TECHNOLOGY DEMAND MANAGEMENT IN FINANCIAL SERVICES: INTEGRATING IT PROCUREMENT, SPEND OPTIMIZATION, AND TECHNOLOGY INVESTMENT DECISIONS

Abstract

Financial institutions worldwide are under increasing pressure to improve technology investments while enhancing digital transformation. Despite the fact that investment in technologies for the global banking sector is growing, technology investment and the resulting financial performance are not necessarily correlated, as research has shown time and time again. This qualitative multiple-case study examines how banks are using information technology (IT) demand management, procurement practices and spend optimization to enhance IT investment decisions. The study reviews the case studies for technology demand management, procurement transformation and spend optimisation in banking and financial services, which have been documented and published in the public domain, including the case studies published by the consultancy firms and the disclosures made by organisations. Cross-case synthesis and thematic analysis are used to create an Integrated Technology Demand Management (ITDM) framework. Results show that there are three integration mechanisms—demand gating, cost transparency, and vendor rationalization. The study highlights the critical gap of integration: although there are many institutions that have processes for demand management, these are often not linked to procurement and/or investment decision making. The ITDM framework provides a way for banking executives to make this bridge. Theoretical contribution involves the understanding of the interdependence of IT demand management in the literature and how it is related to procurement and financial governance mechanisms. Chief Information Officers (CIOs) and Chief Financial Officers (CFOs) use practical implications to drive them towards integrated demand to-investment processes.