The Case of Citibank
Management Information System (MIS) refers to a collection of tools, procedures, human efforts, and software that perform various roles and business tasks in an organization or an institution. In the modern world, the ability of an organization to generate, store, access, and disseminate information has become a critical area of competitive advantage (Bélanger & Crossler, 2011). Information accessibility is crucial in aiding in the decision-making processes of an organization. The development of technology and globalization has pushed the importance of information in businesses to even higher levels. Organizations are faced with increasing competition not only from the local or national environments but also from other players in the industry across the world. Also, technology and globalization have led to many changes and trends in all business segments. Hence, a business needs to remain relevant by adopting new ways of doing business to reflect the trends in the global arena (Tavani, 2006).
Without changes, a business may risk becoming redundant or obsolete. Consequently, the ability of an organization to receive data from its internal and external business environment, process it faster and in an effective manner, and deciding the course of action based on the generated feedback, is an important process (Guriting & Ndubisi, 2006). Consequently, Management Information Systems play a significant role in providing the necessary technology that can allow an organization to generate and use the information to make appropriate decisions to different and complex issues that they face. However, the systems vary depending on the needs of each organization. In this case, some organizations apply MIS for simple tasks while to others, MIS assumes a complex and critical function in the organization’s success. This paper will discuss Management Information Systems as they are applied in Citibank in the United States.
Citibank is a financial banking institution whose main offices are in New York. The bank is one of the largest financial institutions in the world with more than 200 million customers in over 160 countries in the world. The money reservoir is the consumer division of Citigroup, a multination financial services provider, in the United States, but with interests across the world (Citibank, 2015). The institution was founded in 1812 as City Bank of New York. It has more than 200 years of operations in the United States. The company provides a wide range of banking and financial services to consumers, corporations, governments, and institutions where it operates. The financial products and services that it provides include consumer banking and credit, securities brokerage, corporate and investment banking, transaction services, and wealth management (Citibank, 2015).
The mission of the company is to serve as a reliable associate to its customers by responsibly providing financial services that permit expansion and financial development (Citibank, 2015). The strategy of the company focuses on enhancing the bank’s position as a leading global institution for individuals and institutions through a unique global network, client relationships, expertise in emerging markets, and product proficiency (Citibank, 2015). The second strategy is focused on ensuring that the company seizes opportunities arising from the global and current inclinations in the banking sector. Thirdly, the company is focused on ensuring its commitment to responsible financial services (Citibank, 2015). Further, the company is dedicated to strengthening its performance in the United States and its franchisees across the world through gaining market share, becoming more efficient and productive, and building its credibility on a long-standing history of innovation and experience in the sector.
In terms of revenues, the bank is one of the best performing in the financial services sector in the United States and across the world. For instance, the company has more than $400 billion worth of liquid assets while its capital strength is nearly $140 billion in regulatory capital (Citibank, 2015). In 2014, the company achieved net revenues of $71.0 billion in its global businesses. The North American market accounted for 45% of the revenues while Asia accounted for 21%. The rest of the world assumed the remaining share. However, the company is still recovering from the 2007/2008 financial crisis, which saw the bank being bailed by the government when the subprime crisis in the housing sector greatly affected its ability to serve the needs of its clients and/or meet its obligations (Citibank, 2015). However, the company has already managed to repay its debt to the government in full. Now, it is on a path to full recovery. Although it yet to reach its pre-financial crisis status in terms of assets, it is projected that it will return and surpass its previous standing by 2017 (Citibank, 2015).
To meet the needs of its customers, both in the local and global markets, the role of a management information system is essential. The company serves different market segments in terms of regions and customer demands. It must ensure that it has an elaborate management information system in place to help in the decision-making processes that are required to serve customers satisfactorily (Citibank, 2015). The company serves different customer segments, including individuals, institutions, and governments, which require different information and decision-making guidelines. As such, the management information systems in place play an important role in ensuring that all the needs of customers, as well as other internal areas such as management needs, are addressed in a timely and efficient manner.
Objectives of the Project
Need Analysis and Nature of MIS at Citibank
As a banking institution, Citibank provides different services to its customers. Further, as a global entity, the company operates in different regions of the world, each with its information and decision-making needs (Citibank, 2015). Therefore, the company’s usage of management information system is guided by the needs of the customers who include individuals, institutions, and the government. Further, the management information systems are also determined in terms of the function, both internal and external.
