Implementing_Flexcube.ppt

FLEXCUBE Implementation Case StudyApril 15 – 16, 2008

Agenda

Overview of Bank

Reasons Allianz changed their core system

Problems Allianz faced previously

Preliminary Business Requirements

Scope of Implementation

Project Details

Transition Approach

Implementation

Business Model, Business Strategy

Infrastructure Management

Post Production Support

Banking community

Implementation Take-Away

Benefits of FLEXCUBE introduction

Higher ROI, lower TCO

Program Organization Structure

Milestones and Phases

Summary

Overview of Bank

Allianz bank is the tenth largest bank in Bulgaria, by assets, and sixth by number of locations. It has a large coverage nationwide and has attracted some of the largest corporate clients (Allianz Holding – the largest financial institution in Bulgaria) as well as over 150000 retail clients.

Size of bank• Asset Size – over 900 Mil Euro• Number of branches – 126 locations, 95 branches

defined in FlexCube• Number of customers - 170 000 (of which 20 000

corporate & 150000 retail)• Number of accounts 200 000

Overview of Bank Products offered by the bank

• The full range of products for retail, corporate, treasury, private investors, etc.• A set of different channels for offering bank’s services & products in “real

time” – Cards, VISA, MASTER, internet banking – retail & corporate, SMS/e-mail notifications, Mobile phone banking, Scoring, etc.

Reasons for the implementation• Migration from existing platform due to old legacy system being unable to

support the banks rapid expansion (doubled, in asset size, in one year)• Existing platform did not support integration with new channels – internet

banking, on-line card authorization, mobile phone payments, etc.• Need for a more robust platform and availability of resources for its

support and further development.• Need for quicker time for market – fierce competition in a rapidly

expanding financial services market.• The bank’s desire to change the bank’s business and operational model

from de-centralized to centralized. Historical Note

The old bank system was OSBI, local Bulgarian system developed in the early 90s by a Bulgarian vendor. Allianz was the last bank to retire it.

Reasons Allianz changed their core system

The bank desired to modernize their business model and processes to provide efficient, less time and resource consuming, products and services.

The bank needed a standardized IT platform and infrastructure in line with Allianz Germany IT policies, procedures and requirements Old legacy system, unable to integrate in real time with satellite systems, Cards, Internet banking, SMS, Mobile phoneNon-scalable solution, unable to handle the increase in usage Lack of functionality desired, e.g. automatic provisioning, auto loans liquidation, etc Very slow time to market – new products from 3 to 6 months minimum vs. 3 to 8 weeks currently. No available resources for system upgrades (the only bank on that system)

Problems Allianz faced previously

Numerous problems, such as:

Inability to integrate with new electronic channels, scoring systems, etc. Inability to introduce new competitive products to market, such as flexible mortgage, consumer loans, and various depositsInability to process in “Real time” card and internet banking transactionsInability to produce in short time sophisticated reporting and analysis both for internal and external usage

Preliminary Business Requirements

Allianz bank started in early 2006. Looking for:

Easy integration/interfacesDepth and breadth of functionality Quick time to marketInternationally recognized vendor/solution with local presence in BG

Historical NoteStarted Oct. 2006 by introducing Online authorization module (developed by Sirma/i-flex, using FlexCube as a master authorization system)

Scope of Implementation

Lines of business Retail

• Current Accounts

• Savings Accounts

• Term Deposits

• Retail Loans

• Structured Deposits

• Cheques

• National & International payments, SEPA compliance

Corporate• Trade Finance – LC, LG, Bills, Collections

• Corporate Loans

• Treasury – FX, MM

Project Details

Core Solution Stack implemented

Our Role• SI involved – Sirma Business Consulting• Partners involved (from i-flex side) – Sirma Business

ConsultingRelationship between i-flex, SI, partners and bank – back to

back or independent contract • bilateral contracts between Allianz bank and I-Flex, Sirma

and I-Flex, and the bank with SirmaRoles and Responsibilities of different parties

• Sirma – system integrator and implementer• I-Flex – technical support and consultancy

Transition Approach

Implementation approach • Big Bang approach with extensive stress testing and three

full mock conversions. • The bank was already running on one system and splitting

into branches was difficult, splitting of national settlement, central bank reporting, reconciliation and consolidation would have been very difficult and resource hungry.

