Tqm & Bpr Project

8/7/2019 Tqm & Bpr Project

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A project report on

Implementation of B.P.R. in Bank Of India

Submitted to: Submitted by:S.N. Nandi RAHUL SHUKLA(20090203)

DIWAKAR PANDEY(2009017 )VINOD PANCHAL (200902 )Preteek gupta(20090197)

Sec-B


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Introduction:

Business Process Reengineering is the analysis and design of workflowsand processes within and between organizations. A business process is aset of logically related tasks performed to achieve a defined businessoutcome. Re-engineering is the basis for many recent developments inmanagement. The cross-functional team, for example, has become

popular because of the desire to re-engineer separate functional tasksinto complete cross-functional processes. Also, many recent

management information systems developments aim to integrate a widenumber of business functions. Enterprise resource planning, supplychain management, knowledge management systems, groupware andcollaborative systems, Human Resource ManagementSystems and customer relationship management systems all owe a debtto re-engineering theory.Bank of India was founded on 7th September, 1906 by a group ofeminent businessmen from Mumbai. The Bank was under private

ownership and control till July 1969 when it was nationalized along with13 other banks.Company Profile:

Bank of India is an established commercial banks with a pan-Indianpresence and is a century old having been founded on 7th September1906.The Bank is rated as one of the top five banks in the country, withover 2,650 branches across India and 23 foreign branches or offices withan asset base of over $26 billion. Corporate credit, trade finance, loansyndication, export finance, forex operations and all types of retail

banking are its forte.

The bank was the first Indian financial institution to open its branches inLondon in 1946. AfterWorld War II, it opened a branch in Tokyo, Japan on May 17, 1950.Soon after this the Osaka branch was established on 20th October 1950.


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With fifty-three years of experience in global banking it has strongassets and correspondent relations with leading international banks. The

bank believes in a total package approach to meet all financial and non-financial requirements of its customers.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50lakh and 50 employees, the Bank has made a rapid growth over theyears and blossomed into a mighty institution with a strong national

presence and sizable international operations. In business volume, theBank occupies a premier position among the nationalized banks.The Bank has 3101 branches in India spread over all states/ unionterritories including 141 specialized branches. These branches arecontrolled through 48 Zonal Offices. There are 29 branches/ offices

(including three representative offices) abroad.The Bank came out with its maiden public issue in 1997 and follow onQualified InstitutionsPlacement in February 2008. . Total number of shareholders as on30/09/2009 is 2, 15,790.While firmly adhering to a policy of prudence and caution, the Bank has

been in the forefront of introducing various innovative services andsystems. Business has been conducted with the successful blend of

traditional values and ethics and the most modern infrastructure. TheBank has been the first among the nationalized banks to establish a fullycomputerized branch and ATM facility at the Mahalaxmi Branch atMumbai way back in 1989. The Bank is also a Founder Member ofSWIFT in India. It pioneered the introduction of the Health CodeSystem in 1982, for evaluating/ rating its credit portfolio.The Bank's association with the capital market goes back to 1921 when

it entered into an agreement with the Bombay Stock Exchange (BSE) tomanage the BSE Clearing House. It is an association that has blossomed

into a joint venture with BSE, called the BOI Shareholding Ltd. toextend depository services to the stock broking community. Bank ofIndia was the first IndianBank to open a branch outside the country, at London, in 1946, and alsothe first to open a branch in Europe, Paris in 1974. The Bank has sizable

presence abroad, with a network of 29 branches (including five


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representative offices) at key banking and financial centres viz. London,New York, Paris, Tokyo, Hong-Kong and Singapore. The internationalbusiness accounts for around 17.82% of Bank's total business.

