L08 csf of pm in banking
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This document discusses the importance of IT in banking and outlines critical success factors for managing IT projects in the banking industry. IT is essential for banks to operate and provides competitive advantages through customer data, transactions, and service delivery channels. Banking IT projects are complex with many interdependent systems and fast-changing technologies. Key success factors include senior management support, clear objectives, proper methodology, stakeholder communication, and addressing issues promptly to avoid cost overruns or delays. Good project management is vital for banks to successfully implement new systems while minimizing risks from failures.
L08 csf of pm in banking
- 1. IS5540- Project Management and Quality Assurance Critical success factors of Project Management in Banking Prof. Y.B. Yeung 19,21,23 Oct 2009
- 2. Learning objectives Understand the role of IT in banking Understand different types of IT applications Understand the characteristics of IT projects in banking Understand the risk of a project failure Understand the critical success factors of managing IT projects in banking
- 3. Role of IT in banking Banks cannot survive without IT Information is power (market data, customer data, transaction history) IT provides a competitive edge and a differentiator Use IT as a business enabler (revenue) and defensive tool (cost reduction and risk mitigation)
- 4. IT banking applications Products Deposits (savings, current acct, time dep) Loans (mortgage, consumer loans) Payments (remittances, clearing) Foreign exchange Securities services (trading, custody) Trade finance
- 5. IT banking applications(2) Delivery channels Branch banking ATM Telephone banking (VRS, manned) Internet banking
- 6. IT banking applications(3) Internal systems General ledger Financial reporting (Basel 2, Sarbannes Oxley) Human resources Purchasing Email New data centre
- 7. Characteristics of IT projects in banking Use many technologies Fast changing technologies User requirements change all the time Many systems have to work together They want the project yesterday Regulatory pressure
- 8. Use many technologies Banks have legacy systems developed 30 years ago(COBOL, mainframe) Powerful front ends(servers, browser, Java) The middle layer(network, routers, front end processors, firewall, ACD) Needs high interoperability
- 9. Use many technologies(2) Internet banking is a technology nightmare Many technologies have to work together Mainframe; web servers, AIX servers; firewall; telecommunications Volume is unpredictable and difficult to benchmark Cyber attacks everyday Servers more fragile than mainframe Staff and customers have to be security conscious Severe reputation damage if system is down
- 10. Fast changing technologies Don’t we love COBOL Technologies become obsolete fast Tough to keep up the pace because: Capitol investment in hardware/software Takes time to write procedures and train staff Customer education takes time Have to identify fads
- 11. User requirements change all the time Cut throat competition Dynamic market conditions Some users do not know what they want The later the change, the more costly it is Prototyping and browser technology help
- 12. The modern day customer Has more money to invest Knows what he/she wants Seeks better return on investment Has sophisticated financial needs Banking anywhere, anytime “the next bank is only one click away”
- 13. Many systems have to work together Example: credit card system Core system for card processing Credit approval system for new cards Authorisation system for approvals/decline Fraud detection system for alerts Collections system for bad loans
- 14. Credit card system design Card system core Credit application processing Authorisation engine Fraud detection Automated collections
- 15. They want the project yesterday Typical project duration is 18-24 months 1/3 is in requirements and design 1/3 is in development 1/3 is in testing The business cannot wait Need to find ways to have faster delivery
- 16. Regulatory pressure More and more projects are regulatory and compliance related, eg. Basel 2 accord – operational and credit risk mitigation Sarbanes Oxley Act – ensure accurate financial reporting Two factor authentication – imposed by HKMA to protect e-banking customers
- 17. Risks if a banking IT project fail You lose your job Impact customer service & confidence Customer loyalty is very fragile Reputation risk(eg. Fraud) The bank cannot open its doors(eg. Y2K) Financial loss(compensation, interest loss) Regulators can withdraw banking license
- 18. Critical success factors of a project manager in banking IT Senior management support(sponsor) Convey clear objectives Have all the tools/process in place Have a system development methodology Knowledge of business and IT Have a solid plan and stick to it Avoid scope creep Expect problems and fix it fast Communicate and work with people
- 19. Senior management support Identify a project sponsor Senior person to go to if in trouble Form a project steering committee Chaired by the project sponsor and attended by the stakeholders
- 20. Convey clear objectives All parties in the project must understand clearly the common objective of the project This objective will be the focal point through the project This is what we are trying to achieve. Do not lose sight of it.
- 21. Have all the tools/process in place Project plans Tools to track progress Tools to track cost and manpower Change control process Tools to report progress and cost
- 22. Have a SDLC Formalise a System Development Life Cycle Identify major checkpoints and deliverables Get the signoffs Seek additional funding or decision to proceed or not at these checkpoints
- 23. Knowledge of business and IT Project manager must have a good knowledge of the business and IT Be able to understand the linkage between business and IT during project planning and execution A project manager has great influence on project direction(not just an administrator)
- 24. Have a solid plan and stick to it A well thought out plan will pay off at the end Good execution requires dedicated effort Plans do change. Consult the stakeholder and adjust. Make everyone aware of the change and its implications
- 25. Avoid scope creep Probably one of the biggest reasons for project failure scope time money
- 26. Change control process Absolutely essential to control scope Formally document the process and adhere to it Agreed this beforehand with users No sympathy if project is late or over budget due to scope creep The later the change, the more expensive it is
- 27. Expect problems and fix it fast Problems do occur eg. Vendor delay, resignations, failed volume test Expect more problems for bigger projects Fix it quickly before it becomes a big problem Be prepared to escalate if significant
- 28. Communicate Nothing replaces good communications in a project Steering committee Project progress meetings Work groups Have a Newsflash or Project corner on the intranet
- 29. Work with people People are the most important success factor of any project Technology and process are important but it is the people that make it happen
- 30. Summary IT is critical to the banking industry Service delivery is totally dependent on IT Project failure can have grave impact to the bank Good project management is crucial to ensure success in implementing banking IT projects
- 31. References Managing the information technology resource by Jerry Luftman Chapter 5