L08 csf of pm in banking
description
Transcript of L08 csf of pm in banking
© Y.B. Yeung – all rights reserved by the author
IS5540- Project Management andIS5540- Project Management and Quality Assurance Quality Assurance
Critical success factors of Project Critical success factors of Project Management in BankingManagement in Banking
Prof. Y.B. YeungProf. Y.B. Yeung
19,21,23 Oct 200919,21,23 Oct 2009
IS5540: CSF of PM in banking 2© Y.B. Yeung – all rights reserved by the author
Learning objectivesLearning objectives
Understand the role of IT in bankingUnderstand the role of IT in banking Understand different types of IT applicationsUnderstand different types of IT applications Understand the characteristics of IT projects in Understand the characteristics of IT projects in
bankingbanking Understand the risk of a project failureUnderstand the risk of a project failure Understand the critical success factors of Understand the critical success factors of
managing IT projects in bankingmanaging IT projects in banking
IS5540: CSF of PM in banking 3© Y.B. Yeung – all rights reserved by the author
Role of IT in bankingRole of IT in banking
Banks cannot survive without ITBanks cannot survive without IT Information is power (market data, customer Information is power (market data, customer
data, transaction history)data, transaction history) IT provides a competitive edge and a IT provides a competitive edge and a
differentiatordifferentiator Use IT as a business enabler (revenue) and Use IT as a business enabler (revenue) and
defensive tool (cost reduction and risk defensive tool (cost reduction and risk mitigation)mitigation)
IS5540: CSF of PM in banking 4© Y.B. Yeung – all rights reserved by the author
IT banking applicationsIT banking applications
ProductsProducts Deposits (savings, current acct, time dep) Loans (mortgage, consumer loans) Payments (remittances, clearing) Foreign exchange Securities services (trading, custody) Trade finance
IS5540: CSF of PM in banking 5© Y.B. Yeung – all rights reserved by the author
IT banking applications(2)IT banking applications(2)
Delivery channelsDelivery channels Branch banking ATM Telephone banking (VRS, manned) Internet banking
IS5540: CSF of PM in banking 6© Y.B. Yeung – all rights reserved by the author
IT banking applications(3)IT banking applications(3)
Internal systemsInternal systems General ledger Financial reporting (Basel 2, Sarbannes Oxley) Human resources Purchasing Email New data centre
IS5540: CSF of PM in banking 7© Y.B. Yeung – all rights reserved by the author
Characteristics of IT projects in bankingCharacteristics of IT projects in banking
Use many technologiesUse many technologies Fast changing technologiesFast changing technologies User requirements change all the timeUser requirements change all the time Many systems have to work togetherMany systems have to work together They want the project yesterdayThey want the project yesterday Regulatory pressureRegulatory pressure
IS5540: CSF of PM in banking 8© Y.B. Yeung – all rights reserved by the author
Use many technologiesUse many technologies
Banks have legacy systems developed 30 Banks have legacy systems developed 30 years ago(COBOL, mainframe)years ago(COBOL, mainframe)
Powerful front ends(servers, browser, Java)Powerful front ends(servers, browser, Java) The middle layer(network, routers, front end The middle layer(network, routers, front end
processors, firewall, ACD)processors, firewall, ACD) Needs high interoperabilityNeeds high interoperability
IS5540: CSF of PM in banking 9© Y.B. Yeung – all rights reserved by the author
Use many technologies(2)Use many technologies(2)
Internet banking is a technology nightmareInternet banking is a technology nightmare Many technologies have to work together
• Mainframe; web servers, AIX servers; firewall; telecommunications
Volume is unpredictable and difficult to benchmark Cyber attacks everyday Servers more fragile than mainframe Staff and customers have to be security conscious Severe reputation damage if system is down
IS5540: CSF of PM in banking 10© Y.B. Yeung – all rights reserved by the author
Fast changing technologiesFast changing technologies
Don’t we love COBOLDon’t we love COBOL Technologies become obsolete fastTechnologies become obsolete fast Tough to keep up the pace because:Tough to keep up the pace because:
Capitol investment in hardware/software Takes time to write procedures and train staff Customer education takes time
Have to identify fadsHave to identify fads
IS5540: CSF of PM in banking 11© Y.B. Yeung – all rights reserved by the author
User requirements change all the timeUser requirements change all the time
