Finacle - Enterprise Business Technology Transformation


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Infosys Finacle thought paper on Banking Business Transformation Framework & Technology Capabilities & Capacity.

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Finacle - Enterprise Business Technology Transformation

  1. 1. Transformation: The bridge to anenterprise’s futureThought Banking Solution | Systems Integration | Consulting | Business Process Outsourcing
  2. 2. Transformation: The bridge to an enterprise’s future Definitions of business transformation can As previously stated, business transformation differ from company to company; however, is a term used to refer to strategic, enterprise- transformation generally refers to strategic, wide change programs that have a profound enterprise-wide change programs that have a impact on the organization’s end-to-end significant impact on an organization/company. capabilities, technology, environment, processes Transformation programs tend to focus on: and performance. If correctly planned and addressing market change; reducing cost due implemented, business transformation has to new economies of scale at a domestic or significant impact across the entire organization international level; achieving growth by seizing with implications and benefits that deliver (speed to market) each and every opportunity results to the bottom line. The most common offered by the existing and changing markets. drivers for business transformation initiatives are: Whether the intention is to expand capabilities, • Corporate transactions - mergers, acquisitions boost efficiency or to improve profitability, and/or divestitures; Global and/or domestic business transformation has become a way of competition - changing market conditions; corporate life. There is no doubt the forces of • Changes in the global business environment; globalization will continue to drive high levels of business transformational activity for the next • Strategic people, process and/or technology several years. efficiency changes - changing business model, outsourcing/ off shoring, cost reduction, There are two major forms of transformation: consolidation, etc.; • Fundamental change that generates a strong • Emerging trends and new technologies – digital, impact on business results, such as mergers pervasive computing, new commerce; and acquisitions, outsourcing, or strategic initiatives. These programs usually involve • Support for new and emerging markets; external players and generate major • Enterprise-wide technology changes; transformation across significant portions of the organization • Enterprise-wide restructuring/reorganizations; • Transformation Programs that generate • Value-chain improvement initiatives (supply incremental improvement, such as cross- chain programs); and functional performance improvement or technology re-platform – but require new or • Regulatory changes and/or government updated skills, technology and/or organizational policy change. approached to implement and sustain. Continual change is driven by the above In summary, transformation as defined in mentioned factors, and serves as a constant the organizational context is a profound and reminder that there is no such thing as a radical change that drives new direction in an static business environment. There is continual organization and takes it to an entirely different and significant pressure exerted on and from level of effectiveness (from all aspects – cost, boardrooms, forcing executives to rethink, processes, revenue, etc.). Transformation implies reinvent and change the operating model and / a makeover that when complete will have little or structure of the business. In today’s business or no resemblance with the past configuration climate, change and transformation are almost or structure (technology, people and process). as common as “business as usual”.02 Thought Paper
  3. 3. Any change is difficult, and it is well understood • Business Case and value realization isthat business transformation programs are understood and supported;inherently complex. The fear of change can • Robust Governance Model with clearlyhave a paralyzing effect across the enterprise identified stakeholders and a directfrom executives delaying critical decisions to relationship between the transformationmistrust and denial from those affected by and the impact to each stakeholder’sthe transformation. organization. The Governance Model fullyThough business transformation has become aligns accountability, responsibility andthe “norm” for how companies run their authority, ensuring the benefits of successrespective business, executing change is not a or consequences of failure of the endeavornatural capability for the individuals who are bear an impact to the stakeholdertasked with driving the programs that are part or executive;of a transformation initiative. • Workable Approach and Execution ModelIn any business transformation there must be key that has seasoned team with similartenets embedded in the organization to make experience so that the methodology,the successful transformation journey which are: processes, discipline, expertise, and governance defined in the execution model• Accepting business transformation and will be easily understood. The has clear and change as a central and common “way of distinct roles relative to business delivery, working” for an enterprise; transformation management, governance• Realizing that there is a direct causality and technology solution delivery; between business value generated and • Technology Capabilities and Capacity to improvement in business process; perform all the technology solution delivery tasks required by the