and proposed that instead of just getting an off the shelf software and implementing it without proper integration and compatibility the company should focus on setting up a system which would go with the operations of the business as well as provide for long term operation.

He proposed that the company could set up a separate electronic banking division and offer it to customers as a separate product/ service of the company. On this manner it will be introduces to the current customers of the business as a value added service and will also aid in attracting new customers who would prefer to handle their accounts and records from the comforts of their own homes and offices. This option will provide the customers with greater control that Paley’s option and instead of seeming like a dirty patch yup job would be regarded as a value added product/ service. This option could be carried out on a large scale and would include performing the specific background checking and the feasibility study for the project. The functional requirements of the proposed system would be sought out and the proper documentation and analysis would be performed regarding functional requirements, functional specification, system specification and formal implementation of the project. This e-commerce solution would be aimed at providing the customer rein over their accounts and would enable them to interact with the company and conduct transactions and process queries not only regarding their current accounts but the operations of the bank as a whole. This is more of a solution for the new age and would be more appreciated by the customers in the long run.

The problem however with this system lies with the fact that the process of developing a customized large scale system would be one which would require considerable investment of time and money. The time is the factor that the company does not have right now but if the company is to opt for future gains and actually increasing the reputation of the company while streamlining its operations then this is a more feasible option.

The Preferred Choice

My personal preferred choice for the option that should be implemented is the solution proposed by Dever. The reason for this being the preferred option is that the solution provided by Dever is more of a value added service which can be implemented in the long run as the differentiation factor that the company will have relative to the other companies in the same business. Moreover e-banking on a large scale would also multiply the operations of the company and would reap much better results in the long run. Although Paleys option is also attractive it has the significant problem of being termed as a shoddy job or a temporary solution for the problem. The solution would work completely fine but with the passage of time issues regarding compatibility of the system with the current system in place at the company will come about. Moreover the company would be restricted regarding the upgrade required for the system as it might not exit.

Therefore Dever solution is more attractive however it does not provide for a the time constraint factor for this it would be recommended that the company should launch pilot test version of the system for the order processing and transfer request options as per Dever’s solution to provide for a comparatively quick solution which can be updated and changed as the solution is implemented in the rest of the company.

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