Fidelity Investments case questions - ANSWERED PDF

Preview

Summary

Case questions were answered for the document. \...

Description

FIDELITY INVESTMENTS: AT HEART, A TECHNOLOGY COMPANY

Case Assignment Instructions The FIDELITY case is comprehensive and makes use of most of the concepts that we have covered in MISM 2301. In particular, the capstone case serves as the opportunity for you to apply the MIS Integrative Framework to determine Fidelity’s business problems, information problems, and information systems solutions. Note that illustrated in the Integrative Framework, your answers throughout this assignment should be aligned. In other words, your answers to early questions should influence and be consistent with your answers to subsequent questions. Continue to refer to your responses to ensure that your answers align (i.e., are consistent, congruent) with one another. At the outset, read all questions to get a sense of the problems to be addressed in your analysis. Then, as you tackle each question, make sure you read the whole question and answer it fully and specifically (do not lose points for reading errors). Be prepared to go back and revise previous answers as you answer later questions. Many students develop a clearer and more extensive sense of how to address FIDELITY’s challenges as they work through the case questions holistically. Use the answer formats and tables provided to help facilitate your analysis but feel free to adjust them to better reflect the needs of your responses (i.e., add rows or columns to any table as you deem necessary). Create additional tables if you feel that would help you structure your answer. Your answer can extend beyond the single page, but resist the urge to write mainly in narrative / paragraph form. This is an individual assignment. Consistent academic integrity helps keep the market value of your Northeastern University diploma high. Be sure the work you submit reflects your faithful efforts and provide citations for any external sources you use (including websites assigned for course reading). Do not complete this assignment with another student. Do not discuss your answers in real-time with another student. Do not use another student’s answers as the base for yours. As always, if you have question then please let me know. This is your final assignment due for this course…you’re almost there. [See below for questions]

Rev’d for MISM 2301 by md 2018

Page 1

Fidelity Investments: at heart, a technology company (continued)

Case questions 1. Based on a careful reading of the case... a) What is the primary business focus/value discipline for FIDELITY and what evidence do you have to support this choice? The primary business focus/value discipline is customer intimacy. The entire business runs on the ability to attain the life-long value of the customer. When fidelity gains a new customer, they expect to give investment advice up to the point of their client’s retirement. This means they must place a lot of focus on giving clients the tools to succeed and not be afraid to invest a large amount of money into tools the customer can use, even if it means taking a hit at first.   

Fidelity employs over 200 investment research professionals, and conducts its research exclusively for the benefit of its investment, institutional, and individual clients Invests over $2.5 billion ever year in order to provide small and large clients with investment-related tools of their own In 2014, was so sure of their IT infrastructure that they were confident they could provide a onesecond transmission for stock trades, waiving commission if they failed o



The AM division was built in order to provide the “best customer experience in the financial industry” o Provides clients with a range of investment instruments o



In order to better understand the technology millennials use, the CIO’s were reverse-mentored

by recent college graduates Improvement of time-management issues in regards to call center delays o Conducted data analytics in order to create a predictive algorithm to align a callers expected o

 

They accepted the fact that they could take a hit in order to nurture the life-time value of the customer

problem with the correct response Taught employees how the algorithm worked, leading to the mapping of decision trees for

call types. The employees could then provide the developers feedback to drastically improve accuracy Make all offerings transparent, not hiding fees that customers would find later Focus on rapid experimentation to allow quick innovation to keep up with the dynamism of the marketplace o VR to help customers better understand finances

What would be the most important secondary business focus/value discipline for FIDELITY and what evidence do you have to support this choice? The most important secondary business driver is product leadership. Fidelity constantly pushes the bounds of innovation and constantly invests in emerging technologies to improve the products and services they offer.

Rev’d for MISM 2301 by md 2018

Page 2

Fidelity Investments: at heart, a technology company (continued)  



Part of the $2.5 billion mentioned in the above question is used to invest in technology for internal operations and analysis, in order to give customers, the best technology for them to succeed Creation of Fidelity Labs group (Labs). Labs is a technology and research branch of the company that focuses on technologies that need to be widely adopted in the firm in three-to-five years o Motivated by the motto “that’s just not good enough”. They strive to create superior products through the use of technology Experimentation of VR visualization of financial data o Fidelity hoped that through the use of VR, the company could convey complex financial data

o 

to customers in the hopes it would be better understand and contextualized. This, in turn, could lead to better investment decisions Labs built a VR app in order that customers with access to VR could better keep track of their

