TCS Corebanking implementations and lessons to share 1

TCS – Corebanking implementations and lessons to share 1

Core Banking – Making a Success of transformation » » » » Corebanking or Banking Transformation Make sure you have a partner to deliver with Buy in from top to bottom within the Bank Aligning the organisations - partnership versus supplier vendor The right expertise at the right time – expert resources The right programme governance – programme versus project Plan for and plan to mitigate risks and delays Ensure the business drivers are aligned to the implementation Trusted Partner of Choice 2

Bank Objectives » Clear Understanding of High Level Bank Objectives and how they map to aspects of the proposed solution e. g. : » Prepare for the emerging world of global competition » Rapid time to market for new products and services » A solution that can price based on channels and usage » Reduction in account opening and customer request processing overheads for better customer satisfaction etc » Rapid adoption of the new platform by the business » Clear response and understanding of how these main drivers fit into the solution and implementation Programme e. g. » Focus on functionality in the platform but not available in the local market » Engage the business with a product launch plan based on what is now possible out of the box with the new platform » The proposed solution components and integration therein coupled with the process alignment would yield the following benefits: » Introduce pricing strategies for specific customer segments » Use the new platform to design on line real time, once done processes » Greater agility to tap market opportunities » Identify business champions and implement an engagement and training Programme with the business » Better overall customer experience » Create operational efficiencies » Brand image of being a technology savvy bank » SOA driven architecture lays the foundation for the future. » Each major business driver needs to be addressed with a response as part of the core banking Programme 3

Programme Implementation - Key Risks and Challenges Risk Mitigation ü Alignment of Programme Goals Across Stakeholders ü Key User Buy-In / Fear of Change ü Drivers for change should be well understood , internally agreed and communicated. ü Appoint “champions” and develop “power users” to drive change through organization. Ensure benefits to end users are well communicated. ü Mapping and Migration of specialized legacy data into TCS Ba. NCS solution ü Lack of Resource Commitment for Project activities: ü Requirements ü Parameterization Decisions ü Acceptance ü Lack of Decision Making Governance ü Conflict of priorities with other IT projects and alignment of implementation timelines with interfacing systems. ü Critical review of all specialized data / applications to determine which is required moving forward and which exists for legacy purposes only ü Ensure staff are assigned and provided bandwidth for working on the analysis, decisions, and acceptance of the product implementation. Ensure backfill exists to supplement daily operational duties. ü Ensure governance is defined and is designed for quick and effective decisions. ü Governance must ensure priorities are set appropriately across all stakeholders. Proper project planning of dependencies will ensure all parties agree deliverable dates. Look ahead and Plan Better 4

Project Organization and Governance Structure – Implementation Phase Executive Sponsor Programme Governance CIO/COO Programme Management Programme Manager IT Business Change Programme Director TCS Project-Management Functional (business) Process Change Functional/business (Offshore) Technical Organisational Change Migration & Testing (Offshore) Migration Testing Training 5 Process Change (Offshore)

Project Organization and Governance Structure – Implementation Phase Financial Institution CEO PF / Post Leiter CEO Programmeme/CIO Ausschuss (CIO) TCS Executive Steering Committee (half yearly or when required) • Overall Governance • Relationship Management • Overall Decision Making Senior Management Programme Manager and Programmeme-Ausschuss Steering Commitee Programmeme-Manager Programme Steering Committee) (monthly -> quarterly) • Strategic managment • Major deliveries (Migration, Releases) • Oversight of Risk, Change and Quality Programme Director TCS Programme Director Programmeme-Ausschuss Programme Manager and Programmeme. Steering Commitee Management Partnership Review Meeting (monthly –> quarterly, synchronisation with Programme- Management) • Release Management • Risks and Quality management • Change Management Review • KPI Reviews Programme Directors Account Manager Offshore Representative Project- Managers Programmeme. Programme Management Committee (weekly meetings) • Status, Resources, Current plan • Risk Management • Change Management • KPI Monitoring Programme Directors Programme Management Project Management Committee (weekly meetings) • Status Reporting • Issues Programme Directors Project Manager Right Focus at Right Level with Right Rigor 6