• The same would have prolonged the time for implementation and contradict the bank’s desire for full conversion and re-organization within 12 months.

Implementation• High level time lines for different phases

• PWT – 5 weeks – done by Sirma• GAP analysis – 6 weeks – done by Sirma• System initial set-up and parameterization – 14 weeks – done by Sirma• HW sizing and procurement (in parallel) – 13 weeks – done by Sirma and

IBM• IT infrastructure and comm. lines upgrade and set-up (in parallel) – 22 weeks

– done by Allianz bank• System’s parameter and products testing – 12 weeks – done by Sirma and

Allianz bank• Additional set-up and parameterization – 2 weeks – done by Sirma & i-flex• Systems Integration testing (incl. parameters and products) – 6 weeks – done

by Sirma, i-flex and Allianz bank• Train the trainers (in parallel) – 4 weeks – done by Sirma• Mock migrations and stress testing – 6 weeks – done by Sirma, i-flex and

Allianz bank• End user training (in parallel) – 7 weeks – done by Allianz bank• Post Go-live support – 8 weeks – done by Sirma & i-flex

Implementation

• For each phase• Deliverables of the phase – Documents and sign offs for each of the

above phases• Resources (from i-flex as well as bank) involved – numbers, types

(technical, functional, PM, testers, SME etc)• i-flex technical – 10 man months• Sirma technical – 60 man months• Sirma functional – 80 man months• Sirma PM – 12 man months• Allianz bank PM – 12 man months• Allianz bank full time project team – 36 man months• Allianz bank part time project team – 90 man months

• Oversight management strategies used• Project sponsors (bank’s CEO and COO) introduced• Project Steering Committee meeting fortnightly • PRINCE II methodology followed

• Any bank specific step• Compliance with Allianz AG, Germany standards• Allianz AG, Germany QA and supervision

ImplementationData Migration

High level steps involved – strategy, data mapping, utility preparation, extraction from legacy to flat file, file to FLEXCUBE, mock runs, testing, etc.

• Data migration strategy developed by Sirma & i-flex, approved by Allianz bank

• Data mapping conducted by Sirma and approved by Allianz bank• Data upload to FlexCube utilities developed by i-flex and Sirma• Extraction from legacy system executed by legacy system vendor,

requirements prepared by Sirma• Data uploads to FlexCube conducted by i-flex and Sirma, verified and

approved by Allianz bank History data – migrated or not?

• No migration of history data Challenges faced – data enrichment, data cleansing etc

• Extensive and constant data cleansing, verification and reconciliation conducted together with Sirma and Allianz bank

• Large proportion of additional client, loan, collateral data was missing in the core system and had to be gathered for upload to FlexCube

Business Model, Business strategy

• Program Organization was set up in the bank with 30 sub-projects defined with project teams and responsible parties.

• Before implementation bank was totally decentralized- each branch was like a subsidiary bank- admin functions, IT, all separate.

• Defined a new business model and branch model, restructuring and centralizing important functions. Restructuring of all functions were going in parallel for 10-11 months.


High level production hardware layout Type of machines used

• IBM P70 series AIX OS, Oracle 10G for database – 6CPU (12 cores) for production,

• IBM blade center for application, Windows Server 2003 OS, Flex Host – 2 blades 2CPU 4GB RAM each, Flex Branch – 3 blades 2CPU, 4GB RAM each

Location of different machines• All HW located in Allianz bank Production data center

Network details• An MPLS layer 3 network for all 126 locations connected to main

data center with bandwidth ranging from 256Kbps to 1Mbps depending on number of users in each location

• MS Active Directory present and MS Exchange throughout the whole bank


Responsibilities for infrastructure

Hardware • Sizing – Sirma and IBM• Procurement – Allianz bank and Stone Computers (an IBM

authorized reseller)• Setup – IBM and Sirma• Maintenance - IBM • Support – IBM and Allianz bank

Third party software is maintained and supported by the respective software vendor in accordance with the Allianz bank internal rules and procedures

i-flex software (all in compliance with Allianz bank internal IT policy, rules and procedures)• Setup – Sirma• Maintenance - Sirma• Support - Sirma