portfolios Offer an industry competitive commission rate per trade

b) Describe the business process (from FIDELITY’s perspective) of the Asset Management division’s “more disciplined” IT governance approach using a process flow diagram. Your process diagram should have at least five steps and at least two decisions. You are free to use whatever flowcharting application/tool you wish (MS Visio, MS Word by inserting shapes, etc). [Hint: You might find it easier to build the process flow diagram in another application, then copy/paste it into a table in this MS Word document (otherwise the images can take on a life of their own and move around on you without warning).] 1. IT architecture team documented each existing IT capability (application software) 2. IT architecture team reviews savings of each system, and which systems are shared within each business unit a. Must decide if system decreases redundancy, increases savings, and improves data quality b. If it is an improvement, the systems are standardized across units 3. A roadmap is created in order to implement a standardized platform across units a. A business value must be assigned to various implementation efforts to decide is business objectives are conflicting with the information problem at hand 4. Senior IT leaders decide if roadmap needs to be revised a. Yes? Assign new business value to align with company goals (ie. Implementing CRM to improve customer intimacy) b. No? Continue with planned roadmap. Meet with division CIO’s to assess advantages and disadvantages of implementation 5. Yes? Complete implementation of application software between units. Adds value for customers by reducing maintenance costs and quicker/ more accurate decisions Challenges with new IT governance  What do customers value across business units, are they different?  Which business unit is responsible for investment challenges?

Rev’d for MISM 2301 by md 2018

Page 3

Fidelity Investments: at heart, a technology company (continued)

Rev’d for MISM 2301 by md 2018

Page 4

Fidelity Investments: at heart, a technology company (continued)

a) Describe the relevant application software and its role in addressing operational information problems for FIDELITY Asset Management. [Hint: Be sure to show clear alignment between the information problem and the application software]. Since applications are not valuable unless used, also describe how to improve the likelihood of use and end-user satisfaction for each software application you mention. Note: A single information problem might be addressed by multiple software applications and a single application could address multiple information problems.

Information Problem (AM Division) 





How can we understand how much customers are willing to pay for investment advice? How can we allow customers to create different accounts based on the amount of assistance needed? How can we keep track of customer payment and which customers have canceled their subscription?

Enabling Application Software 





Improve Likelihood of Use/ End-user Satisfaction

Market research software:  Create surveys in order to collect information on how much customers are willing to pay for investment help. Online-payment software: A platform that allows clients  to pay for their commission fees and other products that Fidelity offers, such as online courses. Customer ID software: Each client can securely access the site using their own personal username/password. o Depending on if

Ensure customers of a secure payment software that will not release any confidential information. Using the POS system to track historical data and better understand the needs of the customer. Fidelity can then better tailor solutions to each customer.

they have a regular or pro 



How can we ensure



account Point-of-sale system: Keep track of customer payments, track subscriptions, and track historical data. ERP System: Improve the

Rev’d for MISM 2301 by md 2018



Top management Page 5

Fidelity Investments: at heart, a technology company (continued)











that clients can send funds to a platform with all investment tools available? How can we deliver real-time market

efficiency of system by streamlining business processes making it easier to collect and use data realtime. An ERP system would ensure that all content was available to all employees

support: Approval from top management and alignment with business goals. For Fidelity, this means collecting data from all units within the

data to our clients? How can we decide which content should be

across the company. This would lead to a higher level of customer intimacy due to the fact all employees

AM department for a more accurate picture of one particular investment

prioritized on the site based on customer preference?

would have easy access to all clients account and investment goals. For example, answering the

How can we ensure a piece of data is available across the entire database?

question, “How much exposure do I have in the market?” is made easy. Customer tracking system:

and the ability to transition older systems to newer systems without a

Keep track of customer interaction with the website in order to better accommodate the website to customer preferences. o Do customers use one feature over other ones?

major change in daily, transactional business Offer end-users a training session on the new platform

How can we ensure that we are offering competitive prices while also making a profit? How can we ensure employees are productive and providing value to









Appropriate business and legacy systems: Must start with a stable business setting

CRM system: Track customer feedback and interaction with the sight to track site visit per purchase. A possible reason for not retaining customers that



Allows Fidelity to better cater to customers and build a bigger market share by offering more competitive prices

visit the website is because of prices that are too high



Employees who are performing well should be

Rev’d for MISM 2301 by md 2018

Page 6

Fidelity Investments: at heart, a technology company (continued)

the company?



