How to Ensure a Disastrous Core Banking Project

Having run many core banking replacement projects from the vendor side in the past as well as having been a bank CIO, I would add that one other means to ensure failure is to pick a team or a vendor that is used to failure.

A cynic could add so many more:

select the cheapest supplier

select a change management specialist without checking their experience of a core banking system replacement

select the most innovative technical solution - especially if it has never really been done before or at least in quite the way required for this job 

build a system from scratch because it is so easy with the current toolsets

assume that beacuse banking systems are simple the banking processes are

All of the above are good points (and clearly with the voice of experience), but to put a more positive slant on it, I offer "how to ensure a good core project"...

Vendor - Once implemented a core typically stays in place for a long time. It provides a primary support function to any financial institutuon, so select a vendor like you would select a wife or partner....for the long term. Good relationship, understanding of each others business, can work through issues (as they will arise), trust and a clear well defined agreement. It must be win-win to be a partnership.

System - Select a system that has a good fit for your current and future needs -  the core is a moving, growing system - over time new channels, products, and customers will emerge and the system has to be scalable and flexible enough to change, adapt and accomodate new requirements.  No point selecting a system that matches today’s need spot on, that is impossible/expensive to adapt later.  There will be change...

Scope - Keep the scope well defined. Having an agreed and proven approach to project change management will ensure the impact of change requests are understood and dealt with appropriately.

Leadership – The Executive team of the bank must understand that this is not a side-project.  Don't underestimate the effort required - it is surprising how many tenders come out with 'explain how it will be a seamless transition' - organisational change management is key - recognise that this is the opportunity to change outdated work practices, embrace new work methods, and tighten control - it will need drive from the top.  The change of core is a test of leadership - it's why many try to avoid this ...

Processes - Use an industry-standard process reference model - and try and work out why you are not doing your process that way.  Many BIAN members (http://www.bian.org ) process millions of actions using a standard process - and there probably is a good reason - work it out, don't surrender to "the way we do it"

Look - Try and make sure the new system looks 'better' than the old one - chances are the green screen or winapp looked 'old' or 'clunky' to users - spend a little on the look to make people feel it is modern and nice.  They are used to the Web 2.0 - at least make it look like it was designed this century...

Training - Ensure that all users receive sufficient training -  get buy-in from staff - pick at least 5 things that really grate in current system and solve with the new (regardless of if they have to be developed).  Be wary of the parallel run – if not well managed it just delays the moment they realise they have to use the new system – test the users in the dry run leading up to conversion.

Project - There must be a project sponsor who is willing and capable of driving the project through internal roadblocks - and it helps if they represent a key profit center. Have a project team with representation from the whole business.  They need to be supported by HR/Training, change/comms, finance/contract and process engineers - not  just capable technical and business staff. If need be support this with skilled external consultants with direct relevant experience - but recognise that the those paid by the day have a conflict of priorities...

Commercial terms - Plan well  with your vendor/partner and expect the unexpected. Ensure you have sufficient budget and appropriate commercial terms to see the project through to completion

Finally – relax – when you are on the other side of the change process, using a system built after the internet was created, on a database that can be mirrored in real time, able to hire programmers straight out of school to build your twitter and facebook web apps, and providing fast accurate reports to management, board and regulators, you can go to conferences and present on how to be a veteran of the core change process ... wear the badge with pride...