B ANKING I NFORMATION S YSTEMS L ECTURE 10

Package Based Solutions The four main phases are: Make or BuySelecAonImplementaAonOperaAon

Make or BuySelecAonImplementaAonOperaAon

Phase 3: Implementation To implement the package on a solid basis, the best option is to use a structured approach based on best practices.

RAPID - Redesign through Application Package Iterative Development It resides between the extremes of just implementing a package using current state processes and ‘blank sheet’ innovation. This method is intended to be used on projects where a significant degree of redesign around core/strategic processes is desired, with a package serving as a primary enabler of that effort. At this point, the package has already been selected. The method includes comprehensive guidance to deal with the organization design and change management issues inherent in a package-based engagement.

RAPID Cont. RAPID strives to accelerate the speed to value by focusing the redesign effort on those processes that will yield the greatest value to the organization. The business case serves as the benchmark by which ‘value’ is measured. Key project decisions should be evaluated based on their quantitative benefit versus qualitative opinions on what is critical to the organization.

RAPID

RAPID Advantages 1. RAPID is a comprehensive and well-tested route map covering all aspects of a large package implementation, where the package is seen as an ‘enabler’ of business change. 2. The main characteristic is its business-oriented approach towards large-scale IT projects, ensuring that business goals are used as an index of success throughout the engagement. 3. RAPID integrates people, processes, and technology aspects within its main phases of solution definition, solution development, and implementation. 4. RAPID ensures process innovation and improvement and reduces delivery time and risk.

MIR - Multi-site Implementation and Roll out The objective of is to enable an organization to adopt a consistent approach to its business processes, by delivering real business benefits through the controlled implementation of a common enterprise system to multiple locations within a business sphere of influence.

MIR The MRI framework is used when a package or a specific solution needs to be implemented at a number of sites (international or otherwise) within an organization. MIR is specially developed for a roll out of a solution at multiple locations (branches, countries, regions)

A pilot in one location and, after improvement, a roll out to the other locations

MIR Framework Objectives 1. Provide a flexible delivery structure which can be easily tailored to suit any specific client situation 2. Help in delivering integrated services 3. Lower risk of failure 4. Provide a platform for operating units to share and leverage best practices to support the framework

MIR Implementation Features 1. Multi-site implementation. Not necessarily international, but ten or more sites at different levels from upper ‘global’ or ‘coordination’ level to ‘local’ or ‘user’s site’ level.

MIR Implementation Features 2. Business changes will be involved. They are not necessarily a business process re- design initiative, but are more than the traditional/simple alignments to allow the use of a new IT solution.

MIR Implementation Features 3. Implementation of an IT solution within the involved organization. This generally includes more than one company or legal entity, and can even be extended to suppliers or contractors involved in the client’s organization.

MIR Implementation Features 4. Need for an extended support structure at mulA-site level. This includes not only the tradiAonal ‘IT support and maintenance’ organizaAon, but also all human resources to be involved at the different levels from ‘global project office’ level to local implementaAon site.

MIR Implementation Features 5. Need for ‘customization’ at the various levels involved. This could involve customization and adaptation from a ‘corporate’ or ‘coordination’ level to different ‘localized’ versions at the user’s site level. This also includes the needs related to ‘configuration management’ of the IT solution, as well as its ‘version management’, and can also lead to a further ‘application management’ effort.

MIR Implementation Features 6. Training needs at various levels. This is not to be limited to the ‘new system’ training at IT level, but should include all types of ‘education and training’ needs allowing harmonious operation with the new organization. Training should be extended to cover new organization and business processes. Training is necessary in the different steps of a program and includes the training for the project teams, implementers, trainers, end-users, etc.

MIR Implementation Features 7. Change management in the broadest sense. This should include all aspects related to how to manage the changes in the organization at the various levels. This includes the levels from ‘Global’ to ‘Site’, business-related aspects (such as organization, human resources, business processes, etc), as well as IT-related aspects (change requests for the core solution, version and configuration management, application management, etc), and support aspects.

Make or BuySelecAonImplementaAonOperaAon

Phase 4: Operation After the implementation, the actual operation starts. At the beginning, employees and management have very high expectations of the newly chosen solution. But these can easily be damaged.

Phase 4: Operation Production problems will occur and requirements will change over time. It relies on a well-thought-out maintenance phase and support by both supplier and internal experts. Various options for maintenance are available.

OrganizaAon In-house Outsourcing

In-House IT infrastructure, release management, testing and customer support are managed within the company. This requires the availability of employees with first-line technical and functional expertise in the package. The supplier can provide second-line support. This option is preferred if the application incorporates many tailor-made solutions and interfaces.

Outsourcing In this option, the bank delegates the activities to a third-party entity that specializes in that operation. The activities can range from pure hardware operations to complete business processes.

Specialized Forms of Outsourcing ApplicaAon Outsourcing Process Outsourcing Shared Services Center (SSC) TransacAon Bank Business Process Outsourcing (BPO)

Application Outsourcing Software as a Service (SaaS). The service provider manages and distributes software-based services and solutions to customers over a network. There are different types of SaaS constructions, depending on the responsibilities of each party.

Process Outsourcing Process Outsourcing Shared Services Center (SSC) TransacAon Bank Business Process Outsourcing (BPO)

Shared Service Center (SSC) A shared service center is a professional organization, executing specific business functions for (internal) clients. The same functions are executed as in the first option, but now they are shared with one or more other departments. Shared service centers are accountable for the services supplied. The main objectives are cost efficiency through economies of scale and improving quality. The main disadvantage is the dependency on the other pares.

Transaction Bank A specialized company for processing specific operations (for example payments or securities processing) from a bank. Key words are automation (replacement of labor- intensive work), standardization (elimination of complexity costs), and economies of scale (better leverage of fixed cost). These are the same activities/processes in each financial institution. The Transaction Bank is often a joint venture between an IT company and a number of participating banks.

Business Process Outsourcing (BPO) BPO is the contracting out of a specific business task to a true third-party service provider.

LocaAons moves operaAons or jobs Onshore frominternalproducAonto an external enAty within the same country. moves operaAons or jobs from internal producAon to an external enAty in a nearby region of the world. Near Shore moves operaAons or jobs from internal producAon Offshore to an external enAty in another region of the world. leaves part of the service within the client faciliAes. On-site