IT Investment Allocation in Japanese Banking Industry

In this study, we investigate and discuss IT investment and related issues in the Japanese banking industry. And we insist that banks should take account of technology trend as one of heavy IT users and switch long-term-strategy and IT-migration-strategy appropriately in order to make the best of IT. First of all, we show some back grounds of Japanese banking industry and IT revolution. Next, we show three case studies of a Japanese bank. We will find that, over the last ten years, Japanese banks have been struggling with deregulation, the IT revolution and the long resection of the Japanese economy. These external changes have made corporate strategies and traditional information systems are obsolete and inefficient. After then, we analyze IT investment allocation issues in the banking industry. As summary of our analysis, we show some key success factors and recommendation to a Japanese bank. Finally, Japanese banks should always consider Long-Term Strategy with a long-time viewpoint; during the period of IT migration, they should find a path in which they should follow based on IT Migration Strategy. Thesis Supervisor: Michael M. Cusumano Title: MIT Sloan Management Review Professor of Management