CEC Theses and Dissertations


Strategic Information Technology Investment Decisions in the Banking Industry

Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)


Graduate School of Computer and Information Sciences


Sumitra Mukherjee

Committee Member

Easwar Nyshadham

Committee Member

Steven D. Zink


Spending on IT has continually increased over the last 10 years within the North American retail banking industry, but debate remains as to whether organizations have seen the expected value from these IT investments. Greater management focus is being placed on evaluating and realizing shareholder value from IT investments. The challenge is to reduce IT costs from operational infrastructure and move spending to strategic IT investments for business growth and shareholder value. Banks need to develop and implement improved techniques for planning, investing, value realization, and governing strategic IT investments. The goal of the study was to investigate the strategic environment of the retail banking industry in North America and understand how banks decide upon strategic IT investments.

The study consisted of a description of the retail banking strategic environment and applied bank strategies, a literature review of how IT is used within the banks, differentiating between strategic and non-strategic investments, and a cross disciplinary literature review of financial and organizational IT investment techniques for evaluating strategic IT investments. A survey was conducted at a large bank to identify what IT investment techniques were used in practice and why techniques identified in the literature review were not being applied.

The study found that there were varying approaches to assessing strategic IT investments within the banking industry, but typical techniques deployed were traditional financial and conventional planning methods. Emerging organizational management techniques, like the balanced scorecard, proved to be more important than expected and were being actively deployed. Emerging information economics and decision support methods proved promising, but were deemed advanced and less important in the absence of more basic business measures.

The study proposes a maturity framework and 16 techniques for assessing strategic IT investments, which showed promise at the surveyed bank. Future research could consider empirically testing the framework in a longitudinal bank study, evaluating the techniques over the life of strategic projects, in addition to evaluating the framework's potential in other industries. The author hopes that the study has promoted a better understanding of bank's strategic IT investment decision-making, and the applicability of assessment techniques for effective investment management.

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