This case was prepared by Dr.

Khawaja Asjad Saeed, Wichita State University

MSi10MBA017 Msi10MBA028

Muhammad Ahsan Naeem Muhammad Majid Masood

MCB Limited
Banking Operations
Commercial Consumer Wholesale  Islamic Treasury and capital markets

Subsi i ri s
MCB Asset management co. MNET Services (pvt.)Ltd Muslim Commercial Financial services MCB Trading Service Ltd(HK)

Associated Companies
Adamjee Insurance Co. First Women Bank

Lack of effective implementation of symbols project in all branched of MCB LTD

Fact Finding Study of Existing System Problems in Existing System Solution of the Problem Proposed System

Study of Existing system

MCB using MIBS system developed by Information Technology Group (ITG) System Development Front End COBOL Back End Unix

Cont.
Four modules of MIBS 1. Multi currency inter-banking system(MIBS) 1. For managing Customer Accounts and Basic Transaction 2. General ledger banking system(GLBS) 1. For Remittances 3. Remittances banking system(RSBS) 4. LUBCS 1. Utility billing

MIBS Operations
At End of Day Data Entered into System Backup Created on Tapes The system is DOS based and keyboard is primary input device Dialup facilities Online branches

MIBS Operations Cont..

Each branch had a key punch operator. Business at each branch was conducted through paper based vouchers & manual sheets . At the end of day , The vouchers were aggregated & the key punch operator entered the data into the branch based server. The data in the system was then reconciled with the manual sheets maintained by the employees to a certain the validity of the numbers & enforce checks & balances in order to aggregate

MIBS Operations Cont..

the data branches were affiliated with regional offices , which were then affiliated with circle offices, . regional offices compiled the data from the branches & data from regional offices were then compiled by circle offices to produce consolidated financial reports. Branches maintain separate customer accounts , so a customer could have multiple accounts in differ rent branches

Problems in Existing System

MIBS posed many challenges Lack of integration across branches Manually aggregation of data Aggregation and reconciliation took enormous resources and very time consuming and error prone Inter branch transaction were also slow and often required days to complete. MCB also did not have a single view of costumer due to maintaining of multiple account in multiple branches.

Problems in Existing System Contd

The internal operations of the branches were rather inefficient. Use of vouchers to conduct daily operation & then have that information entered into the system at the end of the day posed data integrated risks & resulted in duplication of effort. If a customer wanted to conduct different transaction that required initiation of separate processes to service.

Solution to existing problem

MCB took the decision to upgrade there core banking system so that it would integerate most of the branches and reconfigure the branch based processes for efficiencies.

Proposed System
The AMBIT system (core banking system ) was proposed system. Financial Feasibility: The AMBIT system was procured from SunGard at the cost of $1.7million.

AMBIT system was a seamlessly integrated extended enterprise banking system. Access to the system was enabled through multiple channels. The primary access was provided to the bank teller & staff . However the system also enabled the customer to directly access their banking information through virtual banking interface (internet), ATM & mobile devices

A brief Description of some core modules

The system offered six core modules 1. Branch teller 2. Kernel 3. General Ledger 4. Deposits(RB) 5. Customer Lending

The implementation of AMBIT system at MCB was called symbols project A separate department created at MCB to manage the implementation of AMBIT system The project was initiated in 2003 after the management team made the system selection decision. Information technology group was initially given the responsibility for implementing the project

Testing
Alpha Testing

The first step after system selection was to map the existing processes at MCB to the process in AMBIT system modules Main objectives to identify key gaps & outline scope of customization MCB achieve this objective through two levels of acceptance testing 22 MCB employees were sent to Singapore to get initial training & thoroughly examine system The local services offered by MCB were tested on AMBIT system to evaluate the fit.

Important Deficiency
The system did not support the profit &loss banking offered by the commercial banks & deduction of Zakat. P&L banks stipulated that the rate offered on an account to be recalculated for every quarter. The structure & terminology used for remittance was very different . MCB used pay order for with in city remittances & demand draft for inter city remittances. The system used different conventions for remittances thus MCB requested the vendor to customize the system to accommodate for these gaps. Prior to the implementation of AMBIT system a separate tool was run to make adjustments for profit & loss & processing of Zakat.

After customization was complete, the first branch in Karachi was converted to the new system in 2005. After the initial conversion,104 branches moved to AMBIT system.

Resistance of AMBIT
However ,the conversion processes was met with resistance from the branches and a majority of the branches did not cooperate in the implementation process . Employees at branches felt comfortable with the existing processes and did not see any value in adopting the new systems. In the new environment ,employees had to take over the responsibility of performing work directly on the AMBIT system. Branches were not willing to head over the control of the data residing on their servers. Further, the change made the key punch entry operator position redundant. Due to resistance ,the project suffered delays and conversion of branches was halted.MCB by that time had made significant investment in the system and was facing the probability of implementation failure.

IS Symbol Project Finish!!!!!!!!!!!!

In 2007 the upper management at MCB underwent a major change and anew management team took over the bank. The new team realizing that the symbols project was in crisis put it on high priority.

