© 2012 Tieto Corporation

A Practical
Application of
Enterprise
Architecture in
Commercial
Banking – the
Ecobank Example
K...
Contents
•
•
•
•
•
•

2

Introduction
Strategy
Operating Model
Enterprise Architecture
Engagement Model
Fruits of Unificat...
Introduction
• Presentation based on Enterprise Architecture as Strategy:
Creating a Foundation for Business Execution (Ha...
Ecobank Strategy: Build the
platform – 1985-2011
• Pan-African full service banking group
• 32 African countries
and Franc...
Ecobank Strategy: Develop scale
in key markets – 1985-2011
•

Focus on performance:
• risk management
• customer service
•...
Ecobank Strategy: Growth
acceleration – 2012-2014
• Seek to be Top 3 in all markets and #1 in key parameters
• Exploit int...
Ecobank’s Strategic Challenge
• In Commercial Banking you need to minimize costs – this
comes from operational efficiency
...
Ecobank Strategic Thinking
• The leading Ecobank Information Technology and Operation
Managers come from CitiBank
• Ecoban...
Steps in Implementing Enterprise
Architecture
I.

Operating model – Global Business Processes are
dependent upon Business ...
I. Operating Model
Business
Process
Integration

High

Coordination

Unification

Low

Diversification

Replication

Low

...
More Details about the Operating
Model:
B
u
s
i
n
e
s
s

H
i
g
h

p
r
o
c
e
s
s
I
n
t
e
g
r
a
t
i
o
n

L
o
w

Coordination...
Diversification
• This where EcoBank started through a series of
mergers:
•
•
•
•
•
•
•

Few, if any, shared customers or ...
Unification
• This is what EcoBank wanted to Achive – EcoBank
wanted to absorb its mergers
• Customers and suppliers may b...
I. Ecobank’s Operating Model
Considerations
• Ecobank operates in 32 countries
• Ecobank had strategic goals in relation t...
Strategic Business Reasons for
Unification
• Common Business Processes – but it is not so easy
•
•
•
•

Easier to train st...
II. The Four Stages of Architecture
Maturity
• Business Silos architecture: where companies look to maximize
individual bu...
II. Ecobank Enterprise Architecture
• Ecobank wanted to attain Business Modularity
• You cannot get there at once – “it is...
II. Ecobank Enterprise Architecture
• Ecobank then proceeded with implementing Optimized Core
Architecture – in relation t...
II. Tieto’s Contribution to
Optimized Core
• On-line interfaces to FlexCube and Postillion
• Off-line interfaces to Flexcu...
II. Tieto’s Contribution to
Optimized Core
• Account Management for Pre Paid and Credit Cards
• including interest and oth...
III. IT engagement model
• It is important that Project goals are tightly aligned with
strategic goals
• Executive Reviews...
III. Tieto Contribution to Capacity
Building
• Ecobank defined its business and marketing product
requirements
• Tieto pro...
Fruits of Unification
• 29 affiliates are using Card Suite
• Migrated from HP Unix to IBM AIX platform – also performed st...
Fruits of Unification – Instant Debit
Card Issuing
• Started in one Affiliate
• Took 2 weeks for a new customer to get a d...
Lesson Learned
• Executive Support is Key
• For Large Projects Intensive Cooperation is Required
• Large Customers strive ...
© 2012 Tieto Corporation

Kims Šifers
Principal Business Consultant
Cards, Tieto Financial Services
kims.sifers@tieto.com
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'A Practical Application of Enterprise Architecture – the Ecobank Example by Kims Sifers, LV

