B.A.Sc. Thesis Abstracts - Year 2009

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The Adoption of Mobile Banking By Generation X

Lin Bo, Engineering Science

This thesis provides interesting insights into the diffusion pattern of mobile banking services adopters. While earlier academic research has addressed consumer intention in adopting mobile banking and the qualitative factors explaining why mobile banking will be adopted, this study takes a further step and makes an important contribution to the understanding of the future adoption of mobile banking in a quantitative way. By reviewing a substantial amount of literature and prior research papers, the qualitative factors that play a role in the adoption process are well understood first. Two models are found to be appropriate to model the diffusion process. By employing a modified Technology Acceptance Model and a comparison with Internet banking adoption, an S-shaped mobile banking adoption curve is obtained. The model predicts that early adoption will take place by 2020 and the majority adoption will not happen until 2025. In addition to that, the two most important barriers that impede the diffusion are security concerns and service subscription costs incurred.

Asset Based Lending: Business Process Reengineering

Karen Chan and Michele Shujie Qu, Mechanical and Industrial Engineering

 

Popularized in the 90’s, business process reengineering has been the focus of many organizations as the need to look for new and improved ways of conducting business has been urged on by increasingly competitive environments. Stemming from Frederick Taylor’s Scientific Management principles, the division of work into segmented departments became the norm in today’s organizations. Although each department strives to optimize the efficiency of their own business processes, the importance of standardization and consistency of these processes across the organization is often overlooked. A diagnostic in a Canadian Chartered bank’s lending processes across four of its lending lines of business revealed that their backroom support structures and processes differed from one another. As there are common lending support procedures across the four lines of businesses, the Bank’s internal consultancy group has been charged to propose standardization and migration strategies to reengineer the varied support models to a centralized support group. This thesis sought to assess the feasibility of migrating the support organization of one of the lines of business, Asset Based Lending, into the centralized support group by way of industrial engineering techniques.

Networks and Social Network Services

Farzad Farza, Engineering Science

We set out to answer the following questions: How do we define a successful enterprise social network? How do we design a system which can be used to create a successful enterprise social network? We study the underlying network structure of several open social networks and formulate a quantitative definition of success based on the concepts of graph theory. In addition, we utilize an information systems success assessment model to design an effective social network service. The result of this work is a deeper understanding of the dynamic nature of enterprise social networks and an actionable set of best practices for creating a successful enterprise social network.

Value of Information

Charles Gu, Engineering Science

 

Information plays a crucial role in any business’s normal operations. Many companies spend a significant amount of money to purchase information. However, like everything a business spends money on, what is the value of information? In addition, Information is an intangible asset and it is very hard to quantify. How does one measure the contributions and impacts of information? This research proposes a new methodology to calculate the numerical value of contributions and their impacts, or the value added of information. The methodology explores the concept of perceived value and estimates the value-added figure of information through a breakdown of contributions and their impacts into various subcomponents. Numerical values of each subcomponent are assessed based on perceptions from people within the organization. These values are then aggregated to produce the final value of information. The major contribution of this research is the suggestion of the new methodology and the intention to provide a different and unique approach in the valuation processes of information.

Investigation of the Feasibility to Implement Flexible Work Arrangements at a Financial Institution

Jing Guo, Engineering Science

Over the past decades conflicts arising from employees facing the demands of their professional and personal lives are raising employers’ awareness of the need to help. Ultimately, as the result of the improved quality of life the work quality also increases. Therefore, flexible work arrangements were introduced by companies to assist their employees with work-life balance. While flexible work arrangements are widely studied for general feasibly, there is little understanding of how it can be feasible for an internal technology group within a financial institution. This thesis is a feasibility study for the technology Client Group for applying flexible work arrangements. By conducting business process map analysis, the results illustrated the interaction of the job functions within the Client Group and showed that about half of their employees’ work can be subjected to a flexible work arrangement. Furthermore graphical and statistical analyses of employee’s performance data demonstrated the employees on flexible work arrangements were able to sustain their performance.

 

Assessing Outsourcing Opportunities for New Projects

Arturo Lau, Mechanical and Industrial Engineering

Decisions taken to outsource new projects are typically reached using frameworks which are aligned to the business’s goals. A mature and proven outsourcing framework consistently identifies projects that have minimal risk and maxim benefits for outsourcing. A Canadian bank, the Bank, uses two outsourcing frameworks to provide an objective way to decide whether to outsource or “in-house” a project and, if outsourced, which vendor to choose. The purpose of this thesis is to analyze the Bank’s two frameworks and to determine if best practices from industry and the literature can be incorporated into the Bank’s frameworks. Numerous academic articles were reviewed. Three frameworks were selected for analysis. A gap analysis between the Bank’s and the three literatures’ frameworks was preformed. Four of the Bank’s ongoing and completed projects analyzed using the Bank’s and selected frameworks. Several criteria from the literature were found to be important to the Bank and are included in the recommended framework.

