v chandrasekhar it advisor [email protected] issues and challenges in it enabled business...

V ChandrasekharIT Advisor

[email protected]

Issues and Challenges in IT Enabled

Business Transformation Programs

V Chandrasekhar, IT Advisor [email protected]

Origins of Business Transformation


Pre 2000- Technology in Banking

Business High Margins No Competition Vanilla Products

Low Technology Levels Very low levels of computer literacy Low Levels of Computerisation Resistance to Change Replication of Manual Process Regulator Driven Computerisation only for Accounting Automation

All other Sectors took to IT in a big way while Banking remained untouched by

sweeping changes in Business Environment


Pre-2000 Technology Scenario

Year SystemPre 1980s Ascota URE M/c

1980s ALPM

Late 1980s / Early 1990s

Unix Systems / Mainframes for back office / MIS

1990s TBM

1995 Swadhan ATMs

Late 1990s MICR


Evolution of Automation and Its Business Impact

Pre-1960s Manual Brs, Sellers Mkt

1960s Manual, URE, Electromechanical LPM

1970-80 Manual, LPM, ALPM

1990 Manual, ALPM, TBM

2000 Manual, ALPM, CBS Power Shift from Sellers to Buyers

2002- 2004 End of EDP Era, CBS, TBM, Manual Self Service Channels RTGS and Payment Systems

Post 2005 Foundations for Global Banking

EDP

Accounting / Back Office Focus

Disabling Env

Branch Automation

Networking, ATM

Fee Income, Marketing

Enabling Env

IT as Business Enabler

Disruptive Changes

Consolidation


7 Layers of Technology Evolution in PSBs

1. Technology Hostile2. Technology Averse3. Technology

Tolerant4. Technology Friendly5. Technology Enabled6. Technology Savvy 7. Technology Driven

We are here


Drivers of Change Deregulation Globalisation Increased competition Demanding customer Convergence Complexity – Banking, Insurance, Broking,

Commodities Trading Complexity of Instruments / Products Delivery Complexity - Multichannel Compliance Complexity - Basel – II, SOX, SEC Economic Complexity – WTO, M&A, Ownership

Transformation During Disruptive Changes


New Challenges Dwindling Employee / Customer Loyalty Plastic Money Electronic Payments Net Banking New Identity Management Issues Security Issues Credit Boom Emergence of Rural Market Growing SME / Retail Credit Cut Throat Competition Increased Risk appetite of the customer


Business Challenges - Competition

Customer Attrition Talent Attrition Business Attrition


IT Challenges – Fragmented IT

Complexity Machine Proliferation Loss of Control Architecture Management Talent Management


Challenges- Case of Four Blind Men and the

Bank

IT – not understanding Business Requirements Business – not understanding IT requirements

and specifying their requirements IT terms, Ownership Issues, IT blamed for Business Failures

Consultant – not understanding ground realities Customer – As a consequence , he turns blind

eye to business and business collapses


Business Failure Lack of Technology Lack of Knowledge to exploit

Technology Lack of Enabling Processes / Systems Lack of Strategy

Book of Instructions or Book of Impediments


The New Wave


Why it is called Transformation

End to End Deployment of IT It affects all aspects of Business

Strategy Technology Process People Brand Premises Business Enhancement Business Consolidation

Time to Change is short

Change was always there , it is only the rate of change

that is making us study it as a science


Transformation Drivers

Business Strategy & Architecture Technology Strategy & Architecture Behavioral Strategy & Architecture ( HR)


Change & Transformation

Change TransformationNew Orgn Legacy Orgn

Incremental Complete

Local Global

Point Enterprise wide

Specific Cultural

Pain not felt Extremely painful

Quick Results Slow

Short Period Very Long Period


Business Transformation – Final State - Global Bank

Corporate Centre Structure as per Global Best Practices

Customer Centric Organisation – LOBs Service Delivery Technology Market / Brand Positioning Global Culture


Agenda for Transformation

Strategy – Global / National / Niche Organisation Structure Enterprise Business Architecture Enterprise IT Architecture Transformation Program Performance Measurement

