TCS – Corebanking implementations and lessons to share

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Core Banking – Making a Success of transformation

» Corebanking or Banking Transformation» Make sure you have a partner to deliver with» Buy in from top to bottom within the Bank» Aligning the organisations - partnership versus supplier vendor» The right expertise at the right time – expert resources » The right programme governance – programme versus project» Plan for and plan to mitigate risks and delays» Ensure the business drivers are aligned to the implementation

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Trusted Partner of Choice

Bank Objectives» Clear Understanding of High Level Bank Objectives and

how they map to aspects of the proposed solution e.g.:» Prepare for the emerging world of global competition

» Rapid time to market for new products and services

» A solution that can price based on channels and usage

» Reduction in account opening and customer request processing overheads for better customer satisfaction etc

» Rapid adoption of the new platform by the business

» Clear response and understanding of how these main drivers fit into the solution and implementation Programme e.g.

» Focus on functionality in the platform but not available in the local market

» Engage the business with a product launch plan based on what is now possible out of the box with the new platform

» Introduce pricing strategies for specific customer segments

» Use the new platform to design on line real time, once done processes

» Identify business champions and implement an engagement and training Programme with the business

» Each major business driver needs to be addressed with a response as part of the core banking Programme

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» The proposed solution components and integration therein coupled with the process alignment would yield the following benefits:

» Greater agility to tap market opportunities

» Better overall customer experience

» Create operational efficiencies

» Brand image of being a technology savvy bank

» SOA driven architecture lays the foundation for the future.

Alignment of Programme Goals Across Stakeholders

Key User Buy-In / Fear of Change

Mapping and Migration of specialized legacy data into TCS BaNCS solution

Lack of Resource Commitment for Project activities: Requirements Parameterization Decisions Acceptance

Lack of Decision Making Governance

Conflict of priorities with other IT projects and alignment of implementation timelines with interfacing systems.

Drivers for change should be well understood , internally agreed and communicated.

Appoint “champions” and develop “power users” to drive change through organization. Ensure benefits to end users are well communicated.

Critical review of all specialized data / applications to determine which is required moving forward and which exists for legacy purposes only

Ensure staff are assigned and provided bandwidth for working on the analysis, decisions, and acceptance of the product implementation. Ensure backfill exists to supplement daily operational duties.

Ensure governance is defined and is designed for quick and effective decisions.

Governance must ensure priorities are set appropriately across all stakeholders. Proper project planning of dependencies will ensure all parties agree deliverable dates.

Risk Mitigation

Programme Implementation - Key Risks and Challenges

Look ahead and Plan Better

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Project Organization and Governance Structure – Implementation PhaseExecutive Sponsor

Business Change

Programme Governance CIO/COO

IT

Programme Management

Programme Manager

Programme Director TCS

Project-Management

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Testing Training

Organisational Change

Process Change

Migration

Technical

Functional (business)

Testing Process Change (Offshore)

Migration & Testing (Offshore)

Technical (Offshore)

Functional/business (Offshore)

Financial Institution TCS

CEO PF / PostLeiter Programmeme-

Ausschuss (CIO)

Programmeme-AusschussProgrammeme-Manager

Senior Management

Programme DirectorTCS Programme Director

Executive Steering Committee(half yearly or when required)• Overall Governance• Relationship Management• Overall Decision Making

Programme Steering Committee)(monthly -> quarterly)• Strategic managment• Major deliveries (Migration,

Releases)• Oversight of Risk, Change and

Quality

Programmeme-Ausschuss Programmeme-

Management

Programme DirectorsAccount Manager

Offshore RepresentativeProject- Managers

Partnership Review Meeting(monthly –> quarterly, synchronisation with Programme- Management)• Release Management• Risks and Quality management• Change Management Review• KPI Reviews

Programmeme-Management Programme Directors

Programme Management Committee(weekly meetings)• Status, Resources, Current plan• Risk Management• Change Management• KPI Monitoring

Programme ManagementProject Management

Programme DirectorsProject Manager

Project Management Committee(weekly meetings)• Status Reporting• Issues

CEO /CIO

Programme Manager and Steering Commitee

Programme Manager and Steering Commitee

Programme Management

Project Organization and Governance Structure – Implementation Phase

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Right Focus at Right Level with Right Rigor

Diversity of Implementation expertise

State Bank of India 15000+ branches/200 million accounts,HP Superdome Cluster/OraclePhased , 15000+ branches liveMigrated from distributed Bankmaster installations

State Bank of India 15000+ branches/200 million accounts,HP Superdome Cluster/OraclePhased , 15000+ branches liveMigrated from distributed Bankmaster installations

Bank Negara, Indonesia 850 branches/8 million accounts IBM AIX, IBM Pseries/Oracle

Phased by branch & module, In House Banking platform

Bank Negara, Indonesia 850 branches/8 million accounts IBM AIX, IBM Pseries/Oracle

Phased by branch & module, In House Banking platform

China Trust, Taiwan 160+ branches/3 million accountsIBM OS/390/DB2Mainframe, big bang go live, SAFEII

China Trust, Taiwan 160+ branches/3 million accountsIBM OS/390/DB2Mainframe, big bang go live, SAFEII

Central Bank ( India)3000+ Branches/10+ million accounts Unix/OraclePhased, Pilot live in 4 months, ISBS, Bank Master

Central Bank ( India)3000+ Branches/10+ million accounts Unix/OraclePhased, Pilot live in 4 months, ISBS, Bank Master

ING Direct of Australia Internet Bank/2 million+ accountsHP Unix/ InformixPhased rollout, Loans followed by deposits,De Nuovo

