FREE online courses on Information Technology - Chapter 5 MANAGING
INFORMATION TECHNOLOGY - TECHNOLOGY FOR THE INTERNATIONAL BUSINESS
One key technology for international business is
communications of all types. A firm
with a significant international presence is likely to need an international
network of some kind. The experience of Hong Kong and
Shanghai Banking Corp. Ltd. offers an interesting example of networking.
The bank is a principal member of HSBC Holding's, a $265-billion organization
that is one of the ten largest financial groups in the world. (see Cureton,
1992). The bank has invested heavily in a telecommunications infrastructure to
provide global banking services. The bank has developed an extensive, worldwide
network. The network is private; the bank leases lines and manages the net
itself.
The bank has 45 subsidiaries and 3,300 branches in 50
countries. (HSBC Holding owns Midland Bank, PLC in
England.) The Hong Kong Bank International
network carries data, compressed-voice, fax and video traffic. It consists of
digital leased lines with speeds of 64 thousand bits per second to 2,048
thousand bits per second. The network spans 73 computer centers. This digital
wide-band network handles high-speed and high-volume applications.
The bank also has a private packet-switching network. The
leased line network provides the main links for packet switching. The
packet-switched network provides communications between any of the bank's
computers and some 49,000 terminals. The bank feels that packet switching is
well suited to banks where there are large volumes of short transactions. The
packet network carries 2 million payments and corporate messages each month to
116 offices in 50 countries.
The problems of developing and managing an international
network are reflected in the fact that Hong Kong Bank has to lease lines from
PTTs in some thirty eight countries. (The bank has developed its own service
index for each carrier and ranks international carrier on their performance).
Hong Kong Bank spends more than $400 million a year on
information technology. About 25 percent of this amount is for the global
network. The bank's IT expenditures are about 14 percent of overhead compared to
an industry average of 20 percent. Information technology, particularly
telecommunications, is vital for an international company that has significant
business in many different countries.
