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CSC e4 in Financial Services

Framework for Business and IT Transformation
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“In today's challenging environment,
financial services firms must pursue the
twin goals of operational agility and cost
reduction. CSC e4 is a practical
framework for transforming the way
companies operate. It accommodates
disruptive technologies that enable
collaborative business models and it
protects existing investments in people,
processes and technology.”
Jim Boyd, director, Financial Services
Product Strategy, CSC
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CSC e4 IN FINANCIAL SERVICES
CSC e4 RESULTS
Improved management of business processes has resulted in operational cost
savings between 25% and 50% for CSC’s financial services clients. CSC estimates
that financial services companies could save an additional 25% through the
automation of manual tasks using business process management systems.
HOW QUICKLY CAN YOUR COMPANY
RESPOND TO CHANGE?
Each year, financial services companies spend
up to 40% of their IT budgets on systems
integration. IT staff typically support dozens
of software applications across multiple tech-
nology platforms, requiring maintenance of
thousands of point-to-point interfaces.
Changes to these complex IT environments
can be costly, even impractical. In spite of the
investment in these systems, technology can
be an obstacle rather than an enabler of
change for many financial services companies.
At the same time, insurers, banks and capital
markets firms are under increasing pressure
from government regulation, technology-
savvy consumers and a widening field of com-
petitors. In this environment, process thinking
and agility are essential. Business processes
must be well defined, consistently executed
and able to rapidly respond to changing
business dynamics.
Process improvements, however, are difficult
to achieve if they are hard coded into multiple
software programs, creating spaghetti-like
integration challenges for IT departments. A
single process change must be replicated
many times throughout the enterprise,
resulting in inconsistencies, errors, time delays
and cost overruns. Companies that continue
to hard code business process logic into
software applications or rely on manual steps
will lose out to more agile competitors.
One approach to overcoming process limita-
tions is replacing all underlying legacy
systems with a single software solution. This
big-bang approach is often unrealistic for
many financial services companies. Wholesale
system replacements are necessary in
some cases, but they can be expensive and
highly disruptive.
The most practical approach is one that
simultaneously exploits the potential of new
technologies and the embedded value in
legacy systems – the fundamental strategy
behind CSC e4SM.
A PROVEN ARCHITECTURE THAT
MAKES CHANGE PRACTICAL
CSC e4 defines, enables and manages the
open exchange of information between
systems, across enterprises and among
partners in a value chain. With its focus on
business process management, CSC e4
supports change as a fundamental driving
force in financial services and delivers the
agility that is a mandatory requirement for an
enterprise architecture. CSC e4 gives financial
services companies a robust architectural
framework for enterprise integration,
enabling quick and cost-effective design and
deployment of business processes. CSC e4
eliminates redundancies in internal and
external business processes and increases
automation, providing end-to end-process
visibility, control and accountability.
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“As part of Barclaycard’s aggressive international expansion, we are

offering our multinational merchants more flexible, multi-currency
capabilities for cards processing. Combined with CSC’s CAMS II
software, CSC e4 is helping us streamline and modify business
processes, eliminate manual re-keying and improve data quality
and consistency.”

Colin Hudson, Head of Change Management

Barclays Merchant Services

WHAT IS CSC e4? eliminates repetitive systems integration CSC e4 provides the framework to help
CSC e4 is a proven, service-oriented architec- tasks and costly point-to-point interfaces. financial services companies:
ture that integrates Web technology, legacy
• Renovate core systems, reducing the need
systems and commercial software compo- Users can access components of CSC e4 for full-scale systems replacement
nents with a business process management through a Web portal with a common user projects
(BPM) engine, connected by adapters to interface, simplifying training, increasing
• Exploit the use of new software compo-
middleware services. The adapters expose user acceptance and improving productivi-
nents targeted at specific functions
business services to business analysts, ty. CSC e4 can be accessed globally over the
software engineers and end users who can Internet, a corporate intranet or by the full • Implement enterprise portals to extend
collectively redesign the processes in the same range of Web-enabled mobile devices. business services to a wider community
environment, using a graphical notation. CSC e4 uses open standards such as HTTP- over the Web
based protocols and standard XML inter- • Take advantage of emerging business
This approach takes IT off the critical path by faces defined by ACORD in the insurance process management technologies to
fully involving the business owners in the industry and IFX in the banking industry. model and change complex and volatile
design, deployment and monitoring of enter- CSC e4 is vendor neutral and brings processes in real time
prise processes. Business processes can be together best-of-breed in the areas of mid- • Outsource business processes to third
tuned or amended with minimal changes dleware, application server, enterprise parties, regardless of differences in
to the base code. A true plug-and-play portal, process repository and process technical infrastructures.
solution at the business process level, CSC e4 server technologies.

