Munch and Byte: Boon for IT vendors in 2005... Sucess factors in BFSI Domain

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Hi Friends,

This week for you to munch some crackering nuts of Banking and finance. Digest this info. by bitting it slowly and surely to bring success in your professional career.

1. Success Story - Consolidation of Core Banking Solution:

When Bank Mandiri was created out of the merger of four banks in 1998, it was saddled with nine disparate core banking systems and 120 data centers. The business of the bank was also predominantly focused on corporate banking. Mandiri, which aimed to turn itself into a universal bank, had a huge task of using IT to address its business objectives.
Read the challenges and excitment of IT Manager handling it prudently at ASIAN BANKERs.

2. Forcast by TOWER Group on BFSI Customers spending in 2005:

The U.S. financial services industry will spend a projected $117.8 billion on information technology in 2005, a $5 billion increase over 2004, according to new research from TowerGroup.

TowerGroup finds that U.S. institutions are making both organic growth and operational efficiency top priorities with IT serving as a critical link between the two.

Yet the research group also finds that U.S. financial institutions are standing at an IT crossroads—one that will greatly impact these firms’ ability to grow their business, satisfy customers, manage risk and cope with an increasingly challenging regulatory landscape.

Financial institutions traditionally viewed organic growth and operational efficiency as separate, and often incompatible, business strategies. But TowerGroup says that a number of financial institutions are recognizing that they are closely linked and can work hand in hand.

3. Diebold - Leading ATM manufacturer Making news:

• Diebold has made a major business breakthrough at four Icelandic banks. The Ohio-based company recently installed a software solution on competitive equipment throughout the country.
  

• The solution was developed using Diebold’s Agilis Power software toolkit. ATM machines manufactured by NCR are now powered by Diebold terminal software at Iceland’s Landsbanki, Kauphthing Bank, Islandsbanki and the Savings Bank Datacenter.
  

• Agilis Power is the first Diebold ATM product to be used in Iceland, according to Diebold. Agilis is an open, cross-vendor software platform that allows multiple vendors’ terminals and their respective technologies to co-exist. The flexibility of Agilis allows Diebold to meet the specific needs of each financial institution, the company says.

• To better reflect the market it serves, Diebold Credit Corporation, a wholly owned subsidiary of Diebold, Incorporated (NYSE: DBD), has officially been renamed Diebold Global Finance Corporation. Diebold Global Finance provides financing for all Diebold products, including self-service technology and security solutions on a global basis, including hardware, software and services.
  

I anticipate in near future, it will help Indian market which is rich with pentration potential and hungry for Capital Inflow to support Retail ATM model similiar to US and UK market. It is oberserved that, if proper business model as suggested by me can be used selling 10,000 ATMs per year target can be at arms length in two to three years.

Hope u guys have enjoyed and digest the food for your grey cell. Do drop a word as your valuable comment on analysis and reports.

Open Source getting Foothold - IT Consolidation curve for the Bank

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Hi Friends,

This week is coming to end but, there is something that need to be digested by MICROSOFT and SUN fanatics for weekends.

IT Managers in Bank are going through challenging phase of cutting cost, meeting complienance, delivering applications for new business products, treats of business consolidation phase (M & A) and it's impact on IT and so on.

Few go by the beaten tracks but, some have eye and ears of smelling and seeing opportunities for the them. One of such opportunity was grabbed by Kenneth Kucera, division head of the Omaha-based bank's enterprise technology services.

Cut the long into short, Kenneth felt that, Sun does not offer technologies for running mission critical centeralised solutions and IT Manager need to evaluate offerings of IBM, HP and Unisys.

Kenneth bestowed his choice on IBM Zseries sServer 990 to replace 30 Sun Solaris Boxes and 70 IBM eServer Bladecenter replacing 560 Win-Tel Servers. I admire his decision and providing strong reasons for discouraging Microsoft and Sun as their products are suitable for desktop, mid and low level enterprise computing.

IBM scored becuase of end to end offerings i.e. Mainframe and Bladeserver hardware, IBM DB2 Database, IBM websphere suite of products for running mission critical applications like Online Banking. Sun and microsoft need to depend on other products to provide solution and eventually score more money. Last iceing on cake Capacity on Demand...

Long Live LINUX.... clustered Computing.... we can count birth of Utility computing in months rather than Years.... any takers of building COMPU HOUSE just as we have POWER HOUSE for rented services.

David and Goliath #1: Telecom Follies < > Small Body big Heart

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Hi Friends,

Good morning. Something to brew with morning coffee and ponder in the night before sleep.

1. Telecome Follies: Telecom Biggies who feel they know everthing and anything under the sun might have to pause and look at Gary Audin's "Five Nines".

2. Small Body big Heart: Let us talk of innovation. is innovation as buzz word to get smart value investors ?? or good Brand building exercise. All proves wrong for true strategy to execution by Phillipines based bank - Banco de Oro.

It will setup 20 ATMs in McDonald Stores. Bank is focussing on corporate market specifically of SME segment and pushing agressively Retail banking. Present deal is part of it's strategy to expand it's automated outlets. Bank has tie up with Express net which is national network of Phillipines with 1700 ATMs accessed by 3.5 Million card holders.

