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PROJECT REPORT ON MUSLIM COMMERCIAL BANK
PREPARED BY: Mehreen Raza (419.06) Quratulain Riaz (146.06) SUBMITTED TO: Ms. Nida Mumtaz DATE OF SUBMISSION: 27-april-2009
INTRODUCTION TO THE BANK
MCB formally known asMuslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947. The bank was established with a view to provide banking facilities to the business community of the sub-continent. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto.This was the first bank to privatized in 1991 and the bank was purchased by a consortium of distinguished Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake in the bank. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people. In 2005, the management of the bank changed its name from Muslim Commercial Bank Limited to MCB Bank Limited (MCB). The reason was to explore international markets for the bank as it was facing resistance, especially from Western Countries to avail a license, which partly had something to do with the banks name. Later, MCB became the fourth Pakistani company to be listed on the London Stock Exchange. MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 60 million. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.
THE VISION AND MISSION STATEMENT
Challenging and changing the way You bank
MCB bank’s team, of committed professionals is dedicated to maintaining long-term customer relationships through outstanding service and conveniance
VALUES OF MCB
We are the trustees of public funds and serve with integrity & commitment. Ethical behavior is of critical importance to us. We adopt full compliance with internal and external policies and procedures, operating within the legal framework
We continuously seek to exceed our customer’s expectations, forging and maintaining long term relationships
We strive to be the market leaders in innovative products and services offering customized financial solutions with flawless execution
The diversity of our people is our strength. We inspire and challenge each other – working together to achieve synergy
Our people are our most valuable asset. We are committed to a result oriented culture. Our goals are clear and merit is the only criterion for reward
As responsible citizens we contribute to the social welfare of the community we live in
THE FINANCIAL CONTROL DEPARTMENT
A financial control department makes sure that all financial transactions comply with state laws, rules, and regulations. This Department is responsible for centrally processing and recording the transactions. This department also ensures that enough funds are available before the bank engages in a commitment. This department is also responsible for generation the annual reports in compliance with the company’s ordinance 1984. The Financial control department uses the Oracle GL as its information system that our group has selected as a part of our assignment for the Management Information System (MIS) course. Oracle GL is a product of the Oracle E-Business Suite which the organization has acquired as its platform for managing its business transactions and maintaining records. Oracle General Ledger works seamlessly with other Oracle EBusiness Suite products to drive better decision-making, sustainable financial discipline, regulatory compliance, and optimized business processes. These are what some elements of the Oracle General Ledger look like (sources: http://www.virginia.edu/integratedsystem/howdoi/HTML/NAV3018U.htm )
THE PREVIOUS SYSTEM AND THE COMPANY’S NEED FOR A NEW SYSTEM
The Financial Control Department before switching over to Oracle E-Business Suite’s Oracle GL system used an in-house developed system called “Financial Control System”. This was implemented so as to meet the business needs of the company at that time, however as the company expanded and it’s branches increased at a phenomenal rate and it started to offer new services, the Financial Control System could no longer meet the complex needs of the department. Apart from this, there were the usual system break downs which resulted in increased cost (time cost because it required some time to repair the system and monetary cost because it required having separate personnel for training new employees).A need was felt that a new system had to be brought in to the department that would integrate smoothly with the organization and the departments information management needs and at the same time also be reliable. Therefore, after a period of searching and evaluating various information systems, the company bought a new information system, the “Oracle Financial Suite” and one of the elements of this financial suite was Oracle GL which was perfectly suited for the Financial Control Departments requirements. This system was adopted by the organization because it allowed the company to cope with its changing requirements and this software gave the company several options that were not previously available in the previous system. This system also enables the organization to better organize its operations than before. The biggest advantage of this system over the previous one was that it is compatible with other elements of the Oracle Financial Suite, hence the work done in other departments can be smoothly integrated with Financial Control Departments tasks and vice versa.
