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CASESTUDY:StateBankofIndia,World'sLargestCentralizedCoreProcessingImplementationPRESENTEDBY:AmritaBiswasC-18PamelaRoyC-17GuruCharanTejaC-39NareshAdabalaC-35

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BackgroundOfTheCaseTheStateBankofIndia(SBI),thelargestandoldestbankinIndia,hadcomputerizeditsbranchesinthe1990s.Toremaincompetitivewithitsprivate-sectorcounterparts,in2002,SBIbeganthelargestimplementationofacentralizedcoresystemeverundertakeninthebankingindustry.TheStateBankofIndiaselectedTataConsultancyServicestocustomizethesoftware,implementthenewcoresystem,andprovideongoingoperationalsupportforitscentralizedinformationtechnology.AlthoughSBIinitiallyplannedtoconvertonly3,300ofitsbranches,itwassosuccessfulthatitexpandedtheprojecttoincludeallofthemorethan14,600SBIandaffiliatebankbranches.TheStateBankofIndiahasachieveditsgoalofofferingitsfullrangeofproductsandservicestoallitsbranchesandcustomers,spreadingeconomicgrowthtoruralareasandprovidingfinancialinclusionforallofIndia'scitizens.

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DriversForANewCoreSystemSBIhadundertakenamassivecomputerizationeffortinthe1990stoautomateallofitsbranches.localimplementationrestrictedcustomers'usetotheirlocalbranches.Technology-savvymarketsegmentviewedthepublic-sectorbanksastechnologylaggardsthatcouldnotmeettheirbankingneeds.SBIengagedKPMGPeatMarwick(KPMG)in2000todevelopatechnologystrategyandamodernizationroadmapforthebank.In2002,bankmanagementapprovedtheKPMG-recommendedstrategyforanewITenvironmentthatincludedtheimplementationofanewcentralizedcorebankingsystem.

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ObjectivesOfSBIToModernizeCoreSystems

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ChallengesForTheBankfindinganewcoresystemthatcouldprocessapproximately75millionaccountsdaily.thebanklackedexperienceinimplementingcentralizedsystemsmeetingSBI'suniqueproductrequirementsthatwouldrequirethebanktomakeextensivemodificationstoanewcorebankingsystem.

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VendorConsortiumSelectionSBIsoughtproposalsfromanumberofvendorconsortiumsthatwereheadedbytheleadingsystemsintegrators.ThebanknarroweddownthepotentialsolutionstovendorconsortiumsledbyIBMandTCS.ItwasagreedthatTCSwouldberesponsiblefortherequiredsystemsmodificationsandongoingsoftwaremaintenanceforSBI.

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TataConsultancyServicesAndTCSBaNCSAfterscrutinizingtheleadingvendorsSBIselectedTCStoberesponsiblefortherequiredsystemsmodificationsandongoingsoftwaremaintenance.TCShaslongbeenaleaderincoresystemsintegrationservicesforbanksAfteritpurchasedFNSin2005,thecompanyalsobecamealeadingglobalproviderofcorebankingsoftwareforlargebanks.TheBaNCSsystemisbasedonservice-orientedarchitecture(SOA)andisplatformanddatabaseindependent.

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InitialSBICoreSystemsModernizationProjectThecontractfortheinitialprojectwascompletedinMay2002;3,300branchesweretobeconvertedbymid-2007.Thechangesincludedinstallingrequiredinterfaceswithmorethan50othersystems.BeforethefirstconversioninAugust2003,TCSandHPcreatedthedataprocessingenvironmentforSBI.

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InitialConversionProjectAnassemblylineapproachwasthenemployedinApril2006tospeedthebranchconversionprocess:

Branchpersonnelwereresponsiblefordatascrubbingandcleaningoftheircustomerinformationontheexistingsystem.Brancheswerenotifiedthreemonthspriortotheirconversiondatetobegin"mock,"ortest,conversionsusingaspeciallycreatedtestversionoftheBaNCSsystem.Branchesperformedseveraltestconversionstoensuretheactualconversionwentsmoothly

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StateBankofIndiaFullBranchConversionThesuccessoftheinitial3,300-branchconversionforSBIdemonstratedthat:

TCShadthetechnicalcapabilitiestosupportthebank'sITinitiativeandscaleofoperations.Bankpersonnelhadtheskillstoadoptnewprocessesandsupporttheconversions.TheIndiancustomerbasewouldreacttonewtechnologybyadoptingnewelectronicservicesanddemandingnew,moresophisticatedbankingproducts.Anassemblylineapproachcouldbeusedeffectivelytosupportlarge-scalebranchconversions.

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