BPR Project Report- Bank of India

INDEX

Introduction: ........................................................................................................................................... 2 Company Profile: ..................................................................................................................................... 2 Reason for BPR Initiative: ........................................................................................................................ 4 Scope and Time Frame: ........................................................................................................................... 4 Team Involved: ........................................................................................................................................ 5 Project Design: ........................................................................................................................................ 5 Supporting Tools and Techniques: ........................................................................................................... 6 Impact of the project"as is: and "to be": ............................. .................................................... .......................... ......................................... ............... 13 Conclusion and Recommendations: ....................................................................................................... 13 Bibliography: ......................................................................................................................................... 14

Implementation of BPR in Bank of India

2010

Introduction: Business Process Reengineering is the analysis and design of workflows and processes within and between organizations. A business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all owe a debt to re-enginee re -engineering ring theory. t heory. Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized nationalized along with 13 other banks.

Company Profile: Bank of India is an established commercial banks with a pan-Indian presence and is a century old having been founded on 7th September 1906. The Bank is rated as one of the top five banks in the country, with over 2,650 branches across India and 23 foreign branches or offices with an asset base of over $26 billion. Corporate credit, trade finance, loan syndication, 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 in London in 1946. After World 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. With fifty-three years of experience in global banking it has strong assets and correspondent relations with leading international banks. The

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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.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalized banks. The Bank has 3101 branches in India spread over all states/ union territories including 141 specialized branches. These branches are controlled 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 on Qualified Institutions Placement Placement in February 2008. . Total number of shareholders shareholders as on 30/09/2009 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 and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalized banks to establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ 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) to manage the BSE Clearing House. It is an association that has blossomed into a joint venture with BSE, called the BOI Shareholding Ltd. to extend depository services to the stock broking community. Bank of India was the first Indian Bank to open a branch outside the country, at London, in 1946, and also the first to open a branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of 29 branches (including five representative offices) offices) at key banking and financial centres viz. London, New York, Paris, Tokyo, Hong-Kong and Singapore. The international business accounts for around 17.82% of o f Bank's total business.


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Reason for BPR Initiative: 

For faster work

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Regulations of RBI and other ot her banks

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For secure data transfer

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For making banking very easy for a retail as well as corporate customer

Scope and Time Frame: Scope:

There was a huge scope when Bank of India went for Business Process Reengineering (BPR) because all the banks were competing against each other and RBI was bringing about a major change in the banking system by introducing the core banking solution. Being in India’s banking sector, Bank of India has the responsibility of serving its customers with adequate security. Like most leading banks, it has taken all possible actions to beef up its IT infrastructure and security set-up. It has taken care of all the areas in the organization, which are critical from a security standpoint. Technologies such as biometrics and encryption are in use. Conducting Co nducting regular drills at its data recovery site site and successfully recovering most of the IT system instantaneously after a simulated disaster. Bank of India looks like a bank which never stops working 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 a ISO 27001 certification.

Time Frame:

From year 2000 when TCS Bancs was used for Total Branch Automation, Infosys brought up Finacle Finacle which was a Core Banking Solution for all the banks in India. So BPR was implemented by Bank of India since 2000 and changed it a lot and still changing by introducing new services.


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Team Involved: Seven consultants, including Ernst &Young, Boston Consulting Group (BCG) and McKinsey have expressed interest interest to take t ake up job of evaluation and restructuring of the organiz o rganizational ational set up of the bank. The Boston Consulting Group assisted Bank of India. The bank short-listed the consultants and its board of directors would soon take a decision on the matter in its next meeting. The bank would recruit 3295 employees which would include 2250 officers in various departments like agriculture, statistics, and marketing among others. The bank has obtained the approval for opening a subsidiary branch in New Zealand and this is going to be launched soon. It has also applied for o opening pening a branch in Canada. As a measure towards financial inclusion, the bank has opened 40 lakh no-frills accounts and issued 1 lakh bio-metric cards. In Orissa five more branches were proposed to be opened by March this year taking the total to 134. This would further be increased to 150 by September and all the districts would be covered in the next 2-3 years. The bank has a business of Rs 5250 crore with a branch network of 129 in Orissa. Orissa.