Blackberry Enterprise Data Warehouse Reporter

Ian Liu, Mechanical and Industrial Engineering

The purpose of this thesis is to investigate the considerations necessary and lay the groundwork to ultimately develop or implement an application to deliver and display EDW BI information to a user’s Blackberry mobile device. Such an application will serve to alleviate information disconnect between user and local PC by providing pertinent business information to users anywhere cellular service is available. Easy access to BI enables users to make informed business decisions. The EDW is incomplete at this time, however the EDW Status Reporter tool is developed as a proof of concept to assist the process of gathering user feedback, testing or implementing changes on the path of development towards the final EDW Data Browser. The investigation and the design considerations necessary for such an application to be a success are also addressed. The EDW Status Reporter identifies necessary features pertaining to security, information input, filtering, navigation and display. The study also identifies the investment in time and money to determine the infrastructural requirements and potential for the use or implementation of third party BI applications. These considerations must be addressed as the EDW comes closer to completion and as the Bank continues to make decisions related to logistics and scope of implementation of the project.

Microcredit Services for Microentrepreneurs in the City of Toronto

Roman Alvarado Lopez and Darren Ong, Mechanical and Industrial Engineering

The Bank is interested in expanding its range of services into the microcredit market as both an act of social responsibility and as a way to reach out to new clients. However, the Bank has no previous experience in providing loans to microentrepreneurs with low income who posses few to no assets to be used as collateral. Therefore, in order to define a microcredit service for the Bank the problem of finding microentrepreneurs and determining the best way to serve them, both financially and non-financially, is addressed in this thesis. This is done through statistical analysis of population demographics (new immigrants) that have the characteristics of successful microcredit users (motivation, commitment, business knowledge) and the determination of their location within the City of Toronto. In addition, a comparison of lending models, loan qualification processes, and non-financial services offered by North American microcredit implementations to determine the most successful methods and common pitfalls is conducted. Adherence to the final recommendations in this thesis could result in a microcredit service that has the highest chance for long-term success in the City of Toronto and provide the social return on investment anticipated by the Bank.

Evaluating Innovation: An Analysis on the Value of Innovative Change in Business Organizations

Daniel Marquez, Mechanical and Industrial Engineering

We define innovation as “a new concept within the scope of its implementation” that leads to revenue generation, value adding organizational improvements, strategic value, competitive advantage, and options for subsequent innovation. A consistent methodological approach to assessing innovative ideas is proposed. All available ideas are considered for their feasibility. Good ideas that are currently infeasible due to cultural/temporal and resource constraints beyond the control of the decision making team are left for later consideration. The set of potential concepts is categorized, according to how they fit within the organization from a functional and value chain standpoint. Redundancies and synergies are identified. Estimates of fundamental measures such as revenue, initial investment, feasible lifetime, etc. are used to calculate other key pieces of information, such as the project’s volatility, and expected present worth. Candidates are selected using three methods: integer optimization, and two heuristics, one based on the TABU algorithm and the other on a greedy heuristic. Finally, the fundamental measures of each concept selected are re-assessed. An option theory analysis is performed using more accurate figures. Only those projects that generate sufficient value are implemented.

Reengineering a Variable Compensation System

Brandon McDonald, Mechanical and Industrial Engineering

The process by which a large Canadian bank verifies the correctness of sales commissions is analyzed with the goal of determining process improvements which will prevent the current leakage of an estimated $4 million annually from over payment of commissions. The analysis is carried out by modeling the existing process and identifying gaps and limitations which affect the process’ capacity to verify sales. A sample of previously paid sales is scrutinized to determine the current extent of such leakage, and to determine which sales are at most risk of being over paid. Some limitations to the total capacity of the sales verification process have been found and identified. Because sales to be verified are received from the sales force at an uneven arrival rate, on most days the verifying employees process sales at only 20% of their maximum capacity. Furthermore, factors which affect the rate of leakage in sales have also been identified. It is evident that the highest rates of leakage are found in Ontario (18% of all commission are likely overpaid), and Mutual Funds A and GIC/Term-Deposits are the highest risk products. And for all areas, all of the Mutual Funds A and GIC/Term-Deposits sales should be verified. These results imply that some sales are at a much higher risk of being overpaid.

