Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Phase I - Core Transformation Journey Starting Out

Phase I - Core Transformation Journey Starting Out

Ratings: (0)|Views: 20 |Likes:
Published by Infosys
The expected benefits of core systems modernization - agility, integration, efficiency and reduced maintenance costs - should make it an easy sell. But in reality, executive leadership is always caught up in an intractable analysis of risk versus reward. How an operational teams present a convincing case for core systems transformation that will justify both its considerable cost and risk? And having secured approval, how can they bring all stakeholders, in whom the responsibility of implementation actually vests, on board?
The expected benefits of core systems modernization - agility, integration, efficiency and reduced maintenance costs - should make it an easy sell. But in reality, executive leadership is always caught up in an intractable analysis of risk versus reward. How an operational teams present a convincing case for core systems transformation that will justify both its considerable cost and risk? And having secured approval, how can they bring all stakeholders, in whom the responsibility of implementation actually vests, on board?

More info:

Published by: Infosys on Apr 19, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

08/06/2013

pdf

text

original

 
Universal Banking Solution System Integration Consulting Business Process Outsourcing
Phase I of theCore Transformation Journey:Starting Out
 
Phase I of theCore Transformation Journey: Starting Out
The expected benefits of core systemsmodernization – agility, integration, efficiency andreduced maintenance costs – should make it aneasy sell. But in reality, executive leadership isoften caught up in an intractable analysis of riskversus reward. How can operational teamspresent a convincing case for core systemstransformation that will justify both its considerablecost and risk? And having secured approval, howcan they bring all key stakeholders, in whom theresponsibility of implementation actually vests, onboard? Admittedly, this is not an easy task. To becompelling, the core systems proposition mustaddress the major concerns of the bank’s topmanagement in the following ways:
Show that it is supportive of long term strategyJustify the cost through ROI analysis
Create a framework to assess impact onstakeholders and business value
Present a fair assessment of risk and mitigation• Craft the implementation strategy to suit risk
appetite and desired timelines
Have a plan for managing organizational change
The fact that core transformation strengthens thebank’s foundation and hence enables it to achievelong term objectives must be highlighted at theoutset. It is more convincing to talk in specificterms - detailing intermediate milestones andways to get there, for instance - than makesweeping statements. Hence, the business casemust be broken down into smaller projects each of which improve operational performance, fulfilstrategic objectives or create value for stakeholders.Primarily, top management wants to know howmuch the investment in core bankingtransformation will yield by way of returns, andhow long it will take to do so. Hence, the businesscase must employ realistic and relevantillustrations to address these questions upfront.For instance, how much of system maintenancecosts will core transformation save? By how muchwill it bring down time to market for new products?Will faster and better processes bring down error incidence and manpower costs?Besides the above, transformation yields severalbenefits that are not easily quantified, but arenonetheless very important, for instance,regulatory compliance. An attempt must be madeto attach monetary value to such benefits bybreaking them down into their lowestdenominators so that their financial impactbecomes more visible.The case for core transformation becomes evenstronger if it can be demonstrated that therenewed systems will help the bank overcome itsbiggest pain points. For example, a bankstruggling to expand its international footprintriding on an outdated system will be veryinterested in a modern alternative that can beeasily extended to new geographies.It is equally important to present the downsidefairly. Typically, replacing a mainframe with aUnix-based system calls for additional skills andinvestment. Transformation also carries a certainamount of risk. The business case is not completewithout an analysis of these aspects.Most transformation fears arise from theuncertainty surrounding the nature and magnitudeof its impact. Much of this can be alleviated byhaving a mechanism to quantify the impact of transformation on the organization. Whentransformation risks and rewards are reduced to anumber, it makes it easier for top management toweigh and indeed, come to a decision. The impact assessment framework must bealigned with the organization’s principal objectives – for instance, if shareholder value is paramount,the framework should assess whether transformation is earnings accretive or attritive.Similarly, it must describe how changes inprocesses or organization structure might affectstakeholders.Show that it is Supportive of Long Term StrategyCreate a Framework to Assess Impact onStakeholders and Business-value
Justify the Cost through R
 AnalysisR
ROI
 
 All transformation carries risk, and all topmanagements know that. The chances of gettingtheir approval improve with a business case thattells it like it is, with an unbiased assessment of risks, their likelihood, potential impact andmitigation.Banking transformation extends way beyondsystems replacement to bring into playoutsourcing, restructuring, change managementand rightsizing. What to do and how muchdepends upon the banks’ individual situation. Asmall bank might go for a big-bang execution andimmediate switch over; a large one is unlikely totake that risk, and will probably insist on phasedimplementation.But in general, since information on the paybackfrom long transformation programs is not easilyavailable, senior managements tend to be wary of projects with front-ended expenses andback-ended results. Hence, it is important tosecond-guess the management’s patience level,desired timelines and accordingly present a planthat accelerates value realization by securingquick wins and reducing the time to go-live.Showing top management that it is possible tomitigate transformation risk through phasedexecution also improves the probability of gettingthem on board.Managing organizational change is one of thecritical success factors of transformation. Often, itis not accorded the priority it deserves, withdisastrous consequences. The plan for managingand communicating change – including its impacton people, processes, resources, policies etc. –must form part of the initial presentation to topmanagement. Banks have been known to keeptransformation plans under wraps, fearingorganization backlash as a reaction to change.Having a clearly defined roadmap for changemanagement will give them the confidence tomake the decision public and get all keystakeholders involved from an early stage. Thiscould make the difference between success andfailure.People issues are the biggest barriers toacceptance of the need for core bankingmodernization. The bank must overcome thefollowing challenges in order to secure the buy-inof all stakeholders:Identify all stakeholders:Transformation haswide-ranging impact, affecting all functionsincluding, but not limited to, IT, Business,
Operations, Sales and Service, Risk Management
and Finance. It is important to identify and notifyall those who will be affected well in advance.Drive different stages of transformation throughthe right stakeholders:Contrary to popular perception, core systems transformation is not theexclusive preserve of the IT department, althoughthey have an important role to play. Theinvolvement of key stakeholders changes alongthe journey. IT may play a large part duringinitiation, but once the project has the approval of senior management, business users must takecentre-stage. Every phase of the transformationlife cycle calls for participation from one or severalteams; it is vital that the right people are involvedat the right time to the right extent.Involve stakeholders early:Obviously, if the bankexpects all key stakeholders to participate in thetransformation process, it must get them on boardearly in the day. This means seeking their contribution at every step, starting with buildingthe business case. Stakeholders must also beinvolved in key decisions, to the extent necessary.Having approved the project, senior managementmust lend its efforts to securing the acceptance of people down the organization.Once all stakeholders are recruited, they must beassigned clear roles and responsibilities. For instance, many people will be entrusted withexecution, others with facilitation and only somewith decision making – it is critical that everybodyunderstands what is expected from them.
Phase I of theCore Transformation Journey: Starting Out
R
Craft the Implementation Strategy to Suit R iskPresent a Fair Assessment Rof Risk and Mitigation
R
 Appetite and Desired TimelinesHave a Plan for Managing Organizational Change

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->