What can be measured - gets done


Transformation Pre-requisites

Top Management Ownership Sponsor Project Mode Business Driven Communication with key stake

holders internal and external – Unions, Associations, Media, Analysts


Business Issues – Take a Global View

Separate strategy from Business and IT Focus on Building Agile and Adaptive

Enterprise View of an Integrated Connected

Enterprise Enabling BPR & Change Mgt Environment


Reasons for Poor IT Absorption –Avoid IT / Business Disconnect

IT not participating in Business Strategy formulation

Business implementing IT without involving IT IT by itself cannot provide value Only business derives value from IT IT is concerned only about performance of IT

systems Business Strategies , Goals , Policies must result in

IT projects IT Representation at Board Level


Business Issues – Customer centricity

Customer, rather than account, focused business New Lines of Business (Customer Segmentation) Channel Management Customer Relationship Management Re-Brand Marketing Focus


Business Transformation – Technology

CBS Internet Banking Lending Automation Cash Management Global Treasury GL Risk Manager ALM HRIS Multi-Channel Delivery Networking Security Infrastructure


Business Transformation – Operations

Operational effectiveness and efficiency thru Technology

BPR Shared Services E-Strategy - Multi-Channel Delivery Lending Process Automation Performance Measurement Telecommuting / Working


Technology Challenges


IT Issues Customer Data - MCIF Data Migration Historical Data Storage / Retrieval Record Management Universal Teller BCP at Branch / Bank Level STP Integrate HRIS DWH / BI / CRM Basel – II Testing and Acceptance Security Policy Project Management Tools


IT Issues

Cost of IT Perishable nature of IT Technology Refresh Need to get ROI Faster

Business needs to Leverage

IT investments Quickly

for Survival


Business Issues - Ownership of IT Projects

Business Owners LOB Heads

Technology Owners IT Head

IT Enabled Business Transformation


IT Governance

IT Business Alignment Old, Transition, Final Models Security Policy BCP


Sourcing Models

Assets Owned and Managed by Bank

Assets owned but FM outsourced Assets and FM both outsourced

Onshore / OffshoreDonot Outsource

Strategy, Architecture, Design, Security


IT Deployment Management

Data Center & Rollout Mgt Disaster Recovery Center Business Continuity Plans DRS Governance DRS Drills

Transfer & Recovery at DRC Return of Control to DC


IT Management Challenges

Security Management Record Management Channel Management Shared Services Management Risk Management Compliance Reporting


HR Challenges


IT impacting HR

Universal Teller Extended Hours Banking Sunday / Holiday Banking Mobile Banking Mobile ATM Global Treasury BCP


HR Issues Skill / Talent Identification Competency Mapping Career Planning Succession Planning Performance Measurement Rewarding Performance / Excellence


HR Issues

Constant transfers Lack of specialisation Moving to / from Rural to Urban

Areas Transfers when LOBs are formed HR policy on transfers


HR Issues - Managing Digital Divide

Management / Employee Training Including top management training on use of digital dash

boards , DSS Customer Behavior Monitoring thru Multiple delivery

channels Product Design

Customer Training New Generation Customers can handle complex products They can handle self service channels Older Generation needs simple products and human touch


New Skills


New skills - Business Strategy Best Practices / BPR Risk Management Financial Engineering Performance Management Reporting Treasury HR Marketing Branding


New skills - Technology

Strategy IT Architecture Vendor Management SLA Management Security Management


New Skills

MCIF CRM HRIS Datawarehousing Business Intelligence


New Designations - CXOs CEO – Chief Executive Officer COO – Chief Operating Officer CFO – Chief Financial Officer CTO – Chief Technology Officer CSO – Chief Security Officer CCO – Chief Compliance Officer CRO – Chief Risk Officer CMO – Chief Marketing Officer


IT brings fundamental changes in the style of doing business.

Willingness and Ability of business to adapt to these

paradigm changes is critical for any technology driven transformation program


Success of an enterprise depends on building internal

skills and competencies on an enabling (IT) agile infrastructure

and govern it wisely for business results


In aligning the organization, communicating the strategy is not

enough -effective communication is backed up by

enabling processes and structures -that essentially translate strategy into

day-to-day activities. In short, effective strategy has to be

embedded in work.


Delivery is all about Leadership,

Communication, Culture and People

There must be someone in the organisation to put it out of comfort

zone – on a continuous basis


Summary Ensure Sponsorship Identify Change Agents Increase number of believers Create an entrepreneurial environment Encourage innovation Forgive genuine failures Nothing like an overall Feel Good

Environment – Positive Strokes

V ChandrasekharIT Advisor

[email protected]

THANK YOU

v chandrasekhar it advisor [email protected] issues and challenges in it enabled business...

Documents

v chandrasekhar

business requirements

business environment

customer slide

business collapses

advisor pre

advisor agenda

smicr slide