Impact of Information Technology on Customer and Supplier Relationships in the Financial Services Essay

In puddleation applied science plays an important role to bet on the relationships between nodes and suppliers in pecuniary industriousness. Different industry faces different war-ridden and different blood practice. as well as, we can use nurture engineering science to set up the opportunities and threats to the relationships between clients and suppliers.In this research, it focus on the pecuniary service industry that is motivated by three factors which ar the paucity of research in node and supplier relationships in service industries relative to manufacturing industries, the sheer size of it of the fiscal service bea relative to other service sector and the potential for information engineering to positively impact firm process with channel expansion, cost mitigation and service level enhancement. fiscal service industry includes all Standard Industrial Classification (SIC) codes beginning with the digit six. In this research, we only focus on those work typ ically classified as financial. Financial service companies are the early commercial users of information technology. Economic forces and technological advances, especially Internet has drive this consolidation across international boundaries and across type financial services. The financial service companies are relatively unique in regard to their lever chains. Without possessing any in bourneediate product can add repute to the send away product.The financial services industry has been doing business electronically for many an(prenominal) years. round customer and regulatory statutes demand the use of paper-based transaction audit trails and coverage those transactions. However, the industry leaders will pressure them to adopt electric dispersal and information management methods.This report concerns on electronic connectivity, alliances and partnerships. There is a lack of understanding of and available insight into the emerging role of e-business as a deliin truth chan nel and customer connection mechanism crystallize a great concern of many organizations. Research MethodologyThe stolon phase of methodology is to identify the current and potential role of information technology to support relationship among customers and suppliers in financial services. It included 5 steps which are definition of scope determination of survey methodology and identification of hear creation of a survey instrument regime of the survey and analysis of survey results. In this phase, they limited the scope to the present(prenominal) suppliers and customers of the subject companies. So the respondents no need to identify suppliers of their suppliers or customers of their customers.In this research, it conducts two interviews in several sectors. Due to the avail exponent of contacts, three of the subjects worked in mutual fund industry, one in retail banking, two in each insurance carriers, institutional investment companies, and brokerage. Eight of them were cond ucted by call off and another two were chosen to supply written responses. The typical respondents are senior managers and vice president. Interviews were recorded manually by interviewer so that it is confidentiality and security. abstractThe collected data were analyzed using qualitative techniques. It seeks to conceptualize theory from data rather than proposing theory. The method involves organizing and understanding interview transcripts, collected documents and hear social or business practice. The methodology involves extracting theory from one episode study and studies to augment, refine the theory by using subsequent case. Since the sample is limited, they only drew inferences upon a convergence of ideas across industry sectors.Findings / Results ground on the results of interview, there are consistent patterns in the thought, planning, and implementation processes of different participants. They have group the result into five categories. First is how information tech nology supports existing customer and supplier relationships. foster and third are the opportunities and threats they image when they expand their business. The fourth session is the drivers of change. Finally, they examine how manager predict the early respect to the relationship among their customers and suppliers.The analysis of current activities begins with an examination of the partnerships that support inter- organizational business activities within the respondents respective industries. There is high storey of interdependence among various financial service industries. A non-linear relationship among the parties is understandably shown. Besides, the relationships demonstrate a high level of complexity and variability. Existing sound recording response and Web-based account access functions reduced the cost of delivery for many customers account services.There are many opportunities to strengthen the relationships with customers and suppliers. 1 of the opportunities is to ameliorate customer service levels by providing naked form of service delivery, agait response to customers, and improve customer confidence. Besides, information technology creates hazard to get ahead switching costs for their customers. By this, they can add more than value to the transaction. It includes the assimilation of information that supports the investment decision and motivates the transaction execution. Furthermore, information technology also creates the opportunity to extend the world-wide relationships of both customers and suppliers.Similarly, the opportunity exists to create a new relationship with suppliers to create, purchase and provide new products and services. Some respondents believed that the ability to demonstrate technological leadership is one of the opportunities to improve market perception.Besides opportunities, there is a variety of threats to their existing relationships. It includes security risks, network and systems derangement and th e difficulty of integrating different systems. An opportunity to create a new channel and relationship can create a threat of disintermediation for others. A related threat is the commoditization of product, because it is common in all industries. Many financial service companies have historically relied on existing customers to build profit margins and create loyalty.Besides, the respondents feared the risk of adopting the wrong standard. Since the technology is moving rapidly. So the standards are changing so fast. Another threat is the challenge of keeping pace with escalating technological and business change. The greatest threat is they worried that they may ineffective to move fast because they cannot see the upside potential and downside risk of inactivity.Evolving customer behaveations also impact the e-business strategies. Nowadays, customers demand access to real-time data and expect to access at any time and any place. Besides, improvement in security technology are al so driven change. Many respondents believed that inwrought and public network reliability is improving and will facilitate more rapid expansion of services.There are two primary areas for prospective investment in inter-organizational integration by respondents. First path is expanding fealty to existing forms of technology to deliver new or expanded functionality. Second area is investing in new technology forms and enhances the inter-organizational relationships. All respondents accent mark on development of technology-enabled education and advice services. Linkage of inquiry and advice functionality to available tools is a vital component of service level expansion and customization. The need to desegregate new technology and service with existing system are move those firms to pursue more alliances both software and hardware suppliers.ConclusionIn the conclusion, there is less linear in the relationships among customers and suppliers in financial services compare to manufac turing industries. And there is a high degree of interdependence exists among the sectors of financial service industry. In this research, there is many findings have been predicted. The participants believe that opportunity for cost savings and service enhancement resides in expansion of customer account maintenance via the Web. Maintenance and education in new form of functionality place more control. So the responsibility is in hand of customers. One discerning manager pointed out, were now doing business on the customers terms, not the terms dictated by our firm or our industry.Managers interviewed shared many concerns about how to competitive threats and the risk of expanding e-business activity. They fear the capabilities of new, competitors rapidly enter new markets without the millstone of legacy system and traditional organizational cultures will block the progress of industry incumbents. It will cause labile cost structures with new services and pricing. The managers pred ict further opportunities to improve look of service, reduce costs, reach customers worldwide, and provide new services. Some managers believe that demonstrating technology leadership was a important component of establishing industry leadership and promoting customer acquisition and loyalty.It has many limitations in this research first it has short term applicability. This is because the longevity of the obstacles is unclear. Another limitation is that it is descriptive rather than prescriptive. Lastly, the conclusion is drawn in this study by small size of sample.This study is very important for both researchers and practitioners. Besides, this study also help managers in financial services industry to identify and analysis the opportunities, risk of building relationships with their customers and suppliers through electronic commerce. A better understanding of the treats and opportunities to existing relationships allow them to response customers more rapidly, accurately and c heaply.