Reason for BPR Initiative:

For faster work Regulations of RBI and other banks

For secure data transfer

For making banking very easy for a retail as well as corporatecustomer

Scope and Time Frame:

Scope:

There was a huge scope when Bank of India went for Business ProcessReengineering (BPR) because all the banks were competing against eachother and RBI was bringing about a major change in the banking system

by introducing the core banking solution.Being in Indias banking sector, Bank of India has the responsibility ofserving its customers with adequate security. Like most leading banks, ithas taken all possible actions to beef up its IT infrastructure and securityset-up. It has taken care of all the areas in the organization, which arecritical from a security standpoint. Technologies such as biometrics andencryption are in use. Conducting regular drills at its data recovery siteand successfully recovering most of the IT system instantaneously aftera simulated disaster. Bank of India looks like a bank which never stopsworking regardless of the scale of the catastrophic event that it may face.This bank has much more to offer to its customers while it guns for aISO 27001 certification.


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Time Frame:

From year 2000 when TCS Bancs was used for Total Branch

Automation, Infosys brought up Finacle which was a Core BankingSolution for all the banks in India. So BPR was implemented by Bank ofIndia since 2000 and changed it a lot and still changing by introducingnew services.

Team Involved:

Seven consultants, including Ernst &Young, Boston Consulting Group

(BCG) and McKinsey have expressed interest to take up job ofevaluation and restructuring of the organizational set up of the bank. TheBoston Consulting Group assisted Bank of India. The bank short-listedthe consultants and its board of directors would soon take a decision onthe matter in its next meeting. The bank would recruit 3295 employeeswhich would include 2250 officers in various departments likeagriculture, statistics, and marketing among others. The bank hasobtained the approval for opening a subsidiary branch in New Zealand

and this is going to be launched soon.It has also applied for opening a branch in Canada. As a measuretowards financial inclusion, the bank has opened 40 lakh no-frillsaccounts and issued 1 lakh bio-metric cards. In Orissa five more

branches were proposed to be opened by March this year taking the totalto 134. This would further be increased to 150 by September and all thedistricts would be covered in the next 2-3 years. The bank has a businessof Rs 5250 crore with a branch network of 129 in Orissa.

Project Design:

The public sector Bank of India (BoI), which targets to take its businessto about Rs 12 lakh


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crore in next 5-6 years, mulls to implement Business Process Re-engineering (BPR) initiates to streamline its growing business.The board has in principle decided to adopt the BPR initiative to facecompetition. The evaluation of the proposals is going on and a decision

is going to be taken in the next board meeting of the bank.The bank has a branch network of 3159 at present. This would have to

be increased to about 5000-7000 over the next five years.To meet the credit need of the corporate sector and help in fasterdecision making on the loans, the bank would set up one corporate

branch in every state. Accordingly, a corporate branch of the bankwould come up in Bhubaneswar soon. The bank would recruit 3295employees which would include 2250 officers in various departments

like agriculture, statistics, and marketing among others.

Supporting Tools and Techniques:

Core Banking Solution

Core banking is a general term used to describe the services provided bya group of networked bank branches. Bank customers may access their

funds and other simple transactions from any of the member branchoffices.Core means "Basic", hence the basic services provided by the inter-networked branches of bank is called "Core Banking". Core Banking isnormally defined as the business conducted by a banking institution withits retail and small business customers. Many banks treat the retailcustomers as their core banking customers, and have a separate line of

business to manage small businesses. Larger businesses are managed viathe Corporate Banking division of the institution. Core banking basically

is depositing and lending of money.

Nowadays, most banks use core banking applications to support theiroperations where CORE stands for "Centralized Online Real-timeExchange". This basically means that all the bank branches accessapplications from centralized datacenters. This means that the deposits


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made are reflected immediately on the bank's servers and the customercan withdraw the deposited money from any of the bank's branchesthroughout the world.These applications now also have the capability to address the needs of

corporate customers, providing a comprehensive banking solution. Afew decades ago it used to take at least a day for a transaction to reflectin the account because each branch had their local servers, and the datafrom the server in each branch was sent in a batch to the servers in thedatacenter only at the end of the day (EoD).