Project Design: The public sector Bank of India (BoI), which targets to take its business to about Rs 12 lakh 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 face competition. 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 faster decision making on the loans, the bank would set up one corporate branch in every state. Accordingly, a corporate branch of the bank would come up in Bhubaneswar soon. The bank would recruit 3295 employees which would include 2250 officers in various departments like agriculture, statistics, and marketing among others.


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Supporting Tools and Techniques: Core Banking Solution

Core banking is a general term used to describe the services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. Core means "Basic", hence the basic services provided by the inter-networked branches of bank is called "Core Banking". Core Banking is normally defined as the business conducted by a banking institution with its retail and small business customers. Many banks treat the retail customers as their core banking customers, and have a separate line of business to manage manage small businesses. Larger businesses are managed via the Co rporate Banking division of the institution. Core banking basically is depositing and lending of money. Nowadays, most banks use core banking applications to support their operations where CORE stands for "Centralized Online Real-time Exchange". This basically means that all the bank branches access applications from centralized datacenters. This means that the deposits made are reflected immediately on the bank's servers and the customer can withdraw the deposited money from any of the bank's branches throughout the world. These applications now also have the capability to address the needs of corporate customers, providing a comprehensive banking solution. A few decades ago it used to take at least a day for a transac t ransaction tion to reflect reflect in the account because each branch had their local servers, and the data from the server in each branch was sent in a batch to the servers in the datacenter 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 across multiple channels like ATMs, Internet banking, and branches. branches. Core Banking solutions are banking applications on a platform enabling a phased, strategic approach that lets people improve operations, reduce costs, and prepare for growth. Implementing a modular, component-based enterprise solution ensures strong integration with your existing technologies. An overall service-oriented-architecture (SOA) helps banks reduce the risk that can result from multiple data entries and out-ofdate 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 banking circles. The advancement in technology, especially internet and information technology has led to new ways of doing do ing business in banking. These technologies have cut down time, working simultaneously on different issues and increasing efficiency. The platform where PRAVAH SHUKLA @ IISE

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communication technology and information technology are merged to suit core needs of banking is known as Core Banking Solutions. Here, computer software is developed to perform core operations of banking bank ing like recording of o f transactions, transactions, passbook maintenance, maintenance, and interest calculations on loans and deposits, customer records, balance of payments and withdrawal. This software is installed at different branches of bank and then interconnected by means of o f communication lines like telephones, satellite, internet etc. It allows the user (customers) to operate accounts from any branch if it has installed core banking solutions. This new platform p latform has changed the way banks are 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 ledger systems and reporting tools. Strategic spending on these systems is based on a combination of service-oriented architecture and supporting technologies that create extensible, agile architectures. Processes

The top priority in the bank’s security policy po licy is that its operations should be carried out in a secure and safe manner and that accessibility to the people in the organization as well as those outside should be provided in a secure and controlled way. For evaluating the state of the system, auditing is performed annually across branches. The bank follows follows processe pro cessess 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. Only after it has been cleared by both the teams, it can go ahead and become the t he part of the organization’s business. Systems

Bank of India has all the security related software and hardware like anti-virus, spam filters, firewalls, content filters, storage security installed and implemented. Using all these tools they seem to have a stable organizational security structure. The bank uses all possible vulnerability tools to ensure that its infrastructure is not vulnerable to external attack. It uses biometrics at all critical installations for authentication and encryption is used across the board. A team of 10-15 security security specialists at the head office o ffice takes care of the important tasks. Apart from the core team, a team of about 150 people is taking care of security across branches. Certifications PRAVAH SHUKLA @ IISE

