IS5540- Project Management and   Quality Assurance   Critical success factors of Project Management in Banking Prof. Y.B. ...
Learning objectives <ul><li>Understand the role of IT in banking </li></ul><ul><li>Understand different types of IT applic...
Role of IT in banking <ul><li>Banks cannot survive without IT </li></ul><ul><li>Information is power (market data, custome...
IT banking applications <ul><li>Products </li></ul><ul><ul><li>Deposits (savings, current acct, time dep) </li></ul></ul><...
IT banking applications(2) <ul><li>Delivery channels </li></ul><ul><ul><li>Branch banking </li></ul></ul><ul><ul><li>ATM <...
IT banking applications(3) <ul><li>Internal systems </li></ul><ul><ul><li>General ledger </li></ul></ul><ul><ul><li>Financ...
Characteristics of IT projects in banking <ul><li>Use many technologies </li></ul><ul><li>Fast changing technologies </li>...
Use many technologies <ul><li>Banks have legacy systems developed 30 years ago(COBOL, mainframe) </li></ul><ul><li>Powerfu...
Use many technologies(2) <ul><li>Internet banking is a technology nightmare </li></ul><ul><ul><li>Many technologies have t...
Fast changing technologies <ul><li>Don’t we love COBOL </li></ul><ul><li>Technologies become obsolete fast </li></ul><ul><...
User requirements change all the time <ul><li>Cut throat competition </li></ul><ul><li>Dynamic market conditions </li></ul...
The modern day customer <ul><li>Has more money to invest </li></ul><ul><li>Knows what he/she wants </li></ul><ul><li>Seeks...
Many systems have to work together <ul><li>Example: credit card system </li></ul><ul><li>Core system for card processing <...
Credit card system design Card system core Credit application processing Authorisation engine Fraud detection Automated co...
They want the project yesterday <ul><li>Typical project duration is 18-24 months </li></ul><ul><li>1/3 is in requirements ...
Regulatory pressure <ul><li>More and more projects are regulatory and compliance related, eg. </li></ul><ul><ul><li>Basel ...
Risks if a banking IT project fail <ul><li>You lose your job </li></ul><ul><li>Impact customer service & confidence </li><...
Critical success factors of a project manager in banking IT <ul><li>Senior management support(sponsor) </li></ul><ul><li>C...
Senior management support <ul><li>Identify a project sponsor </li></ul><ul><ul><li>Senior person to go to if in trouble </...
Convey clear objectives <ul><li>All parties in the project must understand clearly the common objective of the project </l...
Have all the tools/process in place <ul><li>Project plans </li></ul><ul><li>Tools to track progress </li></ul><ul><li>Tool...
Have a SDLC <ul><li>Formalise a System Development Life Cycle </li></ul><ul><li>Identify major checkpoints and deliverable...
Knowledge of business and IT <ul><li>Project manager must have a good knowledge of the business and IT </li></ul><ul><li>B...
Have a solid plan and stick to it <ul><li>A well thought out plan will pay off at the end </li></ul><ul><li>Good execution...
Avoid scope creep <ul><li>Probably one of the biggest reasons for project failure </li></ul>scope time money
Change control process <ul><li>Absolutely essential to control scope </li></ul><ul><li>Formally document the process and a...
Expect problems and fix it fast <ul><li>Problems do occur </li></ul><ul><ul><li>eg. Vendor delay, resignations, failed vol...
Communicate <ul><li>Nothing replaces good communications in a project </li></ul><ul><li>Steering committee </li></ul><ul><...
Work with people <ul><li>People are the most important success factor of any project </li></ul><ul><li>Technology and proc...
Summary <ul><li>IT is critical to the banking industry </li></ul><ul><li>Service delivery is totally dependent on IT </li>...
References <ul><li>Managing the information technology resource by Jerry Luftman Chapter 5 </li></ul>
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L08 csf of pm in banking

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