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DBSs Business Returns:

Analysing Returns Using IT Portfolio Theory





Business Returns Measurement and Credibility

Tangibility of Business Returns



DBS bank today is one of the most successful banks in the Southeast Asia region.
To attain this status the bank had to go through some serious transformations.
From focusing on acquiring other banks to the development of information
technology and leading in innovation. The disappointment of the failed
acquisition of Danamon Bank in Indonesia lead the new CEO of DBS Mr Piyush
Gupta to believe that in order for the bank to make serious inroads in the Asian
market they would have to focus on moving to information and mobile ( Kien
S.S, Soh C, Weill P, Chong Y, 2015) based banking systems. How they became
successful has been analysed using the IT portfolio theory.
DBSs Business Returns
Business returns are essentially the returns on investments for a particular
business. DBS bank has certain business returns in mind and therefore invests in
information technology to help achieve the returns. The knowledge of technology
for the managers, standardisation, growth of business (nationally and
internationally), local customer satisfaction, leading in innovation and higher
workflow efficiency can be considered as some of the main business returns for
DBS bank. Once these business objectives are accomplished, the final and most
important return of all, the profit shall grow together with the share price. The
more aware managers are of technology the better they will be able to
implement it. Standardisation allows businesses to control and streamline
operations and gain economies of scale bringing down maintenance costs.
Growing and spreading the business will expose it to more markets and will
enable the bank to have a bigger customer base providing more income. Local
customer satisfaction is highly important to DBS as they aim to become the
Asian Bank of Choice (Kien S.S, Soh C, Weill P, Chong Y, 2015) and therefore maintain
as well as spread their customer base by keeping their customers happy
especially in the Asian context. Leading in innovation is highly important to DBS
as without that being amongst the top banks in South East Asia would be next to
impossible, as innovation is what sets DBS apart from its completion. All of DBSs
business returns enable DBS to accomplish its business plan, which is to become
the leading bank in the South East Asian region.
Analysing Returns using IT Portfolio Theory
1.)Infrastructure: These investments are mainly to do with business
integration, standardisation and providing services to the business that
are both measurable and changeable by management (Weill, P., & Ross, J.
W. 2004). DBS standardised their core banking system by deploying a
common core banking system called Finacle. As a result, less maintenance
staff were required therefore costs were saved. Another example is of
using the same collaborative technology services such as unified
communication infrastructure, video- telepresence conferencing systems
and enterprise portals. These services are measurable and changeable by
management. These investments are moderate risk and moderate return.
The returns that the business is looking for here is rapid implementation of
future electronically enabled business initiatives (Standardisation) and also
higher cost efficiency. The risks associated with infrastructure investments

are mainly financial (Dewan, S., Shi, C., & Gurbaxani, V, 2007), for
example overinvesting in infrastructure or implementing wrong
infrastructure, which would result in wasted resources. Another risk is of
underinvesting which would result in rash investing and therefore making
bad decisions. Limited sharing of resources, integration and expertise are
all further risks of poor infrastructure investment (Weill, P., & Ross, J. W,
2.) Transactional: Transactional assets are essentially any investments
which increase throughput and cut costs ( Weill, P., & Aral, S., 2006). IDEAL 3.0
which is DBS internet and mobile banking platform for businesses, offers a
customisable dashboard to corporates to manage trade and cash finance
transactions via straight through processing. Therefore costs are cut as
processing is quicker and time is equal to money. More data is able to be
processed and therefore throughput is increased. Another example is of
mobile banking applications reduced the need for customers to come into
the bank branch as they could simply take care of most of their banking
needs on the go reducing the necessity of banking staff. The risks
associated with Transactional IT investments are minimal, as eventually
the costs will be recovered by automation. The business return that this
asset class targets is reducing unnecessary overheads as systems are
clearly automated and increasing operating efficiency as the more
automated a service is the more customers are able to use it, therefore
increasing throughput.
3.)Informational: Informational assets are investments, which provide the
business with intelligence so that they can better monitor and analyse the
business. Some examples of informational asset investments are setting
up voice analytics, having reporting software built into ATM machines,
restructuring the team and investing in SAS software. Voice analytics
allows the management team to monitor conversations on call centres so
that issues facing their customers can be identified and analysed ( Weill, P.,
& Aral, S. 2006). Having reporting software built into ATM machines enables
monitoring of usage and consumer patterns. SAS enables data to be
analysed and predictions for the future to be made. The business returns
addressed in this asset class are customer satisfaction as more
information is analysed the better customer experience the company will
be able to offer. The biggest return here is actually knowing how much to
invest in each individual asset class. The risks associated with investing in
this asset class for example, information assets decay nearly as soon as
they accumulate therefore the information needs to be regularly
monitored. This is a moderate return, moderate risk class (Kumar, R.,
Ajjan, H., & Niu, Y. 2008).
4.)Strategic: These assets give the company a competitive edge over its
competitors. This is a high risk- high reward type of asset class. PayLa
and SMS Go Service provide features to their customers which enable
them to interact easily with the bank and each other. DBS has stregically
marketed its products on social media by adapting to the local context. An
example of this is the YouTube channel Chilli Paneer in India. PayLa
enables customers to transfer money from one account to another by
simply tapping ones phone with anothers. The SMS Go Service is a

simple technology that sends out an SMS to the banks customers

informing them of the wait time they may have to experience before
coming into a bank branch. The business returns for this asset class are
making managers more technologically aware, localised customer service,
leading in local innovation and the growth of the business. The risks
associated with strategic investments in IT are the risk of no- return
relative to the amount invested. Considering that Strategic investments
are one of if not the most heavily invested asset class, the risk the
company faces is potentially to go broke (Dewan, S., Shi, C., & Gurbaxani,
V. 2007).