SCALE Diversity of Implementation expertise State Bank of India 15000+ branches/200 million accounts, HP Superdome Cluster/Oracle Phased , 15000+ branches live Migrated from distributed Bankmaster installations Bank of China 22000 branches/220 million accounts IBM z. Series, IBM DB 2 Phased by branch & LOB, In house Banking Platform Bank Negara, Indonesia 850 branches/8 million accounts IBM AIX, IBM Pseries/Oracle Phased by branch & module, In House Banking platform Central Bank ( India) 3000+ Branches/10+ million accounts Unix/Oracle Phased, Pilot live in 4 months, ISBS, Bank Master Taishin Bank, Taiwan 100+ branches/4. 5 million accounts HP/Oracle Large Unix, big bang go live, Inhouse Banking Platform Indian Bank 1500+ Branches/4 million accounts Unix/Oracle Phased, Pilot live in 4 months, ISBS, Bank. Master NLB, Slovenia 100+ branches/1. 5 million accounts IBM OS/390/DB 2 6 banks, phased by module, Inhouse Banking Platform China Trust, Taiwan 160+ branches/3 million accounts IBM OS/390/DB 2 Mainframe, big bang go live, SAFEII ING Direct of Australia Internet Bank/2 million+ accounts HP Unix/ Informix Phased rollout, Loans followed by deposits, De Nuovo Capitec, South Africa 200+ branches/2 million accounts Windows 2000/SQL Server Paperless Micro-lender, Phased by business line, De -Nuovo Varied transformation initiatives executed successfully with a COMMON methodology 7

State Bank of India Group : an Overview Background n Largest Financial group. Subsidiaries across Banking, Capital Market, Life Insurance and Cards. n More than 25% of the Banking sector in terms of Assets. n 250 Million accounts, 150 million customers and an average of 50+ million transactions a day Size Business Areas 18, 000+ branches in all n Retail/ Consumer Banking n Small Business/ Middle Market Banking ä 13, 000+ SBI Branches n Corporate/ Institutional Banking ä 5000+ Associate Bank Branches n Agricultural and Rural Banking ä 52 foreign branches in 32 countries n Principal Bankers to Governments, City Corporations and Government Institutions n Clearing bank and Currency chest functions on behalf of central bank in some regions. n n Assets $323 billion n 21, 000+ ATMs

Project Governance Model Programme Sponsor TCS Board of Directors Chairman, SBI Group Bank Initiative Directors Joint Technology Committee Managing Director (MD) SBI Group Others Design Authority TCS and Bank Programme Director Business Change Manager Mc. Kinsey, TCS and Bank TCS Quality Assurance and Compliance Application Build Mgmt Application Interfaces Core Banking Trade Finance Treasury PMO/ Implementation Planning Project Managers Operations Readiness/ Infrastructure Design Testing Test Preparation Test Execution Infrastructure Design Build Service Model 3 rd Party & Vendor Mgmt Business Readiness Change Mgmt Training Process

Project Highlights Characteristic Details Multi-entities Eight legal entities, multi-tier structure Customization First ever India project for Core Banking. Large effort for Localization and customization Interface More than 50 Interface sets to other systems within the Bank Release Management Phased Releases and customization § First phase – Retail Banking branches § Second phase – Additional corporate banking functionality and Government banking § Third phase – Full corporate banking functionality § Fourth phase – Changes based on business process re-engineering § Two pronged approach for Eximbills rollout – Initially standalone, then centralized Software distribution and Production management § Multiple locations data mgmt ~ 18, 000+ branches § Concurrent management of changes to production and ongoing customization Data Migration § Data Migration with automated routines. Process covering Data cleansing, Customer Intimation, Account renumbering and conversion weekend management § Average daily conversion – 20 branches/ day; Peak of 56 branches migration on core/ day. Business Process Reengineering Back office planning and design assistance and design for Consolidation/ reporting. Program and Vendor Management § Multiple players – Eight banks, group level stakeholders amongst others § Synchronization across other projects: ATM rollout, EFT and Network enablement § Four vendor partners, several third party vendors, Independent testing agency

SBI Benefit Case: Point of Arrival Operating and IT Model Characteristic Point of Departure Point of Arrival Centralized Operations Many processes required branch level processing and Establishment/ design of Central processing centers with some operations addressed regional back offices. covering key Business processes. Elimination of redundant back offices. Data Integrity Limited data stored in a variety of ways, including paper based, leading to duplication and redundancy. Branches on core on a single, reliable and accurate database. (100% coverage) Standardized processing Framework and standards exist for most processes but actual processing tends to be region specific rather than standard across the business All processes across businesses are the same Straight through processing Limited STP exists. Greater process automation using imaging, workflow and documentation technologies. Customer View Partial view of limited segments (Corporate Accts) facilitated by data replication and consolidation. Bank has a collective view of entire customer data/relationships held with the bank. Management Information Limited MI is provided by disparate systems and in many cases is driven by user requests and is not immediate. Operations and Systems alignment for GL and reporting consolidation. More than 150 new MIS reports available in a time-bound manner. Customer Experience Inconsistent experience through different channels. Limited channel synchronization. Cross-Channel integration and seamless experience across ATM, Contact center, Internet, and branches. Lower future operating cost Manual processes and disparate systems have limited Cost to Income ratio has reduced sizably opportunity to reduce future operating costs. Source: TCS Analysis, SBI Investor Presentation, Aug 2005

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