BPRE

EXAMPLES FROM INDIAN CORPORATE WORLD

BY
RITU KARN
SAHAS P N
SHAMAL ABDULLA
DEFINITION
 Reengineering is the fundamental rethinking
and radical redesign of business processes to
achieve dramatic improvements in critical,
contemporary measures of performance such as
cost, quality, service and speed.
 Business process reengineering (BPR) is the
analysis and redesign of workflow within and
between enterprises.
BANK OF INDIA
INTRODUCTION
 Founded on 7th September, 1906.
 Is an Indian state-owned commercial bank
 HQ - Mumbai, Maharashtra
 Pan-India presence
 Controlled through 50 zonal offices.
 In the forefront, introducing various innovative services and
systems
 First among the nationalised banks to establish a fully
computerised branch and ATM facility at the Mahalaxmi
Branch at Mumbai in 1989.
 Founder member of SWIFT (Society For Worldwide Inter Bank
Financial Telecommunications)
 One of the top five banks in India
REASON FOR BPR INITIATIVE

 For faster work

 To face competition

 For secure data transfer

 For making banking very easy for a retail as well as

corporate customer
 Core banking system and centralized data system

 Automate all its branches across the country

TEAM INVLOVED
 The Boston Consulting Group
 Finacle of Infosys
PROJECT DESIGN
 To streamline its growing business globally
 Increasing branch network of 3159 to about 5000-
7000 over the next five years.
 To meet the credit need of the corporate sector and
help in faster decision making on the loans, the
bank would set up one corporate branch in every
state.
 The bank would recruit 3295 employees which
would include 2250 officers in various departments
like agriculture, statistics, and marketing among
others.
SUPPORTING TOOLS AND TECHNIQUES
Core Banking Solution
 Core banking basically is depositing and lending of money

 CORE stands for "Centralized Online Real-time Exchange".

 Core banking functions- recording of transactions,

passbook maintenance, and interest calculations on loans and
deposits, customer records, balance of payments and
withdrawal.
 Banks make these services available across multiple
channels like ATMs, Internet banking, and branches.
 The core banking applications run on Finacle from Infosys and
the database is set up using the Oracle Financial Service
Architecture
 This software was installed at different branches of bank and
then interconnected by means of communication lines like
telephones, satellite, internet etc.
PROCESSES

 The bank follows processes such as information

profiling which involves classification of information
into categories, such as- secret, confidential,
corporate confidential, offices and public.
 Every new process is scanned for its risks and
vulnerabilities and various other security clearance
aspects.
CONTD...
 The core banking applications run on multiple HP Superdome
servers while the storage solutions have been migrated to a
HP StorageWorks XP1024 disk array.
 This is further connected through leased lines to various Cisco
switches and routers deployed across the country with the
branches forming a hub and spoke model that uses a central
point to co-ordinate activities between various branches and
the data centre.
 At present, the operations at about 2,433 branches across the
country are computerized out of which 108 operate in a
partially-computerized mode.
 The bank is a member of the RBI’s VSAT Network and has
installed about 39 VSATs linking strategic branches and
offices adding redundancy during disaster.
 To fulfil its deployment objectives BoI chose HP as consultants
and network integrators for the project
IMPACT OF PROJECT “AS IS” & “TO BE”

 Operations are carried out fast and customers are happy

with the quick service of the bank
 The technological advancement has the changed the
working of bank of India totally
 Account opening is done on the same day

 Implementation of internet banking (more secure),

(wireless application protocol) banking, SMS banking
with no extra cost to the customer
 Forms can be downloaded from the website itself and a
virtual keyboard is present on the login site (in case of
internet banking) to avoid hijacking of passwords.
INTRODUCTION
 M&M was started off by two brothers J.C and K.C
Mahindra
 The company started off as manufacturer of general
purpose utility vehicles and carried a production
capacity of 75 jeeps In 1948
 Over the period they diversified into hotels financial
services auto components IT Infrastructure and trading.
 In 1994 the co established Mahindra USA to promote
tractor sales worldwide.
 Top management philosophy was strengthen the
competitive position in the domestic market before
launching an ambitious globalization program
CONTD..
 The top management realized that they had the
opportunity to become a truly global brand
 In 1994 a BPR exercise started - a change in
functional to SBU structure
 As a result 6 autonomous SBU’s were formed with
empowered presidents for each sbu
 The intention was to provide direction for the future
growth of various business lines
RESTRUCTURING FARM EQUIPMENT
BUSINESS

