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Managing business processes

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CIOL Bureau
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The Indian banking industry is currently in a transition phase. On one hand,

the PSUs, the mainstay of the Indian banking system, are in the process of

shedding their flab in terms of excessive manpower, excessive non-performing

assets (NPA) and excessive governmental equity, on the other hand the private

sector banks are consolidating themselves through mergers and acquisitions.

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This makes it an ideal time for the introduction of business process

management (BPM) which along with document management are likely to be the

technologies offering highest RoIs to banks in 2004-05. These would provide an

infrastructure for process automation leading to process centralization,

outsourcing and extending the enterprise. Business process and document

management would also help ‘de-risk’ the processes by making them compliant

with statutory and regulatory guidelines without any extra effort.

Says Diwakar Nigam, MD, Newgen Software Technologies, "Owing to its high

transactions, high manpower characteristics, the work in the BFSI sector is best

suited to automation by IT. BPM is the key emerging concept for the BFSI

Industry globally and it is good to see even the Indian BFSI sector adopting to

it early. A large number of BFSI institutions like Citibank, ICICI Bank, HDFC

Bank, IDBI Bank, Global Trust Bank, BNP, Standard Chartered Bank, Bank of

Punjab, SBI, financial services like GE Countrywide and insurance players like

Max NewYork Life Insurance, Bajaj Allianz, ICICI Prudential Life Insurance have

already adopted BPM.

A large number of PSU banks like Bank of Baroda, Bank of India & Oriental

Bank of Commerce which are undertaking large scale IT initiatives to streamline

their operations, are expected to go for BPM this year. Some of the key

application areas of BPM in banks would be centralization of trade finance

operations, retail loans processing and credit approval processing. BPM is

expected to help drive up volumes and speed for these banks without a

significant impact on output quality. The convergence of the insurance and

financial services industries is providing further impetus for the rise of BPM.

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Smitten by

outsourcing

If BFSI has taken

a lead in technology investment, can it be far behind in outsourcing? Certainly

Not! Many banks have already started outsourcing functions and processes like

data entry of account opening forms and cash management data, and call center

functions. This trend is likely to continue in 2004 primarily amongst the MNC

and the private banks while PSUs would take to this level of outsourcing later.

HDFC Bank has been one of the pioneers, in outsourcing most of their crucial

business processes to third parties, though the rest have not walked the same

path primarily due to security concerns. Hot areas will continue to be remote

infrastructure management. Already many BFSI companies like HDFC Bank, BNP, IDBI

Bank, Standard Chartered Bank and Morgan Stanley have already outsourced their

infrastructure management part to integrators like CMC, Wipro Infotech and

Netmagic. ASP is still out.

For PSU banks or co-operative banks fully to be networked, the prognosis 2004

- a combination of both in-house and remote centralized monitoring and

management system. Online DR sites is another area where BFSI are keen to spend.

Given that in many cases the data centers were being used by BFSI firms as their

disaster recovery sites, in all likelihood opt for online DR sites. Following

DR, security and storage would also be another area of high interest BFSI.

While the security emphasis would rest more on technologies like VPN, IDS and

intrusion prevention, the technologies to look for on the storage front in 2004

would be fiber channel SAN, iSCSI and storage virtualization.