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Core Banking Transformation:A Roadmap to a Successful Core Banking Product Implementation
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 1
Key reasons for new core banking solutions:
• Legacy systems do not allow banks to manage the growth in business.
• A disparate set of application components undermines the efficiency of the overall solution architecture.
• Loss of competitive advantage.• Governance, risk and
compliance issues.
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 2
Sponsorship and Stakeholders An effective and successful sponsor: • Ensures required documentation• Is involved in the solution
selection process • Ensures management support
for budgets and resources • Seeks cooperation of stakeholders• Ensures communications and meetings
are result- and task-oriented • Monitors and resolve post-implementation issues• Provides direction and guidance from initiation to
closure - PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 3
TOM Advantages: • Provides a holistic view of the overall operations• Provides an IT governance model aligned
business objectives • Improves processing efficiencies• Facilitates better operational
risk management • Improves the return
on investment
Proposed Target Operating Model (TOM)
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 4
The Requirements Document
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 5
Change Management • Changes are all-encompassing.• Processes, procedures, policies, controls, roles,
service levels and business strategies will need to be addressed and involved in the project from the beginning.
• User involvement with requirements definition and scope definition will help implement change.
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 6
Phased Implementation Approach
Three Phases• Phase 1 - Applications operated with
minimum integration.• Phase 2 - Mission critical or transaction
processing applications• Phase 3 - Data warehouse applications, non-
regulatory applications
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 7
Phased Approached Advantages
• Helps realize the investment from stakeholder
• Demonstrates progress by the project team and stakeholders
• Increases acceptance from stakeholders• Better risk mitigation
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 8
Data Migration The bank must ensure:• A knowledgeable team and sufficient team
members to the manage scope. • Appropriate Data cleansing/purging from
source systems. • Data definitions of both the source and
target systems should be documented. • The mapping algorithm is made. • Business user involvement is required.• Validation occurs by Business user group. • Test scripts are required at various stages of
testing. - PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 9
System Integration• Core banking solution comprised of several
applications and interfaces.• Form an integration team for mapping end-to-
end processes.
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 10
Testing of the Target Solution To avoid pitfalls:
1. Allow sufficient time for testing. 2. Make certain acceptance
criteria is discussed in detail.3. Define clearly the entry and
exit criteria for each testing cycle. 4. Ensure link between vendor’s software unit and the
bank’s development servers. 5. Create numerous test cases and adequate testing
cycles with sufficient time for review. 6. Plan stress and a performance tests in the production
environment. - PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 11
Testing of the Target SolutionCont.
• Third-party testing vendors– Management must ensure:• The business users are involved• The testing company supplements
the effort of the business users• The ownership of the testing phase
and the eventual sign- offs• The bank’s staff does not lose out on the knowledge
gained during the testing• The monitoring and control of the testing process work
harmoniously - PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 12
Production Stabilization Period
- PMI Virtual Library | www.PMI.org | © 2008 Kannan S. Ramakrishnan 13
Conclusion
Key steps in implementing a core banking system:• Sponsorship and Stakeholders • The Proposed Target Operating Model (TOM) • The Requirements Document • Change Management • Phased Implementation Approach • Data Migration • System Integration • Testing of the Target Solution • Production Stabilization Period- PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 14
Q&A Open discussion
http://alfisig.wordpress.com/- PMI Virtual Library | www.PMI.org | ©
2008 Kannan S. Ramakrishnan 15