IRIS
i-flex Solution issued a clarification in response to the claims made by
Saraswat Bank in the media recently about the software firm’s failure to
deliver banking software modules on time.
However, the i-flex’s vague clarifications have failed to pacify the
enraged Saraswat Bank management.
i-flex has mentioned in its notification/advertisement that ‘..all the
modules, except treasury securities module, ATM interface module and Flexcube
retail module, were accepted by Saraswat Co-operative Bank in February 2002.’
However, Digambar Shirodkar, managing director of Saraswat Bank, said i-flex
was supposed to deliver the complete package by January 2000, adding that the
user acceptance test (UAT), which had begun in October 2000 is still underway.
Besides, the modules that are the bone of contention - treasury securities, ATM
interface and retail - are the most important ones for any bank to provide
quality services to the customers.
i-flex maintains that the delay in implementation of the project was due to
change in the bank’s management during the course of the project. To which
Shirodkar retorted, ‘How can change in management affect software
implementation.`
Speaking to Myiris.com, Shirodkar said, ‘We purchased the i-flex package in
May 1999 and so far we have spent Rs 32 crore on the software package, hardware
and networking. We have 30 executives working on the package and i-flex has
deployed only three software engineers on the project. Ninety per cent of the
package was amended to suit the requirements of the bank. But it has not
generated the required results,’ he added.
On the UAT issue, Saraswat Bank stated that the i-flex stand that the bank
has signed UAT is misleading and incorrect. The UAT was signed conditionally,
subject to i-flex delivering many mission critical and statute compliant
requirements in their software and therefore full payment has not been made,
said the bank.
The Saraswat Bank again released an advertisement in the interest of
investing public in reply to i-flex solutions public notice/advertisement. The
bank has struck at the right time. i-flex Solutions is out with its maiden IPO
which opened on June 5, 2002 and will close on June 11, 2002.
The bank has stated in the notice that it has suffered huge losses both in
terms of direct cost in investments in hardware, software, systems software,
RDBMS and manpower as well as opportunity costs to the tune of over Rs 200 crore
and if it files a suit against i-flex it will be in excess of Rs 250 crore.
The bank has appointed Yusuf Lanewalla as a consultant to advise the company
on the package. In a months time, the consultant will advise the bank on whether
they should continue using the package or the cancel the agreement and sue
i-flex.
Detail clarification given by i flex
i-flex‘s clarification follows: Saraswat Co-operative Bank Ltd entered into
a contract with i-flex to license Flexcube software. As per the contract, all
the modules, except treasury securities module, ATM interface module and
Flexcube retail module, were duly accepted by Saraswat Bank in writing in
February 2002, after a user acceptance test (UAT).
The UAT for treasury securities module is being conducted at Saraswat Bank
and ATM interface module and Flexcube retail module are scheduled to be
implemented at a later date.
The accepted software is operating live after completion of the UAT. Saraswat
Bank has also made payments for the invoices due and raised by —flex for the
software implemented so far.
Source: myiris.com