There was an upbeat atmosphere at the Asia Executive Roundtable, organised by CIO Asia and sponsored by BMC Software, at Kuala Lumpur’s plush Mandarin Oriental Hotel. The moderator, Fairfax Business Media Asia managing editor, Ross O. Storey, said “there is a fresh breeze of optimism blowing through Asia and if you talk to the big logistics providers like DHL and FedEx, they will tell you their order books are looking much healthier for the next six months”.
Many countries in Asia, including Malaysia, have now returned to positive economic growth.
Storey said BMC Software “must be doing something right because they had experienced a continuing string of enviable financial results”. The event started with a presentation by Indonesia’s Sigit Arnanto, Bank CIMB Niaga’s vice president of IT delivery and services head.
The ‘big bang’
He candidly shared the challenges he faced with one of Southeast Asia’s biggest IT integration projects—the CIMB Niaga and Lippo Bank merger last year. A key decision was whether to opt for a ‘big bang’ approach or a phased-in method. Convention, Arnanto said, would have pointed to the slower, phased-in approach but from the business point of view, the ‘big bang’ strategy was far better and less costly.
KAF Investment Bank’s head of Group Information IT, Abdul Saheed, asked how much influence CIMB Bank Malaysia had on the integration process.
“Lots,” Arnanto said. “CIMB Group was Bank Niaga’s guru and brought the Malaysian experience to the table. They wanted it done earlier and faster which was a key factor in us deciding on the ‘big bang’ approach.”
The right partner
Institut Jantung Negara (IJN) Holdings’ general manager of group MIS, Puan Sharifah Salwa Binte Syed Abu Bakar, wanted to know just how long it took for CIMB Niaga to decide on using BMC and what were the critical elements in the decision.
Arnanto replied that it took only about a month. “A firm decision must be made quickly and carefully because once it is made, the project can begin and you will have to live with it for the next few years at least,” he cautioned.
BMC was chosen, he said, because of its strong presence, its large customer base locally and globally, its high adoption and implementation success rate, and because it is a recognised leader in business service management (BSM).
The concluding presentation point, which highlighted the 99.97 per cent success rate for the merger project, based on BSM, grabbed everyone’s attention.
Like spaghetti
Chip Salyards, vice president of BMC Software, Asia Pacific, likened the business service management to “a bowl of spaghetti where the lines and connections are all there but are easily broken and don’t usually make much sense”. “BMC,” he said, “takes on a new approach. It takes all the technology acquired over time, all the best of breed applications, and puts it all together to develop a configuration management data system that delivers not data, but information. Today’s customers want information, not just data, because information is what helps with the decision-making process.
BMC Software’s vice president of solutions marketing, David Greene, said today’s new technology was designed to change the infrastructure where enterprises move from the blueprint of building, to more of a lifecycle process. The dynamics and infrastructure will continually change and Greene said BMC’s role was to help manage the change and track the results. Storey said change is what companies have to deal with everyday and the complexity of technology is generally advancing faster than the ability to control it. In the light of a more positive recovery scenario, he asked whether there would be budget control changes in the coming months and how did this affect return on investment calculations?
Measuring ROI
KAF Investment Bank’s head of group IT, Abdul Saheed, said during recessions, IT budgets generally get slashed by 25 per cent but his company was better prepared this time round.
“We always prepare for the worst,” Saheed, said. “We don’t over-spend, we do things that will help our business during both good and bad times. Our approach has been to break a big project into small chunks where we can get the ROI within 12 months. With ROI, now we don’t just look at the issue of cost, when we do a project we question how many users will it affect? We’re prepared to pay more for the sake of peace of mind. If it gives peace of mind, that is ROI to us.”
Dato’ Peter Tan Suan Tian, group managing director of KLH Ventures, declared that his company does not see IT as a cost centre, but more as solution provider and a “pain remover”.
“With ROI, we particularly want to know: does it help in our case to move forward?” Tan said. “In the last three years, we spent more on hardware going forward and we used the software to solve our pain points. So in effect, BMC is more of a pain reliever.”
Sharifah says while IT automation cuts down on time, the ROI for IJN is defined more in people terms, based on whether the technology is providing better patient care and ensuring patient safety. If the returns on the project can be shown from those two angles and in a shorter timeframe of four to six months, then the IT spending will be accepted, Sharifah added.