To avoid Failure of Symbol Project Some steps are taken

Hiring of Faisal Ejaz as project manager and A.F.fergusan for consulting services A.F.ferguson recommendations Establishing a project team which should include personnel with both technical and business skills. To reconfigure the governance structure of the project which include setting up a cross functional steering committee and revising the reporting relationships.

Cont.
Mr. khan quickly took action to form a dedicated team for project. The core criterion for selecting team members was to get the best people at MCB and create a mix of members with strong IT background and individuals with skills in IT and banking based processes. A team of 166 employees was set up. The steering committee was made responsible for monitoring the project and making decision on changes and customization requests.

Need of Standard Process for migration of branches to AMBIT System Conduct Data Cleansing

Verification of NIC Verification of master account BLANCES Verification of Signature

Cont

Concept of Day End The data is first verified and sent to migration team through FTP or on data tapes. The Data is then restored in test environment.

AMBIT SYSTEM INCLUDED BASED SECURITY

THE ROLE

Security parameters are outlined in terms of who in the branch will have access to different modules, process and information. SO, AMBIT System includes role based security. Different verification reports could be generated at various processes in order to maintain the check & balance .

Migration of Three Core System

a. b. c. Multi currency Inter Banking System(MIBS) General Ledger Banking System(GLBS) Remittance Banking System(RSBS)

MIGRATION OF MIBS
Data Cleansing of CNIC. Verification of Master Account Balances of MIBS. Run the report for accruals for all account nature. Run tool program for calculation of number of cheque. The text files of the data are created so apply tool program to transfer the MIBS data in SYMBOLS.

MIGRATION OF GENERAL LEDGER

Check the balance verification of different accounts with the master file summary of MIBS which generated after file clearing Assets & Liabilities must be balanced Run monthly verification program for GL Run monthly verification program for HO Processing of profit center codes & items codes Created text files of GBLS from UNIX & migrate GLBS to SYMBOLS by running tool program.

MIGRATION OF REMITTANCE
Run RSBS Remittance program(DD/POI payables) to extract the amount of DD/PO outstanding & amount of unclaimed DD/PO outstanding and convert it into text files As the text files are already being created so only tool program is to transfer RSBS to SYMBOLS database

TRAINING METHODOLOGY
Training methodology was to develop to address two important areas a. High-level managers to be educated about the symbols project b. To get the staff at the branches ready to effectively utilize the new system

E-Learning
Symbols project team initiated & executed the idea of distance learning by introducing elearning platform. E-learning system was web based application that was accessible through an internet enabled location. Website includes symbols training material, Demos and Questionnaires.

Advantage of E-Learning Platform

Made training much easier for the staff members Help MCB save on training costs

INFRASTRUCTURE SETUP

METHODOLOGY

&

An infrastructure team was established to manage the implementation of hardware in each branch that was migrated to the AMBIT system. The team develop standard hardware requirement for the conversion of branch to the AMBIT System that included desktop computers, Networking equipments cabling, imaging/scanning system & backup power system (UPS).

INFORMATION TECHNOLOGY COODRDINATION

GROUP

Assurance from ITG that the procurement will be done in a fashion that adheres to the overall implementation plans. Even after extensive coordination , procurement of hard ware resulted in some project delays because the companies providing the hardware at times could not deliver the required equipment on time MCB data centers a. Main data center located at MCB tower b. Second located Sheikh Sultan Trust Building(BACK UP)

SUPPORT METHEDOLOGY
MCB had to develop a systematic way of dealing with incidents and requested changes related to the AMBIT system for pre implementation to post implementation. Incident covers unexpected system behavior. Changes request includes request by the user for modification of system for improving functionality and improving ease of use.

CONT.
MCB Signed a service agreement with SunGard for addressing System incident report and change request. Quality assurance department was established to support the on-going development and maintenance of system. The symbol Team focused on was to provide support to the new user of the AMBIT. Three help desk was established and provide help to user that had question or faced issues while working on the systems.

Looking Onward
818 branches were migrated by symbols team. Opening of New branches were being done on the AMBIT System. For enhancing the functionality the symbols team evaluated additional futures and modules Customer lending and trade finance module were setup in 2008. Creation of quality assurance department was a good step towards on-going management of the life cycle and maintenance of system.

Success Evaluation
Success was Evaluated based on the progress of the implementation process, Reliability of system and the user Satisfaction. It would important to develop key performance of the system both from the technical and business prospective. The Virtual Banking and mobile banking platform provided the customers with self service tool to manage their finances.

Financial Control Group

MCB established the FCG in 2007 FCG maintain and managing the reporting requirements for the branches and corporate office FCG contacted the branches to outline the information they needed and ranked them in order of importance. The information was used to develop reports that were required on a regular basis.

Cont
350 unique reports were developed and some of these are directly available to employees through the system. FCG make Ad-hoc reports on request and handle it on case to case basis. FCG received 200 daily request for information FCG was doing an excellent job in servicing the reporting need at MCB. Probable Avenues of expansion included exploring new ways of analyzing and utilizing the information residing in the AMBIT system