Assessing Outsourced Distribution Channels

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F68407700%3A21630%2F18%3A00323173" target="_blank" >RIV/68407700:21630/18:00323173 - isvavai.cz</a>

Výsledek na webu

<a href="http://dx.doi.org/10.5709/ce.1897-9254.267" target="_blank" >http://dx.doi.org/10.5709/ce.1897-9254.267</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.5709/ce.1897-9254.267" target="_blank" >10.5709/ce.1897-9254.267</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Assessing Outsourced Distribution Channels

Popis výsledku v původním jazyce

We respond to recent failed initiatives of the Czech banking market to develop business models for the sale of retail deposit products, based on third-party distribution channels. We argue that the issue is the application of inappropriate capital budgeting methods. While static cost-benefit analysis seems to be generally appropriate for conventional banking projects based on branching or internet, they provide grossly misleading estimates of commissioning expenses, which can lead to completely unrealistic project assessments and poorly designed commission schedules. Alternatively, we derive a dynamic model based on statistical simulation (Monte Carlo) and using a real-life case study to illustrate the impacts of particular value drivers on commissioning costs. Our analysis shows that conventional and simulation-based budgeting generates inverse cost functions over time, and the difference becomes operationally tangible in the second and third year of the project, which is commensurate with the apparent timing of the bank’s business strategy revisions. To fulfill the goal of this paper, we demonstrate that statistical simulation is an expedient tool for managerial support and capital budgeting in cases where value drivers are impacted by non-linear dynamic processes.

Název v anglickém jazyce

Assessing Outsourced Distribution Channels

Popis výsledku anglicky

We respond to recent failed initiatives of the Czech banking market to develop business models for the sale of retail deposit products, based on third-party distribution channels. We argue that the issue is the application of inappropriate capital budgeting methods. While static cost-benefit analysis seems to be generally appropriate for conventional banking projects based on branching or internet, they provide grossly misleading estimates of commissioning expenses, which can lead to completely unrealistic project assessments and poorly designed commission schedules. Alternatively, we derive a dynamic model based on statistical simulation (Monte Carlo) and using a real-life case study to illustrate the impacts of particular value drivers on commissioning costs. Our analysis shows that conventional and simulation-based budgeting generates inverse cost functions over time, and the difference becomes operationally tangible in the second and third year of the project, which is commensurate with the apparent timing of the bank’s business strategy revisions. To fulfill the goal of this paper, we demonstrate that statistical simulation is an expedient tool for managerial support and capital budgeting in cases where value drivers are impacted by non-linear dynamic processes.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Contemporary Economics

ISSN

2084-0845

e-ISSN

—

Svazek periodika

12

Číslo periodika v rámci svazku

2

Stát vydavatele periodika

PL - Polská republika

Počet stran výsledku

10

Strana od-do

129-138

Kód UT WoS článku

000437546500001

EID výsledku v databázi Scopus

2-s2.0-85049436546