IT Capabilities and Organizational Change: Digging Deeper into the Banking Industry
The importance for organizational performance of aligning IT and organizational change is well recognized in the empirical literature [1], [2], [3] and there are many theoretical approaches that focus on this subject. In this study we use an emergent pers
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stract. The importance for organizational performance of aligning IT and organizational change is well recognized in the empirical literature [1], [2], [3] and there are many theoretical approaches that focus on this subject. In this study we use an emergent perspective [3], [4], [5] to show how IT capabilities can help management in strategic planning involving organizational change. The organizational change is studied according to process-level research [6] and the findings describe how IT capabilities can drive this change. The context for our study is the Italian financial industry in its bid to be compliant with the MiFID directive. The method combines quantitative (questionnaire) and qualitative (focus groups) analysis to achieve reliable evidence and results. The sample is composed of 37 Italian financial institutions and the study focuses on theoretical and empirical work. Keywords: IT capabilities, organizational change, strategy, banking industry, financial markets, MiFID.
1 Introduction This paper, which contributes to the literature in information technology (IT) studies and organizations [7], aims to analyze organizational change in the Italian finance industry, related to IT capabilities. In recent years this industry has become very competitive or, to use Jeffrey Williams’s expression [8], has become a “Schumpeterian market”. The occurrence of mergers and acquisitions (M&A) provides strong evidence of the rapid process of internationalization that has taken place in European banks since the early 1990s. The need to be ever more competitive has driven the European Union (EU) to standardize some of the more typical financial services in order to compete with US and Asian banking structures. The institutional “tool” typically applied is the EU directive. These changes in Europe’s financial systems have had and are having obvious consequences in terms of organizational changes in processes, practices and business. This article focuses on these changes. In particular, we investigate what has been or what might be the contribution of IT to the activity of planning organizational change and determining a long run strategy. The need for banks to react quickly to the changes D.J. Veit et al. (Eds.): FinanceCom 2007, LNBIP 4, pp. 81–96, 2008. © Springer-Verlag Berlin Heidelberg 2008
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M. Marabelli and F. Rajola
in the environment and the competition reinforces the importance of IT in their bid to maintain competitiveness in a complex and dynamic scenario. 1.1 The Scenario Since 2000 the European financial system has undergone major structural changes as a result of efforts to harmonize national currencies (introduction of the Euro), credit rates according to Basilea II, new payment system (SEPA – Single Euro Payment Area) and financial markets (MiFID – Market in Financial System). Each of these changes has had a different impact depending on the types of organizations involved, on the way that particular financial institutions have chosen to manage the change, and on the strategic value they have imputed
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