transformation,• Setting objectives is not enough— there must including but not limited to skills, tools, be a clear vision and a target operating model processes, and management capability; underpinning it, that has enterprise-wide buy-in and the full supported of the executives; • Enterprise Business Capabilities and Capacity to design, support, implement• Strong executive commitment and involvement and operate the transformation elements throughout the transformation; and their related business aspects for• Continuous business transformation readiness the transformation assessment to evaluate and measure the The remainder of this paper focuses on the enterprise’s readiness to undergo change. transformation readiness and delivery model Critical readiness areas to assess are: for the transformation program. The emphasis • Vision (target end-state operating model) is on the program structure, execution model is clearly defined and related to the change and methodology are required to successfully that is to be achieved; drive a transformation program.The bridge to an enterprise’s future: ‘The Journey’Overview ‘The Journey’ regulatory) factors that spark the requirement to embark on the transformation journey.The journey starts with a vision of an enterprise-wide change program, driven by internal Refining the vision and the commencement(e.g. cross functional changes, or a merger) or of constructing the business case is where theexternal (e.g. changing market conditions, or journey begins to take shape, and also become Thought Paper 03
  4. 4. complex. Yes, visions and ideas do create Business case euphoria and excitement! That said; navigating Unfortunately, many business transformation to the “end-state” (implementation/outcome) of programs either don’t make it out of the starting the transformation is complex and full of gate or are grossly underfunded... Success, challenges. Bringing order and shape to a therefore, depends heavily on getting “the transformation program, requires a framework. numbers are right” which in turn demands that The framework must embrace the key building the business case be constructed to connect block of the transformation: vision; business the dots from vision to target operating model case; governance model; workable approach to meaningful business measurements. and execution model; technology capabilities and capacity; along with both the business The end goal for a business case is not simply capability and capacity. The framework is getting Executive or Board approval. While that essential. Organizations shouldn’t fall into the is the essential first step, the business case also trap of just conforming to the framework establishes the case for change and influences (i.e. assume the framework is the answer), in the odds of a successful transformation. contrast the framework should be embraced This broader view of the business case embraces and in turn influence, guide as well as direct robust processes for developing, managing them down the transformation journey. and continuously measuring the business case – adapting as appropriate - throughout the TRANSFORMATION GOVERNANCE MODEL initiative. The following are some key tenets for BUSINESS CASE constructing a business case: VISION WORKABLE APPROACH AND • Understand the “Current State” EXECUTION MODEL Understanding the key drivers in the current business environment that influence BUSINESS CAPABILITY AND CAPACITY performance is foundational to the business TECHNICAL CAPABILITY AND CAPACITY case. By focusing on known metrics, improvements and. and performance indicators Exhibit – Framework for execution of Business are mapped to processes and organizational Transformation Program effectiveness correlating the transformation activities to tangible, measurable, real world results. Vision • Get the basics right - set the foundation, The vision is driven by the executive and senior implement and measure management team, supported by various levels and key stakeholders across the organization. A business case for transformation must The vision should tightly align with the include measureable benefits, costs and a corporate vision; in some cases transformation clear line of accountability and ownership will “rewrite” the corporate vision while being of both the benefits and costs. A business synergistic with corporate values. case must have data and accurate numbers backed by a compelling story that can The initial level of the vision should cascade be understood and agreed to by the into increasing detail, directly mapping the key business executives. process metrics between the vision and the subsequent levels. The most detailed level To ensure the business case delivers, it should clearly align with the key business is essential to build the metrics (both processes that will drive measurable improvement. qualitative and quantitative) into the Each of those processes should be mapped to transformation delivery plan. The business the business cases linking business value to executives can then actively monitor business meaningful, well-defined metrics. benefits throughout the transformation04 Thought Paper
