National Westminsters's strategic IT infrastructure: redefining branch banking with Pounds 500 million, making the investment decision, managing the risk

National Westminster Bank (UK) is currently in the process of redesigning the bank's information technology (IT) infrastructure, to enable the bank to be more responsive to customer needs and to the demands of the market-place. This redesign includes replacing a file-based suite of accounting applications with database management and thus entails significant revisions to hundreds of files and thousands of applications programs. Branch automation and telecommunications are also to be upgraded. The cost is estimated to be several hundred million pounds. A project of this magnitude is not attempted without board-level consideration and approval. Getting this approval is particularly challenging when benefits are uncertain and difficult to quantify. A project so much larger than typical for the organization has unique risks, which must be understood and effectively managed. Most significantly, since the information technology infrastructure not only facilitates development of products and services, but also effectively delimits the options available to a financial services company, this infrastructure cannot be designed without a thorough understanding of the evolving competitive environment.<>