CASE 1 RESPONSES

1. Identify the problem described in this case study. What management, organization, and
technology factors contributed to this problem?
The problem that is described in this case is the fact that Deutsche Bank, lacked an
appropriate Information Technology system that was up to date. Important financial data
went unreported for multiple days due to a system outage. A bank with the largest
portfolio of derivatives valued at $49 trillion (Snyder, 2019) would be expected to keep
their IT systems updated with the changing needs of the market. The management failed
to integrate systems with the bank’s acquisitions, and reporting trades were a “nightmare”
because trades between teams were booked in different systems (Butcher, 2018). The
company was finding it very difficult to show the risk that they were exposing themselves
to even with simple transactions (Butcher, 2018). They chose to keep using old and
outdated systems for workload that was greater than the past. The technology used at the
Deutsche Bank was not designed for handling and managing larger operations of the
Bank. Systemic issues included no common codes for identifying a client in different
booking systems for trades and having 45 different operating systems (Butcher, 2018).
This is the problem that is described in this case study.

2. What was the role of information technology at Deutsche Bank? How was IT related to
the bank’s operational efficiency, decision-making capability, and business strategy?

Deutsche Bank used information technology for many bank related functions such as
reporting trades, swaps and spotting misconduct in operations. The IT system in place at
Deutsche Bank was one that was confusing and not organized. The bank was operating
with 45 different operating systems, with very little compatibility with each other
(Butcher, 2018). This brought down the operational efficiency of the bank. It also
contributed to poorer decision making since the system’s failure affected the evaluation
of systemic risks (Butcher, 2018). The bank eventually tried to come up with a strategy to
overcome this IT issue but solving one problem resulted in more problems coming up.

3. Was Deutsche Bank using technology effectively to pursue its business strategy? Explain
your answer.
No, Deutsche Bank was not using technology effectively since they ignored the need to
update their operating system. The management did not make the effort to try and
integrate existing systems with their acquired counterparts’ system to have a common
operating system to work with (Butcher, 2018). This would have possibly saved the
company’s future; had it been done early on. The outdated systems that were used by
the Bank were not equipped to handle the workload of all the new mergers and
acquisitions (Butcher, 2018). There were a large number of tasks that were being
 handled manually, which compromised efficiency (Butcher, 2018). Therefore, it is very
evident that the Bank was not using technology effectively to meet their work demands
and strategies.

4. What solution for Deutsche Bank was proposed? How effective do you think it will be?
Explain your answer.
The solution that was proposed was to reduce the bank’s costs and improve overall
efficiency. They planned to do this by laying off almost 6000 contractors and 18,000
other employees (Snyder, 2019), reducing the number of operating systems from 45 to 4
and replacing outdated software with newer software that is capable to handle more
workload (Butcher, 2018). They also announced plans to complete shut down their global
equities trading business as part of their “restructuring plan (Snyder, 2019). Even though
the plan seems like it would be effective, I don’t think that the bank will be able to
implement it smoothly. This is because of how the bank put departments and groups
against each other rather than finding a way for them to work together. Bringing these
groups together would be a very difficult task for Deutsche Bank. Also, the systems that
were neglected for a very long time will need a lot of capital and effort to bring back up
to date. This could prove to be a very difficult task for Deutsche Bank, therefore hurting
its chances of rebuilding.

External Sources

Butcher, S. (2018, May 05). Inside Deutsche Bank's "dysfunctional" IT division. Retrieved
September 11, 2020, from https://news.efinancialcareers.com/ca-en/313445/technology-at-
deutsche-bank

Snyder, M. (2019, July 22). A Bank with 49 Trillion Dollars in Exposure to Derivatives Is
Melting Down Right in Front of Our Eyes. Retrieved September 11, 2020, from
https://www.globalresearch.ca/bank-49-trillion-dollars-exposure-derivatives-melting-
down/5684294