  1. 1. © 2012 Tieto Corporation A Practical Application of Enterprise Architecture in Commercial Banking – the Ecobank Example Kims Šifers Principal Business Consultant Cards, Tieto Financial Services kims.sifers@tieto.com
  2. 2. Contents • • • • • • 2 Introduction Strategy Operating Model Enterprise Architecture Engagement Model Fruits of Unification and Lessons Learned © 2012 Tieto Corporation
  3. 3. Introduction • Presentation based on Enterprise Architecture as Strategy: Creating a Foundation for Business Execution (Hardcover) by Jeanne W. Ross, Peter Weill, David C. Robertson • A Practical Application of Enterprise Architecture in Commercial Banking – the Ecobank Example 3 © 2012 Tieto Corporation
  4. 4. Ecobank Strategy: Build the platform – 1985-2011 • Pan-African full service banking group • 32 African countries and France • $17.2 billion assets • 8.4 million customers • 23,355 employees • Strategic alliances • Single IT platform 4 © 2012 Tieto Corporation
  5. 5. Ecobank Strategy: Develop scale in key markets – 1985-2011 • Focus on performance: • risk management • customer service • capacity building • Optimize balance sheet: • diversify funding sources • optimize capital allocation • Develop key businesses • Proactive inorganic opportunities to build market share • Target key customer segments 5 © 2012 Tieto Corporation
  6. 6. Ecobank Strategy: Growth acceleration – 2012-2014 • Seek to be Top 3 in all markets and #1 in key parameters • Exploit international opportunities • Capture efficiency & process improvements through centralization & outsourcing • Investment in key growth drivers • Fill out holes in network • Enhance profitability & operating efficiency 6 © 2012 Tieto Corporation
  7. 7. Ecobank’s Strategic Challenge • In Commercial Banking you need to minimize costs – this comes from operational efficiency • Every affiliate (Ecobank country) was doing its own thing • Very expensive from a procurement and operational point of view • Uneven risk and quality • EcoBank and Africa is very large – 29 different countries and cultures – Africans are different • Ecobank understood that efficiency had to be improved and cost reduced 7 © 2012 Tieto Corporation
  8. 8. Ecobank Strategic Thinking • The leading Ecobank Information Technology and Operation Managers come from CitiBank • Ecobank Managers implemented an Enterprise Architecture Strategy as they had in CitiBank • Large Multi-International Customers act in similar ways 8 © 2012 Tieto Corporation
  9. 9. Steps in Implementing Enterprise Architecture I. Operating model – Global Business Processes are dependent upon Business Goals II. Enterprise architecture – This is dependent upon on the Operating Model chosen III. IT engagement model – You cannot implement an Enterprise architecture without project governance 9 © 2012 Tieto Corporation
  10. 10. I. Operating Model Business Process Integration High Coordination Unification Low Diversification Replication Low High Business Process Standardization 10 © 2012 Tieto Corporation
  11. 11. More Details about the Operating Model: B u s i n e s s H i g h p r o c e s s I n t e g r a t i o n L o w Coordination Shared customers, products, or suppliers Impact on other business unit transactions Operationally unique business units or functions Autonomous business management Business unit control over business process design Shared customer/supplier/product data Consensus processes for designing IT infrastructure services; IT application decisions made in business units Unification Customers and suppliers may be global or local Globally integrated business processes often with support of enterprise systems Business units with similar or overlapping operations Centralized management often applying functional/process/business unit matrices High-level process owners design standardized processes Centrally mandated databases IT decisions made centrally Diversification Few, if any, shared customers or suppliers Independent transactions Operationally unique business units Autonomous business management Business unit control over business process design Few data standards across business units Most IT decisions made within business units Replication Few, if any, shared customers Independent transactions aggregated at a high level Operationally similar business units Autonomous business unit leaders with limited discretion over processes Centralized (or federal) control over business process design Standardized data definition but data locally owned with some aggregation at corporate Centrally mandated IT services Low Business process standardization 11 © 2012 Tieto Corporation High
  12. 12. Diversification • This where EcoBank started through a series of mergers: • • • • • • • Few, if any, shared customers or suppliers Independent transactions Operationally unique business units Autonomous business management Business unit control over business process design Few data standards across business units Most IT decisions made within business units • However, there are cases when diversification should be applied because e.g. Business unit control over business process design • IT must serve business 12 © 2012 Tieto Corporation
  13. 13. Unification • This is what EcoBank wanted to Achive – EcoBank wanted to absorb its mergers • Customers and suppliers may be global or local • Globally integrated business processes often with support of enterprise systems • Business units with similar or overlapping operations • Centralized management often applying functional/process/business unit matrices • High-level process owners design standardized processes • Centrally mandated databases • IT decisions made centrally • This is preferred because economies of scale are gained and a common way of doing things – easier to control and understand 13 © 2012 Tieto Corporation