Incident Management Systems: Identifying Potential Markets for the Telecommunication Industry

Elizabeth Jeeyoung Min, Engineering Science

With the growing occurrence and magnitude of unpredictable incidents, public and private sectors are realizing the significance of incident management as well as its need. Many citizens have had to endure incidents such as the power outage of 2003, the global SARS epidemic, the North American hurricanes, and the Toronto propane explosion. Catastrophic events have become a major concern of government emergency management teams as well as private industries, particularly the importance of acquiring an effective incident management capability to restore and sustain regular operations quickly after an unpredicted incident has occurred. However, the limitations of current methods and tools of incident management systems in Canada have challenged this capability. This thesis assesses an end-to-end incident management system and seeks to identify the requirements needed to build a framework of an effective incident management system within an organization. Based on the assessed needs, this thesis identifies key challenges within the current incident management system in Canada and evaluates a telecommunication industry leader’s competitive advantages in strategizing the most beneficial direction the telecom needs to take in order to optimize its strengths and capabilities for use in the emerging field of incident management systems.

Rack Mount Servers vs. Blade Servers: An Evaluation of Cost, Performance and Power Consumption

Stephen Mok, Engineering Science

Vendors such as HP and IBM have introduced new technology for data centres that promise lower power consumption as well as decreased GHG emissions. The purpose of this study is to compare the new technology (blade servers) and old technology (rack mount servers) using several constraints such as constant performance, constant power consumption, constant spatial occupancy and constant budget, to determine the optimal platform. Analysis is performed to determine the total cost of ownership (TCO) per-server, the total GHG production and the cost of GHG savings for both server types. The rack mount server is determined to have a lower TCO than the equivalent blade server. However, the blade server is calculated to be the optimal platform in the cost of GHG savings analysis. The total GHG production is inconclusive as the optimal platform changed with each scenario. The results of the analysis in this thesis suggest that in order to reduce the GHG emissions by lowering the data centre power consumption, the optimal platform is the blade server architecture; however, it comes at a cost.

Load Levelling and Load Shedding in Commercial Bank Real Estate

Oleksandra Onisko, Engineering Science

Load reduction and peak shaving, achieved with simple, proven technologies and by small modifications to the current policy, has the potential to make a significant positive impact on the Bank’s overall environmental footprint. Some of the technologies considered for load shedding are higher efficiency HVAC units, high performance insulation and windows, tighter building envelopes, alternative heating systems, and various control strategies for lighting and equipment energy management. Energy storage and on-site co-generation are considered for peak shaving. The most significant changes to improve building performance are those implemented at the design stage, such as better insulation, higher efficiency windows, tight building envelopes and energy efficient lighting design that incorporates daylight and active controls. Changes made at the design stage are by far the most cost effective and carry the most impact. Retrofit strategies for air tightness, windows and lighting equipment can also greatly decrease the building’s energy expenditures. Energy efficiency rating systems and design guides, such as The Leadership in Energy and Environmental Design (LEED) rating system, provide good standards and guidelines for high-performance buildings. Computer power management and scheduled lighting shutdown can significantly reducing energy expenditures. In the Wonderland location, which was extensively studied, these two strategies would have produced $3,737.40 and 15.1959 tonnes of CO2e in annual savings. The impact of a Bank-wide implementation of these changes can save hundreds of thousands of dollars annually and greatly reduce the Bank’s carbon footprint. New and emerging technologies are attractive and compelling in their novelty, but the results they deliver do not yet justify their costs.

A Plastic Future

Muhammad Osamah Saeed, Chemical Engineering

This thesis describes the inefficiencies in cash‐based societies while demonstrating how profitable the move towards increasing the use of cashless technologies may be. This may well be a viable and important step for commercial banks to take in order to continue to best serve the interests of their customers while improving their own internal efficiencies. This work focuses on small value, convenience‐based payments and uses industry research and surveys to form a basis to justify increasing cashless activities. Various expenditures were studied to identify a unique market where cashless payments are of primary concern. By examining growth rates of cashless payment instruments and evolutionary new technologies, the finding indicates that Canadians are using less and less cash but are favouring cashless instruments of payment. S‐shaped (sigmoid function) curves are used to show that competing technologies affect growth adoption rates. The breakdown of costs in convenience‐based purchase locations and average amounts spent were examined. The findings show that both vendors and consumers could be at a relative advantage with the use of cashless technologies. Comparing five cashless technology interfaces in detail, the recommendation favours biometrics and RFIDs as the ideal instruments to ensure security and speed. A sensitivity analysis has shown that cashless technologies could benefit commercial banks by generating additional revenues. It is therefore recommended that the use of cashless payment technologies have a greater role in modern banking applications.