Management Information Systems (MIS) in Citibank are focused on the achievement of various goals in the organization. Firstly, the systems address the large scope of financial management, rather than just the normal roles such as tax reporting, financial record keeping, and analysis (Bélanger & Crossler, 2011). Further, the company’s MIS is aimed at helping in defining marketing strategies and alliances (Tohidi, 2011). The company has also put in place important measures to ensure that its MIS can identify potential niche markets, as well as providing data on the current market trends. The MIS also emphasizes creating and expanding knowledge in the organization. It is also focused on dealing and addressing issues from the human resource management segment of the company (Citibank, 2015). The banking sector is also characterized by large transactions, which require fast decision making to ensure that the contractual agreements are fair to the involved parties. As such, the MIS is an essential tool that assists the company in negotiating contractual arrangements (Saunders, Cornett, & McGraw, 2006). The company’s MIS also performs a central role in ensuring efficient customer care services.
The above goals and objectives of MIS in the organization address various needs that arise in its activities. Firstly, as a global financial services institution, Citibank is involved in the purchase of different commodities and services that are essential in its activities. As such, the purchasing role in the organization is an elaborate process, which can only be adequately managed through a Management Information System. Secondly, human resource management needs to justify the importance and relevance of a Management Information System. Currently, the company has employed more than 240,000 workers across its more than 4,600 branches and franchises around the world (Citibank, 2015). As such, the role of management information system is very essential in ensuring that employee affairs and needs are addressed appropriately in the company.
As a financial services provider, the company undertakes numerous financial transactions and other related services, which require proper recording and the provision of error-free information for decision-making. In this case, a Management Information System is very essential in ensuring that the bank and the customer can easily access relevant information concerning financial services (Gregor, 2006). In the modern world of technology, banking institutions are the biggest targets of cybercriminals and internet fraud. These malpractices take advantage of poor security measures in banking institutions. The banking sector also stores information of millions of customers. This situation is very lucrative and hence a target by criminals. In recognition of these issues, the security of the bank and its customers is very essential, and hence the paper’s focus on the management information system (Gregor, 2006). Lastly, customers are the center of the financial institution. As such, the provision of efficient and reliable customer care services is a major area for the management information system.
Information Technology Plans and Policies of Citigroup
The use of technology in the financial services sector, as well as other industries, has become greatly enshrined in the service delivery processes of the organizations. Due to the centrality of information technology in the financial sector, it is a requirement for all banks to have plans and policies that guide their usage (Phillips et al., 2009). The main reason for such policies is to ensure that customers and the business gain the best outcomes while at the same supporting the goals of the organization in serving its customers and shareholders (Bonczek, Holsapple, & Whinston, 2014). The company’s information technology plans and policies are focused on addressing three key areas, namely security, the customer, and internal services.
Firstly, the company’s policies are focused on ensuring that the use of information technology enhances the security and integrity of its services to its customers and its shareholders. In the current digital age, information technology has provided many advantages to organizations. On the other hand, it has provided vulnerabilities, which can be compromised through cyberattacks, thus leading to enormous losses to financial organizations (Bonczek et al., 2014). In this case, the company has established policies and plans that focus on maximizing the use of information technology while at the same time providing increased security and protection from cyber-attacks.
Secondly, the company’s policies and plans are focused on enhancing the customer experience. The issue of customer relations is a major focus in any organization. The use of information technology can enhance the customer experience by guaranteeing ease of access and efficiency of services (Chaffey & White, 2010). Therefore, the organization has focused on implementing technologies that support the above goals (Parnell, Driscoll, & Henderson, 2011). For instance, the company has implemented automated teller services, mobile banking systems, and customer care services that have been enhanced by information technology. The focus on the plans and policies on customers and services ensures ease of access to relevant information services wherever and whenever they are needed at the comfort of the customer (Parnell et al., 2011). However, this function is also a chief focus on the security function of information and technology. In this case, while ensuring that customers can access information and services, the organization is keen on protecting its customers from loss of data and their money through the available online banking platforms.
Lastly, the company’s policies are also focused on the usage and relevance of information technology for internal activities (Citibank, 2015). These internal services include human resource management, customer data management services, customer care services, financial recording, and security among others. In this case, Information Technology allows the employees of Citibank to access customer information to ensure that they can provide the services needed by clients. Also, the information system allows the organization to record financial transactions made by customers and the organization to ensure that the management knows its financial position at any given time (Bélanger & Crossler, 2011). Information Technology policies are also geared towards the management of human resources in areas such as compensation, recruitment, and training. However, the security function is also very important in internal services. In this case, information and technology are used to protect the bank from internal fraud, which is a key problem in the banking industry across the world.
Main Modules of the System
The company’s main modules of the management information system include purchasing systems, financial management systems, human resource management structures, and customer care management systems. The modules are essential segmentations in the management information system since they allow the organization to address various needs that require to be served by the system.
