Business Plan IT(Oman)

7/21/2019 Business Plan IT(Oman)

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HABIB BANK LIMITED

INFORMATION TECHNOLOGY DEPARTMENT

HBL OMAN

Strategic Plan

Habib Bank LimitedCentralised Oerati!n

"#rram H!#se $ MBD AreaTel% &'()*+,)-.-',/ Fa0% &'()*+,)-1)2'

3eb a4e% 55567bl6!m



In8!rmati!n Te97n!l!4: DeartmentHBL Oman

;trate4i9 Plan

Table of Contents

-6 INTROD<CTION +

+6 MI;;ION$ ;TRATEGIE; ETC6 =

=6 PROD<CT>;ER?ICE DE;CRIPTION ,

,6 ;3OT ANALY;I; )

16 F<T<RE CHALLENGE; @ ;TRATEGIE; -2

(6 FINANCIAL PO;ITION @ PROECTION; -,



-6 Intr!d#9ti!nThe IT Department at HBL plays a key supporting role in the planning and execution of theBank’s business strategy. It is fair to state that every business and support unit ithin theorgani!ation is significantly dependent on technology in delivering their various products andservices" both internally and to our customers.



+6 Missi!n$ ;trate4ies et96The mission on the IT department is to consistently deliver a range of technology and systemssolutions" products and services in a manner hich is based on our key values" namely#

$ustomer %ocus &roactive Innovative Timely 'uperior (uality $ost effective



=6 Pr!d#9t>;eri9e Des9riti!nBackground

The IT Department in )man as formally established in early *++, hen the Bank made itsfirst investments in data processing. Hoever" the strategy adopted at that stage as adecentrali!ed one" ith separate database for each branch and ith the key application being-)B'" an inhouse developed multi currency general ledger system hich provided the

basic banking functionalities.

The decentrali!ed approach toards data processing made sense hen there as a eak

communications infrastructure and the need for automated data processing as relativelylimited. Hoever" in *+++ HBL )man IT management has start orking on centraliseddatabase and in year ,/// -)B' has converted to one database for all branches hichsuccessfully implemented in HBL )man and till ,//0 HBL )man branches ere usingcentralised -)B' hereas all other domestic and international operation of HBL ere usingdecentralised version of -)B'. Hoever from ,/// onards" it had become clear that thedecentrali!ed model using -)B' had a limited life span and a ne systems and technologyroadmap had to be developed" based on the folloing key strategic considerations#

Centralization: 1 centrali!ed data processing as preferred as the existing

decentrali!ed model led to higher operating costs" inconsistencies in the application systems 2

operating softare installed in the respective regions 2 international locations and lack of aconsolidated database.

Enhanced Functionality: -)B' is essentially a general ledger based accounting

system and does not provide many of the functionalities re3uired to process ne products"

hich are largely technologybased. 4ather than invest in -)B'" a conscious decision as

made to revie the 5best of breed’ banking systems being used in other banks for deployment

at HBL.

Scalability: 6ith over five million customers" nearly *7// branches in &akistan as

ell as branches and subsidiaries in over ,/ locations" it as recogni!ed that e needed arobust banking system" poerful machines to process these transactions and a robust

communications infrastructure

Security: 6hile the branch netork as the only distribution channel previously" it

as obvious that customers desired choices and HBL ould need to invest in alternate

delivery channels" hich are primarily technology based. $onse3uently" there as a need to

significantly upgrade our information security capabilities" both on the applications side as

ell as in the technology infrastructure.



Where are we today

The revamping of HBL’s IT systems and technology at Head )ffice started from ,//,. 1tthat stage" the Bank decided to replace its legacy systems ith the -isys suite of applicationsfor its banking operations and to upgrade its netork infrastructure.To date HBL has made substantial investments in ac3uiring and implementing ne systems"revamping of IT infrastructure" introduction of ne delivery channels and building up arobust Business $ontinuity capability. 1s of date" e have achieved the folloing#

1ll branches in )man ere moved to -isys in 8anuary ,//+ and no have their end

of day transactions processed in the 93uation core banking system" hich allos us to have a

central database and the capability to have the financial 2 -I' data for )man operationavailable on a daily basis. 1t the branch level" all )man branches are on the -isys platform" ith having the

capability to do teller transactions via the $ashier system.

