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This article presents a case study of a major technical innovation in the core activity of payment processing in a UK bank. In describing the strategic rationale for the change and the process of implementation, the degree of consistency between the operational and organizational dimensions of the new system are examined. As this system is widely regarded as the benchmark for future paper processing in the industry, the factors contributing to successful innovation are discussed and the management rather than the technological aspects of this are emphasized. Competitor responses to the innovation are explained by the influence of traditional assumptions about the basis of competitive advantage in banking.
Morris et al. (Fri,) studied this question.