ERP implementation and significance in banking industry

ERP implementation and signifi pottyce in depositing industryThe Industrial recognition and Investment Corporation of India (i.e., simply ICICI marge of India) is Indias 2nd largest cashbox (first macrocosm State Bank of India SBI) currently with total as castigates of value more than 3,634 cardinal which approximately amounts to US $ 81 billion. For the financial year quited thirty-first March 2010 the Net Operable Profit After Tax was institute to be 40.238 billion which is approximately US $ 898 million.To achieve such a financially racy value, the stick needed to exhaust a Brobdingnagian network. Today, its network is one of the biggest networks in the country having 2528 unified branches and about 6000 ambiance centers across the country. It is currently present in 19 countries. Besides India (where it originated) the bank has subsidiaries in USA, UK, Singapore, Bahrain, Hong Kong etc. and representative offices in UAE, China, South Africa, Bangladesh, Thailand, M alaysia etc. The family is focussing on more and more harvest-home and further expecting to fill out its market appear structure.The firm i.e., ICICI Bank in the current scenario offers an enormous liberal range of banking products and various financial services to a large modus operandi of integrated and retail customers through a variety of delivery impart and through its particularised subsidiaries in the areas of investment banking, venture capital and indemnification sectors. The bank today had multiple number of rewards and its innovative closures has conquered the minds of customers and misrepresentd to win every smirch their hearts. The confederacys network is the biggest and it had more than 15 million customers by the current year. The growth achieved by the company in the recent few years is noteworthy.organisational OBJECTIVESAs a firm grows, it has certain challenges to face and its profitability totally depends on how it uses various available resources to safeguard itself. The best way to block competitors and rivalry firms from sidelining you is to continuously upgrade yourself with latest engine room and market trends.The master(prenominal) objective of ICICI bank was to have a universal bank which can provide call for value to customers with financial solutions. High engineering was necessitate and at the same fourth dimension, it was necessary to have a proper poser to avoid risks associated. Since, there were various applications involved the level of vulnerabilities needed to be checked and minimized.Key Business driversThese factors govern the way the firm should manage its business. ICICI bank was doed when the economic concepts of liberalizations and globalisations just started in India. Before the reach of ICICI bank, the banking sector was under control of several state owned and outside(prenominal) owned banks. But with the arrivals of economic trend like liberalization globalization Reserve Bank of India (then, apex bank of the nation) had paved the way for secluded banks to come in.The state owned banks had huge network but no or little innovation involved (focus on service) while lapse was the case with foreign banks. State owned banks focussed on all poor people and gave only simple interface without provoding any special features while foreign banks targetted individuals or corporations with high net worth. So, the only probability possible for ICICI bank to grab market share was to target fondness class on a larger scale and that too by innovations. Doing this analysis, ICICI Bank decided to position itself as a applied science moil customer friendly bank.Problems with the existing systemThe existing system had umteen applications running simultaneously to pay off the requirements of the customers. But those applications had several vulnerabilities and their weaknesses needed to be addressed before it gets exploited by the customers and competitors.Pravin Vohra, Group CTO, ICICI bank was strain by the speed of online transactions and he points out that the applications arent centralized profuse that makes security testing of applications a highly time consuming project. He wanted to search for proper vender to organize the given set of applications so that all the security tests can be covered as soon as possible.The main line of work was that ICICI had poor risk circumspection and they badly needed whatever framework to help them assess risk. second the selective informationbase apply in the system wasnt centralized and hence the main task in front of the industry was to have centralized entropybase so that data access becomes simple process.Expectations from the engineeringNow, the challenge in front of ICICI bank was to have proper framework so that all the weaknesses are correct at the lowest possible be. As per words of Chandra Kochar, executive coach of ICICI bank Our objective of creating a universal bank providing end to end fin ancial services clearly required solutions which were based on newfang conduct generation technology, offered end to end functionality and were highly flexible and scalable.The main problem in the existing system was risk associated with all the applications and most of the applications at that time needed to be tested continuously so, the bank required a computer software system to manage the testing of all applications autonomously so that the time is not wasted in manually searching for faults and available convalescence solutions. To manage proper assessment of risk associated with applications, ICICI needed to have the technology which can test applications and correct problems if possible.In order to penetrate into the market, the bank needed to have the necessary technology to make system fast(a) and to curb smooth flow of information within the system. The other requirements from the software in India were to have open systems approach, future conclusion excellent tec hnology and best of breed retail etc. ICICI wanted to achieve economies of scale. move on more, ICICI wanted to have a centralized database to support all applications divergence on and needed a solution which can boost up its infrastructure in friendly manner.IMPLEMENTING THE ERP TECHNOLOGYICICI bank had positioned itself as a technology focussed industry. Most of its plants facilities were on the verge of automation and this was requisite to achieve customer