rbc royal bank

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RBC Royal Bank: Service

Platform Implementation

BITC B

Group 6


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Contents

Introduction1

Current Information System2

The Service Platform Project3

Project Initiation4

Project Progress5

Implementation6


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Introduction

RBC Royal Bank or RBC Financial Group is the largest

financial institution in Canada, as measured by deposits,revenues, and market capitalization

1864

MerchantsBank ofHalifax

1901Renamedas RoyalBank ofCanada

1999

Announced plans tocut $400million &lay off6000employees

2002

Became the largest CanadianBank

(assets - $328 bn, market

capitalization - $36.2bn)


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Current System

1961 RBC became the 1st Canadian bank to install itsown computers

1967 RBC was the 1st mover in the Canadian bankingindustry to provide computer-processed customertransactions

1972 RBC installed 14 ABM in Toronto

1980 Installed at least 1 ABM in each branch acrossCanada

1985 Each ABM processed 10000 transactions on an avgevery month

1994 Started telephone banking services

1995 Clients had multiple channels to do business withRBC

Challenge Lack of Integration


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CSR Workbench

The CSR Workbench was developed in1980s.

Features:

Ran on DOS platform

Had separate applications for: Client Financial Transactions

Foreign Exchange

Maintenance Transactions

Client demographics and account inquiries

Since DOS was not a Multitasking Operating

system, it is impossible to run multiple

applications simultaneously


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Example of multiple transaction

Customer came to the branch but forgot his account number

Step 1

CSR has to close the current application and openthe application for searching names

Step 2Once the account number is identified its written

on a piece of a paper and the application is closed

Step 3

The CSR would then reopen original application inorder to post the transaction

Even for simple transactions the CSR had to go throughmultiple applications, like 80% of customers wanted to

check their balance before proceeding with the transaction


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Changing Role of CSR

By 2003, the CSR role had become a blend of

service and sales activities, they had a targets tomeet now

The CSRs were supported by the CRM systemwhich had its own limitations like:

Had only 39 character field to highlight offers &

opportunities

Provided minimal information

Did not have the capability to update after the offer has been

discussed and new offer can be displayed

Executingtransactional

banking

Now expected to promotevarious banking products and

refer clients to personalbankers for other products


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The Service Platform Project

Goal Replace hardware & software used by CSR with a

state-of-the-art paperless transaction system

It was one of the numerous projects in RBC to create acomprehensive e-business architecture

It all started in 2000 when attempts were being made toreduce RBCs proof processing costs to that of itscompetitors BMO financial group & TD bank financialgroup

Investigations revealed that RBC incurred higher cost they

did not follow the same proof process as TD and BMO This resulted in increased work effort by Symcor, the

outsourced proof processing partner


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Manual Process Flow

Step 1

Prepare a manual withdrawal slip & request theclient to sign it as records of funds withdrawn

Step2

CSR(using CSR financial) posts the withdrawal toclients account, draws a line on the slip to confirm

Step 3

The withdrawal slip is placed in the bundle of workdestined for reconciliation centre

Step 4

The next day the centre verifies accurate posting ofthe transaction

Withdrawal Process


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The previous failed attempt

In 1996 RBC made an attempt to replace its DOS based

system with IBM OS/2 In the new system clients were given new swipe bank

cards with PIN instead of old signature cards

The system had issues:

The concept of Swipe and Pin did not go down well with the

consumers

IBM OS/2 was slower than DOS

The slower speed was an issue with both CSR and customers

The project was scrapped because Its development process had taken longer time than

expected The system required the customers to change their

banking behavior too dramatically


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Project Initiation

November, 2001 Business case wasapproved

Promised Benefits:

Improvedefficiency of

proofprocessing

Simplifyingbranch

transactions

Ensuringerrorless

transaction

Enhancingsales andservicesupport


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Cost Associated

Cost incurred due to :

1) new hardware and software

2) time of bank personnel on theproject team

Total estimated cost - $50 million

Annual savings (favorable scenario) :$12 - $15 million

Duration of payback on investment -4 years


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Selecting a System

PackagedSolution

InternalDevelopm

ent

Proposalfrom IBM

Portingfrom DOS

toWindows

NT


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Packaged Solution

Features:

Vendor U.S. based, niche player ,specialists in teller solutions software ,thousands of implementation done

System development in guaranteed timeProduct fit well with needs of CSRs

Issues:

Architecture server based , RBC trying tomove away from this

U.S. clearing system very different fromCanada


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Internal Development

Features:

Traditional mode for RBC Allow customization to the specific needs and experiences

Tailor made system for RBC

Issues:

High risk in terms of meeting timelines for deliverables

Porting from DOS to Windows NT

Features :

Using offshore resources

Relatively inexpensive alternative

Issues:

No additional functionality provided

Strongly Recommended System :

IBM Solution


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Hardware Selection

8000 wickets in 1100 branches

Each wicket monitor , keyboard andprinter

Pre-installation branch visits to each site

were conducted by a vendorNumerous counter configurations

throughout the branch network required

Decided to purchase hardware that was ofindustry standard size


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Project Leadership

Project Team

designing and executing implementation plan

Core Members:

1) Ron Brandow

Senior Manager , Business & information solutions

2) Jan Bremner

Program Manager Service Platform ,RBC Banking bis Group

software lead , managing the design and implementation planning

3) Liagen Stangenberg

Program Manager Service Platform ,RBC Banking bis Group

hardware lead , providing hardware specifications, overseeing pre-

installation visits and inventory database , implementation planning 4) Jannie Hayworth

Program Manager , RBC Banking bis group

overall program manager , developed and managed fully integrated projectplan

facilitated weekly status meetings , issues tracking and escalation

ProjectLeadership

Project Team

SteeringCommittee


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Steering Committee

Members both from RBC and IBM

Monthly review of project status anddeal with critical decisions

Financial reviews rigorous toensure costs and scope remained in

line with the approved business case


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Project Progress

17 system developers from India brought by IBM

to expedite the development Total cost for human resource hired economical

and timely than acquiring local expertise

Biggest Issue:

Major mismatch between project costs(50%)between signing the document of understanding(DOU) and reaching Commitment to deliver(CTD) milestones

Reason:Initial estimates for interfacing the developedsystems to all the required systems was nottaken into account


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Solution

Reassessment of the business case in

light of what has been learnt so far

Aggressive price negotiation onhardware costs reduced the initial

estimation - capitalization period onhardware could be extended to 6years from 4 years

Project was rebaselined taking into

account the above changes


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Another Challenges

1) Managing the scope of project

Debate on whether to include paperlesse-bill in the initial development

It was put on the back burner and

planned for development in 20052) Problems in usability

Company called Interpix evaluated the

system from usability perspectiveInteracted with the system and resulted

in designing a simpler version of theinterface


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Proposal from IBM

Features :

System to be developed in companyswebSphere platform

Actual development responsibility IBM

Requirement Analysis(using RAC) shared

between IBM and RBC

Primary responsibility for business requirements bis group

Integration of the system with other RBC systemand testing RBC IT Team

Projected completion time September , 2003

Implementation and training - responsibility ofbis team


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Implementation Plan

Decisions to be made:

Timing of the hardware and software

implementations

Geographic roll out of the system

Overall scope of the project

Figuring out actual implementation

Decisions on software

Change management


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Hardware & Software Implementation

Two methods:

Implement both simultaneously

Benefits:

Single period of disruption for the branches

Less disruption for clients

Savings will be realized quickly Two stage approach

Benefits:

Limit on the amount of change taking place at any one time

Create momentum for the project

Challenges:

Hardware should be compatible to both old and new way of

conducting transactions

Would require another level of testing in the field

No benefits would be realized till software is installed


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Geographic Roll Out

Historically, new programs were

introduced at the same time acrossdifferent regions

This could be implemented by

beginning with the largest branchesin the busiest regions

Benefits:

Obtaining business benefit would depend on the

volume of transactions processed by the new system

Financial targets of the system could be met sooner


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Overall Scope of the Project

Four requests to be considered

regarding the overall scope of theproject:

A change to the CITs to accommodate the

future design of Visa cards Bandwidth upgrades to various branches

Network operating system conversions

Replacement of cash dispensing units


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Actual Implementation

Approaches available:

Hire implementation officers

People brought in from various areas within the

bank

Stay for 24-36 month period Trained and used during roll out

Outsourcing

How much internal expertise required?


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Software Related Decisions

Training 10000 CSRs

Gathering CSRs and giving classroomtraining without interrupting dailyoperations

Make use of RBC intranet, RBCnet byuploading learning materials

How to design learning material?


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Change Management

How well this new system would be

accepted?

Manage change for CSRs as well asClients

When to inform clients?


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