  5. 5. program. As the program evolves change is execution. At the nucleus of the execution inevitable. Changes to scope, plan or time model is the methodology which at its best must be continuously factored into the seamlessly integrates the business change business case, with decision matrices that with the technical delivery. The hallmarks of reflect the impact on the key drivers and metrics. an effective methodology are being modular and customizable to the type of transformation.• Defining the “Future State” Modularity supports the decomposition of Odd as it sounds, the future comes first. Set the desired outcome into more logical and goals that foster change through innovation manageable threads while recognizing and paradigm shifts while aligning to the and managing the interconnections. The vision. Define “good” as it relates to the threads represent the major focus areas of business. What are the key process and the transformation. metrics? How does the process and metrics support the business case? Do the processes Key areas of the methodology are: process align with the strategy and drive organizational optimization; application analysis and optimization; effectiveness (operating model)? Are the change (adoption and accountability); global enablers aligned to the processes, and in turn delivery framework (align and orchestrate aligned to the metrics? What is the impact capabilities); infrastructure and operations on technology requirements and organization? analysis and design; partner delivery and decision What roles, technology and processes are framework; delivery management (manage most impacted? Does the delivery and and deliver transformation); and value model implementation align with delivering the (linking business benefits to delivery (outcomes). benefits in a prioritized fashion? The methodology drives and maintains the integrated view of business and delivery that• Leverage your people results in real value. Involving business people early on ensures the roll-out is about delivering business Workable Approach and Execution Model is benefits, rather than doing things to the best implemented by an experienced team business. Stakeholder support - business bringing different perspectives but a common and technology - at each step of creating understanding of the roles and responsibilities the business case will both shape and fully associated with the methodology, processes, reflect the perception of current performance disciplines, expertise, and governance are of the business, as well as the business required for success in high impact, high risk priorities and expectations. initiatives. The model should have clear and distinct roles relative to: business delivery,As you progress with your business case, engage transformation management, governance as wellvarious levels of the enterprise in designing as technology solution delivery. The Executionthe future operating model enabling them to Model provides a single, consistent approach forclearly understand the changes at an individual managing multi-program/project, multi-vendorrole level. The transformation leader cannot (consultant and software), and multi-organizationmandate behavioral changes within the business, transformational having some key people at various levelswithin the business builds the support and To execute any transformation, there areextended leadership to successfully drive the always dire needs for high end architects (e.g.changes required by the transformation. data, infrastructure, and integration), testing management requirements management andWorkable approach and execution business change across the delivery of themodel business outcome. These aforementioned whenAt the heart of every transformation are a grouped together form the Solution Delivery.workable approach (i.e. minimal overhead, The business delivery (outcome) is across thedefined ways of working), and a delivery focused Solution Delivery. Thought Paper 05
  6. 6. The end to end and integration management with the business outcomes, thereby maintaining integrates the individual business outcomes a focus on the desired business results as and solution delivery across the transformation. opposed to the day-to-day program tasks. One To summarize the Execution Model integrates key aspect of the model is to create a controlled the solution, delivery and integration across the baseline from which to measure success and transformation, while providing both horizontal make changes in response to emerging business and vertical management to ensure consistency priorities. Another is to build full stakeholder and quality. support, clarify roles and support effective, timely decision making. The Execution Model must ensure that the solution is cohesive across the various business The transformation governance model accelerates outcomes within a transformation. To support business transformation and organizational a cohesive solution, the Execution Model must change through the effective use of business have a consistent structure for the delivery. resources, technology organization, and executive The structure is a consistent delivery model management. The governing body should be which is a matrix structure where the business empowered to: outcomes are organized and driven vertically • Create focused linked forums that foster greater across the Solution Delivery. Solution Delivery for most any transformation, systems integration • Communication; or even a project has significant scope in • Collaboration; requirements/process design, integration architecture, data architecture, infrastructure • Standardization; and architecture, testing management, and business • Collaboration across the programs in the change/organizational readiness. These have transformation. always been and will continue to be the • Provide the basic infrastructure and foundation of any transformation program. communication tools to allow stakeholders to Finally, end-to-end delivery management leads collaborate and be effectively integrated with both the Solution Delivery and Release/Business organizational decision making Outcome delivery. The diagram below is a logical Transformations should consider at least 4 depiction of Execution Model. different leadership roles, each focused on the End to End and Integration Delivery