)man )peration data processing is done at :arachi ; &akistan ith the approval of

local regulator.

)n the product side" various applications have been implemented hich interface

ith the 93uation core banking system. These applications include Trade Innovation for

processing trade transactions" 9B1 and $ashier as frontend branch teller systems"

Intellimatch for nostro reconcilement" '-- for processing '6I%T messages" -antas for

anti money laundering purposes" etc. In the area of alternate delivery channels" e no offering 1T-s" &)' services to

our customers.. The netork infrastructure in &akistan has been revamped ith the implementation

of H<= pro>ect. This provides the Bank ith ade3uate capacity for expansion" groth" and

netork resilience. Business $ontinuity and 4ecovery site has been established at 'eeb branch

TARGET ENVIRONENT

This section addresses the target environment here e desire to be over the next threeyears" i.e. ,/*7 ; ,/*?. The underlying focus ill be to build up on our existing strengths 2capabilities" take measures to overcome our deficiencies and above all position ourselves soas to meet the key values outlined in our mission statement.

The key ingredients of our target environment are summari!ed belo#

)n the applications side" Head office have already defined the broad parameters of dsystems architecture" -ost of the applications have already been implemented implemented

in HBL )man @ hoever" a fe of them are ork in progress A-icrosoft 9xchange" -obile



Banking and &rofitability 1nalysis" 9nterprise content management hile certain others arestill in the discussion 2 analysis stage )n the data processing side" our core data processing ill continue to be done on

IB- i series machines. Head )ffice currently have three machines and ill look to replace

the to older ones A)C4 and I=T units ith a ne & machine. There are nearly *// Intel

servers in the Data $enter and ill seek to rationali!e them through greater use of blade

technology and virtual servers. The end goal is to have a greener and more efficient data

center. In terms of the data communications infrastructure" HBL made a significant

investment and no HBL )man no moved from point to point leased circuit to a cloud

based international -&L'.. Information security is becoming increasingly important" especially ith the groing

use of alternate delivery channels. This is an area hich HBL need to invest in and our target

environment envisages a scenario here all our IT assets are properly secured and monitored

on a realtime basis. In addition e need to ensure that data is processed in a secured

environment" its confidentiality and integrity maintained and unauthori!ed access not

permitted. 6ithin the IT E 'ystems <roup at Head office " e need to develop products"

services and processes hich lead to more efficient pro>ect management" development of key

performance 2 risk indicators and an overall serviceoriented culture ithin the group.



,6 ;3OT Anal:sisTo reach our target environment and implement the various key initiatives set forth above" ehave undertaken a comprehensive '6)T A'trengths" 6eaknesses" )pportunities and Threatsanalysis" the key findings of hich are given belo. This analysis looks at both the internalAspecific to HBL environment as ell as external factors hich impact" either positively or negatively" the attainment of our ob>ectives.

!trengths $ommitment by Top -anagement to support our key IT strategies. 1lignment of Business priorities ith IT priorities

The centrali!ed database n allos us to offer ne products and services to our customersin a better controlled and much faster time.

'traight through processing as systems are integrated ith each other. This means

minimum manual intervention and enhanced controls. D4& site in place to provide continuity of services ith minimum disruptions. 'ignificant communications infrastructure capacity to cater for future groth and

expansion

Weaknesses 1bsence of a formal pro>ect management process 1t times the full benefits of systems implemented are not achieved" due to lack of

understanding 2 training or resistance to adoption of ne processes and technology. 1ging staff force at loer and middle management level" resulting in the scarcity of the

staff having the skills and experience in implementing next generation technologies. 6eak application systems documentation resulting in dependencies on the key individuals. 1n overly regulated IT environment hich leads to additional paperork and slos don

the pace of development ork.