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

As far as certifications are concerned, Bank of India complies with RBI regulations and IT Act 2000. Bank of o f India is also in a process of getting ISO 27001 certification. certification. IDRBT Hyderabad handed the best bank for information 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 are handled by eFunds. DR/BC Disaster Recovery 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 Bangalore and 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 leased from MTNL, BSNL and Bharti Enterprise. Branch links terminate at Network Aggregation Points (NAPs) that are simultaneously connected to the BoI data centre in Mumbai and DR centre at Bangalore. The interconnectivity is established based on point-to-point protocol using leased lines. Data travels through multiple leased lines from the data centre to the disaster recovery centre. The core banking applications run on Finacle from Infosys and the database is set up 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 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 topology that uses a central point to co-ordinate activities 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. Data Recovery


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Bank of India has a data recovery site located at a different seismic zone from its primary site. The secondary site is a hot site that is almost identical to the primary one. Bank of India can recover its entire core-banking setup almost instantaneously. It periodically conducts drills at the DR site. Bank of India (BoI) has started a business process re-engineering (BPR) exercise, encompassing centralization of operations not requiring customer interface, restructuring of the organization in view of changing business requirements, and putting branches on the core banking solution 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 assisting Bank of o f India in this exercise. The solutions deployed

If the new infrastructure was not put in place, it would have jeopardized its productivity and revenues. Moreover, migration from the existing facility facility to t o the new one was dependent on the network implementation. The facilities facilities in India I ndia are connected by multiple MPLS circuits. circuits. These circuits are on the Trans-Atlantic and Trans-Pacific communication cables routed from United States to the facilities in Bangalore and Hyderabad. The Trans-Oceanic communication cable lines are handled by MCI and AT&T. The network also supports automatic re-routing and inter-connected operations for the facilities in Bangalore and Hyderabad. The network’s DR objectives were achieved through the use of redundant network equipment and communication links. The deployment complemented First Indian to achieve its expected link uptime of 99.99 percent for various international transactions and business processes. Technology used

The switching facilities included Cisco Catalyst 6506-E for core switches. Cisco’s Catalyst 6513 and 6509 were deployed dep loyed as access switches while Catalyst Catalyst 4506 forms a Demilitarized Zone. The access layer switches helped First Indian harden its system. The server farm switches were Cisco Catalyst 6509. Internet and WAN routing was accomplished accomplished through thro ugh Cisco 3825 series series routers.


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Security was framed and designed with flexibility for future needs and control that could be handled at the access or core layers. The enterprise security aspect is covered using Cisco’s PIX-535-UR-BUN and PIX-535-FO-BUN firewalls with failover. Remote connectivity was established through VPN Concentrators through the use of Cisco VPN 3030. Network administrators can enforce corporate assigned policies through Cisco Secure S ecure Access Access Control Server. Benefits

It took three months to complete the deployment. During that time the IP Contact Centre routed the calls from corporate global centres in the United States and across Asia and India. It is now being routed by the Cisco Unified Intelligent Contact Management. The main management of call centres is in United States while the calls are being handled by customer 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 expand with the business growth. This has led the company to spread its operational 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 automate all its branches across the country. The bank also needed to introduce a core banking system and centralized data system since the data access in each branch was limited to city level servers. This was why BoI decided to shift from branch-specific automation to an overall bank

automation

along

with

business

continuity

and

disaster

recovery

implementation, implementation, according to P A Kalyan Sunder, GM, IT. BoI currently has more than 2,000 branches across the country. Out of these 1,000 are considered as strategic branches. To fulfill its deployment objectives BoI chose HP as consultants and network integrators for the pro ject. ject. PRAVAH SHUKLA @ IISE

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Solution and Technologies Deployed