Normal core banking functions will include deposit accounts, loans,mortgages and payments. Banks make these services available acrossmultiple channels like ATMs, Internet banking, and branches.

Core Banking solutions are banking applications on a platform enablinga phased, strategic approach that lets people improve operations, reducecosts, and prepare for growth. Implementing a modular, component-

based enterprise solution ensures strong integration with your existingtechnologies. An overall service-oriented-architecture (SOA) helps

banks reduce the risk that can result from multiple data entries and out-of-date information, increase management approval, and avoid the

potential disruption to business caused by replacing entire systems.

Core Banking Solutions is new jargon frequently used in bankingcircles. The advancement in technology, especially internet andinformation technology has led to new ways of doing business in

banking. These technologies have cut down time, workingsimultaneously on different issues and increasing efficiency. The

platform where communication technology and information technologyare merged to suit core needs of banking is known as Core BankingSolutions. Here, computer software is developed to perform coreoperations of banking like recording of transactions, passbook

maintenance, and interest calculations on loans and deposits, customerrecords, balance of payments and withdrawal. This software is installedat different branches of bank and then interconnected by means ofcommunication lines like telephones, satellite, internet etc. It allows theuser (customers) to operate accounts from any branch if it has installed


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core banking solutions. This new platform has changed the way banksare working.Gartner defines a core banking system as a back-end system that

processes daily banking transactions, and posts updates to accounts and

other financial records. Core banking systems typically include deposit,loan and credit-processing capabilities, with interfaces to general ledgersystems and reporting tools. Strategic spending on these systems is

based on a combination of service-oriented architecture and supportingtechnologies that create extensible, agile architectures.

Processes

The top priority in the banks security policy is that its operations shouldbe carried out in a secure and safe manner and that accessibility to thepeople in the organization as well as those outside should be provided ina secure and controlled way. For evaluating the state of the system,auditing is performed annually across branches.The bank follows processes such as information profiling whichinvolves classification of information into categories, such as, secret,confidential, corporate confidential, offices and public. Every new

process is scanned for its risks and vulnerabilities and various othersecurity clearance aspects. Only after it has been cleared by both theteams, it can go ahead and become the part of the organizations

business.

Systems

Bank of India has all the security related software and hardware like

anti-virus, spam filters, firewalls, content filters, storage securityinstalled and implemented. Using all these tools they seem to have astable organizational security structure. The bank uses all possiblevulnerability tools to ensure that its infrastructure is not vulnerable toexternal attack. It uses biometrics at all critical installations forauthentication and encryption is used across the board. A team of 10-15


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security specialists at the head office takes care of the important tasks.Apart from the core team, a team of about 150 people is taking care ofsecurity across branches.

Certifications

Bank of India is the first Indian bank to open a branch in London, a taskit accomplished way back in 1946. It is rated as one of the top five banksin India with more than 2,650 branches in the country and 23 abroadwith an asset base of over $26 billion

As far as certifications are concerned, Bank of India complies with RBIregulations and IT Act 2000. Bank of India is also in a process of gettingISO 27001certification. IDRBT Hyderabad handed the best bank forinformation security policy and practices award to Bank of India.

Outsourcing

The entire IT infrastructure management has been outsourced. Core

banking is outsourced and managed by HP. The ATM systems arehandled by eFunds.

DR/BC Disaster Recovery and Business Continuity) set-up

The BoI data centre set-up is located in Mumbai and forms the tier-one.The tier-two setup, the disaster recovery centre, is based in Bangaloreand is in a different seismic zone.The connectivity between these two centres and across branches is

established by means of dedicated leased lines that have been leasedfrom MTNL, BSNL and Bharti Enterprise.Branch links terminate at Network Aggregation Points (NAPs) that aresimultaneously connected to the BoI data centre in Mumbai and DRcentre at Bangalore. The interconnectivity is established based on point-to-point protocol using leased lines. Data travels through multiple leased