satisfaction and to rival the foreign firms.Selecting the vendorThe company had some requirements in front of them and their job was to analyze which vendor would satisfy their requirements. So, they went through brochures of various Application developers and studied software requirements. After canvass various features offered by different vendors they decided to shortlist 2 vendors Finacle heart and soul Banking Solution by Infosys and SAP by IBM.ICICI then finalized Fiancle Core Banking solution because it was segmen ted for financial institutions only. They took Finacle because of its specificity make it suitable for banks, secondly Finacles future proof technology, and extensive corporate banking features, scalable architecture, best of breed retail made it a technology worth selecting. Some of the key technological features offered by Infosys Finacle wereAdvizorHelps Banks to deliver services through a self service carry onAlertsProvides banks with the capability to alert end users about updates and new servicesConsumer kind ManagementCRM is a modular, multi lingual application to help bank to have centralized database containing all the customer information want.Core BankingCBS addresses various strategical and key technological processes taking place in a bank. It checks faults associated and corrects them. account bankingThis marketing tool helps banks to directly acquire, track and service customers.E bankingProvides high flexibility for customization and robust security featuresMobil e bankingEmpowers banking transactions on winding impart like SMS or GPRSWealth ManagementModular and coordinated investment management system for specific purposeOperational data storeData warehouse centralized and secured.TreasuryFinacle is an integrated exchequer solution covering the entire deal lifecycle for broad range of trade and capital markets products. The major value was that Finacle offered so many features at proportional lesser costs compared to other similar technolnogical products. Keeping these many good and industrial applicable features in mind, the technological software solution used was Finacle and the vendor was Infosys.Problems set about during the beginningThe implementation of any technology cannot be in(predicate) right from the beginning as risks are involved. The 1st stair involved is to make this technological heighten understandable by globe and hence the challenge was in front of ICICI was to ensure proper prep to their employees. For tha t purpose, special officials were employed. Training were given to employees right from the day when technology was deployed. This was a key step in maintaing vendor relationships.Integrating this technological change with the existing system is the major hurdle which is to be get the bestd. The biggest challenge which Finacle had was to ensure Straight Through Processing (known as STP in corporate segment) of various financial transactions. With the ICICI group having many companies under its huge corporate umbrella. Finacle had to integrate with various corporate wide applications like Credit Card, M banking, mutual funds, brokerage, call center and other applications taking place simultaneously.ICICI bank went with a phase of organic and inorganic growth to expand market share. First it bought out Bank of Madurai and then had a reverse coalition with parent firm i.e., ICICI limited. Therefore, managing with the technology change was a hurdle for the bank. To overcome this obst acle, ICICI decided to have a strategic partnership with the software vendor i.e., Infosys. That strategic partnership started in 1994 and that close collaboration in 1997 led to many innovations.Getting the benefits during the endOnce the problems with the implementation are identifed and right via proper planning toolkits, the success and benefits are guaranteed. The major advantage with Finacle was that it was a scalable and open system architecture and this made it a successful implementation. In 2000 only 400, 000 transactions while this figure was more than 2 million in 2005 years so, popularity of the bank drastically increased in only 4 years.The risks associated with people, process and technology was managed and this made ICICI a useful firm. In 1997, ICICI was the first bank to ensure electronic banking. This made ICICI establish itself as the leader in the e commerce segment. The main advantage of using Finacle was that only 25 % routine transaction take place through branches and remaining through various delivery channels.http//www.infosys.com/finacle/Images/icici_cs_img1.gifFig Finacle crack various services in ICICI.Thus, the use of Finacle has helped ICICI in cutting costs and time and managing automatically various transactions that take place on a day to day basis. As shown above, ICICI managed to penetrate into various market segments by the enormous features offered by Fiancle. Today, most of the transactions take place at the bank center by its various distribution channels and not at the branches.CONCLUSIONSAfter studying the given case, it can be understood that what role the technological advances play in growt A mightily of a bank. A highly scalable and flexible technology platform is essential for organizations to manage growth and compete successfully. Such a software is Finacle. Fiancle, a leading IT Core Banking Solution has helped ICICI achieving its objectives across the network. Though ICICI faced certain problems and cha llenges in the beginning, they managed to win in the end. Thus, investing in technology helped ICICI get rich dividends.The bank has successfully used the Finacle and has managed to successfully deploy the solution in the areas of core banking, consumer driven e-banking (Electronic B 2 C segment), direct banking, corporate e-banking (Electronic B 2 B segment) and Customer family relationship Management. Thus, Finacle guaranteed flexibility to achieve proper segmentation. This helped ICICI in growing its market and having some edge over the competition.because of its high trust on technology, ICICI Bank is acknowledge as a leader in the region and has won a large number of awards worldwide for its technology-driven initiatives. The bank has used core technology as a strategic differentiator, thus redefining the rules of banking in India and additionally besides showing how technology can do some good in transforming a banks business.