Strategic Sourcing in Banking - A Framework

The banking landscape in Europe and Germany has a polypolistic market structure with an average vertical range of integration of 80%, implying high process redundancies. Accumulating processes for standardized products is one way to achieve efficiency improvements. "Smart sourcing" can change the production mix of banks lead to a concentration of processes. A challenge is the lack of consistent frameworks for the banking industry to systematically support the sourcing decision process. In this paper, drawing on the resource based view and transaction cost economics it is shown that, in addition to a make or buy decision, co-operation between competitors should be included into a sourcing analysis as the third alternative. To support the decision on making, buying or sharing an activity, a quantitative analysis of each activity of the banking value chain is necessary. We propose an analysis framework based on a generic banking value chain. Since the recent literature mostly f...

• Type: Conference
• Year: 2004
• Where: ECIS
• Authors: Markus Lammers, Nils Loehndorf, Tim Weitzel
• Keywords: Average Vertical Range, Banking Value Chain, ECIS 2004, Information Technology, Polypolistic Market Structure