Philippine bank eyes better decision-making with BI

Von Melissa P.

The Land Bank of the Philippines (LBP) is looking forward to making more intelligent business decisions with the full automation of its Central Management Information System (CMIS).

To be undertaken in partnership with Spain-based IT management and consulting firm Soluziona, the business intelligence (BI) project will allow LBP to come up with a timely and accurate reporting system.

The new scheme will equip the bank"s MIS department with exploration and analytical tools which will allow them to produce relevant reports and help management make better decisions based on information that is current and accurate. The project will also enhance data integrity for these functions.

"Our MIS used to run on manual, semi-automated and automated processes," explained LBP vice president for technology management Alan Bornas. "Although it is possible to consolidate information from the different departments, it takes a lot of time to do that and is very hard to sustain."

According to Bornas, consolidating the information alone may take around three weeks and comes with the risk of compromising information integrity that may arise as a result of human intervention. When the full automation is completed, the bank expects to cut the consolidating time down to only three days.

Not for the faint-hearted

Having deployed the first phase of the system only a month ago, the bank, according to Bornas, will feel the initial benefits of the automated CMIS when the first reports come out in December.

The first phase, which will last for 18 months, covers the design, installation, testing, training, and development of LBP"s MIS system, particularly in the deposit and trade transactions.

"We have a six- to eight-year roadmap for providing all the information requirements of the bank. I know several banks that have installed the same system several years ago and it is only now that they are starting to feel the benefits. Becoming fully automated is a long journey and it"s not for the faint-hearted because it takes a lot of patience," stressed Bornas.

He said LBP plans to automate the asset and liability management side of the bank first and then gradually move up to lending, credit, customer relationship, credit risk management and, eventually,"everything else needed to comply with the bank"s requirements."

With more than two million account holders comprised mostly of government agencies, cooperatives, countryside farmers and government employees, LBP also expects the project to help middle and senior level management, as well company analysts, to come up with better marketing decisions.

"The system will provide us the information we need in order to know which of our products and services will fit a specific market segment rather than offer everything to everyone," Bornas explained. "It will allow us to become more responsive to our customers" needs and that, I think, is the main benefit from the system."

Soluziona has decided to use best-of-breed solutions to make the project possible. It presently draws on the IBM AIX-based platform using pSeries machines and a DS 4500 storage system. It uses the Oracle Financial Data Model (OFDM) software database and Informatica to run PPL processes. Business Objects takes charge of the analytics.

Other IT initiatives

The LBP has been aggressively implementing various IT applications to improve its services. Two years ago, it went live with SAP"s mySAP Human Resource Information System (HRIS).

Company executives said the system an automated employee information database - has enabled the bank to significantly enhance its people management functions.

"The need to automate our system processes has become even more pressing following the government"s mandate for publicly-owned institutions like LandBank to provide the public with better and more efficient services," explained Bornas."We also aim to taper expenses, enhance operations, and realize transparency in processes."

One of the key areas that required automation and improved efficiency was human resources, he added to Bornas. He noted that prior to using SAP, critical personnel data was stored in multiple databases and, therefore, consolidation required substantial effort, time, and paper costs.

"So LandBank decided to overhaul its HR system and decided to use SAP"s mySAP HRIS solution," he said. "In November 2002, we partnered with CAI Pacific Consulting Alliance, a regional SAP implementing partner and IT consulting firm, to begin project implementation. We completed the project in June 2003."

The system collects, stores and updates information on LandBank"s 8,500 employees working in 320 branches nationwide. It covers HR processes such as employee recruitment, skills identification, payroll, succession planning, and retirement compensation, according to CAI Pacific Consulting director Nancy Aguirre. "All this data can be immediately accessed and converted into the format executives require for decision making," she said.

A key benefit of the mySAP HRIS is speedy reports generation, greatly reducing the time spent on administrative work. "In the past, HR reports were manually prepared and usually took two weeks to complete. Since SAP automatically consolidates data across all departments and organizes it into a standard, systemized form, HR officers can produce reliable reports, such as overall employee salary statements, almost immediately," added Aguirre.

The mySAP HRIS also provides LandBank with the means to perform employee competency evaluations based on absences, work results, and skill sets. Employee career plans and qualifications are integrated into the system, enabling the bank to easily "view and track employee hierarchy structure, which enhances decision-making for executive succession and subsequently making new appointments."

Employees also benefit from timely salary distribution and accurate payroll remittances. "And the system provides the motivation to work productively since employees know that their performance is being accurately and continually monitored," Aguirre said.

Business continuity

After carrying out the SAP project, the LBP in October 2004 went on to deploy a business continuity and disaster recovery solution from Nortel Networks through local authorized reseller IBM Philippines.

The Nortel Networks Optical Metro 5100 (formerly known as OPTera*) CWDM (coarse wavelength division multiplexing) networking platform and a storage system from IBM enable the bank to fulfill its key function as an official depository of government funds for countryside development by providing a high degree of security in the event of a natural or man-made disaster.

Deployed in accordance with a directive from Bangko Sentral ng Pilipinas (Central Bank of the Philippines) requiring the banking sector to establish backup data sites for business continuity, the data recovery solution allows LandBank to replicate its corporate database, transaction records and other pertinent data at a backup site as well as enable real-time access to stored information.

"We implemented Nortel Networks with IBM because their networking and storage technologies work together to provide precisely what we require at the moment " security of information for a secure future for our clients, the agricultural sector and the government,"said Bornas.

Optical Metro 5100 is a compact, cost-effective and power-efficient CWDM platform that delivers up to eight protected (and 16 unprotected) wavelengths of CWDM per system and is designed to cost-effectively extend optical broadband services to the network edge. Enabling high connectivity over point-to-point or survivable ring-based optical networks and ideally suited for co-location sites and customer premises, the simple architecture of Optical Metro 5100 makes it easy to deploy and enables operational costs to be significantly lowered.

As part of the networking solution for LandBank, Nortel Networks also supplied Ethernet Switch 470 for high-density desktop connectivity; management and prioritization of data traffic for maximum network performance; and robust security features to offer a high degree of protection against unauthorized access to data traffic.

The Land Bank of the Philippines has been ranked by Computerworld Philippines as the No. 1 IT user for 2004. It is currently one of the country"s top five commercial banks with more than 300 branches nationwide and is the present implementing agency of the Comprehensive Agrarian Reform Program (CARP).