A leading French insurer used CSC e4 to

transform its policy administration process
CSC e4 Architecture supporting 600,000 policies.The company
created a Web-based portal for administering
new business and processing policies for 30
Distribution
PDA iDTV products, which shifted 80% of servicing activ-
Coordination
Management

SmartCard Browser WAP

ities from the company’s home office to its
Process

Security VoiceXML

Channel Gateway
3,500 agents and substantially reduced core
processing costs.
Service
Mul er External Party
ti-C hannel Adapt Enterprise
Content Management Gateway External Party
Session Manager

Workflow Aut hentication External Party Manager

Scree
n-fflow Mana ger
MIS Imaging

Document Production Printing

Policy Administration Billing and Collection

CRM General Ledger

Claims Supplier Chain

Management
Enterprise
Application
Enterprise
Manager

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CSC e4 IN FINANCIAL SERVICES

ENABLE TRANSFORMATION OF which can then be automated by an adminis-

CSC e4 allows changes to be made at
the process level, rather than within
the underlying IT infrastructure, so
companies can:
• React rapidly to changes in the
environment
• Model new or reengineered processes
• Manage exceptions to processes
• Collaborate with internal staff as well
as outside vendors and partners.
A top-tier U.S. financial services company needed
to launch new insurance products faster, but the
company was faced with administering a variety of
products on multiple technology platforms.
The company licensed CSC’s VP/MS calculation
engine to provide a common product definition
component, and it is applying CSC e4 principles
across the entire insurance enterprise to achieve
unprecedented integration capabilities. CSC e4 is
allowing the insurer to rapidly launch products
without major modifications to its legacy systems.
COMPLEX PROCESSES
The power of CSC e4 is most beneficial
where processes are fluid, difficult to coordi-
nate across numerous parties and where the
focus of management attention is on
continual process optimization and
improved decision-making. In the insurance
sector, for example, motor vehicle claims
present a daunting challenge to business
analysts and systems architects.
Claims administration is a complex process
with clearly defined outcomes – payment or
denial of payment. Each claim must traverse
parallel processes and sub-processes, many
or all of which must interact efficiently to
administer the claim in a timely fashion and
control financial leakage. Unfortunately,
areas in which processes and sub-processes
interact, often called touch points, tend to
interrupt the claims administration process.
All claims must be reported, verified, negoti-
ated and ultimately paid. However, claims
handlers also may be required to manage
other processes, such as bodily injury evalua-
tion, repair shop estimates, salvage and fraud
detection and legal case management.
Although it’s possible to describe individual
parts of the process in procedural terms,
tration system or workflow management
system, the real problem lies in the complexity
and volatility between related parts of the
process. In theory, of course, programmers
could define procedural rules covering how to
manage every claim and how to handle every
exception. However, in most cases, the effort
needed to achieve this level of automation
exceeds the benefits derived because of built-in
system rigidity.
Many companies simply don’t try to automate
these kinds of processes and instead restrict
their efforts to automating parts of processes
that are easily defined. As a result, complex
interactions – the ones that are exception-
prone and often the most volatile from a
customer service standpoint – are left
untouched. Yet these are areas with the
greatest potential for transformation
through automation.
CSC e4 provides a framework that enables the
process complexities and exceptions found in
the physical world to be more easily reflected in
the digital world. Volatile processes are
managed at a layer above the application
software. Automated and manual activities
are combined in an uninterrupted, end-to-
end process.

