MORGAN STANLEY DEAN WITTER Operating Globally through Technology

The shrinking world the number of people needed to deal must develop information technology globally. In the financial sector, The merger of Morgan Stanley and
with increasing volumes of trade. It has systems that can support businesses information technology allowed Dean Witter consolidated both organi-
The most significant developments in also standardised and increased products effectively and enable them to main- investment, ie. capital, to enter foreign sations’ strengths, increased their
the business environment over recent and services across the world, allowing tain a competitive advantage. markets freely and investors to gain the collective product range and scope of
INTRODUCTION years have been the internationalisation organisations to build economies of best returns regardless of national bor- distribution.
Competitive advantage refers to an
This case study focuses on how infor- and globalisation of businesses. scale and increase efficiency. However, ders. It has also made it possible for
organisation’s unique competencies Morgan Stanley Dean Witter is depen-
mation technology enables Morgan Stanley Morgan Stanley Dean Witter is aware capital to exit a country just as easily.
Internationalisation refers to the that are in demand in its market and dent on information systems in order to
Dean Witter to operate within the global financial that subtle differences between regions This was demonstrated in 1998 by the
process of increasing involvement in compete globally in financial services.
market place and maintain a competitive advantage. which its competitors are unable to virtual collapse of the Asian
international operations. and cultures must be considered. The
provide at that moment. Morgan economies, which, with links between It has a combination of software appli-
Morgan Stanley Dean Witter is a global financial services company that standardisation of systems that increase
Globalisation is an approach that Stanley Dean Witter aims to develop economies world wide, created volatil- cations that allows it to trade on the
seeks to maintain a leading market position in each of its business areas: volume, transcend time differences and
actively seeks conformity in prod- an information infrastructure which ity and general uncertainty. The forces world’s stock markets, giving it access
ucts, markets, promotion and international borders must not compro-
• securities • asset management • credit and transaction services. will meet its long term strategic plans of globalisation have increased the to market news and data from around
branding, based on the belief that mise the uniqueness of the global ser-
and enable it to be more proactive. complexity of the financial market- the world. Telecommunications in the
It combines global strengths in investment banking, institutional sales differences in markets around vices it offers.
Traditionally, the investment banking place. They have also created wider form of the Internet, e-mail and the tele-
and trading with investment and global asset management services. It also the world are disappearing.
sector has been strategically driven by opportunities. The ability to trade phone allows exchanges of information
provides consumer credit products to its customers. Morgan Stanley The changing environment
Both trends are reflected in its product lines. Changes in customer across national borders can bring between clients and colleagues.
Dean Witter is a global organisation, operating from four major
rapid growth in world trade, expectations mean the industry has had higher returns, diverse products and a With such a dependence on
trading centres: London, New York, Hong Kong and Tokyo. investment and in joint ventures One of Morgan Stanley Dean Witter’s
to become customer focused, provid- wider variety of sources of finance. information systems,
Information technology is fundamental to all of its business between companies in different most fundamental responses to the The sheer number of products and
ing up to the minute information and a support and back up
areas. This study is concerned with the business of countries. These allow companies developing global financial market, financial strategies has added further
more transparent, seamless service. services must exist
in different countries to gain compet- has been the application of new tech- complexities to markets.
securities. Securities are financial assets which can be to maintain
itive and technological advantages and nology to address the challenges it faces.
bought and sold by investors in organised mar- The financial marketplace Information technology has brought its those systems.
to increase market share. Rapid developments in information
kets. The stock exchange is the market for own set of complexities, by increasing
securities. Information technology has been fun- technology mean that systems soon Advances in information technology the speed of transactions and
damental, enabling financial services become outdated. International financial have made the world a smaller place creating a broader flow
companies to trade globally and reducing markets change rapidly and organisations and enabled organisations to operate of information.
 Responding to change a batch system means that by the time • Manage enterprise-wide risk
the data has been processed, the infor- Straight Through Processing will pro-
Morgan Stanley Dean Witter must mation on which decisions are based is vide an enterprise-wide view of key
continue to seek more accurate not available until it is time to settle the exposures credit, market and operational
predictions of trends and account. risk. It will reduce the time to provide
respond to changes in order global risk exposure for some types of EXERCISES
3. Volume
to maintain a competitive There has been a significant increase in complex risks from weeks to days. It
advantage. The information will also reduce operating errors and
on which it bases its
the volume of the transactions per day.
Currently, Morgan Stanley Dean Witter
improve the quality of reference data, 1 What are securities?