Cut throat competitionCut throat competition Dynamic market conditionsDynamic market conditions Some users do not know what they wantSome users do not know what they want The later the change, the more costly it isThe later the change, the more costly it is Prototyping and browser technology helpPrototyping and browser technology help
IS5540: CSF of PM in banking 12© Y.B. Yeung – all rights reserved by the author
The modern day customerThe modern day customer
Has more money to investHas more money to invest Knows what he/she wantsKnows what he/she wants Seeks better return on investmentSeeks better return on investment Has sophisticated financial needsHas sophisticated financial needs Banking anywhere, anytimeBanking anywhere, anytime ““the next bank is only one click away”the next bank is only one click away”
IS5540: CSF of PM in banking 13© Y.B. Yeung – all rights reserved by the author
Many systems have to work togetherMany systems have to work together
Example: credit card systemExample: credit card system Core system for card processingCore system for card processing Credit approval system for new cardsCredit approval system for new cards Authorisation system for approvals/declineAuthorisation system for approvals/decline Fraud detection system for alertsFraud detection system for alerts Collections system for bad loansCollections system for bad loans
IS5540: CSF of PM in banking 14© Y.B. Yeung – all rights reserved by the author
Credit card system designCredit card system design
Card system core
Credit applicationprocessing
Authorisation engine
Fraud detection Automated collections
IS5540: CSF of PM in banking 15© Y.B. Yeung – all rights reserved by the author
They want the project yesterdayThey want the project yesterday
Typical project duration is 18-24 monthsTypical project duration is 18-24 months 1/3 is in requirements and design1/3 is in requirements and design 1/3 is in development1/3 is in development 1/3 is in testing1/3 is in testing The business cannot waitThe business cannot wait Need to find ways to have faster deliveryNeed to find ways to have faster delivery
IS5540: CSF of PM in banking 16© Y.B. Yeung – all rights reserved by the author
Regulatory pressureRegulatory pressure
More and more projects are regulatory and More and more projects are regulatory and compliance related, eg.compliance related, eg. Basel 2 accord – operational and credit risk
mitigation Sarbanes Oxley Act – ensure accurate financial
reporting Two factor authentication – imposed by HKMA to
protect e-banking customers
IS5540: CSF of PM in banking 17© Y.B. Yeung – all rights reserved by the author
Risks if a banking IT project failRisks if a banking IT project fail
You lose your jobYou lose your job Impact customer service & confidenceImpact customer service & confidence Customer loyalty is very fragileCustomer loyalty is very fragile Reputation risk(eg. Fraud)Reputation risk(eg. Fraud) The bank cannot open its doors(eg. Y2K)The bank cannot open its doors(eg. Y2K) Financial loss(compensation, interest loss)Financial loss(compensation, interest loss) Regulators can withdraw banking licenseRegulators can withdraw banking license
IS5540: CSF of PM in banking 18© Y.B. Yeung – all rights reserved by the author
Critical success factors of a project manager in Critical success factors of a project manager in banking ITbanking IT
Senior management support(sponsor)Senior management support(sponsor) Convey clear objectivesConvey clear objectives Have all the tools/process in placeHave all the tools/process in place Have a system development methodologyHave a system development methodology Knowledge of business and ITKnowledge of business and IT Have a solid plan and stick to itHave a solid plan and stick to it Avoid scope creepAvoid scope creep Expect problems and fix it fastExpect problems and fix it fast Communicate and work with peopleCommunicate and work with people
IS5540: CSF of PM in banking 19© Y.B. Yeung – all rights reserved by the author
Senior management supportSenior management support
Identify a project sponsorIdentify a project sponsor Senior person to go to if in trouble
Form a project steering committeeForm a project steering committee Chaired by the project sponsor and attended Chaired by the project sponsor and attended
by the stakeholdersby the stakeholders
IS5540: CSF of PM in banking 20© Y.B. Yeung – all rights reserved by the author
Convey clear objectivesConvey clear objectives
All parties in the project must understand All parties in the project must understand clearly the common objective of the projectclearly the common objective of the project
This objective will be the focal point through This objective will be the focal point through the projectthe project
This is what we are trying to achieve. Do not This is what we are trying to achieve. Do not lose sight of it.lose sight of it.