Type of Support• Local

Tools used • Help desk system is being used for issue tracking and

resolutionStandard support methodology usedSupport infrastructure

• Temporary access to the Production Environment is granted only for applying patches and new functionalities

• Permanent access to Test & Dev. Environments incl. at site and remote

• Access to data – only access to Test & Dev environment data • Data patches – Sirma & i-flex were responsible; with

temporary access being granted on a “need to have” basis


Methodology used for moving a fix to production – apply to pre-production, test and move

• A fix or new functionality is first applied in Dev. Environment and tested by us

• The fix or functionality is then applied in Test Environment by us and tested by the bank

• After bank’s approval a temporary access to production environment is granted to us for applying the fix/functionality

Banking community

Show cases and visits

• Since “Go-live” there has been two site visits by Banc de Brazil, from Brazil and Bank Republic from Azerbaijan

• Allianz bank and its management are quite happy with hosting such visits

Implementation Take-Away

What did we do right?• Close tracking• Preventing scope creep• Regular visibility to all stake holders• Daily discussion of issues• A wider consultancy on operational issues and processes and ways to

optimize them• A wider support and consultancy for issues outside the project scope but

relevant for the overall implementation – IT infrastructure, network set-up, IT processes and procedures

What could we have done differently?• Did not insist on the creation of full time dedicated bank implementation team

from the start of the project. The subsequent hand-over of responsibility from us to the bank was longer than desired.

• Following from the above, it also took longer for the bank personnel to get accustomed to the new processes and applications

• A weak or non-existent marketing and awareness building of Allianz’s success, throughout the wider banking community locally and within the region

Benefits of FLEXCUBE introduction

SEPA complianceDomestic and International Payments enabled staff

reductions and faster and more reliable services to customers

An on-line and timely reporting enabled all levels of management for easy analysis and fast response to market trends and customer’s needs

A range of new products have been introduced and new customer growth rate increased, from 15% to 35%, on a yearly basis

A range of new services introduced such as on-line card authorization, internet banking, and reporting

Customer scoring system interfaced to FlexCube reduced the average time for decision making from 2.5 days to 6 Hours

Higher Return On Investment, Lower Total Cost of Ownership

The bank’s IT department head count was reduced by 42%The bank’s back office operations department was completely

centralized and head count reduced by over 50%The bank’s front office personnel was relieved from back office

duties and entirely focused on sales and customer servicesCustomer’s information gathered, stored and analyzed has

increased by over 70% for retail customers and over 50% for corporate ones

Director ITSirma PM

Program Organization Structure

Investment Control

Project Streams/Project Teams

IT and OperationsBusiness Strategy Risk Management Other Functions / Governance

Project Management Office Program SponsorProgram Director

COO Project Director

Board of Directors

CEO, ED

Chief System Integrator

Sirma Business Consulting

Director Retail Director Corporate

ERP Project

Steering Committee

Steering Committee

• Approving and changing the scope of the Program according to the master plan and budget.• Reviewing the regular Program status reports and proposing solutions regarding tasks implementation

required by the Director. • Tracking task implementation at the regular Steering Committee meeting where the Director presents the

Program progress and the necessary solutions. (incl. proposing solutions)• Making final decision regarding the Program

• Preparing implementation plan (with the Project managers if necessary)• Distributing tasks to the responsible persons• Tracking task implementation during the meetings of the Program• Coordinating different tasks with counterparties, consultants and other external resources• Coordinating obligations and responsibilities with Project Managers• Preparing the Program regular status reports for Steering Committee• Presenting Program status and informing Steering Committee for necessary solutions• Collecting budget status report from line management

Role Responsibilities

Project Managers

• Preparing implementation plan (with Project team if necessary)• Distributing tasks to the responsible persons• Tracking Project task implementation • Presenting Project status report at the regular Program meetings• Responsible for the approval of all Project products• Presenting all requirements for project changes to the Program Office• Reporting all issues which could not be resolved within the Project• Informing Program Director about all delays of the initial plan deadlines

Program Director

Roles and Responsibilities

Roles and Responsibilities

Project Management Office

Project Members

• Information Center for all questions regarding the Program• Archiving and renewing Program master plan• Managing processes for task solution, change requests, approval for Project products• Archiving and renewing central registers and documentation regarding issues, change requests, approvals

of Project products• Preparing and renewing Project participation list• Reviewing project status reports and preparing Program status report• Organizing and taking minutes at Program and Steering Committee meeting • Providing on time accurate information for forthcoming changes for all employees of the Bank, organizing

meetings and preparing newsletters

• Proposing ideas and expert opinions• Working on tasks defined by Project Manager• Preparing the necessary documents and analysis connected with the Project products