The purchasing system provides an elaborate database of information that can be accessed to inform purchasing decisions, as well as managing supplier relations in the organization (Tavani, 2006). The purchasing is also linked to the inventory management system, which focuses on ensuring that goods and services are available and stocked appropriately at all times (Saunders et al., 2006). Citibank deals with different suppliers and service providers and hence the need for an effective management system, which ensures that all the purchasing needs and interactions are handled effectively and securely.
The second module is the financial management system. The organization’s core business is the provision of financial services. The bank offers services to individuals, businesses, and governments (Guriting & Ndubisi, 2006). Some financial services are small in terms of money transactions while others run into billions. However, each financial transaction or service is important to the organization since it contributes to the bank’s bottom-line agenda. The company is keen on ensuring that its management information system can record all the financial transactions effectively. The financial system also provides the necessary information that can support the decision-making needs of the organization concerning financial services.
The third module is the human resource management system. The bank is a global institution. As such, it has a large human resource segment to guarantee the effective and efficient provision of services to customers. The company’s human resource management department is dedicated to keeping a record of all employees, their qualifications, and their roles within the organization. Further, the system is important in ensuring that the company determines the optimum staffing needs and responding appropriately to recruit the needed staff members. The system is also vital in tracking the performance of the staff members for appraisal purposes.
Lastly, the customer care management system is an essential module that provides the necessary information to customer care representatives to ensure that they can respond effectively to customer needs (Tohidi, 2011). Also, the system makes it possible for customers to access other services through the internet. It forms an essential part of the organization since it allows the recording of customer concerns and feedback, as well as allowing the company to follow up cases with the customers.
Concisely, the above modules provide the various segments of the management information system that is implemented at the Citibank. These modules allow the company to ensure that its management information system provides an elaborate, yet centralized function of collecting processing, storing and disseminating information to different areas of the bank where it is needed.
Design Components of the System (Database Design and Type)
The management of information in an organization requires the use of relevant systems, which can support the input, process, storage, and output of information. In this case, the use of the database is a central tenet of an effective management information system (Gregor, 2006). At Citibank, the organization uses a Database Management System (DBMS), which allows the centralization of all functions of the Management Information System.
The company uses both relational and logical database design. In the relational database plan, facts are entered and generated through tables, rows, and columns. The use of relational records is very important in the input, storage, and generation of information that involves calculations and financial transactions. Therefore, the relational database design is very important in the company in the generation of information such as interest rates, transaction costs, account balances, and other related services that are needed in the company (Phillips et al., 2009). The relational records allow the input of information from both outside and inside the organization. In other words, customers can enter data in terms of inquiries where they seek information concerning financial services and bank rates. On the other hand, internally, the management can enter information to generate reports such as bank statements for customers, daily transactions undertaken by each employee, and other information that may be sought by an organization.
The logical database design is also used in the organization to support the management information system. In this database design, the focus is on providing as many details as possible concerning any information that is needed (Parnell et al., 2011). For instance, the logical database information at Citibank is used to generate reports and details of information highlighting relations between transactions and activities that may be needed by the management for decision-making reasons. For instance, when generating reports about customer complaints, the logical database allows the organization to generate detailed information on each transaction that may have been carried and the corresponding information such as the date and locations where such transactions were carried (Parnell et al., 2011). Therefore, the above database models are essential in providing the needed support services for the effectiveness of the management information system (Phillips-Wren, Mora, Forgionne, & Gupta, 2009).
Reports Generated by the Systems
The Management Information System provides important information to the running of decision-making purposes. Such information can be in the form of single inquiries, which provide the needed feedback on-demand or periodically. At Citibank, the MIS generates information in the form of reports, which are very essential in informing the day-to-day decisions, as well as long-term plans. The current MIS at Citibank generates two kinds of reports, namely, on-demand reports and trend reports.
Firstly, a user generates the on-demand reports upon request (Chaffey & White, 2010). In this case, at Citibank, on-demand reports provide the information that has specifically been requested by an individual using the system based on the needs of the time. For instance, on-demand reports can include financial details of a specific organization, bank statements of an individual, or customer details. Both the staff members and customers need these reports to address specific issues or serve explicit information needs that may arise (Saunders et al., 2006). For instance, customers may request auto-generated short bank statements relating to their accounts. Also, customers may use them to request information through online banking platforms that are available in Citibank. These are the most used reports because the bank has to deal with different inquiries that require diverse information details as per the needs of each situation.