O""ortun#t#es The systems and technology infrastructure is in place to allo us to further centrali!e our

operations processing functions.

$apacity available to take on high volume customer originated transaction businesses ithlittle or no further investments re3uired in either the core banking system" hardare or

netork infrastructure Investing in ecommerce initiatives to meet customer needs" especially in the areas of

trade" cash management" incoming home remittances" etc.

Threats

4eliance on staff fe vendors for critical services like key application" branch support andhardare maintenance.

4etention of high 3uality staff due to the groing market demand for IT professionals.





16 F#t#re C7allen4es @ ;trate4ies

$E% INITIATIVE!

During the next three years the folloing key initiatives have been identified for the IT. This

list is based on hat e kno as of date and changes ould be made based on emerging

business and regulatory re3uirements. 6ork on several of these initiatives has already started

and for ease of reference" they have been identified ith an asterisk AF sign.

A""l#cat#ons Debit $ard offering for international branchesF 4ollout of chip based 9-C compliant cardsF 6eb based system for receiving incoming home remittancesF Implement '6I%T 6orkers 4emittances solutionF Host international locations information ebsites under the hbl.com domain 9nterprise $ontent -anagement A9$-

&el#'ery Channels 4eplacement of 1T- ith $$D-F

Launch of Internet BankingF 9stablishment of a secondary $all $entreF Trade &ortal for corporate customers

Infrastructure I& Telephony 9xchange rollout for )man 4eplacement of existing 1D E '-' 'ervers ne generation of H& server series

Infor(at#on !ecur#ty

4isk revie of all ma>or applications and infrastructure 'ecurity monitoring" intrusion detection and data loss protection solutions Implementation &$ID'' standards

)*AN RE!O*RCE RE+*IREENT

The success of the IT centre in meeting its ob>ectives is dependent on the availability of resources in three critical areas" i.e. technology" capital and people. 6hile the availability of

suitable technology and funding is generally beyond our control" e can effectively manage



the human resources ithin our department. )ur challenge is to attract and retain high 3ualitystaff" against a backdrop of a groing need for IT professionals .

1s of date" HBL )man 7 staff in the IT department payroll. Turnover has been moderate ith

one IT staff leave the Bank during ,/*G to pursue opportunities in other organi!ations.

'ourcing 3uality IT candidates is a challenge for us as most professionals prefer to ork ith

Local Banks IT here there are better opportunities for career groth. =evertheless" e ill

ork ith the H4 department hire suitable candidates" ith our primary focus being to attract

$omputer 'cience or 9ngineering graduates from the top educational institutions in )man

having 7 years ITrelated experience. 1t this stage" they already have the basic technical

knoledge and through on the >ob exposure" they ill be groomed to assume greater

responsibilities.

%or our existing staff" e ill continue to differentiate beteen the top performers and those

hose performance is at best average. $learly" e ill be focusing on ade3uately

compensating our top performers hile concurrently orking ith H4 to eed out the non

performers.



(6 Finan9ial P!siti!n @ Pr!e9ti!ns

In large organi!ations" IT expenses usually constitute 7 to */ of the company’s totaloperating expenses. 6ithin HBL" the comparative figure has been .G in ,//? and 7.? in,//0. It is our strategic goal to bring this figure don to 7 or less over the next three years.