Role Responsibilities

Investment Control

• Supporting Program Management with new ideas and proposals for issue solutions and problems• Controlling quality and professional preparation of all Program products• Reviewing the results and products of the Program and proposing approvals

Milestones and PhasesIntroduction of FlexCube

Milestones Deliverable Start End

Planning of deliverables connected with introduction of bank- information platform of TB “Allianz Bulgaria”. Developing detail plans of the project plans for tests, migration, training and adoption.

A plan for PWT ***A plan for key users’ training*

09.10.2006 10.11.2006

(PWT) The bank’s team is introduced to the basic functionalities and the architecture of FlexCube

A protocol for completion approved by the leader of the team

13.11.2006 12.01.2007

Analysis of the existing bank products and defining their place in the functionality of the bank- information platform (product fitment).

A product catalog of the present products in Allianz**A product catalog of the future products in FlexCube*

15.01.2007 02.03.2007

Parameterization and Product set-up of FlexCube A protocol for completed parameterization of the products from the Product catalog

05.03.2007 30.04.2007

Preparing data base for System Integration and User Acceptance tests

A protocol for completed installation of the data base and FlexCube application

01.05.2007 01.06.2007

User Acceptance test - plan, preparation and accomplishment

Making up test scripts***A protocol for correctness of the test scripts results

04.06.2007 03.08.2007

Milestones and Phases Introduction of FlexCube

Preparing the formats for data migration Making up tables for data migration*

16.03.2007 01.06.2007

Data migration from the existing systems in FlexCube.

A protocol for correctness/ faithfulness of the migrated data

01.06.2007 03.08.2007

System Integration test plan, preparation and accomplishment

A plan for System Integration test*A protocol for correctly completed System Integration test

03.08.2007 31.08.2007

Trial conversion and stress testing A protocol for trial conversion 16.07.2007 27.08.2007

Train the trainers A protocol for completed training the important/key users

02.07.2007 31.07.2007

Go-live – big bang A protocol for successful putting into operation for every single branch

06.09.2007 10.09.2007

Support and optimization (tuning). 26.09.2007 30.11.2007


Milestones and Phases Development of interfaces to the basic bank system


Analysis of the requirements to the interfaces Interface Requirement Specification Document**

23.10.2006 28.02.2007

Design, functional specification of the design and architecture

Interface Functional Specification Document*

27.11.2006 28.02.2007

Development and introduction A protocol for introducing the interfaces

11.12.2006 29.06.2007

System Integration test plan, preparation and implementation/ fulfillment

A system integration test plan*A protocol for correctly completed system integration test

02.07.2007 05.08.2007

Documentation Technical, System and Architecture interface documentation*

28.02.2007 05.08.2007

Milestones and PhasesExploitation of Centralized report system

Analysis of the requirements to the Centralized report system

Application Requirement Specification Document**

02.12.2006 30.03.2007

Design, functional specification of the design and architecture

Application Functional Specification Document*

05.03.2007 30.03.2007

Development and introduction A protocol for introducing the application/system/product

05.03.2007 01.06.2007

System Integration test plan, preparation and fulfillment/ accomplishment

System integration test plan*A protocol for correctly completed system integration test

02.07.2007 05.08.2007

Documentation Technical, System and Architecture interface documentation of the application/system/product*

28.02.2007 05.08.2007

Support and tuning ---------------- 03.09.2007 30.10.2007


Notes : * Sirma responsibility** Allianz responsibility*** Joint responsibility of for both sides under the agreement

In Summary

This was the first project of its kind, considering its scope and functionality covered. The implementation was almost entirely led and done by SBC, an I-Flex partner, and successfully completed within twelve months.

Contacts

Velko Todorov

E-mail: [email protected]

Tsvetomir Doskov

E-mail: [email protected]

Web: www.sirmabc.com

mailto:[email protected]

mailto:[email protected]

http://www.sirmabc.com/

Implementing_Flexcube.ppt

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