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lines from the data centre to the disaster recovery centre. The corebanking applications run on Finacle from Infosys and the database is setup using the Oracle Financial Service Architecture.The core banking applications run on multiple HP Superdome servers

while the storage solutions have been migrated to a HP StorageWorksXP1024 disk array. This is further connected through leased lines tovarious Cisco switches and routers deployed across the country with the

branches forming a hub and spoke topology that uses a central point toco-ordinate activities between various branches and the data centre.At present, the operations at about 2,433 branches across the country arecomputerized out of which 108 operate in a partially-computerizedmode. The bank is a member of the RBIs VSAT Network and has

installed about 39 VSATs linking strategic branches and offices addingredundancy during disaster.

Data Recovery

Bank of India has a data recovery site located at a different seismic zonefrom its primary site. The secondary site is a hot site that is almostidentical to the primary one. Bank of India can recover its entire core-

banking setup almost instantaneously. It periodically conducts drills atthe DR site.Bank of India (BoI) has started a business process re-engineering (BPR)exercise, encompassing centralization of operations not requiringcustomer interface, restructuring of the organization in view of changing

business requirements, and putting branches on the core bankingsolution platform. Bank of India has completed work on product

portfolio review (PPR), and small and medium enterprises (SME)strategy. Now bank is focusing on the last module BPR. The Boston

Consulting Group is assisting Bank of India in this exercise.

The solutions deployed

If the new infrastructure was not put in place, it would have jeopardizedits productivity and revenues. Moreover, migration from the existing


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facility to the new one was dependent on the network implementation.The facilities in India are connected by multiple MPLS circuits. Thesecircuits are on the Trans-Atlantic and Trans-Pacific communicationcables routed from United States to the facilities in Bangalore and

Hyderabad. The Trans-Oceanic communication cable lines are handledby MCI and AT&T.The network also supports automatic re-routing and inter-connectedoperations for the facilities in Bangalore and Hyderabad.The networks DR objectives were achieved through the use ofredundant network equipment and communication links. Thedeployment complemented First Indian to achieve its expected linkuptime of 99.99 percent for various international transactions and

business processes.

Technology used

The switching facilities included Cisco Catalyst 6506-E for coreswitches. Ciscos Catalyst 6513 and 6509 were deployed as accessswitches while Catalyst 4506 forms a Demilitarized Zone. The accesslayer switches helped First Indian harden its system. The server farm

switches were Cisco Catalyst 6509. Internet and WAN routing wasaccomplished through Cisco 3825 series routers. Security was framedand designed with flexibility for future needs and control that could behandled at the access or core layers. The enterprise security aspect iscovered using Ciscos PIX-535-UR-BUN and PIX-535-FO-BUNfirewalls with failover.Remote connectivity was established through VPN Concentratorsthrough the use of Cisco VPN 3030. Network administrators can enforcecorporate assigned policies through Cisco Secure Access Control

Server.

Benefits

It took three months to complete the deployment. During that time theIP Contact Centre routed the calls from corporate global centres in the


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United States and across Asia and India. It is now being routed by theCisco Unified Intelligent Contact Management. The main managementof call centres is in United States while the calls are being handled bycustomer care representatives in Bangalore on various Cisco 7960 IP-

based phones.

Future expansion

First Indian handles 800 terabytes of data and this is expected to expandwith the business growth. This has led the company to spread itsoperational wings to other locations.

First Indian is looking to set up its base in other Indian cities as well.This will also mean further extension of its network architecture.

Automated against disaster

The Bank of India wanted to migrate to a system that would automateall its branches across the country. The bank also needed to introduce acore banking system and centralized data system since the data access in

each branch was limited to city level servers. This was why BoI decidedto shift from branch-specific automation to an overall bank automationalong with business continuity and disaster recovery implementation,according to P A Kalyan Sunder, GM, IT.BoI currently has more than 2,000 branches across the country. Out ofthese 1,000 are considered as strategic branches. To fulfill itsdeployment objectives BoI chose HP as consultants and networkintegrators for the project.