Salvage Supplier
Vehicle Approved
Procurement Materials
recovery repairer
Medical Coinsurance
Driver Inspection
report
Private Expert
Repairer estimating Invoices Reinsurance
Motor
system
Bodily Statement Renewal
Claimant Estimate
injury
Framework for Customer Case Final
management Fulfilment Payee Recovery
End-to-End Processes inbound Disposition
Document
Verification Settlement Negotiation Payment management
Microprocesses can be defined as Investigation Recoveree MIS
FNOL Assignment Litigation
discrete organisms, enabling complex Payment
Policy
interactions in the physical world to be cover
Reserve Liability mechanism Reports

more easily managed in the digital world. Property Legal General

Workflow Fraud management
damage ledger

Contents Image Negligence Accounting

Approved
Third Party Witness
supplier
Approved Loss
Catastrophe
repairer adjuster

3
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EXTEND THE LIFE OF
LEGACY SYSTEMS
Legacy systems contain embedded value, but
financial services companies are often faced
with modifying these systems to address new
business and regulatory requirements or fix
troublesome IT processes. The ideal
approach is to extend the life of these
systems, rather than replace them. CSC e4
lets companies isolate and retain specific
functions of existing legacy applications, pro-
tecting their investments in these functions.
System functions are transformed into com-
ponents, which can be easily managed at the
business process level.
This flexibility lets companies switch off
redundant or defective legacy functions and
replace them with new components.
Through mergers and acquisitions, for
example, life and health insurers could
inherit multiple commission manage-
ment systems. Using CSC e4, insurers
can choose the best in-house system or
implement a new component, bypassing
the now redundant legacy functions.
CSC e4 also makes it easier to introduce new CSC e4 allows companies to protect their
functions, for example, to address regulatory existing IT investment with the ability to:
changes such as new guidelines for anti-
• Install new commercial software
money laundering or on-hand capital
components to replace legacy functions
reserves, with minimal changes to the
base code. • Switch off unwanted or defective legacy
code
Combining enterprise integration and portal • Extend business services through an
technologies, CSC e4 is the ideal framework enterprise portal
for a Web portal solution; for example, to • Modify existing IT systems to address
expose a bank’s portfolio of financial services regulatory changes.
offerings to multiple distribution channels. A
single browser-based screen can extend core
banking services to customer service repre-
sentatives, branch offices, automated teller
machines, merchants and remote
business partners.
Managing the Financial Services Enterprise
Business Business Agent /
Users Partners Consumer Internet
BPM
Business
Enterprise Gateway Process
Manager

CSC e4 allows companies to

Enterprise
isolate and retain valuable legacy Adapter Adapter
Manager
system functionality while Enterprise Manager
replacing troublesome or
redundant applications such as Adapter Adapter Adapter Adapter Adapter Adapter Adapter Adapter Adapter Adapter Adapter
payment systems.
Legacy Applications Enterprise Applications

Pensions P&C Life & Health Banking Workflow General

Customer Customer Customer Customer Customer Printing & HR
New Business New Business New Business Deposits Imaging Ledger
Underwriting Underwriting Underwriting Loans
Product Mgt. Product Mgt. Product Mgt. Cards
Claims Claims Claims Credit Ins.
Actuarial Actuarial Actuarial CRM
Payments Receipts Parity Compensation
Commissions Commissions Commissions Servicing
Payments Payments Payments Payments
Receipts Receipts Receipts Receipts