FORECA;T

INFORMATION TECHNOLOGY & SYSTEMS GROUP

E0endit#re

Total staff cost 1158 197 91 246 275 302 333

Non Contractual Payments - - -

Occupancy cost 32 41 14 58 64 70 77

Rent 18 22 8 25 27 29 32

Utilities 7 9 3 13 15 17 19

Rates, Taxes and Insurance 1 1 0 7 7 8 8

Repair & Renovation 1 3 1 7 8 8 9

Branc ! Office "aintenance 5 6 3 6 7 8 9

"aintenance Office #$uipments 0 1 0

I%T% costs 503 608 226 881 1,001 1,073 1,152

Communication cares 27 19 8 15 17 19 21

'(N!internet cares & #)mail 103 90 42 138 150 157 165

Professional Consultancy Cares 289 274 120 375 394 413 434

"aintenance of computer ard*are 42 108 37 173 220 242 266

"aintenance of computer soft*are 41 117 20 180 220 242 266

Travellin and Conveyance 141 38 12 13 13 14 15

#ntertainment 3 3 1 1 1 2 2

-epreciation 322 341 37 357 450 425 400

"ar.etin 0 - 0

Oter expenses 12 11 4 8 8 9 10

/eal cares 0 - -

(uditors fees - - - Cas 0andlin ! "ovement Care - - -

Branc /icense - - -

Trainin #xpenses 2 0 -

ecurity Cares 0 1 0

Printin & tationery 6 4 1 4 4 4 4

Oters 3 5 2 4 4 5 6

Head ofce allocation cost - - -

Total expenditue !"!#$ !"%' () !")*+ !"(!% !"(') !"'('

Po,t e.oe Po/i0ion 1!"!#$2 1!"%$2 1()2 1!")*+2 1!"(!%2 1!"(')2 1!"'('2

R#ees in Milli!n

H A B I B B A N K L I I ! " #

$INAN%IAL &LAN 2010 - 2012

PROFIT & LOSS

PROECTION;

DEC 2. DEC 2) MAY 2' DEC 2' DEC -2 DEC -- DEC -+



Hoever" the key risk factor here is that in certain IT expense categories" e.g. professionalconsultancy charges as ell as maintenance of hardare and softare" there is a significantforeign currency component hich makes it difficult to forecast the expenses over a threeyear

period" given the volatility of the &ak 4upee vi! a vi! the ma>or currencies. =evertheless" ehave attempted to pro>ect the IT E 'ystems <roup expenses over the next three years basedon currently planned IT initiatives and the overall macroeconomic indicators. The overallnumbers on a year by year basis are as follos#

Total 9xpenses IncreaseJear A&:4 -illion AKKK ,//+ A%orecast *"7G =.1.

,/*/ A&ro>ected *"0*, *7.0,/** A&ro>ected *"0+7 G.70,/*, A&ro>ected *"+0+ G.+

The *7.0 increase in the ,/*/ pro>ected expenses is mainly due to the full year impact of investments being made in the current year. )nce e are past the 5investment phase’" thegroth in our core expenses is expected to be less than 7 p.a.

$ey Assu("t#ons

The expense numbers stated above have computed based on the folloing key assumptions# There ill be no change in the &ak 4upee 2 ' Dollar exchange rate These expense numbers are based on current planned pro>ects. 9xpenses associated ith any ne

pro>ects have not been factored in these numbers. 'taff costs are expected to gro by */ p.a. =o additional hiring is planned" other than for filling

existing vacancies and to increase the staffing in the Information 'ecurity Division. Hoever" the

headcount and personnel costs ould increase if e decide to insource our Data $enters" ith a

corresponding reduction in &rofessional $onsultancy charges. )ccupancy costs are expected to increase by */ p.a. 61=2internet and email charges are expected to increase by 0.? in ,/*/ due to the full year impact

of additional communication links installed this year. Thereafter" e expect an increase of 7 p.a. %or professional consultancy charges" e are estimating a 7 increase p.a. over the ,//+ forecast

numbers $omputer hardare and softare maintenance charges ill gro somehat in ,/*/ due to additional

investments made and thereafter are pro>ected to increase by */ p.a. Depreciation expenses are expected to spike to 4s. G7/ million in ,/*/ and thereafter decline by 4s. ,7

million per month as the runoff on depreciation charges is expected to be greater than incremental

depreciation expenses arising from purchase of ne hardare and softare.

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Business Plan IT(Oman)