Tuesday, November 17, 2009

Retail Bank's Cost Breakdown

This information is taken from Study that is done by IBM and the study is based on Bank's in Europe. However I think the information is still quite valid as customer facing activities require a lot of time which then logically contribute the higher cost percentage as well.

This information is quoted as I think many of us are looking for such information, and this sharing / discussion can be usefull.


Monday, November 16, 2009

Business Value - Performance Metrics (2)

If Delloite defines various aspects of Shareholders value that can be increased, however to measure it we also need its metrics. Gartnerin this Research provides what they call as The Gartner Business Value Model. This model helps a business to align Business Metrics with business aspects. The Business Value Model provides metrics that we use for several dimension. While this discussion doesn't compare in detail each value in Delloite's table with each metrics however we can see a coorelation between the two models, which always link to business.


Gartner defines three business aspects i.e.
  • Demand Management - which consist of Market and Sales Responsiveness, Product Development Effectiveness, which much related to revenue growth and operating margin
  • Supply Management - which consist of customer and supplier effectiveness, and operational effiency
  • Support Management - this aspect consist of Human Resources, IT and Finance & Regulatory Reponsiveness.
So using these two maps - we are much help to be more structure to understand how the business is measured and how actually each of them able give value to shareholders.

Business Value - Performance Metrics (1)

Shareholders expects returns to its business investments. The challenge is how do you define the returns terms. What are the ascpect that we can use to explain returns that businesses have created to shareholders. This is also related to how do you can generate performance metrics to provide a clear explanation about business operation result that supposed to create the returns.

To discuss this topic, two major consulting firm approach are quoted in this edition. Deloitte provide as what is called as Enterprise Value Map. This Value Map defines shareholders value into four VALUE DRIVERS cateories i.e. Revenue Growth, Operating Margin, Asset Efficiency and Expectations. This model then drill-down each value into a more detail to support the value drivers into these steps :
  • Level 1 : It show areas that you can do to improve each value.
  • Level 2 : It triggers us to change what we have done - which looking at what we have provide, whom is the target, how do we compete, how we do our operations.
  • Level 3 : It asks you to do better in each aspect by reviewing our business processes, aligning resources with strategies, improving control/reduce risk, collaborating more effectively
This model also have another dimension about where the improvement must be done in order to achieve higher business value. There are six key business process dimension in this model i.e :
  • Business Strategy and Management
  • Customer Strategy, Relationships and Interactions
  • Product Strategy, Development and Production
  • Human Capital Strategy and Management
  • IT Strategy and Management
  • Other shared services
By navigating the enterprise value map by Delloite, then we can also map how we want to go about for Shareholders Value Improvement.

Wednesday, November 11, 2009

Banking Solution - Architecture

There are many areas in Banking Operation that can be improved by using the right InformationSystem Solution. Actually automation in Banking requires a very comprehensive set of solution comparing to other industries. Transactional and non transactional system in banking need support from Information System.

Having this situation, one can be much helped if he can understand the solution components that are actually can be intergrated in a bank. Several Banking Enterprise Solution providers have provided their solution architecture for us so that we are able to see in high level how each solution is interlink one and anothers. In this discussion I quoted solution architecture that is provided by SAP, Infosys, Temenos and Oracle-iflex for our reference.

Diagram 1 : SAP - Solution Map

Diagram 2 : Infosys Solution Architecture


As can be seen, that in each solution architecture - we can see that there are three major sections for the banking operation automation i.e :
  • Delivery Channel
  • Customer Management
  • Product Management
  • Financial Accounting
  • Decision Support System
In each section, an IT Managers then can map their current solution and see opportunities for automation improvement to support the overall business goal.


Monday, November 9, 2009

Getting Right User Requirements

Getting the right user requirements in initial phase of software implementation is always a challenge. Poor requirements specifications can result in systems that do not meet user needs. In the most extreme case, incomplete or error-riddled requirements specifications result in both time and money wasted building the wrong system. Customer perception of past solution package, past software problems and past operation procedure often build a wrong way of providing the right business requirements. Other aspect in getting the right business requirement is also due to schedule pressure which cause oversight.

Some ways to having a better process are :
  • Including Business Process Owners who runs day to day operation in the discussion
  • Having a software business analyst to interview business process owners
  • Understanding that business requirements might not be able capture 100% since day one, so several can be categorised as current business, new business req and potentially new requirements that are not foreseen
  • Mapping requirements into software standard package features, package extentions, and non system solution such as adjustment in the system procedures
  • Choosing from several System Development Life Cycle approaches which is fit for a complex implementation such as : Spiral Model, Incremental Development are found will reduce risk.
To support the above process, especially getting complete business requirements - a tool from ravenflow which help to give a visual requirement definition can be also useful to validate if you have missing requirements.