Published on March 8, 2014
BPRE EXAMPLES FROM INDIAN CORPORATE WORLD BY RITU KARN SAHAS P N SHAMAL ABDULLA
DEFINITION Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed. Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises.
BANK OF INDIA
INTRODUCTION Founded on 7th September, 1906. Is an Indian state-owned commercial bank HQ - Mumbai, Maharashtra Pan-India presence Controlled through 50 zonal offices. In the forefront, introducing various innovative services and systems First among the nationalised banks to establish a fully computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai in 1989. Founder member of SWIFT (Society For Worldwide Inter Bank Financial Telecommunications) One of the top five banks in India
REASON FOR BPR INITIATIVE For faster work To face competition For secure data transfer For making banking very easy for a retail as well as corporate customer Core banking system and centralized data system Automate all its branches across the country
TEAM INVLOVED The Boston Consulting Group Finacle of Infosys
PROJECT DESIGN To streamline its growing business globally Increasing branch network of 3159 to about 50007000 over the next five years. To meet the credit need of the corporate sector and help in faster decision making on the loans, the bank would set up one corporate branch in every state. The bank would recruit 3295 employees which would include 2250 officers in various departments like agriculture, statistics, and marketing among others.
SUPPORTING TOOLS AND TECHNIQUES Core Banking Solution Core banking basically is depositing and lending of money CORE stands for "Centralized Online Real-time Exchange". Core banking functions- recording of transactions, passbook maintenance, and interest calculations on loans and deposits, customer records, balance of payments and withdrawal. Banks make these services available across multiple channels like ATMs, Internet banking, and branches. The core banking applications run on Finacle from Infosys and the database is set up using the Oracle Financial Service Architecture This software was installed at different branches of bank and then interconnected by means of communication lines like telephones, satellite, internet etc.
PROCESSES The bank follows processes such as information profiling which involves 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 other security clearance aspects.
CONTD... The core banking applications run on multiple HP Superdome servers while the storage solutions have been migrated to a HP StorageWorks XP1024 disk array. This is further connected through leased lines to various Cisco switches and routers deployed across the country with the branches forming a hub and spoke model that uses a central point to co-ordinate activities between various branches and the data centre. At present, the operations at about 2,433 branches across the country are computerized out of which 108 operate in a partially-computerized mode. The bank is a member of the RBI’s VSAT Network and has installed about 39 VSATs linking strategic branches and offices adding redundancy during disaster. To fulfil its deployment objectives BoI chose HP as consultants and network integrators for the project
IMPACT OF PROJECT “AS IS” & “TO BE” Operations are carried out fast and customers are happy with the quick service of the bank The technological advancement has the changed the working of bank of India totally Account opening is done on the same day Implementation of internet banking (more secure), (wireless application protocol) banking, SMS banking with no extra cost to the customer Forms can be downloaded from the website itself and a virtual keyboard is present on the login site (in case of internet banking) to avoid hijacking of passwords.
INTRODUCTION M&M was started off by two brothers J.C and K.C Mahindra The company started off as manufacturer of general purpose utility vehicles and carried a production capacity of 75 jeeps In 1948 Over the period they diversified into hotels financial services auto components IT Infrastructure and trading. In 1994 the co established Mahindra USA to promote tractor sales worldwide. Top management philosophy was strengthen the competitive position in the domestic market before launching an ambitious globalization program
CONTD.. The top management realized that they had the opportunity to become a truly global brand In 1994 a BPR exercise started - a change in functional to SBU structure As a result 6 autonomous SBU’s were formed with empowered presidents for each sbu The intention was to provide direction for the future growth of various business lines
RESTRUCTURING FARM EQUIPMENT BUSINESS Project Vishwajeet- a major restructuring program conceptualized by MC Kinsey to turn M&M into a leading tractor producer by 2005 As part of this strategy Farm equipment business was divided into five divisions - Marketing and customer relations , manufacturing and supply chain , product development & r &d services, performance management and international operations.
PROJECT BLUE CHIP In 2002 M&M reached a low point in its historydepressed revenues and high costs reduced profits margins Share price fell from 322 in 2000 to 114 in 2002, ROCE fell from 17.09 to 8.92 M&M set up a Corporate turnaround Program Office and articulated need for a sharper focus on financial returns Due to this a restructuring exercise called blue chip was initiated to raise the bar on performance
WHAT DID BLUE CHIP DO? Benchmarks like market share sales and profits were replaced by ROCE A policy was imposed which stated that businesses had to compete for capital- those with the highest returns would get the capital Operations were overhauled, M&M undertook cost cutting and steramlined its manufacturing facility
PRIOR TO BPR HR WAS NOT A KEY ELEMENT OF STRATEGY FORMULATION
THE RESULTS Tractor division undertook a major cost cutting exercise and bought down Bep from 54000 to 35000 units Net sales for first half of 2004 increased by 28% , operating profit was up by 34% M&M stock touched a high of Rs 390 from a Rs112 a year ago
IMPLEMENTING BPR IN ICICI BANK Company Profile: ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is a major banking and financial services organization in India. It is the 4th largest bank in India and the largest private sector bank in India by market capitalization. The bank also has a network of 1,700+branches and about 4,721 ATMs in India and presence in 19 countries, as well as some 24 million customers. ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Axis Bank and HDFC Bank — its main competitors.
REASONS FOR IMPLEMENTING BPR IN ICICI BANK BPR was implemented in ICICI Bank in year 2000 and later when anytime, anywhere banking came to our country, ICICI Bank had to move away from the branch-centric model and make its services available nationwide. The solution was to centralize its applications. Legacy systems: The traditional systems at ICICI Bank were very centric to the branch. ICICI realized the importance of offering nationwide banking but this would be possible only by having a centralized data repository.
TEAM INVOLVED: Infosys is one of technology partner for ICICI Bank which game the assistance to implement Finacle for handling all the banking activities Bill Desk for online payments SYBASE SAS
SOLUTION BY INFOSYS:
SUPPORTING TOOLS AND TECHNIQUES: Finacle – a core banking and universal banking solution from Infosys The network follows a hub and spoke architecture—a mix of VSATs (Very small aperture terminal) , leased lines, ISDN and radio links. It has around 800 leased lines, about 600 VSATs, approximately 800 ISDN lines and multiple 34 Mbps lines.
CONCLUSION: ICICI Bank has grown immensely over a period of time. First time in history a private bank has merged a public sector bank i.e. ICICI Bank announced merger with Bank of Rajasthan. On 23May ICICI Bank announced merger with Bank of Rajasthan with it through share-swap in a non-cash deal that values the Bank of Rajasthan at about Rs 3,000 crore. Each 118 shares of Bank of Rajasthan will be converted into 25 shares of ICICI. It is said that this merger will also expand ICICI Bank's branch network by 25%.
CONCLUSION: The scalable and open systems based architecture, enabled Finacle to successfully manage the resultant increase in transaction levels from 400,000 transactions a day in 2000 to nearly 2.1 million by 2005 with an associated growth in peak volumes by 5.5times. With Finacle, the bank currently has the ability to process 0.27 million cheques per day and manage 7000 concurrent users.
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