  14. 14. I. Ecobank’s Operating Model Considerations • Ecobank operates in 32 countries • Ecobank had strategic goals in relation to Tieto to: • • • Improve Risk Management and Customer Service Build capacity Get to a single IT platform • Ecobank, taking into consideration Strategic Goals, chose the Unification Operating Model • After choosing the Operating model, the Next Step is to choose the Enterprise Architecture 14 © 2012 Tieto Corporation
  15. 15. Strategic Business Reasons for Unification • Common Business Processes – but it is not so easy • • • • Easier to train staff Higher quality level Easier Statistical Analysis Result of Common Business Process are lower costs • Common Security Platforms – trust is key for the bank • PCI DSS Certification – based on procedures and their implementation - harder with different technical procedures • Chip (Smart) Card – to reduce Fraud losses from counterfeit cards • Easier to Launch New Products across the Group – EcoBank is Pan African • EcoBank Private label cards – upgrading to CPA • Instant Debit Cards 15 © 2012 Tieto Corporation
  16. 16. II. The Four Stages of Architecture Maturity • Business Silos architecture: where companies look to maximize individual business unit needs of functional needs • Standardized Technology architecture: providing IT efficiencies through technology standardization and, in most cases, increased centralization of technology management • Optimized Core architecture: which provides company wide data and process standardization as appropriate for the operating model • Business Modularity architecture: where companies manage and reuse loosely coupled IT-enabled business process components to preserve global standards while enabling local differences Enterprise Architecture as Strategy: Creating a Foundation for Business Execution (Hardcover) by Jeanne W. Ross, Peter Weill, David C. Robertson 256 pages. Publication date: Jun 07, 2006, page 71 16 © 2012 Tieto Corporation
  17. 17. II. Ecobank Enterprise Architecture • Ecobank wanted to attain Business Modularity • You cannot get there at once – “it is a journey” • Business Silos means every affiliate making their own IT decisions – this is expensive • Ecobank firstly implemented Standardized Technology: • IBM Servers, AIX, and Oracle • More efficient both from a Procurement and Operational point of view 17 © 2012 Tieto Corporation
  18. 18. II. Ecobank Enterprise Architecture • Ecobank then proceeded with implementing Optimized Core Architecture – in relation to cards: Tieto’s Card Suite, FlexCube, and Postilion were used • With this implementation Ecobank had attained Optimized Core • EcoBank is now beginning to enjoy the fruits of Business Modularity 18 © 2012 Tieto Corporation
  19. 19. II. Tieto’s Contribution to Optimized Core • On-line interfaces to FlexCube and Postillion • Off-line interfaces to Flexcube, MasterCard, and Visa, and from Postillion • Affiliate net settlement and clearing • Merchant Management including Merchant Settlement and Merchant Service Charge calculation • Fraud Detection and Prevention – Exceptional Fraud Management 19 © 2012 Tieto Corporation
  20. 20. II. Tieto’s Contribution to Optimized Core • Account Management for Pre Paid and Credit Cards • including interest and other account fee calculations • Account statementing • Basic collection functionality • Issuing Authorization including: VSDC, M/Chip, and CPA • Card Life Cycle Management for Debit and Credit Cards • Cards transaction (also on-line) and card commission calculations 20 © 2012 Tieto Corporation
  21. 21. III. IT engagement model • It is important that Project goals are tightly aligned with strategic goals • Executive Reviews and Steering Meetings allow us to ensure that the goals are correctly aligned • Organizations needs to ensure Business Change 21 © 2012 Tieto Corporation
  22. 22. III. Tieto Contribution to Capacity Building • Ecobank defined its business and marketing product requirements • Tieto provided business and technical consultations • Initially, Tieto provided Application Service Management Tieto Employees lived on-site • 7 Ecobank employees were ready for everyday operations with Card Suite, an accounting expert has been trained for Ecobank Operations 22 © 2012 Tieto Corporation
  23. 23. Fruits of Unification • 29 affiliates are using Card Suite • Migrated from HP Unix to IBM AIX platform – also performed stress tests – less expensive to manage a common platform • Migrated 29 affiliates data • Common business and IT practices mean greater capacity and improved customer servicing • Fraud Detection and Prevention – Exceptional Fraud Management • Chip rollout – improved risk management • In some African countries mandatory • Reduced Fraud Losses • PCI DSS Certification has been attained • PCI DSS Certification was greatly aided because common and business IT practices were introduced – improved Risk management 23 © 2012 Tieto Corporation
  24. 24. Fruits of Unification – Instant Debit Card Issuing • Started in one Affiliate • Took 2 weeks for a new customer to get a debit card – Africa is big • Business requirement was to reduce card delivery time • Cards are made without cardholder’s name and with PIN mailer • The affiliate has its own embosser – to write the cardholder name • Web Service used to take information from FlexCube and update it into Card Suite • Cardholder can now get a personalized card in about 10 minutes • Improved Customer servicing that allows for increase in customer base • This now can be rolled out to other affiliates because there is a common enterprise architecture 24 © 2012 Tieto Corporation
  25. 25. Lesson Learned • Executive Support is Key • For Large Projects Intensive Cooperation is Required • Large Customers strive to implement Business Modularity Architecture and Unification Operating Model • It is in everybody’s interest to define appropriate functions to appropriate systems 25 © 2012 Tieto Corporation
  26. 26. © 2012 Tieto Corporation Kims Šifers Principal Business Consultant Cards, Tieto Financial Services kims.sifers@tieto.com

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