On the other hand, the trend reports are generated periodically as set by the organization (Chaffey & White, 2010). These reports are essential since they help the management to identity unique events in the organization and consequently act on them appropriately. For instance, the trend reports are used in tracking the inventory to ensure that the responsible people are aware of the need to restock specific commodities that are running out of stock (Parnell et al., 2011). Also, the trend reports are used in the organization to track staff attendance and hence identify days that show increased absenteeism or to show trends in specific employee sick leave days (Phillips et al., 2009). Therefore, the reports are very important in ensuring that the organization can identify and respond to any emerging issues that are likely to affect the organization in different ways.
Features and Uses of the System
Management Information Systems must meet specific criteria to be viewed as relevant to an organization. In this case, the systems have unique features that are shared across the board. The main features of the Management Information System include accuracy, relevance, timeliness, and structure.
Firstly, MIS provides accurate information, which can aid in the decision-making process in an organization. Customers need accurate information to respond to their inquiries and concerns (Gregor, 2006). For instance, Citibank’s management information system serves customers, as well as internal information demands by the management. In this case, the organization has ensured that the system is precise and able to provide the needed information by customers as well as the management.
Secondly, the organization focuses on ensuring that its management information system provides relevant information. The relevance of information is vital in ensuring faster decision-making in an organization (Tavani, 2006). As such, the organization’s management information system has been designed to ensure that only the users of the system can provide the most relevant facts as demanded. For instance, using filters, the users of the system can generate information that is specific to an individual for an explicit duration.
Thirdly, another important feature of a management information system is timeliness. The financial services providers work with strict deadlines and many demands from customers (Chaffey & White, 2010). Therefore, the systems must provide the needed information within a short timeframe to ensure that decisions are not delayed. Lastly, the system must be structured in a way that allows faster access and generation of information. At Citibank, the focus has been on ensuring an easy user interface that can allow faster access to all relevant areas needed by a user.
The management information systems in an organization have several uses. These uses include the input, processing, storage, and output/dissemination of information (Bonczek et al., 2014). At Citibank, the input function allows users to key in instructions and/or to enter data into the system. The processing function allows the system to analyze the statistics into evocative information that can be used to inform decisions (Tohidi, 2011). Thirdly, the storage function allows the system to save data for future use. The output function allows the system to provide reports and feedback on queries entered into the systems.
Analysis of Issues and Drawbacks with the System
Despite the importance of Management Information System in Citibank, various issues and drawbacks with the systems often derail its maximization. These issues are related to security, cost, and ethics. Firstly, the use of the Management Information System poses serious security issues in the banking sector, including Citibank. Management Information Systems are built upon Information Technology, which poses unique security challenges to the financial institutions (Gregor, 2006). Hackers who take advantage of weaknesses in the systems can perpetuate fraudulent activities. These security breaches may cost the organization millions of dollars while at the same time exposing confidential customer information to malicious usage (Guriting & Ndubisi, 2006). At Citibank, to counter the security issues, the company has invested heavily in building strong firewalls and other security measures to protect its business, as well as shielding customer information.
Secondly, the cost of a Management Information System is another issue, which the bank faces. In this case, the cost of putting in place and maintaining an effective MIS is very high (Gregor, 2006). Also, due to the unpredictability of changes in the information technology sector, the fickleness of security breaches, or the identification of weaknesses in the system, it is difficult to budget ahead to address such issues (Saunders et al., 2006). As such, the cost of implementing and maintaining MIS is a major issue that Citibank faces. The other central element and drawback touch on the ethical issues that face the implementation and usage of the Management Information System (Chaffey & White, 2010).
For instance, information rights and obligations are an ethical issue that is reported in the use of MIS. In this case, it is difficult to define the kind of information rights that individuals and organizations possess concerning themselves and what they can protect (Phillips et al., 2009). Safeguarding and protecting the integrity of the information shared in the banking institution concerning clients is also another controversial ethical issue (Parnell et al., 2011). Another central ethical issue that arises is the accuracy of the information presented to customers. In this case, banks have often been accused of not revealing all the information concerning the charges that customers might incur when accessing services such as loans. Citibank strives to provide accurate and relevant information as it is legally acceptable.
Findings and Recommendations
Management Information System plays an important role in the modern world. In the banking sector, the role of MIS is very important in supporting the services that are provided to customers. Citibank is a global bank. As such, it recognizes the importance of MIS in ensuring that it provides good services to all its more than 200 million customers in 160 countries. Therefore, the company has put in place an elaborate MIS that supports both internal and external information needs for decision-making purposes.
To ensure that the institution’s MIS remains relevant and responsive to the changing customer needs and technological field, the organization must invest resources in continuous improvement of the system. Such improvement will ensure that progress is achieved incrementally, thus protecting the organization from high expenditure on the systems in upgrading redundant functions. Secondly, the organization should focus on the security of the system to ensure that the integrity of the information stored in the system is upheld.
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