BENEFITS OF “ORACLE GL” TO THE ORGANIZATION/DEPARTMENT/END USERS AND ITS SALIENT FEATURES
The Oracle GL provides to its end users a friendly interface and hence the end user does not require specialized training to operate this system (The end users can know how to user this system with minimum of training.)This system enables the department to generate accounting reports according the accounting standards of Pakistan and according to the specific requirements of the bank. The system makes it easy to customize reports the way they are needed which helps the bank and the department adjust to any procedural or any other changes that may need to be implemented. For example if there are any changes in accounting laws or procedures that the bank may need to implement, the system easily facilitates that. This system also has the capability to fulfill most of the requests of the end users by default. The Oracle GL provides high Data Integrity by making sure that the data that is saved will be available for future use and will not have any errors. Data retrieval or data recovery is also made easy by the system and the end users of the system are saved from spending too much time or effort in trying to recover data that may normally be hard to find in other systems. It also reduces the occurrence of a system failure to almost ZERO (according to the person we interviewed) as there hardly are any cases of system crashes or any other issues with the system. It also has a Relational Database Management System that stores data in the form of related tables. Relational databases are powerful database management systems because they require few assumptions about how data is related or how it will be extracted from the database. As a result, the same database can be viewed in many different ways. (Sources: http://www.webopedia.com/TERM/R/RDBMS.html).
INFORMATION PROVIDED BY THE SYSTEM
This system enables the department in making General Ledgers for the bank, completing its transactions, maintaining accounts and balances of the bank and its customers and with the help of that it helps the department to balance the accounts and generate Financial Statements (the MCB generates the following financial statements with the help of this system: Balance Sheet; Profit and Loss account; Cash Flow statement and Statement of Changes in Equity). The system then saves and documents all these reports and financial statements into its database for future use and referencing. This information is not only useful for preparing reports and financial statements for the bank but is also used in times such as making audit reports, company reports, etc.
END USERS OF THE SYSTEM AND THE DEPARTMENT IT CATERS TO
Since Oracle GL is a financial software system designed to for an organization’s financial needs and caters to an organization like MCB’s financial needs. Its end users will be people related to finance. In this case, employees in MCB’s Financial Control Division are the end users of the system. All the employees in this department have been properly trained to use this system. The system itself has also been highly customized to suit all the needs of the department and meet its requirements in an efficient and cost effective manner.
TRAINING OF THE END USERS
The training involved people from Oracle visiting the organization which was the MCB head office. These sessions were held at MCB only due to the fact that they could accommodate space for the sessions, and hence theses sessions were not held outside the organization as is usually the case with other organizations. The training sessions resembled much like the classroom format. Attendants were given classroom like training lessons regarding the system. They were given books and CDs for studying at home too. Since the system is meant for only the finance department, only people with financial and accounting expertise could attend these sessions. They were, however, accompanied by technical consultants, functional implementers, and Database Administrators (IT personnel). While these sessions were going on, the attendants were not assigned with any work. Coming to the organization, they would directly go to these sessions and not to work. In this course, attendants learned the basics regarding the table functionality of the core Oracle General Ledger. This course also taught the Applications Basics and centered on how to use the basic Applications tools to find information, as well as describe concurrent processing, flex fields, alerts, and Oracle Workflow Builder. Attendants learned how to read and understand Entity Relationship Diagrams (ERDs), and Oracle Applications' Applications Technology ERDs. This course will also address the standards for using these interfaces. • Basic technical functionality of the core Financials applications • Technical overview of Oracle General Ledger. • Customers, and Assets • Major business functions associated with the financial applications • Flow of application information through major tables
- The objectives of the sessions were the following
• • • • Describing the Oracle General Ledger Identifying the primary business functions that can be performed using each Oracle Financials application Describing the Oracle Financials applications integration and data flow among applications Over viewing the default account sources, multi-organization architecture, and the use of Multiple Reporting Currencies
- Lastly, the attendants were made familiar with the following:
• • • Major business functions of Oracle General Ledger Oracle General Ledger entity relationship diagrams related to its major functions Major tables by business function
- The attendants returned as soon as the training sessions ended, ready to carry out their
tasks with the new system.
TECHNICAL SPECIFICATIONS OF THE INFORMATION SYSTEM
Hardware – HP Blade Server Software – Oracle e-Business Suite R12 Operating System – Linux Environment Input – Financial data Output – financial statements like ledgers, balance sheet etc. Processing – Batch processing Storage – both Hot-sites and Cold-sites (to be discussed later in the report)
SECURITY OF THE SYSTEM
- User authenticity:
As mentioned earlier, the system is restricted for use by the financial personnel, therefore only people from the Financial Control department. Also, since its use is only finance specific, others departments have nothing to do with it. Having said that, there are passwords for the end users; hence passwords ensure security and control.
