12 Dec 11 Non-existent link between IT performance and business impact in financial sector
In today’s world every business is handicapped without technology. This is even more apparent in banking and financial sector. Any delay in application delivery results in decline of performance, which can cause lower productivity, lost customers, revenue loss, and higher costs.
IT applications are a platform to communicate and represent value proposition to the customers. For example, if an ATM is shut down or out of service for a day, the losses incurred are very high. In the banking and financial sectors the application performance directly impacts customers. It is therefore crucial to be able to quantify the business impact. But it’s scary to learn that most of CTO/CIOs in banking and financial sector do not have the means to measure low application performance and the impact it has on their business.
In a recent study conducted by ValueNotes and Anunta we found that 56% of the IT decision makers in the financial sector do not measure the business impact of the performance of their IT applications mainly due to:
- Lack of tools to measure impact
- Added cost of measurement
- Lack of know-how
- Belief that losses are not significant
In fact we found that IT heads in the banking and financial sector are struggling to outline metrics to calculate revenue losses due to underperforming applications. The IT head of a general insurance company said that “In current day, Indian BFSI sector isn’t evolved enough to measure the business impact.”
During the course of the study we also learned that financial sector is not able to identify the inefficiencies experienced by the internal end user. This loss in employee productivity can be in the range of 10-20% which is huge.
The inability to map application performance and its effect on the business process affects brand reputation. Customer satisfaction plays a major role in the brand of any organization. Slow websites or malfunctioning ATMs lead to unhappy customers and brand erosion.
Therefore, delays in improving the application performance can result in worsening employee productivity, brand image and revenue growth. The ability of a bank or financial institution to measure the impact of IT performance on the businesses will determine whether they can compete in an increasingly technology intense world.
To download a complimentary copy of the white paper, “State of application performance management in the Indian BFSI sector”, please follow this link.