Strategic Information Systems Plan

THE RESULTS

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Contents

• Executive Summary
• The Company
• The Approach
• The Results
  • Project Plan Model for Kwangju Bank
    • Development of the Project Plan Model
    • Preparation for Tactical and Operational Modelling
    • Project Phase Sequence in KJB Summary Project Map
    • Priority Projects
      • Candidate Views For Priority Projects
      • Selection and Benefits of Priority Projects
  • Recommendations for Action
    • Tactical Modelling Focus
      • Recommendations

• Appendices

Project Plan Model for Kwangju Bank

All activities and databases that were identified by Visible Advantage in the Strategic Model are documented in Appendix 2: Cluster Report. This report was used to develop an overall Project Plan data model, utilizing the CASE tool also to derive a project plan for project management.

Development of the Project Plan Model

Each cluster that represents an activity in the Cluster Report is a project task in the Project Plan; independent or interdependent activities identified in the report each becomes a prerequisite task of relevant projects in the plan.

Visible Advantage was used to group related activities into a series of projects. The cluster report for this Project Plan model was produced, showing a number of separately implementable projects for the Bank. This Project Plan Cluster Report is also included in Appendix 2.

Three main project areas emerged that are all important to the Bank: Marketing; Risk and Finance; and Planning and Resource. In each project area there are several focus areas, each of which comprise a number of projects for activities identified in the Strategic Model. These are summarized. They are provided in detail in Appendix 2.

Preparation for Tactical and Operational Modelling

A Model View was defined for each of these project areas and their focus areas in the Strategic Model. A description of each area was entered into the Visible Advantage Planning Dictionary as a Project Planning Statement for each model view. This enables reports to be produced during tactical and operational modelling for these projects, for use by project teams in these areas. These reports provide input from the Strategic Model for more detailed tactical and operational data modelling. The following reports provide required strategic input for each project:

Reports from each Project Model View as input for Tactical Modelling:

• Planning Statement Report of all planning statements in the relevant Model View
• Data Map of all entities in the relevant Model View
• Cluster Report of all entities in the relevant Model View
• Entity Report of all entities in the relevant Model View

Project Phase Sequence in KJB Summary Project Map

The model views listed above are now rearranged according to model view dependencies based on the Project Plan Model. This was derived from the Cluster Report in Appendix 2, using the method discussed earlier in relation to Figure 18 and Figure 19. The Project Plan is shown in summary form in Figure 23. This clearly shows the model view project sequence, by phase, for building the Information Warehouse and KJB databases and systems.

Figure 23 indicates that the Market Management and Financial Management model views have activities within them that are prerequisite activities for many of the other model views. This is not surprising for a market-driven Bank as market needs drive many banking activities and good Financial Management is paramount for a Bank. In the absence of any other priorities, the initial tactical modelling projects would focus on Market Management and on Financial Management. However there are other factors which also have to be examined to decide the most important priority projects. Some of these factors may relate to problems associated with current systems and others may address opportunities that are emerging. An assessment of business priorities will also contribute to a decision of which project areas to select for initial tactical and operational modelling.

Priority Projects

A number of candidate model views were considered to determine the priority projects for the Tactical Modelling phase. These are first summarized and then discussed in more detail in terms of the basic and advanced systems that apply to each area. Detailed Project Maps have been included and are discussed for the highest priority model views. The benefits or advantages (ie. merits) and the disadvantages (ie. demerits) of each view are identified.

Candidate Views For Priority Projects

• Financial Management : For enhancement of the quality of profit and loss control
• Customer Management : For Marketing purposes
• Product Management : For Marketing purposes
• Portfolio And Treasury : For the improvement of funds management and asset control
• Risk Management

Selection and Benefits of Priority Projects

The Tactical Modelling phase will define the content of entities within a cluster in greater detail. This involves identification of tactical data attributes for entities in the cluster. Some attributes will represent aggregates or may exist as derived attributes calculated from detailed operational data. New entities will also be identified through Business Normalisation. The focus for tactical data modelling therefore addresses the entities within priority clusters.

In KJB, the importance of Customer Management and Product Management appears to be very strong, but prioritization for systems development of individual databases and activities at this stage is very difficult. We will therefore consider the strategic importance of each cluster in order to choose priority projects. Once the views in which those priority projects reside are selected, we can then define the number and range of priority projects belonging to those views. We will also need to check the current systems and databases related to chosen priority projects, as well as prerequisite projects that should be developed before the priority projects.

From the candidate views above we have determined that Financial Management, Customer Management and Portfolio & Treasury Management are very important to KJB. However the final choice will depend on the range and the difficulty of projects to be developed and the status of current systems and databases related to those projects. We will now examine each of these views in more detail.

Financial Management

JUMP1 and JUMP2 are current Financial Management Systems developed and used by KJB. Many of the existing KJB MIS systems also use financial management data for decision-making and business operations at present. Considering prior experience and the existing data in the financial management area, the development of new financial management systems will give us clear benefits.