The higher level management decided to tackle change management issues with determination and by ensuring continuous training to its employees. The training on various banking technologies and business aspects was jointly executed by BoI and HP. The BoI data centre set-up is located in Mumbai and forms the tier-one. t ier-one. The tier-two set-up forms the disaster recovery centre and is based in Bangalore. The DR centre lies in a different seismic zone. The connectivity 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 Network Aggregation Points (NAPs). The NAPs are simultaneously connected to the BoI data centre in Mumbai and DR centre in Bangalore. The inter-connectivity is established based on point-topoint protocol using leased lines. Data travels through multiple leased lines from the data centre to the disaster recovery centre. The core banking applications run on Finacle from Infosys and the database is set up upon Oracle Financial Service Architecture. The entire 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 in various branches forming a hub 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 of managing the bank’s infrastructure which includes mainframes, Web and data servers, network devices and desktops. The responsibilities also include upgrading the applications and the software for core banking applications, telephone banking and Internet


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banking. The deployment and implementation leaves enough room for future increase in customer customer base and upgradation upg radation of deployed systems and network. The benefits

The IT deployment and transformations in core banking and data warehousing have helped BoI to reduce its Total Cost of Ownership. The deployment has almost achieved its prime objectives of shifting from branch-centric automation to bank automation without compromising on disaster recovery and business continuity processes The deployment has complemented BoI to update its database through data mirroring and remote auto backups. Management Information System and various critical functions of controlling offices have been computerized. At present, the operations at about 2,433 branches across the country are computerized out of which 108 branches operate in partially-computerized mode. The bank is a member of the RBI’s VSAT Network and has installed about 39 VSATs linking strategic branches and o ffices ffices adding redundancy during d isaster. isaster.

The IT deployment and transformations in core banking and data warehousing have helped BoI to reduce its Total Cost of Ownership. The deployment has almost achieved its prime objectives of shifting from branch-centric automation to bank automation without compromising on disaster recovery and business continuity processes. Future plans

The core banking application is deployed in 1,000 branches currently. It will 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


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processing. This should further scale up the IT infrastructure and operations at the bank.

Impact of the project “as is: and "to "t o be": 

The Bank of India has successfully implemented the core banking solution in all branches. They are using Finacle of Infosys and carrying out their operations very fast and customers are happy with the quick service of the bank

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

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Infosys introduced Finacle which changed the way of working for banks. Now, account opening is done on the same day in Bank of India. If compared to earlier, it took one week at least. Not only technology helped Bank of India to implement BPR but their fast working and updated manpower also gave them edge over other banks. Now, all documents reach within one week or t wo which took too much time earlier. Now Bank of India has implemented Internet Banking (more secure), WAP(Wireless Application Protocol) Banking, SMS(Short Message Service) Banking with no extra cost to the customer One can open an account with Rs. 100 (without cheque book) and Rs. 500 (with cheque book) Now, 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.

Conclusion and Recommendations: Bank of India has successfully implemented Business Process Reengineering over a period of time to satisfy the today’s customer needs and enhance the business process in a better manner. Bank of India is now earning a great goodwill among the customers (retail and corporate) due to its great services. However, there are still some recommendations for the bank:


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Implementation of BPR in Bank of India 

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2010

Bank of India should try to implement implement a better way of o f working which can help a comm co mmon on man. Today, a common man faces too much problem in opening a bank account. With the help of UIDAI (Unique Identification Authority of India) the bank can try to link everything in a centralized manner. However, UIDAI is planning the same. Internet education should be imparted to the common citizens so that they can learn the benefits of technology which can save time and money. Though BPR is being implemented yet Bank of India being a public sector bank is facing tough competition from private banks like ICICI Bank, Axis Bank due to certain discrepancies. It should try to improve its image over other banks whether public or private.

Bibliography: 

Business process change: reengineering concepts, methods, and technologies By Varun Grover, William J. Kettinger

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http://www.business-standard.com

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http://www.banknetindia.com

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http://www.financialexpress.com


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BPR Project Report- Bank of India

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