Management interests of a distinct group of stakeholders Release (Business Outcome) Delivery Requirements / Process Design (Business Design) • Executive In-Charge (EIC) is accountable for the overall success of the transformation. The Integration Architecture EIC provides the overall leadership and Data Architecture direction; owns the business outcomes; owns Infrastructure Architecture Testing Management and is accountable for the business case; and Business Change/Organizational Readiness/Training & Development owns the organizational consequences. Solution Delivery • Business Sponsor – owns the business solution, resources, alignment and integration Exhibit – Execution Model with technology. The Business Sponsor ensures initiatives are business driven. The Transformation governance model Business Sponsor leads the Business Council The governance model is the nucleus of a accountable for: transformation program. The pressure for rapid • The target operating models; action and critical decisions is paramount. Designing the optimum transformation approach • Identifying and establishing the necessary requires balancing: costs; scope; capabilities; conditions for transformational success; benefits; and timing. The operating characteristics • Managing operational and delivery risk; for the governance model should be integrated06 Thought Paper
  7. 7. • Aligning change actions with target service providers, supplier and technology outcomes; and environments, including technology shared services across the transformation program. • Embedding behavioral change. • Technology Sponsor – Ensure interoperation between all intra-enterprise, externalThe below depicts an example structure and the respective accountabilities. • Executive Accountability Executive In-Charge • Spending Requests • Technology and • Recommendations for Business Sponsorship • Changes in Strategic Direction • Manage corporate and Transformational Governance • Intra and inter business issues transformation risk • Scope and Budget resolution • Executive Reporting • Operational - Day to • Cross Program Integration Day leadership and Management Management • Escalated and cross program • Manage all Programs End to End Delivery Management risks and issues • Budget and financial • Plan management across all management programs and projects Well defined reporting and processes End to End and Integration Delivery Management Release (Business Outcome) Delivery Requirements / Process Design (Business Design) Integration Architecture Data Architecture Infrastructure Architecture Testing Management Business Change/Organizational Readiness/Training & Development Solution DeliveryExhibit – Transformation Governance ModelTechnology capabilities and capacityThe readiness of the technology organization program. Typical areas of impact requiringis another critical success factor in transformation. initiatives to support the transformation are:Most transformations require significant • Capability to support end-to-end environmentstechnology changes, which create the need for that are integrated with current (legacy)new technologies, upgraded skill-sets, change environments;in operational processes, and organizationalchanges along with modifications to the existing • Tools – the right tools and processes tobusiness as usual processes. This requires an support a large transformation;in-depth review and gap analysis – during the • Skills and capabilities of the internalinitial phase of the transformation. The output technology organization; andof the gap analysis is a set of initiatives thatwill be owned by the Technology Sponsor, and • Partners (suppliers) and third-parties – rightmanaged and delivered by the operational partners and third parties (products) toteams as part of the over as part of the overall support the transformation Thought Paper 07
  8. 8. Enterprise business capabilities and capacity To succeed in any transformation, businesses important. It is essential not to “carry baggage” must be ready to lead through increased from business as usual into a transformation as complexity and volatility, drive operational that is a critical risk, as the organizations have excellence and enable collaboration across the tendency to recreate what is in place today. enterprise functions, develop higher quality In addition, Partners (suppliers) should be leadership and talent, and manage amidst assessed to ensure they can supplement the constant change throughout the journey. capabilities as well as the methods and tools to Knowledge of the business is a given, it is deliver the transformation. the change-related capabilities that are most Conclusion The successful delivery of a business The framework for a transformation should transformation must be underpinned by a provide a common understanding of how solid framework. Transformation is large scale, the people, process and technology will be enterprise-wide change that will significantly structured so as to align with and achieve the impact an organization/company. In addition, objectives set out by its vision to meet the the methods, execution approach, and capabilities business plan to ensure achieving the desired to support the framework are essential. business outcome. Michael A. Leyva Head of Finacle-CSI, Infosys08 Finacle
  9. 9. About FinacleFinacle from Infosys partners with banks to transform process, productand customer experience, arming them with ‘accelerated innovation’that is key to building tomorrow’s bank.For more information, contact© 2012 Infosys Limited, Bangalore, India, Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosysacknowledges the proprietary rights of the trademarks and product names of other companies mentioned in this document.