Sustainability in FinTechs: An Explanation through Business Model Scalability and Market Valuation

Framework: Financial Technology (FinTech) is an industry composed of diversified firms that combine financial services with innovative technologies. The research question and main goal are attempting to answer whether they are more similar to traditional banks or trendy technological firms deploying their innovativeness to favor financial inclusion and sustainability. Justification: Evaluators may wonder if FinTechs follow the typical evaluation patterns of bank/financial intermediaries or those of technological firms. Preliminary empirical evidence shows that the latter interpretation is the one consistent with the stock-market mood. Objective: This study goes beyond the extant literature, analyzing the differences between FinTechs and traditional banks in market valuation, and showing the potential for digital interaction and cross-pollination of complementary business models. Methodology: The differences will be empirically analyzed with the stock market valuation and the multipliers associated with these firms. Results: The main contribution of this paper is that the appraisal approaches of FinTechs follow those of technological startups, having a revenue model much more scalable than that of a typical bank. FinTechs may so provide a solution for sustainable finance with microfinance and crowdfunding among others. FinTechs and traditional banks may eventually converge towards a common market exploiting co-opetition strategies

Enterprise application reuse: Semantic discovery of business grid services

Web services have emerged as a prominent paradigm for the development of distributed software systems as they provide the potential for software to be modularized in a way that functionality can be described, discovered and deployed in a platform independent manner over a network (e.g., intranets, extranets and the Internet). This paper examines an extension of this paradigm to encompass ‘Grid Services’, which enables software capabilities to be recast with an operational focus and support a heterogeneous mix of business software and data, termed a Business Grid - "the grid of semantic services". The current industrial representation of services is predominantly syntactic however, lacking the fundamental semantic underpinnings required to fulfill the goals of any semantically-oriented Grid. Consequently, the use of semantic technology in support of business software heterogeneity is investigated as a likely tool to support a diverse and distributed software inventory and user. Service discovery architecture is therefore developed that is (a) distributed in form, (2) supports distributed service knowledge and (3) automatically extends service knowledge (as greater descriptive precision is inferred from the operating application system). This discovery engine is used to execute several real-word scenarios in order to develop and test a framework for engineering such grid service knowledge. The examples presented comprise software components taken from a group of Investment Banking systems. Resulting from the research is a framework for engineering servic

IT Assets, Organizational Capabilities, and Firm Performance: How Resource Allocations and Organizational Differences Explain Performance Variation

Despite evidence of a positive relationship between information technology (IT) investments and firm performance, results still vary across firms and performance measures. We explore two organizational explanations for this variation: differences in firms’ IT investment allocations and their IT capabilities. We develop a theoretical model of IT resources, defined as the combination of specific IT assets and organizational IT capabilities. We argue that investments into different IT assets are guided by firms’ strategies (e.g., cost leadership or innovation) and deliver value along performance dimensions consistent with their strategic purpose. We hypothesize that firms derive additional value per IT dollar through a mutually reinforcing system of organizational IT capabilities built on complementary practices and competencies. Empirically, we test the impact of IT assets, IT capabilities, and their combination on four dimensions of firm performance: market valuation, profitability, cost, and innovation. Our results—based on data on IT investment allocations and IT capabilities in 147 U.S. firms from 1999 to 2002—demonstrate that IT investment allocations and organizational IT capabilities drive differences in firm performance. Firms’ total IT investment is not associated with performance, but investments in specific IT assets explain performance differences along dimensions consistent with their strategic purpose. In addition, a system of organizational IT capabilities strengthens the performance effects of IT assets and broadens their impact beyond their intended purpose. The results help explain variance in returns to IT capital across firms and expand our understanding of alignment between IT and organizations. We illustrate our findings with examples from a case study of 7-Eleven JapanNYU, Stern School of Business, IOMS department, Center for Digital Economy Researc

Self-organizing Coordination of Multi-Agent Microgrid Networks

abstract: This work introduces self-organizing techniques to reduce the complexity and burden of coordinating distributed energy resources (DERs) and microgrids that are rapidly increasing in scale globally. Technical and financial evaluations completed for power customers and for utilities identify how disruptions are occurring in conventional energy business models. Analyses completed for Chicago, Seattle, and Phoenix demonstrate site-specific and generalizable findings. Results indicate that net metering had a significant effect on the optimal amount of solar photovoltaics (PV) for households to install and how utilities could recover lost revenue through increasing energy rates or monthly fees. System-wide ramp rate requirements also increased as solar PV penetration increased. These issues are resolved using a generalizable, scalable transactive energy framework for microgrids to enable coordination and automation of DERs and microgrids to ensure cost effective use of energy for all stakeholders. This technique is demonstrated on a 3-node and 9-node network of microgrid nodes with various amounts of load, solar, and storage. Results found that enabling trading could achieve cost savings for all individual nodes and for the network up to 5.4%. Trading behaviors are expressed using an exponential valuation curve that quantifies the reputation of trading partners using historical interactions between nodes for compatibility, familiarity, and acceptance of trades. The same 9-node network configuration is used with varying levels of connectivity, resulting in up to 71% cost savings for individual nodes and up to 13% cost savings for the network as a whole. The effect of a trading fee is also explored to understand how electricity utilities may gain revenue from electricity traded directly between customers. If a utility imposed a trading fee to recoup lost revenue then trading is financially infeasible for agents, but could be feasible if only trying to recoup cost of distribution charges. These scientific findings conclude with a brief discussion of physical deployment opportunities.Dissertation/ThesisDoctoral Dissertation Systems Engineering 201