Looking at present restriction of opening branch outlets ( Banks can open brnaches only for co-operative and microfinance related activities) it is the best option available. Bank's size of 184 branches is small compared to medium size of banks in India (Some are having 300 to 400 branches but, are so fat that, can't move an inch).

3. "MphasiS Acquires Princeton Consulting." Read Recent acquition news - It describes good perception about IT companies in India and their problems (Also Reinforcing Kiran Karnik's Nasscom Chairman's view)

Munch & Byte: Is it True that, Indian Programmers work like Car Mechanic

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Hi Friends,

Yes what you read is correct. This is what felt by none other than Kiran Karnik, Nasscom, President. For Full story read the interview posted on one of the web site.

I am deeply impressed by describing the truth in clear naked words. Words used at juncture where, President of Indian Goverment is describing for Vision for India in IT market place.
I feel any person with Two eyes and brain reads it, must not feel humilated about it. Rather I suggest he/she to contemplate on reasons and ways to change the nature of it.

Mr. Karnik scores 100 out of 100 for getting the hold of social impact of IT jobs on Indian culture and values. IT jobs specific to Call center and BPO are inclining more and more young guys to mimick western culture. I will make my stance clear in stating that, cultures are not actions performed in literal sense but, mind space absorbing, processing and generating thoughts/actions. One real incident happen to me to endorse Mr. Karnik " In 2003, I was working late in night @1:30 pm. Returning home from office, waiting for the Hired Taxi and smoking a cigrette. One young girl in her early 20s approaching me with her lusterous body language and asked for favour to lend a cigrette.".

One more analysis to Mr. Karnik about Primary education which is major challenge that he is going to face for next 15 years. Cost of Primary education for kid born on Jan 1,2005 till he becomes Enggineering Graduate at present prevailing cost (assuming not a premium eduation institute) can be around 8,50,000. Major components are coaching class and private tuition fees contributing to 70% in whole career of engg. student.

Let us assume a family of Father, Mother and Two Child (One boy and one Girl) with total family income to Rs.10,000/= per month thus, annually Rs. 1,20,000/=.

Total Monthly expenditure for family (Vegetables, Milk, Grains, Basic amnities) Rs. 3,000/= per month assuming no abnormal illness. Annually will be Rs.36,000/=. Other expenditures like conveyances, clothes etc. Rs.10,000/= per annum. (Assuming travelling in public transport, not wearing branded cloathes from glittering shopping malls :>))

Break of remaining Rs.76,000/= goes as portion to ....
Goverment for income tax, service tax, professional tax and what not (total say 3000 per ann),
celebration of festivals or other unexpected expenditure etc. (rs.5,000/=)
Provident Fund, Pension Fund, Insurance policy etc. Rs.8,000.
This expenditure excludes any recreation activiites (Holidays touring, going for seasonal shoppings), any consumer loans etc. leads us to our family saving approx. Rs. 60,000/=.

One more twist to the whole thing is education with and with out coaching classes. With out going in why and what of oaching classes/tutions, we can estimate that, with coaching class family need to bear Rs. 2,500/= per kid and with out it can range from 1,000/= to 500/= per annum. For 10 years, kid's father will be paying Rs. 25,000/= per kid. Thus, after 10 years for Two kids - Rs.50,000 to 70,000.

Assume Family saves 60,000/= per annum for next 10 years (ignoring inflation against the increment in salaries and great Taxes and VATs, No consumer loans, no housing loans, no costly mobiles and high fi cloathes and holidays). Family will save Rs. 6,00,000/= with this saving invested every year with 12% annulaised interest will get additional income after great income tax and captial gain tax etc. Rs. 2,00,000/=. Thus saving of Rs.8,00,000/=

Father of the family has biggest question after 10 years when his kids are about to go to school.

a. Marriage of Her daughter which will be around the corner in next 4 to 5 years. Which may cost Anywhere between Rs. 3,00,000/= to Rs. 5,00,000/= (Good that Indian Dowery issues are not burning so Hot). Rest for him, his wife and his kids remaining years education.

b. Use this money for his kid's education (10th year onwards, sudden surge in expenditure of both the kid'ss education which may total upto Rs. 5,00,000/= or more if not becomes enggineer graduate) and reduce the asset to Rs. 4,00,000 - 5,00,000. Assuming his son and daughter never went for coaching class,premium education institutes. Then daughter marriage. (E.g. of one of the non premium coaching class announcing special "Cost effective" loan scheme with EMI of 2,500/= for 12 months - Rs. 30,000/= per year for 10th year)

Fees of IIM, IITs as well of non premium enggineering colleges in India can range from Rs. 60,000/= to 80,000/= per annum with hostel and other exp. like books etc. will be close to Rs. 1,00,000/= per annum.

At the end, Can he save something for his retirement, old age illness medical expanses etc. before he retires or he needs to survive on his pension and retirement.

Does our visionaries of finace have any great investment insruments with low risk for such family, does our education institutes and education ministry stop such situations.

Does it not affecting the vision as one day parents will discourage their kids or will do right or wrong things to get this expenditure. If u are still not convenienced, have a look at some of the statistics in AP and Karnataka States.

I respect Mr. Azim premiji - Chairman of Wipro Pvt. Ltd. - one of the premium IT services firm in India for realising some of such pains of socitey and started emphasis on supporting primary eduation.

Let me also one day contribute to India's growth.