ING Direct of Australia Internet Bank/2 million+ accountsHP Unix/ InformixPhased rollout, Loans followed by deposits,De Nuovo

Taishin Bank, Taiwan 100+ branches/4.5 million accountsHP/OracleLarge Unix, big bang go live, Inhouse Banking Platform

Taishin Bank, Taiwan 100+ branches/4.5 million accountsHP/OracleLarge Unix, big bang go live, Inhouse Banking Platform

NLB, Slovenia 100+ branches/1.5 million accountsIBM OS/390/DB2

6 banks, phased by module, Inhouse Banking Platform

NLB, Slovenia 100+ branches/1.5 million accountsIBM OS/390/DB2

6 banks, phased by module, Inhouse Banking Platform

Capitec, South Africa 200+ branches/2 million accountsWindows2000/SQL ServerPaperless Micro-lender, Phased by business line,De -Nuovo

Capitec, South Africa 200+ branches/2 million accountsWindows2000/SQL ServerPaperless Micro-lender, Phased by business line,De -Nuovo

Indian Bank 1500+ Branches/4 million accounts Unix/OraclePhased, Pilot live in 4 months, ISBS, BankMaster

Indian Bank 1500+ Branches/4 million accounts Unix/OraclePhased, Pilot live in 4 months, ISBS, BankMaster

Bank of China 22000 branches/220 million accounts IBM zSeries, IBM DB2

Phased by branch & LOB, In house Banking Platform

Bank of China 22000 branches/220 million accounts IBM zSeries, IBM DB2

Phased by branch & LOB, In house Banking Platform

SC

AL

E

Varied transformation initiatives executed successfully with a COMMON methodology

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Background

Largest Financial group. Subsidiaries across Banking, Capital Market, Life Insurance and Cards.

More than 25% of the Banking sector in terms of Assets.

250 Million accounts, 150 million customers and an average of 50+ million transactions a day

Size

State Bank of India Group : an Overview

Business Areas Retail/ Consumer Banking Small Business/ Middle Market Banking Corporate/ Institutional Banking Agricultural and Rural Banking Principal Bankers to Governments, City

Corporations and Government Institutions Clearing bank and Currency chest functions on

behalf of central bank in some regions.

18,000+ branches in all

13,000+ SBI Branches

5000+ Associate Bank Branches

52 foreign branches in 32 countries Assets $323 billion 21,000+ ATMs

Quality Assurance and Compliance

Project Managers

Interfaces Test Preparation

Test Execution

Infrastructure Design Build

Service Model

3rd Party & Vendor Mgmt

Change Mgmt ProcessTrainingApplication

PMO/ Implementation

Planning

Business Readiness

Operations Readiness/Infrastructure Design

Application Build Mgmt Testing

TCS

Technology Committee

Chairman, SBI Group

Design Authority

Programme Sponsor

Programme Director

Board of Directors

Initiative Directors

Business Change Manager

Project Governance Model

Managing Director (MD) SBI Group

McKinsey, TCS and Bank

TCS and Bank

Core Banking

Trade Finance

Treasury

TCS

Bank

Joint

Others

Project Highlights

Characteristic Details

Multi-entities Eight legal entities, multi-tier structure

Customization First ever India project for Core Banking. Large effort for Localization and customization

Interface More than 50 Interface sets to other systems within the Bank

Release Management Phased Releases and customization First phase – Retail Banking branches Second phase – Additional corporate banking functionality and Government banking Third phase – Full corporate banking functionality Fourth phase – Changes based on business process re-engineering Two pronged approach for Eximbills rollout – Initially standalone, then centralized

Software distribution and Production management

Multiple locations data mgmt ~ 18,000+ branches Concurrent management of changes to production and ongoing customization

Data Migration Data Migration with automated routines. Process covering Data cleansing, Customer Intimation, Account renumbering and conversion weekend management

Average daily conversion – 20 branches/ day; Peak of 56 branches migration on core/ day.

Business Process Reengineering Back office planning and design assistance and design for Consolidation/ reporting.

Program and Vendor Management Multiple players – Eight banks, group level stakeholders amongst others Synchronization across other projects: ATM rollout, EFT and Network enablement Four vendor partners, several third party vendors, Independent testing agency

SBI Benefit Case: Point of Arrival Operating and IT Model

Characteristic Point of Departure Point of Arrival

Centralized Operations Many processes required branch level processing and with some operations addressed regional back offices.

Establishment/ design of Central processing centers covering key Business processes. Elimination of redundant back offices.

Data Integrity Limited data stored in a variety of ways, including paper based, leading to duplication and redundancy.

Branches on core on a single, reliable and accurate database. (100% coverage)

Standardized processing Framework and standards exist for most processes but actual processing tends to be region specific rather than standard across the business

All processes across businesses are the same

Straight through processing Limited STP exists. Greater process automation using imaging, workflow and documentation technologies.

Customer View Partial view of limited segments (Corporate Accts) facilitated by data replication and consolidation.

Bank has a collective view of entire customer data/relationships held with the bank.

Management Information Limited MI is provided by disparate systems and in many cases is driven by user requests and is not immediate.

Operations and Systems alignment for GL and reporting consolidation. More than 150 new MIS reports available in a time-bound manner.

Customer Experience Inconsistent experience through different channels. Limited channel synchronization.

Cross-Channel integration and seamless experience across ATM, Contact center, Internet, and branches.

Lower future operating cost Manual processes and disparate systems have limited opportunity to reduce future operating costs.

Cost to Income ratio has reduced sizably

Source: TCS Analysis, SBI Investor Presentation, Aug 2005

TCS – Corebanking implementations and lessons to share

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