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An MFI story MicroFinance & New Technologies Summit 2008 Pierre Pezziardi ( [email_address] ) Octopus Founder CEO, OCTO © ...
2005, Omar, CEO Zagora MFI - Morocco © OCTO  Technology 2008 flexible secured 1,4 M€  OLB
2006 : growth … but © OCTO  Technology 2008 2,4 M€  OLB 1,6 M€  OLB
Errors © OCTO  Technology 2008 Too bad, these amounts have not been inputted in the correct cells We now believe that cust...
Frauds © OCTO  Technology 2008 This loan has been discretely inserted without following the standard appraisal process  Mo...
Operating costs increase © OCTO  Technology 2008 2,4 M€  OLB 1,6 M€  OLB .. Extra staff to control and consolidate informa...
THE solution : A MIS ! © OCTO  Technology 2008 Excel (2005) Flexible Secured & automated Excel (2006) MIS (2007)
An 8 months marathon … © OCTO  Technology 2008 Loan + Grant  Requirements analysis RFP Configuration & Migration Software ...
2007 : still growing … but © OCTO  Technology 2008 4,2 M€  OLB 2,8 M€  OLB 1 M€  OLB 1 M€  OLB
MIS doesn’t support our new local-currency products © OCTO  Technology 2008 5 k€ €  OLB DH OLB Never mind, I will manage t...
Can’t improve steering : breakdown rural/non rural © OCTO  Technology 2008 I will ask my Value Added Reseller to develop t...
Can’t improve operations : bulk collective repayments © OCTO  Technology 2008 I will ask my Value Added Reseller to develo...
Can’t change Accounting method © OCTO  Technology 2008 VAR says he can’t handle such a big change in the software : accrua...
Mid-2008 : Specific development is a dead end © OCTO  Technology 2008 And my VAR now proposes a 70k€ shift to a new techni...
Lost Eden … © OCTO  Technology 2008 Flexible Secured & automated Excel (2005) Excel (2006) MIS (2007) MIS ? Is it impossib...
Streamlining Innovation through an adaptive MIS © OCTO  Technology 2008 Automated testing Development 3 weeks Demand poste...
Benefits <ul><li>MFI  empowerment , not alienation  </li></ul><ul><ul><li>Release every month , automated tests ensuring s...
Value of IT … <ul><li>Like 80% of his peers, Omar is unsatisfied  (Source CGAP) </li></ul><ul><ul><li>Yet, he has spent an...
Unrefusable offer <ul><li>Imagine : you manage your computers and network </li></ul><ul><li>Now,  what would you pay, per ...
What you should remember <ul><li>Don’t think static,  think dynamic  : things change fast, MIS must change fast </li></ul>...
THANK YOU © OCTO  Technology 2008
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An Mfi Story

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This presentation describes the challenges faced by a Microfinance Institutions when having to choose an adequate technological solution..

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  • Transcript of "An Mfi Story"

