According to Edvinsson and Malone (1997) and Sullivan (2000), Intellectual Capital
(IC) is the knowledge that can be converted into value. It may be human resources,
organizational structure, processes, research and development, technology and intellectual property rights. IC is finding its association to the performance of organizations for their survival and growth. Both IC and knowledge are becoming important sources of competitive advantage of firms. Almost all organizations, including Small and Medium sized Enterprises (SMEs), have been realizing the same. In the paper, “Intellectual Capital, Financial Performance and Market Valuation: A Study on IT and Pharmaceutical Companies in India”, the authors, Harsh Purohit and Kamini Tandon, have attempted to empirically examine the relationship of IC with traditional measures of financial performance—profitability, productivity and market valuation. They have used a sample of listed Information Technology (IT) and pharmaceutical companies in India for the period of financial years from 2008-09 to 2011-12. The findings indicate that while businesses are improving their systems and processes, the same is not resulting in improved productivity. The findings support the conventional accounting point of view, where financial assets are considered an integral factor when evaluating a firm’s business performance.
There is good research taking place in providing empirical evidence about the impact of Knowledge Management (KM) capabilities on the performance of SMEs. In the paper,“A Methodology for the Development and Implementation of Knowledge Management Strategy in a Mexican SME Trading Company”, the authors, Alonso Perez-Soltero, Ana Gabriel Zavala-Guerrero, Mario Barcelo-Valenzuela, Gerardo Sanchez-Schmitz and Angel Luis Meroño-Cerdan, have attempted to develop and implement a Knowledge Management Strategy (KMS) to identify, preserve and use knowledge of the processes of the marketing area by taking the case of a Mecixan SME. They have reported that application of KMS enables the company to improve knowledge processes for identifying, preserving and using knowledge for the benefit of the company and also for dealing with changes that occur in it.
According to Corso et al. (2002), KM contributes to a firm’s innovation capability. Based on the hypothesis of correlating KM practices and innovation in SMEs, the author, Ritika Saini, in the paper, “Linking Knowledge Management and Innovation in SMEs: A Structural Equation Modeling Approach”, has studied KM practices used in SMEs and also their effect on innovation, using the sample of three states in India. It is reported that the relevant and timely storage of knowledge led to increased organizational performance, competitiveness and employee retention rate by sparking the innovation practices of the organization. It is suggested that SMEs should manage practices that enhance knowledge capturing, sharing and reuse to have the best possible ideas available and use at each point of action to maintain their competitive advantage.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