IS5540: CSF of PM in banking 21© Y.B. Yeung – all rights reserved by the author
Have all the tools/process in placeHave all the tools/process in place
Project plansProject plans Tools to track progressTools to track progress Tools to track cost and manpowerTools to track cost and manpower Change control processChange control process Tools to report progress and costTools to report progress and cost
IS5540: CSF of PM in banking 22© Y.B. Yeung – all rights reserved by the author
Have a SDLCHave a SDLC
Formalise a System Development Life CycleFormalise a System Development Life Cycle Identify major checkpoints and deliverablesIdentify major checkpoints and deliverables Get the signoffsGet the signoffs Seek additional funding or decision to proceed Seek additional funding or decision to proceed
or not at these checkpointsor not at these checkpoints
IS5540: CSF of PM in banking 23© Y.B. Yeung – all rights reserved by the author
Knowledge of business and ITKnowledge of business and IT
Project manager must have a good knowledge Project manager must have a good knowledge of the business and ITof the business and IT
Be able to understand the linkage between Be able to understand the linkage between business and IT during project planning and business and IT during project planning and executionexecution
A project manager has great influence on A project manager has great influence on project direction(not just an administrator)project direction(not just an administrator)
IS5540: CSF of PM in banking 24© Y.B. Yeung – all rights reserved by the author
Have a solid plan and stick to itHave a solid plan and stick to it
A well thought out plan will pay off at the endA well thought out plan will pay off at the end Good execution requires dedicated effortGood execution requires dedicated effort Plans do change. Consult the stakeholder and Plans do change. Consult the stakeholder and
adjust. Make everyone aware of the change adjust. Make everyone aware of the change and its implicationsand its implications
IS5540: CSF of PM in banking 25© Y.B. Yeung – all rights reserved by the author
Avoid scope creepAvoid scope creep
Probably one of the biggest reasons for project Probably one of the biggest reasons for project failurefailure
scope
time money
IS5540: CSF of PM in banking 26© Y.B. Yeung – all rights reserved by the author
Change control processChange control process
Absolutely essential to control scopeAbsolutely essential to control scope Formally document the process and adhere to Formally document the process and adhere to
itit Agreed this beforehand with usersAgreed this beforehand with users No sympathy if project is late or over budget No sympathy if project is late or over budget
due to scope creepdue to scope creep The later the change, the more expensive it isThe later the change, the more expensive it is
IS5540: CSF of PM in banking 27© Y.B. Yeung – all rights reserved by the author
Expect problems and fix it fastExpect problems and fix it fast
Problems do occurProblems do occur eg. Vendor delay, resignations, failed volume test
Expect more problems for bigger projectsExpect more problems for bigger projects Fix it quickly before it becomes a big problemFix it quickly before it becomes a big problem Be prepared to escalate if significantBe prepared to escalate if significant
IS5540: CSF of PM in banking 28© Y.B. Yeung – all rights reserved by the author
CommunicateCommunicate
Nothing replaces good communications in a Nothing replaces good communications in a projectproject
Steering committeeSteering committee Project progress meetingsProject progress meetings Work groupsWork groups Have a Newsflash or Project corner on the Have a Newsflash or Project corner on the
intranetintranet
IS5540: CSF of PM in banking 29© Y.B. Yeung – all rights reserved by the author
Work with peopleWork with people
People are the most important success factor People are the most important success factor of any projectof any project
Technology and process are important but it is Technology and process are important but it is the people that make it happenthe people that make it happen
IS5540: CSF of PM in banking 30© Y.B. Yeung – all rights reserved by the author
SummarySummary
IT is critical to the banking industryIT is critical to the banking industry Service delivery is totally dependent on ITService delivery is totally dependent on IT Project failure can have grave impact to the Project failure can have grave impact to the
bankbank Good project management is crucial to ensure Good project management is crucial to ensure
success in implementing banking IT projectssuccess in implementing banking IT projects
IS5540: CSF of PM in banking 31© Y.B. Yeung – all rights reserved by the author
ReferencesReferences
Managing the information technology resource Managing the information technology resource by Jerry Luftman Chapter 5by Jerry Luftman Chapter 5