    1. 1. An MFI story MicroFinance & New Technologies Summit 2008 Pierre Pezziardi ( [email_address] ) Octopus Founder CEO, OCTO © OCTO Technology 2008 Images by Bidulz.com
    2. 2. 2005, Omar, CEO Zagora MFI - Morocco © OCTO Technology 2008 flexible secured 1,4 M€ OLB
    3. 3. 2006 : growth … but © OCTO Technology 2008 2,4 M€ OLB 1,6 M€ OLB
    4. 4. Errors © OCTO Technology 2008 Too bad, these amounts have not been inputted in the correct cells We now believe that customer #12 has paid, whereas he hasn’t .. And customer #13 is now delinquent whereas he has actually paid !
    5. 5. Frauds © OCTO Technology 2008 This loan has been discretely inserted without following the standard appraisal process Money has been disbursed to someone we don’t know .. How many fake loans have we got now ??
    6. 6. Operating costs increase © OCTO Technology 2008 2,4 M€ OLB 1,6 M€ OLB .. Extra staff to control and consolidate information
    7. 7. THE solution : A MIS ! © OCTO Technology 2008 Excel (2005) Flexible Secured & automated Excel (2006) MIS (2007)
    8. 8. An 8 months marathon … © OCTO Technology 2008 Loan + Grant Requirements analysis RFP Configuration & Migration Software Proposals 1 M€ OLB 80 k€ IT Local IT expertise Technical Assistance
    9. 9. 2007 : still growing … but © OCTO Technology 2008 4,2 M€ OLB 2,8 M€ OLB 1 M€ OLB 1 M€ OLB
    10. 10. MIS doesn’t support our new local-currency products © OCTO Technology 2008 5 k€ € OLB DH OLB Never mind, I will manage the Dirham portfolio aside in Excel I had to pay my Value Added Reseller (VAR) for an import/export program Requirements analysis Development, Test & Migration
    11. 11. Can’t improve steering : breakdown rural/non rural © OCTO Technology 2008 I will ask my Value Added Reseller to develop this feature 10 k€ € OLB Requirements analysis Development, Test & Migration
    12. 12. Can’t improve operations : bulk collective repayments © OCTO Technology 2008 I will ask my Value Added Reseller to develop this feature 10 k€ € OLB Requirements analysis Development, Test & Migration
    13. 13. Can’t change Accounting method © OCTO Technology 2008 VAR says he can’t handle such a big change in the software : accrual accounting seems very different from cash accounting We’ll have to wait for a new release from the Vendor…
    14. 14. Mid-2008 : Specific development is a dead end © OCTO Technology 2008 And my VAR now proposes a 70k€ shift to a new technical solution … € OLB DH OLB New release Won't work Won't work Won't work Local adaptations make the migration to the next Vendor version very difficult
    15. 15. Lost Eden … © OCTO Technology 2008 Flexible Secured & automated Excel (2005) Excel (2006) MIS (2007) MIS ? Is it impossible to streamline innovation while being secured & automated ?
    16. 16. Streamlining Innovation through an adaptive MIS © OCTO Technology 2008 Automated testing Development 3 weeks Demand posted in our MIS’ backlog Demand#233 : Check customer duplicate When a customer is entered, a dialog … Listen, there are too many customer duplicates in the system, it should check if a customer already exists ! Automatic upgrade on the MFI’s side
    17. 17. Benefits <ul><li>MFI empowerment , not alienation </li></ul><ul><ul><li>Release every month , automated tests ensuring software stability </li></ul></ul><ul><ul><li>Open Source ensuring transparence & autonomy </li></ul></ul><ul><ul><li>Auto Update mechanism ensuring fast & secure release updates </li></ul></ul><ul><ul><li>Education of local teams ensuring technical alignment & quality </li></ul></ul><ul><li>Best practices aggregation </li></ul><ul><ul><li>Your best ideas aimed at maximizing social impact in one simple & robust product </li></ul></ul>© OCTO Technology 2008 Bulk repayments Partner remote offices Loan Officer roadmap optim PPI social impact reporting
    18. 18. Value of IT … <ul><li>Like 80% of his peers, Omar is unsatisfied (Source CGAP) </li></ul><ul><ul><li>Yet, he has spent an average 4% of its revenues in IT + hidden costs of its best internal staff time </li></ul></ul><ul><ul><li>In Western countries, IT costs about 10% of Banks revenues … </li></ul></ul><ul><li>Growth , competition and regulation deprecate the IT at high speed </li></ul>© OCTO Technology 2008 * excluding hardware & network k€ 2005 2006 2007 2008 OLB 1,400 4,000 8,000 13,000 Revenues 280 800 1,600 2,500 IT* (in % of revenues) 0 40 (5%) 65 (4%) >70 (>3%)
    19. 19. Unrefusable offer <ul><li>Imagine : you manage your computers and network </li></ul><ul><li>Now, what would you pay, per year, for an adaptable-guaranteed MIS running on this hardware ? </li></ul><ul><li>You can find an Octopus VAR and deal such an unrefusable offer </li></ul>© OCTO Technology 2008 k€ 2005 2006 2007 2008 OLB 1,400 4,000 8,000 13,000 Revenues 280 800 1,600 2,500 IT (in % of revenues) 0 40 (5%) 65 (4%) 70 (3%) IT (in % of revenues) 0 16 (2%) 32 (2%) 50 (2%)
    20. 20. What you should remember <ul><li>Don’t think static, think dynamic : things change fast, MIS must change fast </li></ul><ul><li>Don’t buy a box or a list of features, build a team able to embrace the everlasting change </li></ul><ul><li>MIS decay, the piece of code you write alone is your next year’s nightmare … find VARs who can share their code </li></ul><ul><li>Provision more than 2% of your revenues for IT investments & expenses per year </li></ul>© OCTO Technology 2008
    21. 21. THANK YOU © OCTO Technology 2008
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