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CSC e4 facilitates the enhancement
of supporting systems by giving
companies the ability to:
• Avoid time-consuming and costly systems
migrations
• Strengthen systems through a
combination of consolidation, integration
and introduction of new components
• Meet immediate business needs for system
enhancements
• Position systems to achieve long-term IT
and BPM strategies.
“Having recently overhauled its software
portfolio through the development of a new
common integration architecture, CSC e4,
CSC goes to market with a strong proposition
for insurance.The key features of the solution
are its openness and component-based
structure which, coupled with CSC’s services
capabilities, will appeal to insurers looking to
progressively overhaul their architecture.”
Datamonitor
Changing Business Models
The ability to use software applications to
control discrete operational components
allows companies to retain only the functions
that are critical market differentiators – while
collaborating with other parties to gain com-
plementary capabilities.
5
CSC e4 IN FINANCIAL SERVICES
ENHANCE THE SUPPORTING
SYSTEMS ENVIRONMENT
The traditional approach to enhancing the
legacy systems environment is to migrate
both functions and data onto a new
platform. Although sometimes necessary,
full-scale consolidation of multiple systems
onto a single platform is seldom practical or
desirable. Apart from the difficulty and risk
inherent in such projects, this approach
discards years of development effort in
existing systems. In many cases, these legacy
functions are key differentiators in the mar-
ketplace and are closely tied to a company’s
brand identity, such as excellence in
customer service or rapid response to claims.
CSC e4 allows companies to take a multi-
threaded approach, combining software
consolidation and integration with the
introduction of new software components,
as appropriate.
In the life and pensions sector, for example, a
company may need to completely overhaul
its legacy applications but have an immediate
need for new compensation management
software to strengthen relationships with
agents and brokers. CSC e4 allows the
company to quickly plug in new software for
compensation management and take a
phased approach to the replacement of other
systems, such as policy administration, asset
management and reinsurance.
Traditional
JV JV
Core
Enterprise
JV
Acquisition
Divestiture
Traditional structure: (sector, wholly
owned business, stability)
CSC e4 acknowledges the inevitability of a
multi-application, heterogeneous environ-
ment, and it allows financial services
companies to make enhancements much
more rapidly. IT managers can respond to
immediate business needs and develop a
long-term technology strategy. CSC e4 gives
IT managers the ability to isolate business
services in gradual phases – and an overar-
ching blueprint for exploiting BPM capabili-
ties in the future.
EVOLVE BUSINESS MODELS
THROUGH COLLABORATION
Financial services companies are constantly
assessing their core competencies and the
role that business processes play in their
overall value network. While business
process outsourcing and the use of low-cost
offshore resources can deliver significant
savings in non-core areas, the benefits of
these relationships are generally limited to
increases in efficiency.
In the future, greater value will be gained
from relationships that go beyond the scope
of traditional outsourcing arrangements to
allow companies to evolve their business
models. A company’s core competencies – the
characteristics that are true market differen-
tiators – can be extended outside the bound-
aries of the traditional enterprise with CSC
e4. Often, these differentiating characteristics
are manifested in IT systems.
Modern
Divestiture Divestiture
Acquisition
JV
Alliance
JV
Acquisition
IPO
JV JV Core Alliance
Alliance
Enterprise
JV
JV
IPO JV
JV
IPO
Divestiture
Acquisition Acquisition
Modern structure:
(SBUs, JVs, IPOs, Divestitures, Acquisitions, Partnerships,
Strategic Alliances)
e4 8 new 5/5/04 9:08 am Page 7
In the virtual business model, these business
functions become disaggregated components.
Companies can cease to perform certain
activities by outsourcing them and simultane-
ously offer outsourcing services around their
core competences. Companies can collaborate
in a virtual warehousing, distribution,
servicing and risk management network.
To achieve a virtual model, financial services
companies must have systems that facilitate
the open exchange of information. Through
the use of industry standards, CSC e4
provides the framework for collaboration,
enabling companies to easily integrate with
systems outside the traditional enterprise.
CSC’S COMMITMENT TO CSC e4 IN
FINANCIAL SERVICES
Software Based on CSC e4 Principles
With one of the world’s largest portfolios of
insurance and banking software, CSC is
uniquely positioned to help financial services
companies transform business processes and
IT systems. CSC’s software is designed to help
firms exploit the full power of CSC e4.
Drawing on CSC’s experience in architectural
frameworks and reusable components, CSC’s
core processing engines, work management
tools and expert systems can be easily config-
ured and rapidly integrated with other
mission-critical applications. CSC has worked
with organizations such as ACORD in the
insurance industry and IFX in the banking
industry to develop definitions of open
standards for XML interfaces. CSC applies
standards, best practices and integration
methodologies to deploy pre-built adapters
that integrate CSC’s software, other vendor
software and legacy applications in a single,
logical environment.
Process Heritage
As the firm that pioneered business process
reengineering, CSC has deployed process-
based architectures since 1998, well in CSC e4 allows financial services
advance of today’s marketplace for popular companies to:
BPM solutions. CSC’s heritage in process • Evolve business models by extending
reengineering and our process-centric core capabilities beyond traditional
methodology Catalyst™ have contributed to boundaries
the development of CSC e4 and our capabil- • Collaborate with a broader range of
ity to deliver it. CSC plays an active role as companies in the value chain
co-founder of the Business Process • Rapidly integrate systems to establish
Management Initiative (BPMI.org), a leading new outsourcing relationships
group defining process technologies. CSC
• Achieve greater value from IT systems.
also contributed to the development and
adoption of Business Process Modeling
Language (BPML).
Consulting and Systems
Integration Services
CSC provides comprehensive systems engi-
neering, software engineering and process
engineering services. In addition to business
strategy, IT integration and process architec-
ture design, CSC can assist with the selection
of components, process models and project
management. CSC’s consultants support For more information about CSC e4,
CSC e4 projects with process analysis and call +1.800.345.7672 or send an e-mail to
re-engineering, and they can provide inforequests@csc.com and refer to CSC e4
training to build process expertise. Unlike in financial services.
other approaches that generate only
diagrams, processes developed using CSC e4
tools are directly deployable due to the
process semantics inherent in CSC
e4 components.
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Computer Sciences Corporation

