IT@Large Banks - Nasscom 31 Aug 2004 CTO Bank of Baroda Final Chandrasekhar

Treasury

International

Challenges in Implementing IT@Large Banks

V ChandrasekharChief Technology Officer

Bank of Baroda

InternationalTreasury

V Chandrasekhar GM ( IT )

Change & TransformationChange 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



Implementing IT in Large Banks – Summary Slide

Paradigm Shift in the way we approach Strategy Technology Process People Brand Premises Business Enhancement Business Consolidation



Technology Adoption

Technology adoption was very high in several government agencies after independence Airlines Posts Railways Defense Atomic Energy Space

Somehow Banking was left behind.



Strategy

Strategy as a concept is new Strategy is essentially a measured response to

triggers / events from the market place Strategy has to be Business Driven -

Competitive advantage Strategising in a disruptive Business and

Technology Environment is very challenging



Strategy IT Strategy Business Strategy Transformation Strategy

Balance - Short / medium/ long term Pure IT strategy & its deployment is fast Large transformation programs are slow

and painful Difficult to show quick results

Treasury

International

Technology



7 Layers of Technology Evolution in PSBs

Seven Layers after Zero

technology state in PSBs

1. Technology Hostile

2. Technology Averse

3. Technology Tolerant

4. Technology Friendly

5. Technology Enabled

6. Technology Savvy 7. Technology

Driven



IT for a long time Regulator driven Fragmented Accounting Orientation No MIS – still branch is wasting over 40%

of its time on reports No single window No connectivity No Anywhere Anytime Service No significant delivery channels



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

Back Office Focus

Disabling Env

Branch Automation

Networking

ATM

Fee Income

Marketing

Enabling Env

IT as Driver

Disruptive Changes

Consolidation



IT Now Centralised implementations Networking First steps towards customer focus –

ATM



IT Next Enterprise wide End to End Domestic, Treasury, Overseas,

Subsidiaries Cross Functional – Financial & Non

Financial - HR, eLearning, KM Multi Channel Service Delivery Risk Management, ALM, CRM, DWH Compliance – Basel, AML, SXO, Patriot

Treasury

International

Managing Transformation



Technology DrivenDisruptive Changes

Banking for several historical reasons did not adopt technology for long

Now the technology driven business has forced the pace of change

We are living in an uncertain world Business and product cycles are reducing faster than

we have ever imagined Time to strategise, Plan, Execute and deliver results is

now much shorter While it is nice to talk of consolidation and automation

it also has social implications We are all living dangerously



Change involves active involvement of not only

Industry Captains, Employees and Customers

but also

Governments, Regulators and Citizens.

Change has to come with Social Stability.

While we count the trees , we must not loose sight of woods



Transformation Drivers

Business Architecture Technology Architecture Behavioral Architecture

Change was always there , it is only the rate of change that is making us study it as a science



Transformation is a long journey towards excellence for sustained organisational competitiveness

There are no instant solutions to all problems

What we can and must do is to create an enabling environment for change



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



Transformation Pre-requisites Top Management Ownership Sponsor Project Mode Business Driven Communication with key stake holders

internal and external – Unions, Associations, Media, Analysts



Business Architecture LOBs General Ledger Customer Id Enterprise Data Model Data / Application Migration Historical Data Management / DWH HR / Training



Technology Architecture Get Best Of Breed World Class Systems This is the best way to import best practices

into an organisation without industrial espionage or expensive collaborative agreements or investments

Donot customise – except for local regulatory adoption

Think end to end – across all business lines and be customer centric

Build an enabling architecture – donot buy point solutions



Mindset / Cultural Issues Customer Centricity Branch to Banks Customer Sales Culture Computerised DSS for top management Computerised Audit Centralised Back Office Ownership of Technology investments



New Roles and responsibilities Project Management Sourcing

Services Management Vendor Management

Economist eBusiness Strategy Risk Management Treasury Channel Management Cross selling Branding Marketing



HR Issues Skill / Talent Identification Competency Mapping Career Planning Succession Planning Performance Measurement Rewarding Performance / Excellence These are receiving serious attention



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

Areas Transfers when LOBs are formed HR policy on transfers



Branding & Premises Branding & Brand Management LOB Premises Design

Efficient use of space More space for customers Electronic Lobby Millennium Branch Redeployment of staff Balance – Premises Spending & Savings



Managing Digital Divide 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



Deployment Management Training

Core Deployment Team Trainers Regional Teams IT Teams

Branch Branch as Training Center

Japanese Quality Circles Pre-Installation Training Migration Post Installation Handholding Refresher programs



Deployment Management Data Center Disaster Recovery Center Business Continuity Plans DRS Governance DRS Drills

Transfer & Recovery at DRC Return of Control to DC



Business Enhancement Incremental Business to pay for IT Customer Centricity Cross Selling Service with Smile IT Enabled Products & Services



Business Consolidation M&A IT Integration Process Integration People Integration Culture Integration



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



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

Treasury

International

THANK YOU

IT@Large Banks - Nasscom 31 Aug 2004 CTO Bank of Baroda Final Chandrasekhar

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Transcript of IT@Large Banks - Nasscom 31 Aug 2004 CTO Bank of Baroda Final Chandrasekhar