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Chapter 5 E-business strategy 287

aims to offer financial solutions tailored to individual Capital One (Case Study 5.1) has used Internet tech-
customers’ needs. It does this through mass-customiz- nology so that customers can apply for and service their
ation: offering different rates and fees structures to credit cards online – the concept of ‘web self-service’.
different customers depending on their risk status. Its In their 2007 Annual Report, Capital One (2008)
mission can be summarized as to deliver the right product, stressed their commitment to technology to support a
at the right price, to the right customer, at the right time strategy based on a superior customer experience when
through continual testing, learning and innovation. they stated:
The scale of use of information is indicated by
Our brand is not defined by our television commercials.
different operations in the business. In corresponding
It is defined by the quality of our products and our
with customers, The Banker reported that Capital One
customer experience. At Capital One, our brand is
sends out one billion items of mail per year and handles premised on empowering our customers with informed
90 million inbound calls, 300 million outbound calls, 230 choice, great value, and excellent service. We are
million Internet impressions and 40 million transactions building on our heritage of bringing our customers
per day. Together with its subsidiaries, the company had great value without the hassle by investing in our
45.8 million managed accounts and $60.7bn in managed customer experience to drive ongoing customer loyalty.
loans outstanding as of June 2003. We also are investing in world-class customer infra-
The information-based strategy is managed by the structure, such as an integrated view of customer rela-
Chief Information Officer, Gregor Bailar. He is in charge tionships and enhanced online servicing capabilities.
of operations related to computer systems, analysis of These investments will enable us to provide all of
customer data, data protection, setting data standards, our national and local customers with better products
business continuity and information security. at lower cost.
According to The Banker, Gregor says: We have a franchise of over 50 million customer
accounts and 36 million unique customers. We
CIOs today need to be technology alchemists. They
interact with our customers around 300 million times
need to be strong in professional technical method-
a year, not counting the billion times they use our
ologies so that their conversation is a disciplined one
cards. I am grateful for our customers’ loyalty, and our
but, at the same time, they need to understand the
job is to sustain and build on it to make Capital One
business, be it banking, credit cards or loans.
the best choice for all their banking needs.
Their job is not to know the future of technology,
We are making it easier than ever to become a
nor the latest and greatest of delivery networks, but to
customer of our bank. In 2007 we introduced
be focused on balancing the set of business needs, ®
SmartSwitch , which enables our customers to reli-
and choosing or creating the best possible solutions
ably and easily move their entire banking relationship
that can be provided from a technical perspective.
from another bank to Capital One, including the
On the one hand, the CIO has to be an advocate
seamless transfer of electronic bill pay information.
for the business into the technology world, and on the We also have one of the best customer experiences
other hand, the voice of technology in the best in commercial banking, achieving some of the highest

respect of how it can respond to the business. This is scores in the industry for client loyalty.
a relatively new role and the challenge is to interpret
Source: Based on company annual reports and an article in The Banker
and prioritise correctly the business needs and make
(2003). Reproduced by permission of Capital One Bank (Europe) plc.
the technology systems really responsive. 2007 annual report available from http://library.corporate-ir.net/library/
70/706/70667/items/283356/2007AnnualRpt.pdf
The CIO is expected to be involved not only in
strategy development, but also in business and product
innovation. Now, more than ever, CIOs are being held Question
accountable for driving the business value, not just for Explain with reference to Figure 5.13 how Capital
keeping the lights blinking on the computers. One has achieved competitive advantage through
creating value through e-business.
Objective setting

Effective strategies link objectives, strategies and performance. One method of achieving this
is through tabulation as shown for a fictitious company in Table 5.6. Each of the perform-
ance indicators should also have a timeframe in which to achieve these objectives. Despite