Financial Services Headquarters Worldwide CSC Headquarters

Global/Americas The Americas

200 West Cesar Chavez, 2100 East Grand Avenue, El Segundo
Austin, TX 78701 California 90245. United States
+1.512.275.5000 Tel: +1.310.615.0311
Fax: +1.512.338.2341
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Asia Royal Pavilion
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#08-00 Cecil House Hampshire GU11 1PZ. United
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Fax: +65.6223.0305
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Australia 26 Talavera Road, Macquarie Park
26 Talavera Road, Macquarie Park NSW 2113. Australia
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+61(0)2.9034.3000
Fax: +61(0)2.9034.3999 Asia
139 Cecil Street, 08-00 Cecil House
EMEA Singapore 069539. Republic of
Royal Pavilion Singapore
Wellesley Road, Aldershot Tel: +65.6221.9095
Hampshire, GU11 1PZ
United Kingdom
Tel: +44.1252.534000

About CSC
Computer Sciences Corporation helps clients achieve strategic goals and profit from the use of information technology.
With the broadest range of capabilities, CSC offers clients the solutions they need to manage complexity, focus on core
businesses, collaborate with partners and clients, and improve operations.
CSC makes a special point of understanding its clients and provides experts with real-world experience to work with them.
CSC is vendor-independent, delivering solutions that best meet each client’s unique requirements.
For more than 40 years, clients in industries and governments worldwide have trusted CSC with their business process and
information systems outsourcing, systems integration and consulting needs.
The company trades on the New York Stock Exchange under the symbol “CSC”.

About CSC in Financial Services

CSC distinguishes itself through its time-tested ability to plan, build and operate highly reliable, efficient and secure business
and IT solutions for leading financial services firms around the world. To complement its capabilities in consulting, systems
integration and outsourcing, CSC brings financial services industry knowledge and experience, a comprehensive portfolio of
financial services application software and an extensive network of industry and technology partners. More than 10,000 CSC
employees are dedicated to serving financial services clients, including more than 1,500 major banks, insurers, healthcare
organizations, and investment management and securities firms.

Designed and produced by CSC’s UK Marketing & Communications department.

© 2004 Computer Sciences Corporation. Printed in the U.K. 03/04. All rights reserved.