In a very paper entitled 'System Demographics', ITE panel member, Ian Barron argues that although most areas of IT are characterised by steady progress, there are areas of discontinuity where leaps in progress are being created and where changes occur very quickly, for example, the explosion in the utilization of inter-organisation networking via the Net; the utilization of video discs for storage of information; the employment of latest technologies which enable corporations to implement strategic information systems. Technology discontinuities which enable strategic leaps of this type facilitate to create new markets, and forecasting, in his view, should be based on identifying these opportunities. He offers 3 examples of technological discontinuities which can occur within the near future, and each could have a significant effect on the retail monetary services sector: the convergence between the TV set, the PC and different office products may change delivery patterns to customers of product such as bank accounts and insurance; the convergence of computing, telecommunications, and broadband communication allows the delivery of utterly new merchandise and services, for instance, interactive monetary recommendation; business communication through networks is nearing important mass that can enable most businesses to change to laptop-primarily based communications. This development could have a dramatic effect on employment patterns in the arena as duplicated effort is eliminated.
The retail financial services sector has not very experienced any major discontinuities in its underlying technologies since the 1960s. Even the emergence of the PC has till currently been superimposed upon existing well understood technologies. Numerous authors, researching within the insurance sector and Ernst and Young Consultancy (1994) researching within the banking sector, touch upon how companies in these sectors within the UK go through a step-by-step method building on existing well proven technologies with different firms taking the lead in implementing new technologies at totally different times. Arthur Andersen (1988) administered a survey to compare the impact of 3 completely different IT ways; 'to pioneer or to steer the field; to move with the pack; or to trail'; on completely different aspects of performance in the insurance sector within the USA. The subsequent report, revealed in 1988, drew the subsequent conclusions: pioneers in the use of IT will attract and retain customers and gifted personnel. This will give an necessary competitive edge and improve productivity. But, the potentially higher profit must be weighed against the higher degree of risk. Moving with the pack can reap similar benefits to those enjoyed by the pioneers, however will not offer the same potential for competitive advantage. For many of the US insurers surveyed, this was acceptable, given the lower level of risk related to this strategy. Similarly, with few exceptions, it's the popular choice for the majority of UK insurers. Most monetary services companies adhere to Andrew Carnegie's maxim: 'It's better to be a devotee than a pioneer. The pioneers get scalped. Trailers will tend to lose competitive advantage. In addition, they could notice it very difficult to catch up, particularly as the prices involved would be comparatively high, effectively acting as a barrier to competition.
Within the past, the best position was in all probability that of the 'quick follower', that is, permit the leaders to pilot the new technology and create the mistakes, and then move quickly to exploit the technology once it had been proven. However, as Barron (1994) stresses we are currently in an exceedingly stage of major technology discontinuity where it is possible to create strategic leaps. Retail money services sector companies have to determine whether to introduce technology steadily in a step-by-step approach, as in the past or make these strategic leaps. Previous to 1990 most monetary services companies had account-primarily based systems, i.e. every account opened was indexed consistent with the account number rather than client name in hierarchical databases which were not integrated with systems from other departments such as finance, sales and marketing. During the late Eighties they started moving from account-primarily based to customer-based mostly systems; from hierarchical to relational databases; and to integrated management info systems.
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