Independent Research Firm examines the crucial preparation stages banks must go through for a successful transformation project
The lack of a clear set of business objectives is one of the most prominent risk factors in banking platform transformation projects, according to new research by Forrester Consulting, commissioned by Temenos, ‘Preparing Banking Platform Transformation’ (April 2012). Others include:
• Weak top executive support
• Insufficient internal training
• Poor governance
• Weak communication
• Technology risk
The research also finds that the key motivator for banking platform transformation relates to achieving better business agility, according to 53 per cent of those surveyed, which makes the clear definition of business objectives even more important.
As a result, the most successful transformation initiatives are those that include thorough planning and preparation and a sound understanding of the business, according to Forrester. The respondents that deviated significantly from their original plan then went on to experience an average budget increase in the 75 per cent range.
The study also found that successful transformation initiatives are based upon thorough planning and preparation. Common elements of transformation projects include a strong focus on communication to the business, education of key executives, collection and rationalisation of business requirements, strong governance, and training of bank staff. The banks that implemented continual programmes for communication, education and training found these activities empowered users before the solution went live, and increased top executives’ understanding of banking platform transformation.
Bernd-Michael Rumpf, head of customer services group at Temenos, comments: “Implementation is a disciplined process, not a single event. It is important for banks to take up support and services offered by partners to help guide them through the entire lifecycle of the project – which does not end at go-live. Leveraging the wealth of experience from vendors and partners, and best practices from many implementations - reduces risks from projects and ensures a quicker path to ROI. Customers that leverage the standards in their new core banking platform enjoy significant long term value.”
In this study Forrester interviewed 15 organisations in Asia, Europe and North America to learn about critical success factors in banking platform transformations, planning of transformation initiatives and the role third parties such as vendors played in these projects. Respondents include executives in managerial, directorial or c-level positions of banks.