RBC Royal Bank: Service Platform Implementation

BITC – B Group 6

Contents
1
2
Introduction

Current Information System

3
4 5 6

The Service Platform Project

Project Initiation

Project Progress

Implementation

Introduction
 RBC Royal Bank or RBC Financial Group is the largest financial institution in Canada, as measured by deposits, revenues, and market capitalization

2002 1999 1901 Renamed as Royal Bank of 1864 Canada Merchants’ Bank of Halifax Announce d plans to cut $400 million & lay off 6000 employees Became the largest Canadian Bank (assets - $328 bn, market capitalization - $36.2bn)

Current System  1961 – RBC became the 1st Canadian bank to install its own computers  1967 – RBC was the 1st mover in the Canadian banking industry to provide computer-processed customer transactions  1972 – RBC installed 14 ABM in Toronto  1980 – Installed at least 1 ABM in each branch across Canada  1985 – Each ABM processed 10000 transactions on an avg every month  1994 – Started telephone banking services  1995 – Clients had multiple channels to do business with RBC Challenge – Lack of Integration .

it is impossible to run multiple applications simultaneously .  Features:  Ran on DOS platform  Had separate applications for: » » » » Client Financial Transactions Foreign Exchange Maintenance Transactions Client demographics and account inquiries  Since DOS was not a “Multitasking” Operating system.CSR Workbench  The CSR Workbench was developed in 1980s.

Example of multiple transaction Customer came to the branch but forgot his account number • CSR has to close the current application and open Step 1 the application for searching names • Once the account number is identified its written Step 2 on a piece of a paper and the application is closed • The CSR would then reopen original application in Step 3 order to post the transaction Even for simple transactions the CSR had to go through multiple applications. like 80% of customers wanted to check their balance before proceeding with the transaction .

the CSR role had become a blend of service and sales activities.Changing Role of CSR  By 2003. they had a targets to meet now Executing transactional banking Now expected to promote various banking products and refer clients to personal bankers for other products  The CSRs were supported by the CRM system which had its own limitations like: • Had only 39 character field to highlight “offers & opportunities” • Provided minimal information • Did not have the capability to update after the offer has been discussed and new offer can be displayed .

The Service Platform Project  Goal – Replace hardware & software used by CSR with a state-of-the-art paperless transaction system  It was one of the numerous projects in RBC to create a comprehensive e-business architecture  It all started in 2000 when attempts were being made to reduce RBC’s proof processing costs to that of its competitors – BMO financial group & TD bank financial group  Investigations revealed that RBC incurred higher cost they did not follow the same proof process as TD and BMO  This resulted in increased work effort by Symcor. the outsourced proof processing partner .

Manual Process Flow Withdrawal Process Step 1 • Prepare a manual withdrawal slip & request the client to sign it as records of funds withdrawn Step2 • CSR(using CSR financial) posts the withdrawal to client’s account. draws a line on the slip to confirm Step 3 • The withdrawal slip is placed in the bundle of work destined for reconciliation centre Step 4 • The next day the centre verifies accurate posting of the transaction .

The previous failed attempt  In 1996 RBC made an attempt to replace its DOS based system with IBM OS/2  In the new system clients were given new swipe bank cards with PIN instead of old signature cards  The system had issues:  The concept of Swipe and Pin did not go down well with the consumers  IBM OS/2 was slower than DOS  The slower speed was an issue with both CSR and customers The project was scrapped because  Its development process had taken longer time than expected  The system required the customers to change their banking behavior too dramatically .

Project Initiation • November. 2001 – Business case was approved • Promised Benefits: Improved efficiency of proof processing Simplifying branch transactions Ensuring errorless transaction Enhancing sales and service support .

Cost Associated  Cost incurred due to : 1) new hardware and software 2) time of bank personnel on the project team  Total estimated cost .$15 million  Duration of payback on investment 4 years .$50 million  Annual savings (favorable scenario) : $12 .

Selecting a System Packaged Solution Internal Developm ent Proposal from IBM Porting from DOS to Windows NT .

clearing system very different from Canada . thousands of implementation done  System development in guaranteed time  Product fit well with needs of CSR’s Issues:  Architecture server based .S. RBC trying to move away from this  U.Packaged Solution Features:  Vendor – U. based.S. specialists in teller solutions software . niche player .

