Case Study Review: Mastercard International

The IT managers responsible for selling the data warehouse concept to upper management say that it would be much harder to make the case in today’s climate of shrinking IT budgets because most organizations are trying to cut costs rather than launch new initiatives. Discuss the approach that the IT shop would need to take in presenting a business case for a data warehouse with application tools such as that of MasterCard International.

The IT managers should take a three-step approach to help management understand that the benefits provided by the data warehouse with application tools outweigh the costs of development and implementation. First, management must recognize that its “customers” are banks, whose reputations rely upon security and reliability. The LAN-based data warehouse provides an excellent reliability platform as the system of data warehouse servers interacts with subsystems that establish transactionally, proprietary, and authentication servers. This initiative supports the customers’ need for reliability. Secondly, the IT presenter should point out the scalable or expandable nature of the system. MasterCard management is looking to increase market share, but if it retains archaic or inefficient systems, e.g., a single server or overlapping databases, there will come a point where MasterCard cannot continue its growth without major infrastructure changes. The scalability of the LAN-based data warehouse, once implemented, will foster growth in market share without risking downtime or data integrity vulnerabilities. Thirdly, the IT department should point out the potential marketing focus and client acquisition provided by enterprise systems that are under development. The business support network of reports, which the banks require to develop their own strategic initiatives, is not static. The current software solutions being offered are expandable and the infrastructure hardware will continue to support development; thus, innovation and proactive customer solutions will be developed and implemented. Considering the reward offered by reliability, scalability, and innovation, management should easily come to the obvious conclusion that spending IT infrastructure dollars now will provide very high ROI in the future.

MasterCard makes its tools available to all of its member banks. [STEI02b] states that these tools are more likely to be attractive to state and regional banks. Big national and international banks are likely to have developed and use their analytical tools. Discuss the implications of this in terms of the marketing of MasterCard’s IT services. Include in your discussion a consideration of what MasterCard can offer the big banks.

This scenario requires a two-pronged approach to marketing. First, state and regional banks will be able to take advantage of superior technology and enterprise analytical solutions that far exceed any one bank’s current resources. Thus, state and regional banks can be offered “big bank” solutions for their customers while they serve to promote MasterCard within their service space; a win-win proposition. Second, large national and international banks may have their own analytical tools, but that does not imply superiority of analysis. By developing more sophisticated enterprise analytics and forecasting programs, MasterCard can become a significant strategic partner with larger banks as a result of both its integrated data servicing architecture as well as its innovation in data analysis. One example of this would be an expansion of the regional bank model which uses component architecture and localized analytics into an international model that does essentially the same thing but on a larger scale. Again, by solving capacity issues in its LAN-based data warehouse, MasterCard is in a position to confirm its service offerings to the needs of each category of user. Large or small, the banks get what they need from MasterCard.

Suggest applications or tools that MasterCard could provide that would be attractive to member banks.

There are three application tools that immediately come to mind that could propel MasterCard into the forefront of enterprise solutions for bank customers. First, the IT department should task its programmers with developing an easy-to-use demographic trend analysis and tracking package. The ideal GUI would allow any authorized bank user to immediately obtain data basics; the who, what, why, when, and where of transactional data. This would enhance the bank’s understanding of its customers’ spending patterns, the identification of macro business cycles, and the anticipation of consumer trends so that the bank could be a first mover in the market. Second, developers should bring a “what if” scenario projection capability to the software bundle in the large bank enterprise package. While more difficult to program, this would allow senior managers of the larger banks to pose questions regarding macro-and micro-economic conditions, spot entry points for new or refined products within the consumer preference trends, as well as use various internal scenarios to gauge possible market reactions. Finally, MasterCard should work to develop a top-of-the-line help desk/customer service platform. This will allow state and regional banks to make the most of their strategic relationship with MasterCard, and demonstrate the company’s commitment to customer service to larger institutions.

References

Stallings, W. (2005). Business Data Communications (5th edition). Upper Saddle River, NJ: Pearson Prentice

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