Performance feedback system: Allow customers to submit feedback to employees to track who is providing the most value

compensated more as they provide more value for the company

b) Assume FIDELITY needs to initiate a new IT project in order to build/develop one of the application software/systems you mentioned above. Select the most complex information system you mentioned above. c (i.e., the contract pricing model and duration). Application software/information system: ERP (Enterprise Resource Planning) Outsource approach: Business Process Outsourcing (BPO): A BPO outsourcing approach should be taken as an ERP is a system that demands that a number of business processes be outsourced at the same time. A BPO provider can use technology in order to capture and process data on behalf of Fidelity. For example, outsourcing an advertising ERP solution, they would be outsourcing the budget and payroll process. Pricing Model: Fidelity should obtain a performance-based pricing model contract. This would provide financial incentive for the chosen vendor to give Fidelity a quality service. Duration: The outsourcing of a department-wide ERP would be transformational effort across the organization, rather than simply a single unit. A medium-long term contract should be established in order to fully complete the change and receive the benefits of outsourcing. Benefits: Would provide Fidelity with a faster solution and makes it easier to overcome major challenges in project management, allowing Fidelity to continue focusing on innovating and superb customer intimacy. Risks? Is Fidelity prepared to overhaul their system and have an entirely new set of functionalities? How long will it take for employees and clients to adapt to the new Rev’d for MISM 2301 by md 2018

Page 7

Fidelity Investments: at heart, a technology company (continued)

system?

Given the above outsourcing approach, complete a table describing the likely project management challenges and describe ways to address them. Project Management Challenges Hidden costs associated with outsourcing IT solutions

Ways to Address Them  

Scope creep and maintaining a positive relationship with the vendor for the duration of the project

Outline a budget and compare expected vs actual costs during the project Analyze TCO considerations



Seek outside advice for negotiating an outsourcing contract (ie. Legal team)



Ensure that the contract is inclusive of all work required Monitor priorities and value drivers throughout the project



Maintaining high quality throughout the project



Carry out quality assurance each step of the project to ensure the outsourcing company is not violating the terms of the project and is creating value for the company based on the business focus laid out beforehand

Schedule Management



Track and breakdown how long each part of the project will take and ensure it is on track Create clear milestones of deliverables

 Risk Management



Risk analysis of the project (profitability, consequence and visibility) and create responses to various scenarios beforehand

Rev’d for MISM 2301 by md 2018

Page 8

Fidelity Investments: at heart, a technology company (continued)

2. In addition to the application software/systems you listed in Question 2; FIDELITY needs an information technology (IT) infrastructure. a) Complete a table below with your recommendations for the various components of FIDELITY’s IT infrastructure to support or enable the application software you listed in Question 2a. Include in your table the role the IT infrastructure plays in supporting/enabling the application software. IT Infrastructure Personal Computers

Servers

Firewall Security System Database Management System

LAN, WAN, VPN

Role of IT Infrastructure  Allow employees to easily access customer and real time market data  Allow employees to actively seek out investment opportunities for customer/ stay up to date on market trends  Allow Fidelity to store large amounts of customer and investment data  Facilitates high-speed processing within the organization  Processes incoming data and search for discrepancies in order to alert the company of a possible breach  Assists in the creation of database tables, metadata, reports while standardizing data redundancy across systems  Improves integrity of Fidelity’s data  Lowers maintenance and development costs by storing data in one place. Rather than “firefighting”, Fidelity can easily respond to unanticipated requests   

Utility Software

 

Rev’d for MISM 2301 by md 2018

LAN: Connect the personal computers across the Fidelity office WAN: Enable sharing of data across Fidelity offices that aren’t near in geographic location VPN: Allow Fidelity employees to assist customers and have access to servers remotely. For example, if a client needs an immediate answer but the employee is out of the office at the time Support the Customer ID software, keeping track of customer usernames/ passwords Prompts to update passwords when customers change o Prompts customers to update password every [length of time] to ensure data integrity

Page 9

Fidelity Investments: at heart, a technology company (continued) Network Management System

    

Manage Fidelity’s’ highly complex network Enables network diagnostic and monitoring Cost effective – one system administrator to manage the entire system Monitor devices of employees to ensure they are being productive and doing work that aligns with company goals Can warn company in case of data disruption

c) Given the application software and IT infrastructure components you mentioned, what recommendations would you suggest to address FIDELITY’s likely information security issues? Keep in mind both internal and external parties as part of your recommendations regarding what FIDELITY can do to reduce the risk of data breach/compromise for business data and theft of intellectual property. How to reduce the risk of data breach/ theft Information Technology

 









Rev’d for MISM 2301 by md 2018

Ensure that Fidelity has up-to-date virus and malware protection Have an encryption system in place to ensure only employees of Fidelity can access information being sent around the company (confidential client information, bank and routing number, market information) Data back-up and recovery systems to reduce the amount of time a system is down and to ensure a minimal amount of data is lost; back up data in real time Fire walls – block incoming threats and prevents servers and data centers from crashing/ losing access to client information Authentication system – use two-factor authentication to ensure only people with the proper credentials have access to their accounts VPN – al...