Page 48 - BANKING FINANCE SEPTEMBER 2015

ARTICLE
Each upgrade brings with it best prac-
tices shared by finance organizations
around the world. Plus a key advantage
of off-the-shelf software is the cost-
benefit which is lower than that of
custom built in terms of total cost of
ownership.
In order to enhance efficiency, the so-
lutions deployed by the bank should be
functionally rich and efficient and
should enable a bank to rationalize and
automate as many backoffice pro-
cesses as possible.
So what about the areas that the so-
lution doesn't cover - the 25% or so of
requirements that the package doesn't
meet? Well, generally the software
provider will partner with other spe-
cialists vendors who can 'plug the gaps'
with specific solutions.
Otherwise a good implementation
partner can meet specific functional
requirements through configuration or
some limited software development -
outside of the core banking package.
This debate is not India specific but a
global one, and banks worldwide are
moving to packaged solutions which
deliver best practice solutions at a pre- future customizations.
48 | 2015 | SEPTEMBER
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dictable cost. It
is also easy to
understand
what the solu-
tion is costing
the institution -
there are no
cross-subsidies
from other areas
in the build ap-
proach and no
added costs of
on-going
customization.
One of the biggest benefits of packages aged software is more cost effective
is the ability to upgrade. Since any cus- and will be easier to implement as well
tomized software is outside of the as more accommodating for future en-
package it is generally straightforward hancements and maintenance.
to move to the next version, taking ad- Further, risk of project failure is re-
vantage of new developments, innova- duced because of standard methodolo-
tive ways of working and global best gies and set tools used for implemen-
practices. tation.
The latest trend shows that demand It is important to analyze the basic
for custom built software is slowly de- need for the solution with special con-
clining due to the broad level of exper- sideration of cost of ownership, and
tise and time required to adequately the benefits expected from the new
and efficiently develop the product solution. At the end of the day, back-
and maintain the code of the applica- end processes don't provide differen-
tion. Also, there is no economy of scale tiation in the market.
for sustainable growth with respect to
The key to success is in deploying a
packaged solution that delivers maxi-
The issues in de- mum cost benefit while keeping the
ploying custom- organization able to compete - and
built software are stay agile - into the future.
further alleviated
with the growing It requires a certain level of organiza-
availability of tional maturity to take decisions
packaged soft- around IT sourcing, and they must be
ware. From a based on a deep understanding of the
banks'perspective, benefits of each model and what it can
deploying stan- bring to the institution.
dardized pack-
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