- Physical access:
Physical access is made limited by locked server rooms, sign-in sheets, etc.
- Function security:
• Developers Register Functions o Developers can require parts of their Oracle Forms code to look up a unique function name, and then take some action based on whether the function is available in the current responsibility. o Developers register functions. They can also register parameters that pass values to a function. For example, a form may support data entry only when a function parameter is passed to it. o Typically, developers define a menu including all the functions available in an application (i.e., all the forms and their securable sub functions). For some applications, developers may define additional menus that restrict the application's functionality by omitting specific forms and sub functions. o When developers define menus of functions, they typically group the sub functions of a form on a sub function menu they associate with the form. System Administrators Exclude Functions o Each Oracle Applications product is delivered with one or more predefined menu hierarchies. System Administrators can assign a predefined menu hierarchy to a responsibility. To tailor a responsibility, System Administrators exclude functions or menus of functions from that responsibility using exclusion rules. o If a System Administrators cannot create the desired menu by applying exclusion rules to a predefined menu, they can define a new menu hierarchy. In this case, they construct their menu hierarchy using forms and their associated menus of sub functions. In other words, System Administrators should leave the developer-defined associations between forms and their menus in tact. Available Functions Depend on the Current Responsibility
o o o
When a user first selects or changes their responsibility, a list of functions obtained from the responsibility's menu structure is cached in memory. Functions a System Administrator has excluded from the current responsibility are marked as unavailable. Form functions in the function hierarchy (i.e., menu hierarchy) are displayed in the Navigate window. Available sub functions are accessed by working with the application's forms.
• Visibility of Excluded Functions Some sub functions are associated with a graphical element, for example, a button, and their exclusion may result in: o the dimming of the button o The absence of the button.
- Other sub functions may not correspond to a graphical element, and their exclusion
may not be obvious to an end user.
BACKUPS - MCB has both cold sites and hot sites for its new financial system – the Oracle General
- Since it’s not a multinational organization, it has its hot sites in Pakistan only. - The cold sites are the various regional headquarters in the country. - The hot site is the main headquarter in Karachi at the I.I. Chundrighar Road. - Backups are scheduled on a daily bases in the off-peak hours (late nights). - This time of the day has been selected due to the fact that during the day the systems
are overworked enough to be able to do in real time. Hence, batch processing suits this organization’s culture.
- The data stored would include the financial data converted into statements and ledgers
PROBLEMS WITH THE SYSTEM
In our interview with the bank’s employees who worked on the system, it seemed they were very satisfied with the system and considered that the Oracle GL was a perfect fit for their department. The IT department too was very satisfied with the Oracle software and told us that the number of complaints that they previously used to receive from their employees when they were using their in-house software was very high. Ever since the introduction of Oracle GL, those complaints have almost entirely disappeared because of which the efficiency of the departments has also risen. So for the end users of the organization, the software had no flaws other than that some employees thought that the software could be further customized in a better way to suit their business better.
RECOMMENDATIONS AND FUTURE PLANS ABOUT THE IS
Although Oracle has provided MCB with a highly customized Information System to suit its business needs, the Financial Control Division feels that Oracle GL has not been customized enough to suit their needs according to their specific needs. Therefore one recommendation that is notable and must be pointed out is that if the company purchases a new version of Oracle GL, it should be further customized in a better way with the specific needs of the Financial Control Division in mind. System enhancements over time might also need to be carried out that could involve upgrading the server, storage and database systems. As for the future plans of the Company regarding the information system, it seems that the company is satisfied with the system and willing to retain it. It will purchase new versions of the Oracle E-Business Suite as soon as they are released. In the future, MCB also has expansion plans and is expected to open branches and start operations in some foreign countries also. When that happens, a great deal more will need to be invested in the company’s information system and it would remain to be seen whether the company would continue using the current information system or switch to some other information system.
The Oracle E-Business Suite is a top of the line application software used by businesses around the world. Oracle is a software company renowned for providing its customers with excellent software’s that provide fast, easy and efficient business information and support systems which play a vital part in operational running of a business and coming up with improved business solutions. MCB aims to keep its business in line with the top banks and corporations of the country and therefore, it has chosen Oracle E-Business Suite as the application software that manages and supports its business applications. The Oracle GL has the important task of maintaining General Ledger Balances of the bank from around the country and generating reports and financial statements on a daily basis.
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