Solution and Technologies Deployed

The higher level management decided to tackle change managementissues with determination and by ensuring continuous training to itsemployees. The training on various banking technologies and businessaspects was jointly executed by BoI and HP.


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The BoI data centre set-up is located in Mumbai and forms the tier-one.The tier-two set-up forms the disaster recovery centre and is based inBangalore. The DR centre lies in a different seismic zone. Theconnectivity between them and across various branches is established

with dedicated leased lines. These lines are leased out from MTNL,BSNL and Bharti Enterprise.Branches from across the country terminate at various NetworkAggregation Points (NAPs). The NAPs are simultaneously connected tothe BoI data centre in Mumbai and DR centre in Bangalore. The inter-connectivity is established based on point-to-point protocol using leasedlines. Data travels through multiple leased lines from the data centre tothe disaster recovery centre. The core banking applications run on

Finacle from Infosys and the database is set up upon Oracle FinancialService Architecture. The entire core banking applications run onmultiple HP Superdome servers while the storage solutions have beenmigrated to a HP Storage Works XP1024 disk array.This is further connected through leased lines to various Cisco switchesand routers deployed across the country in various branches forming ahub and spoke topology. This topology uses a central point to co-ordinate activities between the various branches and the data centre.

Apart from project management, HP also holds the responsibility ofmanaging the banks infrastructure which includes mainframes, Weband data servers, network devices and desktops. The responsibilities alsoinclude upgrading the applications and the software for core bankingapplications, telephone banking and Internet banking. The deploymentand implementation leaves enough room for future increase in customer

base and up gradation of deployed systems and network.

The benefits

The IT deployment and transformations in core banking and datawarehousing have helped BoI to reduce its Total Cost of Ownership.The deployment has almost achieved its prime objectives of shiftingfrom branch-centric automation to bank automation withoutcompromising on disaster recovery and business continuity processes


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The deployment has complemented BoI to update its database throughdata mirroring and remote auto backups. Management InformationSystem and various critical functions of controlling offices have beencomputerized.

At present, the operations at about 2,433 branches across the country arecomputerized out of which 108 branches operate in partially-computerized mode. The bank is a member of the RBIs VSAT Networkand has installed about 39 VSATs linking strategic branches and officesadding redundancy during disaster. The IT deployment andtransformations in core banking and data warehousing have helped BoIto reduce its Total Cost of Ownership. The deployment has almostachieved its prime objectives of shifting from branch-centric automation

to bank automation without compromising on disaster recovery andbusiness continuity processes.

Future plans

The core banking application is deployed in 1,000 branches currently. Itwill deploy at all the branches across the country, eventually. BoI is also

planning to introduce online cheque truncation facility for its customers.Cheque truncation is the use of electronic (scanned) images of a cheque

for processing. This should further scale up the IT infrastructure andoperations at the bank.

Impact of the project as is: and "to be":

The Bank of India has successfully implemented the core bankingsolution in all branches. They are using Finacle of Infosys andcarrying out their operations very fast and customers are happywith the quick service of the bank

The technological advancement has the changed the working ofBank of India totally but still the human resource i.e. employeesneed to be more updated than before to provide a better service.

Infosys introduced Finacle which changed the way of working forbanks. Now, account opening is done on the same day in Bank ofIndia. If compared to earlier, it took one week at least.


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Internet education should be imparted to the common citizens sothat they can learn the benefits of technology which can save timeand money.

Though BPR is being implemented yet Bank of India being apublic sector bank is facing tough competition from private bankslike ICICI Bank, Axis Bank due to certain discrepancies. It shouldtry to improve its image over other banks whether public or

private.

Bibliography:Business process change: reengineering concepts, methods, andtechnologies By Varun Grover,William J. Kettinger

http://www.business-standard.com http://www.banknetindia.com http://www.financialexpress.com

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Tqm & Bpr Project