it mega projects in banking - cases and templates
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All banks which go for a core banking driven transformation face similar challenges
Situation 15+ years old systems
Mainly self developed
Well understood
System functions thinking
Rich in functionality
Product thinking
Problems Solution Complications
Functional gaps
Inconsistent data
Low agility
Limited compliance
Limited scalability
High maintenance
Select Core Banking
System as strategic
platform of the future
Limited knowledge of CBS
Build-in business processes
Different implementation
approach
Parameterization within limits
New strategic partner
Adopt, not adapt
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There is still a high failure rate of core banking driven transformations
Transformation programaborted
Transformation programdelivered
Transformation programdeliveredwhile costs and timelinedoubled or tripled
25 %25 %
50 %
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Failure
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Case study Oracle FLEXCUBE, failed implementation at Allied Irish Bank
Budget:84 million Euro
Time:3 years
Technical implementation: IBM’s z/DB2 platform, which is not supported by Oracle/FLEXCUBE
Program management shortcomings
Program stopped in 2010
AIB sued Oracle for 84 million Euro in 2011
Retail banking Accounts Replacement of
legacy retail banking platform
Started in 2007 Migrate
5,000,000 accounts to Oracle FLEXCUBE
Learning
One wrong choice, like the technical infrastructure, can lead to a failed program.
PlanScope Challenges Results
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Case Study Temenos Globus/T24 at ING, stopped CBS transformation after three years
Budget:-
Time:3 years
The requirements were significant higher than anticipated
Underestimated need to meet regional, head office and country requirements
Singapore was the largest branch in Asia Pacific and had a ‘wealth of know-how’ which was not easy to transfer that know-how to head office
Change of database technology during the implementation of the CBS program from Oracle to jBase
In 2005 the program was stopped citing ‘internal reasons’
Wholesale banking TreasuryLendingCorporate financePaymentsCash managementRisk managementGeneral ledger
35 Countries
Single view of a corporate customer across all countries
Start in 2002
Significant change of scope, underestimation of complexity and wrong technical choice can lead to a failed program
LearningPlanScope Challenges Results
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Case Study SAP at Commonwealth Bank of Australia, Integration Partner Accenture, Costs double against initial estimation
Budget:580 million $
Time:4 years
Increase of scale and scope of the CBS program
Acquisition of Bank West and St Andrew’s
Need for significant change of lately renewed access channels, again.
Current knowledge (Mar 2013) on Budget:
1,300 million $ Time:
5+years
Accounts Deposits Loans Payments Started in 2008 Replacement of
45 years old legacy IT system landscape
Change of scale and scope may lead to significant cost overruns
A large SI partner will not prevent you from having costs overruns.
LearningPlanScope Challenges Results
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Success
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Scope Accounts, payments, trade finance, loans, deposits
Oracle FSS Flexcube Universal Version 10
Challenges Managing the banks expectations Changing the habit of the people in the
bank Ensure quality of software customization Coordinate brand and business strategy
over borders
Description
Objectives Core bank automation across foreign branches with Headquarter to follow
Migrate all countries to the same common system
Standardize services, improve cost base and brand loyalty
Replicate good practice across group
Best Practice Patterns
Background Retail and Corporate Bank 210 branches, >70 abroad $50 billion assets
Oracle Flexcube at Chinatrust Commercial Bank Taiwan
Phased Implementation
Model Bank Implementation
Socio-Cultural based Selection of Consultancy
New Operating Model
Prepared Business Processes
Minimum Customization
Communicate the replacement as an
business issue
CASE
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Scope Private Banking Roll out in 3 countries 18 months implementation time Accounts, Deposits, Payments, Securities
Challenges Data migration concerning existing silos of redundant and inconsistent data
Ensure employees continued cooperation within the program
Ensure a smooth and complete knowledge transfer
Different tax issues and client reporting requirements of migrated countries
Description
Objectives Increase operational efficiency and maximize synergies within the group
Migrate all countries to the same common system Improvement of CRM, risk management, and
compliance Reduction of complex interfaces and decrease the
number of technical and platform skills required
Best Practice Patterns
Background Private & Corporate Banking 34 branches in 26 countries CHF 110 billion assets
Temenos T24 at Schroders, Switzerland
Big Bang Approach
Established Change Management
Prepared Business Processes
Shared Strategy
Open Communication concerning Job Cuts
Real Partnership
Be the Reference Bank
CASE
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Scope Accounts, deposits, payments, loans, credit cards
29 months; in 5 countries Alnova Financial Solutions
Challenges Adjust business and IT processes Migrate all P.S.K. client account data to the
new system Achieve a solid post-merger IT platform for
its constituent organizations
Description
Objectives Reducing the need for large back offices Provide online access to all customer- and
product-related information Streamline work processes Create synergies between IT capabilities
and business goals Adapt quickly to new market conditions
Best Practice Patterns
Background BAWAG acquired P.S.K. Retail and corporate banking 150 branches, > 1,300 post offices €45.4 billion assets
Accenture Alnova Financial Solutions at BAWAG P.S.K. ,Austria
Phased Implementation
Established Change Management
Quality People
CASE
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Scope SAP – accounting (R/3), client and account management (Deposits Management)
Investment banking back office operations 26 months implementation time
Challenges Integration requirements, more than 100interfaces
Lack of expertise within SAP for its banking software
Description
Objectives To move from being a small local player to a much larger institution, focused not only on Argentina but also other central and south American countries
Adoption of Basel II
Best Practice Patterns
Background MBA Lazard Argentina is a pure investment bank
No branches
SAP Deposits Management & R/3 at MBA Lazard, ArgentinaCASE
Be the First Reference Bank
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Templates
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Case study
A B C
A B C
A B C
A B C
Learning
ABCDEF
PlanScope Challenges Results
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Scope A B C
Challenges A B
Description
Objectives A B C
Best Practice Patterns
Background A B
CASECASE
Best practicepattern
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Contact
Frank Schwab’s customers are banks, IT consultancies and IT Service Providers in Europe and Middle East.
Frank has more than 14 years experience of IT transformations. He has planned CBS-driven IT transformations based on SAP, Flexcube, Temenos, OSPlus, and others in Scandinavia, Middle East, Eastern Europe, Germany and others.
Until 2009 he was chief architect at Deutsche Bank. Amongst others he was responsible for the planning of the IT transformation based on SAP Banking, the set up and (10 years later) the renewal of the Online Banking, the introduction of Mobile Banking and the set up of the first German lab for Banking IT. Frank also designed an ASP Core Banking model based on SAP Banking Services.
Frank is a pioneer of Online Banking, Mobile Banking and Touch Point Banking and a winner of three European Awards in 2009 and 2010 for the New Online Banking, Mobile Banking and Touch Banking at Q110 - The Deutsche Bank of the Future.
+49 173 670 623 3
Skype: fjschwab