DBS has a well-structured IT Portfolio without which they could have not have
attained the success they did. The portfolio is clearly aligned with their business
model. Some of the key projects that they undertook, for example the
development of some of the 19 mobile applications can be distributed
throughout multiple asset classes. These apps were designed to put them ahead
of their competition as well as to provide data for analysis to the analysts, the
app automated many procedures lowering costs and they form a key part of the
companys infrastructure. The main two areas of investment are clearly strategic
and infrastructure and a lot of the strategic assets do become infrastructural
after time as the competition catches up. A full list of all the investments
allocated per asset class can be found in the appendix section.

Business Returns Measurement and Credibility

Customer satisfaction:
Measurement: Surveys, increase in compliments by 45%, reduced
waiting time on phone calls.
Credibility: Moderately credible as measurement itself is not a
Globalisation/ Growth:
Measurement: Increased customer base, raised share price, Number of
branches worldwide. Overall rising income and the increase in the number
of loans
Credibility: Highly credible as growth can be quantitatively measured.
Managers being technologically ready:
Measurement: Amount of savings
Credibility: Moderate as not all the savings can be attributed to
management being technologically literate.
Measurement: Very hard to measure
Credibility: N/A
Raised Efficiency:

Measurement: Increased throughput and greater number of transactions

per unit of time.
Credibility: Highly credible as this measurement can be soundly
Leading in innovation:
Measurement: R&D budget divided by annual sales. Total number of
patents filed in the previous year. Number of active projects.
Credibility: Highly credible

Tangibility of Business Returns

Business returns are tangible if they directly add to the companys bottom line
and/or can be physically quantifiable. Intangible business returns are tough to
measure and to quantify, however they are the gains companies makes, which
are not quantifiable (Kaplan, R. S., & Norton, D.P ,2004).
Business Returns
Customer Satisfaction

Globalisation / Growth

Managers Being
Technically Sound



Customer satisfaction is
equivalent to the
goodwill customers have
in your services. It can
be measured but it still
is intangible, as you
cannot physically feel
this gain.

Tangible since DBS has

to grow therefore, there
will be more customers
and more assets will
have to be invested in.
This growth can be
measured through the
financial statements.
Intangible since this is a
skill and therefore
cannot be directly
Intangible as the
economic benefits can
be felt however there
are no new assets. This
return is very hard to

Raised Efficiency

Leading in Innovation

This is tangible as the

rise in efficiency can be
measured and the effect
can be found in the
financials. For example
in the call centres less
time is required to
address customers
needs which results in
financial savings.
Tangible as the assets
developed are physical
in nature, for example
the apps. These can be
measured in the
financials as well as
counting the new assets

DBS bank has clearly identified its business goal of becoming the Asian Bank of
choice and therefore growing the company. The business model that will get
DBS to that point is heavily dependent on Information technology and it is quite
evident that they have strategically invested their money into the different asset
classes with a particular return in mind.

Dewan, S., Shi, C., & Gurbaxani, V.. (2007). Investigating the Risk-Return
Relationship of Information Technology Investment: Firm-Level Empirical Analysis.
Management Science, 53(12), 18291842. Retrieved from
Kumar, R., Ajjan, H., & Niu, Y. (2008). Information Technology Portfolio
Management: Literature Review, Framework, and Research Issues. Information
Resources Management Journal (IRMJ), 3(21), 64-87.
Weill, P., & Ross, J. W. (2004). IT governance: How top performers manage IT
decision rights for superior results. Harvard Business Press.
Kaplan, R. S., & Norton, D. P. (2004). The strategy map: guide to aligning intangible assets. Strategy
& Leadership, 32(5), 10-17.
Weill, P., & Aral, S. (2006). Generating premium returns on your IT investments. MIT Sloan
Management Review, 47(2), 39.
Kien S.S, Soh C, Weill P, Chong Y, (2015). Rewiring The Enterprise For Digital Innovation: The Case
of DBS Bank, Nanyang Business School. 1-10.

Breakdown of IT Portfolio and DBSs asset allocation:

Mobile Banking






SAS etc
ATM machine
inbuilt analytics

Investing into a team to

develop future technologies

Voice Analytics

SMS Q service


Mobile Banking

Mobile Banking

Wealth Management Platform

ATM features being the most
advanced in the region

Heavy push to
make everything
online therefore
reducing costs
Mobile Banking


IBM Watson
IBM Watson