 Project Vishwajeet- a major restructuring program

conceptualized by MC Kinsey to turn M&M into a
leading tractor producer by 2005

 As part of this strategy Farm equipment business

was divided into five divisions

 - Marketing and customer relations , manufacturing

and supply chain , product development & r &d
services, performance management and
international operations.
PROJECT BLUE CHIP
 In 2002 M&M reached a low point in its history-
depressed revenues and high costs reduced profits
margins

 Share price fell from 322 in 2000 to 114 in 2002, ROCE

fell from 17.09 to 8.92

 M&M set up a Corporate turnaround Program Office

and articulated need for a sharper focus on financial
returns

 Due to this a restructuring exercise called blue chip was

initiated to raise the bar on performance
WHAT DID BLUE CHIP DO?

 Benchmarks like market share sales and profits

were replaced by ROCE

 A policy was imposed which stated that businesses

had to compete for capital- those with the highest
returns would get the capital

 Operations were overhauled, M&M undertook cost

cutting and steramlined its manufacturing facility
PRIOR TO BPR HR WAS NOT A KEY
ELEMENT OF STRATEGY FORMULATION
THE RESULTS
 Tractor division undertook a major cost cutting
exercise and bought down Bep from 54000 to
35000 units

 Net sales for first half of 2004 increased by 28% ,

operating profit was up by 34%

 M&M stock touched a high of Rs 390 from a Rs112

a year ago
IMPLEMENTING BPR IN ICICI BANK

Company Profile:
 ICICI Bank (formerly Industrial Credit and Investment
Corporation of India) is a major banking and financial
services organization in India. It is the 4th largest bank
in India and the largest private sector bank in India by
market capitalization. The bank also has a network of
1,700+branches and about 4,721 ATMs in India and
presence in 19 countries, as well as some 24 million
customers.
 ICICI Bank is one of the Big Four Banks of India, along
with State Bank of India, Axis Bank and HDFC Bank —
its main competitors.
REASONS FOR IMPLEMENTING BPR IN ICICI
BANK

 BPR was implemented in ICICI Bank in year 2000

and later when anytime, anywhere banking came
to our country, ICICI Bank had to move away from
the branch-centric model and make its services
available nationwide. The solution was
to centralize its applications.
 Legacy systems: The traditional systems at ICICI
Bank were very centric to the branch. ICICI
realized the importance of offering nationwide
banking but this would be possible only by having
a centralized data repository.
TEAM INVOLVED:
 Infosys is one of technology partner for ICICI Bank which
game the assistance to implement Finacle for handling
all the banking activities
 Bill Desk for online payments

 SYBASE

 SAS
SOLUTION BY INFOSYS:
SUPPORTING TOOLS AND TECHNIQUES:

 Finacle – a core banking and universal banking solution

from Infosys
 The network follows a hub and spoke architecture—a
mix of VSATs (Very small aperture terminal) , leased
lines, ISDN and radio links. It has around 800 leased
lines, about 600 VSATs, approximately 800 ISDN lines
and multiple 34 Mbps lines.
CONCLUSION:
 ICICI Bank has grown immensely over a period of time. First
time in history a private bank has merged a public sector bank
i.e. ICICI Bank announced merger with Bank of Rajasthan. On
23May ICICI Bank announced merger with Bank of Rajasthan
with it through share-swap in a non-cash deal that values the
Bank of Rajasthan at about Rs 3,000 crore. Each 118 shares of
Bank of Rajasthan will be converted into 25 shares of ICICI. It
is said that this merger will also expand ICICI Bank's branch
network by 25%.
CONCLUSION:
 Thescalable and open systems based
architecture, enabled Finacle to successfully
manage the resultant increase in transaction
levels from 400,000 transactions a day in 2000
to nearly 2.1 million by 2005 with an associated
growth in peak volumes by 5.5times. With
Finacle, the bank currently has the ability to
process 0.27 million cheques per day and
manage 7000 concurrent users.