“Usually, IJN takes things in stages, but some applications are difficult to take in for short periods, so we have to go for quick hits, say, the first phase within six months, the next stage by the next six months so that a three-year project can show returns and deliverables in a shorter timeframe.”
On lessons learnt from his mega merger exercise, Arnanto said there were are still some pain points, such as the challenge of e-mails, but Salyards suggested that the problem could be eliminated by having one central repository.
“The business should be redesigned to take advantage of the complete BMC software,” Salyards said. “Software aligned to make sure you take advantage of automation will help you to anticipate whether something will go wrong and to find a solution beforehand.”
Fear factor
Sin Chee Pang, Western Digital (M)’s vice president of worldwide IT and global manufacturing systems, technical lead, said the ‘fear factor’ underpinned his company’s IT spending. His chief executive officer (CEO) views every “dry loss” as a “human loss” and often asks how many human lives it will involve and how it will help the organisation itself.
BMC’s Asean managing director, Nick Lim, said companies put more emphasis on the total cost of ownership, as opposed to ROI. Saheed thinks if you put tools in place at the right place for people to do business better, and if you get improvements, definitely, you will get better ROI. So continuous business process improvement should be what IT people strive for.
BOX 1:
Delegates at the roundtable
Chin Siew Chuang, manager, IT, CIMB Group
Puan Sharifah Salwa Binte Syed Abu Bakar, general manager, group MIS, Institut Jantung Negara
Abdul Saheed, head, group IT, KAF Investment Bank
Dato’ Peter Tan Suan Tian, group managing director, KLH Ventures
Sin Chee Pang, vice president worldwide IT global manufacturing systems, technical lead, Western Digital (M)
Sigit Arnanto, vice president of IT delivery and services head, Bank CIMB Niaga
Chip Salyards, vice president, Asia Pacific, BMC Software
David Greene, vice president of solutions marketing, BMC Software
Moderator: Ross O. Storey, managing editor, Fairfax Business Media Asia
The Merger
Indonesia’s Sigit Arnanto, Bank CIMB Niaga vice president of IT delivery and services head, said his responsibility was clear. It was to coordinate the successful integration of the IT landscapes of Bank CIMB Niaga and Lippo Bank with a minimum impact on the business itself. “A big-bang approach to integrate IT was chosen involving the simultanuous implementation for 400 branches with 700 ATMs, no services disruption to the rest of the 250 ex-Bank Niaga branches and the new system meant the introduction of new userid, new screens, new menus, new procedures, etc, for some 3,000 users,” he said.
“Working with Accenture and some 200 staff, we were able to record, monitor, escalate the input, the details and instantly analyse, track the progress in real time and prioritise the handling of problems that crop up. The pre-Operational Ready Tests (ORT) was conducted in early April with 20 branches involved in the pilot stage and that helped us identify the weak areas.
“Two weeks later, we launched ORT 1 stage with basic transactions on 600 branches and 1,200 ATMs and a total of 950 incidents were reported. In May, we conducted a simulation where real live transactions took place on all branches and only 500 incidences were recorded. By 17 May, we had all branches, all the ATMs on the same platform and the number of incidents reported was 200 and decreasing.”
Big-bang approach
Asked what made him go for the big-bang approach, Arnanto said CIMB Malaysia’s previous experience of merging with three other banks was instrumental. The CIMB group challenged his conventional mode of thinking and based on their past experience with bank mergers in Malaysia, it was an invaluable advice. The big-bang approach was a calculated gamble and yes, it was stressful, but the stress was short term, he added.
“We could evaluate and fix problems at the branch level and prevent problems from happening again,” he said. “We had a checklist for problem-solving and we even had a contest for the staff to gauge the fastest response, the most calls received, etc. It worked really well, during the pre-ORT, the number of problem calls was only six per cent, during the ORT period, it rose to 33.8 per cent but after the SLA [service-level agreement] kicked in, the calls dropped to five a day and eventually we closed down the help desk.”
Arnanto said the integration process was painful initially and the internal customer feedback service struggled to keep up to its 98.5 per cent level but business-wise, it was still worth it—the merger itself was good synergy .
“A one-month stabilisation period was needed for people to adjust to the new procedures and it was expected that it would take one year into the project for people to familiarise themselves with the new situation. The approach we took was very flexible and it suited our needs. In the end, we were able to migrate some 1.7 million accounts with a 99.97 per cent success rate,” he said.