5 Discuss the advantages and
disadvantages of global
such as accounts and product literature.
strategic decisions needs makes 300,000 transactions per day. 2 Define ‘information
conformity in terms of product,
to be as up to date, accu-
rate and as transparent
Trends suggest that within five years it • Meet growth and expansion technology’. markets, promotion and brand.
could be completing one million trans- The volume of business is growing rapidly
as possible to meet its
clients’ needs because cus-
actions per day. and the new system is currently designed to 3 What do you understand
6 How does information
technology enable
handle one million transactions per day. by the term ‘competitive
tomers now want advice, 4. Product focus to client focus
Morgan Stanley Dean Witter
products and liquidity across There has been a shift towards focus- • Decrease time to market advantage’?
to compete in the global
ing on the customers who now require The business requires a system which can
all geographic markets.
a much more transparent, seamless, respond to new business opportunities 4 What is the difference financial services industry?
A number of software applications more quickly, as well as integrate local between data and information?
capture information during trading
service. This gives them appropriately
presented information which they can
suppliers’ packages rapidly and at low cost. Why is it so important 7 Why is the batch system
of processing data no
hours in each of the four major world
financial centres. While many of the
interpret and act upon quickly, rather • Improve cost/productivity for businesses to have up longer appropriate for
than data which may mean little to The system aims to improve operational to date information? Morgan Stanley Dean Witter?
trading applications process data in
them until it has been processed. productivity for standard products and
real time, core transactions such as pro-
increase the number of markets and
cessing and bookkeeping are processed These challenges represent the need to
products that can be processed straight
overnight on the mainframe computer. develop systems that will process data through, without the need for manual
This system, known as a batch system, in real time, rather than relying on an intervention.
processes 300,000 transactions every overnight system which provides
evening. A batch system collects and access to information too late. • Meet and anticipate customer
requirements
processes data at the end of the trading Straight Through Processing should
day in London, New York, Hong Kong The goals of Straight enable Morgan Stanley Dean Witter to:
and Tokyo. This means that when a Through Processing
transaction is completed, the data is not 1. provide single customer view
processed, turning it into usable infor- Morgan Stanley Dean Witter is currently 2. improve and extend client connectivity
mation, until the following day. implementing a concept called Straight
3. meet customer demands, e.g. con-
Although this system has been very Through Processing. This will be put
firming trade within a set number of
efficient it now faces a number of chal- into place over a multi year period,
minutes and the ability to service
Information technology meaning in the long term. Information lenges to which it must respond. with the aim of producing a seamless
should be: any global business from any
customer service.
1. Increased trading hours location at any time of day.
Information technology includes the use • up to date
Electronic Crossing Networks are systems This represents a shift not only in the
of three electronic technologies: Conclusion
• accurate that allow trading to continue after a information technology infrastructure,
• computing hardware
• readily available stock exchange has closed. For example, but also in organisational structure as it
Information technology is the key to
the New York stock exchange may be moves from procedure to event driven.
• telecommunications and networks
• appropriate
able to continue to trade for a number The aims of Straight Through Morgan Stanley Dean Witter’s ability
• applications
• user friendly. of hours after the market has closed. Processing are to: to operate globally. The global financial
and the way they gather, store, process Therefore, the batch of data processed services industry is an exciting, fast
and distribute information.
The information technology infrastructure
from that particular market may begin to
• Meet changing time restrictions moving environment which requires
at Morgan Stanley Dean Witter has The new system should be able to respond dynamic, innovative responses both from
overlap with the data being processed
Computers handle and process data. been developed over the last 15 years. to the compression of settlement time its people and its systems. Straight
from another which is just opening.
The data which is provided requires a Most of its information technology within the New York market and the Access the CD-ROM...
Through Processing aims to meet the
2. Reduced cycle times extension of trading hours brought to print this Case Study,
context and therefore it is only when solutions have been implemented challenges faced by the global finan-
If a trader buys a stock on the New about by Electronic Crossing Networks find more about
data is processed in a particular way, strategically, to meet the perceived cial services industry. It also enables Morgan Stanley Dean Witter
York stock exchange he/she currently by working on-line in real time.
for example added together or viewed needs of the organisation’s five year Morgan Stanley Dean Witter to main- and for hot links to
has three days to settle the account. The www.times-money.co.uk
as percentages, that it becomes strategic plans. Additionally, because It will also prepare for global electronic tain its competitive advantage and
New York stock exchange will soon be www.mbapublishing.co.uk
information. Such information is used of the complexities of global financial brokerage, communication networks increase its market share within a
introducing a new system which allows
by organisations as a basis for decision markets, some of the solutions have and exchanges. complex business environment.
one day to complete a transaction. This Browse the Web...
making. Operationally which means been developed reactively to meet does not allow time for making or for up-to-date company info
in the short term, or strategically operational needs. rectifying any mistakes. Operating on www.msdw.com

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