Figure 24 : Project Map Showing Financial Management Activities

Figure 24 indicates that the Currency Financial Statement Activity is a prerequisite for many other activities. In addition, the Branch Location Activity in Branch Management and the Market Need Activity in Market Management are prerequisites for activities to which they point.

These activities most likely all presently exist: some may be processed by current systems; others may be manual systems. They may not need to be redeveloped if they currently satisfy the Bank's requirements. It is important to determine which of the activities in Figure 24 offer the greatest potential benefit to KJB. These may be considered as potential projects for tactical modelling.

From the Cluster Report in Appendix 2 and an assessment of current systems, the KIMIS project team has identified a number of basic and advanced Financial Management Systems. Some have been identified in the Strategic Model, while others exist in the current systems and would only be identified from more detailed tactical and operational modelling. These systems are:

Basic Systems for Financial Management

• Financial Accounting Systems
• Balance Sheet, Profit & Loss
• Tax Management
• Region and Branch Accounts, Balance Sheet, Profit & Loss

Advanced Systems for Financial Analysis

• Budget and Position Control (Plan and Actual)
• Portfolio and Account Analysis Systems
• Cost Management Systems
• Cost and Profit Analysis Systems
• Risk Analysis in Financial Systems and Accounts

Projects related to Financial Management identified from the Cluster Report in Appendix 2:

Financial Management Merits (ie. Benefits)

• A number of current systems and data
• Bank wide interests
• Tend to be project areas that are logical prerequisites for other projects

Financial Management Demerits

• Do not belong to direct profit generation areas such as Marketing and Funds Management

Customer Management

To expand the customer base and differentiate customers according to KJB marketing focus, Customer Management is most necessary. Additionally it will be a principal system for Electronic Banking marketing.

Figure 25 also shows that the Currency Financial Statement Activity in Financial Management is a prerequisite for many other activities in Customer Management. Branch Location Activity in Branch Management and the Market Need Activity in Market Management are prerequisites also for activities to which they point in Customer Management.

Again it is important to determine which of the Customer Management activities in Figure 25 offer the greatest potential benefit to KJB. These may be considered as potential projects for tactical modelling. From the Cluster Report in Appendix 2 and an assessment of current systems, the KIMIS project team has identified a number of basic and advanced Customer Management Systems. Some have been identified in the Strategic Model, while others exist in the current systems and would only be identified from more detailed tactical and operational modelling.

Figure 25 : Project Map Showing Customer Management Activities

The Basic and Advanced Systems for Customer Management are:

Basic Systems for Customer Management

• Principal Customer information
• Detailed Customer information
• Customer group information

Advanced Systems to Differentiate Customers

• Customer profit contribution analysis system
• Customer credit analysis
• Customer transaction information
• Newly opening or Closing account information
• Customer advisory system

Projects related to Customer Management identified from the Cluster Report in Appendix 2:

Customer Management Merits (ie. Benefits)

• Widely used, so will arouse considerable support
• Direct Contribution to Marketing : Business promotion
• Provides basic customer information for Electronic Banking marketing and other delivery channels

Customer Management Demerits

• For effective systems development, the focus of Customer Management Systems is broad. This means that there is a possibility that a customer-related project may be too big to achieve good results in a short period of time
• Difficulty in collecting exterior information beyond KJB information sources

Product Management

This area determines the performance of each product, assesses the product portfolio structure and differentiates products for customers. KJB has developed very few Product Management Systems.

Figure 26 : Project Map Showing Product Management Activities

Figure 26 again shows that the Currency Financial Statement Activity, Branch Location Activity and Market Need Activity are all prerequisites for activities in Product Management. The KIMIS project team has identified a number of basic and advanced Product Management Systems. These systems are:

Basic Systems for Product Management

• Product principal information : product history, product structure, basic prices, etc
• Product list

Advanced Systems for Product Management

• Product price analysis (realized)
• Customer product analysis
• Product performance analysis
• Product portfolio analysis

Projects related to Product Management from the Cluster Report in Appendix 2:

Product Management Merits (ie. Benefits)

• Compared to Customer Management, relatively easy to control the range of projects
• High possibility for easy extraction of product related data from KJB

Product Management Demerits

• To produce big benefits, the range for system development needs to be wide - which makes the control of projects difficult

Portfolio And Treasury Management

This area helps in understanding the performance of Funds Management and the condition of Assets Control, so contributing to sensible decisions in funds and assets management.

Figure 27 shows that the Currency Financial Statement Activity, Branch Location Activity and Market Need Activity are again prerequisites for activities in Portfolio Management. The KIMIS project team has identified a number of basic and advanced Portfolio Management Systems. These systems are:

Basic Systems for Funds and Assets Management

• Securities information
• Other funds and assets information

Advanced Systems for Funds and Assets Management

• Portfolio analysis for funds management
• Fund Allocation and Control
• Securities Investment analysis
• Present value analysis of holding securities

Figure 27 : Project Map Showing Portfolio Management Activities

Projects related to Funds and Assets Management from the Cluster Report in Appendix 2:

Funds and Assets Management Merits (ie. Benefits)

• Relatively easy to control the range of project because of its specialty
• Can import advanced knowledge of Funds Management from other banks (including overseas) through benchmarking other banks’ advanced systems
• Timeliness : notify right information on the list of holding securities, the present value and performance to management

Funds and Assets Management Demerits

• Highly linked to Risk Management, but there is much difficulty in system development as this area is dependent on the availability of knowledge base resources.