Microservice Transition and its Granularity Problem: A Systematic Mapping Study

Microservices have gained wide recognition and acceptance in software industries as an emerging architectural style for autonomic, scalable, and more reliable computing. The transition to microservices has been highly motivated by the need for better alignment of technical design decisions with improving value potentials of architectures. Despite microservices' popularity, research still lacks disciplined understanding of transition and consensus on the principles and activities underlying "micro-ing" architectures. In this paper, we report on a systematic mapping study that consolidates various views, approaches and activities that commonly assist in the transition to microservices. The study aims to provide a better understanding of the transition; it also contributes a working definition of the transition and technical activities underlying it. We term the transition and technical activities leading to microservice architectures as microservitization. We then shed light on a fundamental problem of microservitization: microservice granularity and reasoning about its adaptation as first-class entities. This study reviews state-of-the-art and -practice related to reasoning about microservice granularity; it reviews modelling approaches, aspects considered, guidelines and processes used to reason about microservice granularity. This study identifies opportunities for future research and development related to reasoning about microservice granularity.Comment: 36 pages including references, 6 figures, and 3 table

AN OPTIONS APPROACH TO QUANTIFY THE VALUE OF DECISIONS AFTER PROGNOSTIC INDICATION

Safety, mission and infrastructure critical systems have started adopting prognostics and health management, a discipline consisting of technologies and methods to assess the reliability of a product in its actual life-cycle conditions to determine the advent of failure and mitigate system risks. The output from a prognostic system is the remaining useful life of the host system; it gives the decision-maker lead-time and flexibility in maintenance. Examples of flexibility include delaying maintenance actions to use up the remaining useful life and halting the operation of the system to avoid critical failure. Quantifying the value of flexibility enables decision support at the system level, and provides a solution to the fundamental tradeoff in maintenance of systems with prognostics: minimize the remaining useful life thrown while concurrently minimizing the risk of failure. While there are cost-benefit models to quantify the value of implementing prognostics, they are applicable to the fleet level, they do not incorporate the value of decisions after prognostic indication (value of flexibility or contingency actions), and do not use PHM information for dynamic maintenance scheduling. This dissertation develops a decision support model based on `options' theory- a financial derivative tool extended to real assets - to quantify maintenance decisions after a remaining useful life prediction. A hybrid methodology based on Monte Carlo simulations and decision trees is developed. The methodology incorporates the value of contingency actions when assessing the benefits of PHM. The model is extended and combined with least squares Monte Carlo methods to quantify the option to wait to perform maintenance; it represents the value obtained from PHM at the system level. The methodology also allows quantifying the benefits of PHM for individualized maintenance policies for systems in real-time, and to set a dynamic maintenance threshold based on PHM information. This work is the first known to quantify the flexibility enabled by PHM and to address the cost-benefit-risk ramifications after prognostic indication at the system level. The contributions of the dissertation are demonstrated on data for wind farms

Engineering Systems Integration

Dreamers may envision our future, but it is the pragmatists who build it. Solve the right problem in the right way, mankind moves forward. Solve the right problem in the wrong way or the wrong problem in the right way, however clever or ingenious the solution, neither credits mankind. Instead, this misfire demonstrates a failure to appreciate a crucial step in pragmatic problem solving: systems integration. The first book to address the underlying premises of systems integration and how to exposit them in a practical and productive manner, Engineering Systems Integration: Theory, Metrics, and Methods looks at the fundamental nature of integration, exposes the subtle premises to achieve integration, and posits a substantial theoretical framework that is both simple and clear. Offering systems managers and systems engineers the framework from which to consider their decisions in light of systems integration metrics, the book isolates two basic questions, 1) Is there a way to express the interplay of human actions and the result of system interactions of a product with its environment?, and 2) Are there methods that combine to improve the integration of systems? The author applies the four axioms of General Systems Theory (holism, decomposition, isomorphism, and models) and explores the domains of history and interpretation to devise a theory of systems integration, develop practical guidance applying the three frameworks, and formulate the mathematical constructs needed for systems integration. The practicalities of integrating parts when we build or analyze systems mandate an analysis and evaluation of existing integrative frameworks of causality and knowledge. Integration is not just a word that describes a best practice, an art, or a single discipline. The act of integrating is an approach, operative in all disciplines, in all we see, in all we do

Value-Based CRM - The Interaction of the Triad of Marketing, Financial Management, and IT

One major development within business practice is the increasing interest in customer relationship management (CRM) in recent years. CRM thereby focuses on establishing and maintaining profitable relationships with the customer using modern information technology (IT) and has emerged as a major research field in business and information systems engineering. However, despite huge investments many CRM projects fail to achieve their objectives as the complex and interdisciplinary nature of CRM is not addressed adequately. In fact an adoption of a customer-centric orientation within a value-based management requires not only a cross-functional integration of different business departments but also a selectively adjusted collaboration of those departments. The paper provides an overview of the state of the art of CRM in literature as well as current practices in companies. Furthermore it outlines the specific challenges of a value-based CRM for the cross-functional integration and collaboration of marketing, financial management, and IT. Thus, in addition to a mutual alignment of marketing and IT, a value-based analysis, planning, and controlling of CRM-activities requires the development and implementation of standardized performance measurements and their adequate IT-support