This is a sequel to my previous entry, titled “Challenges to the Core Banking Solutions Implementation Projects – 1.”
Continuing on the problems faced in core banking solution implementation projects, let us look at some other problems.
Lack of IT Resources with Banks
Usually, the core banking solution vendors claim to offer lower overheads, advanced technology, lower maintenance costs etc. After all, such claims win the clients and especially their finance people, as they see IT as a big cost center instead of a strategic asset. Vendors are also aware of the fact that the banks will calculate a minimum of five years total cost of ownership (TCO) before they make any decision about a vendor and its solution. If the system requires a large number of IT resources, it will reflect negatively in the TCO spreadsheet. They thus would not recommend the banks to hire the adequate sized IT team. Even if they are forthright about it, the banks may not take the suggestion that seriously, and try to bargain this number. Also, banks are not that big on IT and the trends in software, such as Agile Methodology and other object oriented frameworks. They thus cannot, or find it hard to appreciate the roles of user experience, documentation, quality control and quality assurance engineers. Ironic, isn’t it? During negotiations with the application vendors, the same bank managers vouch to create their own IT team to manage the solution during and after implementation. They ask the vendors to train their teams on the technology and features so that the bank could reduce dependence on the external vendor. Yet they do not hire enough people.
In my experience, I haven’t even heard about a single bank going for ISO 9001:2000 compliance. But don’t be misaken here: a number of banks are very active on IT security and service delivery. While this is a good trend that shows that the IT managers of the banks are waking up to the security threats and service delivery, they are not aware of the software development advancements.
Lack of Experienced Project Managers
A bank changes its core banking system once in decades. Same goe s for any other IT solution that a bank purchses, such as credits, risk management, middleware and the likes. Also, such projects are so large that it is difficult to find project managers from the market with experience of similar sized projects. The project manager is expected to provide insight, skill, communication and foresight to steer the project in the right direction. While a project manager can bring skill and communication, if he/she is not from the banking arena, the foresight, risk management and insight will be missing. A newly inducted project manager will also face issues in taking control of the things because he/she is a new entrant.
Missing Comprehensive Training Programs
This problem hits the implementers and the banks, both, and equally hard. The way banks and implementers lose their IT manpower, there is almost always a dire …