Internal Development Features:  Traditional mode for RBC  Allow customization to the specific needs and experiences  Tailor – made system for RBC Issues:  High risk in terms of meeting timelines for deliverables Porting from DOS to Windows NT Features :  Using offshore resources  Relatively inexpensive alternative Issues:  No additional functionality provided Strongly Recommended System : IBM Solution .

keyboard and printer  Pre-installation branch visits to each site were conducted by a vendor  Numerous counter configurations throughout the branch network required  Decided to purchase hardware that was of industry standard size .Hardware Selection  8000 wickets in 1100 branches  Each wicket – monitor .

RBC Banking bis Group software lead . managing the design and implementation planning 3) Liagen Stangenberg Program Manager Service Platform . Business & information solutions 2) Jan Bremner Program Manager Service Platform .RBC Banking bis Group hardware lead . implementation planning 4) Jannie Hayworth Program Manager . developed and managed fully integrated project plan facilitated weekly status meetings . RBC Banking bis group overall program manager . overseeing preinstallation visits and inventory database .Project Leadership Project Leadership  • •             Project Team Steering Committee Project Team designing and executing implementation plan Core Members: 1) Ron Brandow Senior Manager . issues tracking and escalation . providing hardware specifications.

Steering Committee  Members both from RBC and IBM  Monthly review of project status and deal with critical decisions  Financial reviews – rigorous to ensure costs and scope remained in line with the approved business case .

Project Progress  17 system developers from India brought by IBM to expedite the development  Total cost for human resource hired economical and timely than acquiring local expertise Biggest Issue: Major mismatch between project costs(50%) between signing the document of understanding (DOU) and reaching Commitment to deliver (CTD) milestones Reason: Initial estimates for interfacing the developed systems to all the required systems was not taken into account .

capitalization period on hardware could be extended to 6 years from 4 years  Project was rebaselined taking into account the above changes .Solution  Reassessment of the business case in light of what has been learnt so far  Aggressive price negotiation on hardware costs reduced the initial estimation .

Another Challenges 1) Managing the scope of project  Debate on whether to include paperless e-bill in the initial development  It was put on the back burner and planned for development in 2005 2) Problems in usability  Company called Interpix – evaluated the system from usability perspective  Interacted with the system and resulted in designing a simpler version of the interface .

2003  Implementation and training .Proposal from IBM Features :  System to be developed in company’s webSphere platform  Actual development responsibility – IBM  Requirement Analysis(using RAC) – shared between IBM and RBC  Primary responsibility for business requirements – bis group  Integration of the system with other RBC system and testing – RBC IT Team  Projected completion time – September .responsibility of bis team .

Implementation Plan Decisions to be made:  Timing of the hardware and software implementations  Geographic roll out of the system  Overall scope of the project  Figuring out actual implementation  Decisions on software  Change management .

Hardware & Software Implementation Two methods:  Implement both simultaneously • Benefits: – Single period of disruption for the branches – Less disruption for clients – Savings will be realized quickly  Two stage approach • Benefits: – Limit on the amount of change taking place at any one time – Create momentum for the project • Challenges: – Hardware should be compatible to both old and new way of conducting transactions – Would require another level of testing in the field – No benefits would be realized till software is installed .

Geographic Roll Out  Historically. new programs were introduced at the same time across different regions  This could be implemented by beginning with the largest branches in the busiest regions  Benefits:  Obtaining business benefit would depend on the volume of transactions processed by the new system  Financial targets of the system could be met sooner .

Overall Scope of the Project  Four requests to be considered regarding the overall scope of the project:  A change to the CIT’s to accommodate the future design of Visa cards  Bandwidth upgrades to various branches  Network operating system conversions  Replacement of cash dispensing units .

Actual Implementation  Approaches available:  Hire implementation officers • People brought in from various areas within the bank • Stay for 24-36 month period • Trained and used during roll out  Outsourcing  How much internal expertise required? .

RBCnet by uploading learning materials  How to design learning material? .Software Related Decisions  Training 10000 CSR’s  Gathering CSR’s and giving classroom training without interrupting daily operations  Make use of RBC intranet.

Change Management  How well this new system would be accepted?  Manage change for CSR’s as well as Clients  When to inform clients? .

Akhil Midha (12DM-017) Divya Chawla(12IT-007) Atul Rajan(12IT-005) Presented by: Bhawya Bhawam(12DM-045) Rahila Surti(12IT-013) Ritesh Jain(12IT-015) .

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