Recommendations for Action

The Strategic Model and SISP will enable KJB to align its information systems directly with its strategic plans, and build an Information Warehouse to provide information for management. However these benefits will only be achieved if the strategic model is expanded to tactical and operational model detail, and priority systems and databases are implemented. The following recommendations therefore address the initial steps that should be taken to achieve this.

Tactical Modelling Focus

The Project Plan Model in Figure 23 clearly indicates that Market Management and Financial Management have prerequisite activities that are used also by other model views. These are the Market Need Activity, Currency Financial Statement Activity and Financial Account Resource Activity and would normally be the starting points for tactical modelling. However KJB already has systems that support these activities; they would only be used as a starting point if they were problem areas for the Bank. As this is not the case; other model views may provide a more appropriate starting point.

The earlier assessment of project priorities indicated that an emphasis on Customer Management and on Portfolio and Treasury for initial tactical modelling offer considerable potential to KJB. These will also need to include some of the prerequisite activities from Financial Management and Market Management.

Recommendations

• The first model view for tactical modelling should be Customer Management.
  • Figure 25 illustrated the Project Plan Map for Customer Management. It showed Market Need Activity from Market Management as a prerequisite in Phase 1. This activity is the responsibility of Market Management to define fully; it should only be defined here to a level of detail suitable for Customer Management. More detailed definition of Market Need Activity will be completed in a later Market Management project. The focus on Customer Management will therefore be on Org Cost Activity and Org Role Cost Activity in Phases 2 and 3. But the documentation available regarding tactical plans for Customer Management does not provide sufficient guidance.
    
• Tactical business plans should first be defined for Customer Management.
  • Goal Analysis was covered in the Strategic Planning and Data Modelling Workshop attended by the KIMIS project team. This should be used to define the Mission, Goals, SWOTs (Strengths, Weaknesses, Opportunities and Threats), Strategies and KPIs for Customer Management. This can be achieved by doing Tactical Business Planning in initial planning sessions attended by all KIMIS project team members. The tactical business plans that are developed should then be used as input for tactical modelling of Customer Management.
    

• Financial Management should be the second model view for tactical modelling.
  • As Financial Management activities are prerequisites for Portfolio Management (see Figure 27), some tactical modelling of Financial Management (Figure 24) will need to be completed before starting to do tactical modelling in the Portfolio Management model view. This will involve data modelling of Currency Financial Statement Activity and Financial Account Resource Activity.
    

• Tactical business plans should first be defined for Financial Management.
  • While Financial Management Plans are well documented in a Bank, clear tactical business plans that define the Mission, Goals, SWOTs (Strengths, Weaknesses, Opportunities and Threats), Strategies and KPIs for Financial Management should nevertheless be explicitly documented for use as input to tactical modelling.
    

• Portfolio Management should be the third model view for tactical modelling.
  • When tactical modelling for Financial Management of Currency Financial Statement Activity and Financial Account Resource Activity has been completed, tactical modelling in the Portfolio Management model view can commence. This is illustrated in Figure 27.
    

• Tactical business plans should be defined for Portfolio Management.
  • Clear tactical business plans that define the Mission, Goals, SWOTs (Strengths, Weaknesses, Opportunities and Threats), Strategies and KPIs for Portfolio Management should be explicitly documented also for use as input to tactical modelling.
    

• Schedule Concurrent Tactical Modelling Projects.
  • Tactical business planning and tactical modelling for these model views should be conducted with three project teams working initially together, and then progressively moving to concurrent tactical modelling as illustrated in Figure 28.
  • All teams initially should do tactical business planning of Customer Management and then work concurrently in tactical data modelling of separate parts of the Customer Management tactical model. This ensures all teams have a good basic understanding of the tactical data model for the Customer Management model view.
  • Once Customer Management tactical modelling is progressing well, the Financial Management team 2 and Portfolio Management team 3 should do tactical planning, then tactical modelling of Financial Management. These two teams thus gain a good understanding of the tactical model for the Financial Management model view, while Project team 1 continues tactical modelling of Customer Management.
  • In turn, team 2 continues with Financial Management, while team 3 does tactical planning and tactical modelling of Portfolio Management based on their knowledge of Financial Management.

• More detailed project plans will be developed for each project team, as they progress through tactical modelling of priority activity clusters in their respective model views.
  • This three tier concurrent project strategy provides an effective application of project team knowledge and resources to the initial model view of Customer Management, while spreading knowledge of these prerequisite model views into project teams who will later work on tactical models of dependent model views.
  • As the project teams progress through tactical modelling, the tactical model for each model view will be documented in a Tactical Information Systems Plan (TISP) report in a format similar to this SISP.
    

This completes the body of the SISP Report. The following section documents the Appendices.

• Click to go to the next section: Appendices