Temenos -Al Khaliji Case-study

Case Study Success at al khaliji This is the story of a highly high ly successful implementation in which al khaliji, the fast-growing “next-generation” bank in Qatar, replaced its fragmented legacy core environment with a single fully-integrated Temenos platform that covers all lines of business.

Temenos  Case Study 02

Executive Summary

T

his is the story of a highly successful implementation in which al Together, these factors turned a complex and potentially risky khaliji, the fast-growing “next-generation” bank in Qatar, replaced transformation into a remarkable success. its fragmented legacy core environment with a single fullyintegrated Temenos platform that covers all lines of business. Shortly after the implementation, al khaliji was named “Best Operational Bank Qatar” by the Global Financial Market Review, in With the Temenos solution in place, al khaliji has a massively scalable recognition of its highly efficient transformation. bedrock for growth and has reduced its IT costs as a percentage of total operating costs. Also recognized “Best Premium Bank” i n the Middle East and “Best Commercial Bank of the Year in Qatar” in 2014, al khaliji is now well In this case study we examine five key factors that made the set to become a leading bank not only in Qatar but also in the Gulf implementation a success. These factors encompass people, Cooperation Council (GCC) region. process and product. By setting detailed expectations, scope and accountabilities, the joint project team was able to entirely focus on delivery once the project began, limit the number of material scope changes and minimize the impact of these changes on the timeline. Having a clear project plan let Temenos provide the right expertise at the right time, which enhanced the efficiency of the delivery and fostered strong trust and collegiality. The project was treated as a business transformation rather than a IT system delivery. Senior business representatives of the bank were involved on a daily basis, as was Temenos senior management when appropriate. To prevent scope creep, the bank adopted the solution’s model processes rather than adapting them. 85% of al khaliji’s requirements were catered for out-of-the-box by Temenos’ solution and less than 5% of additional development man-days were identified during the project. Finally, the bank’s business users owned their data during the migration cycles, reducing latter cycle times to 6 hours and lifting data accuracy to 99%. Comprehensive pre-UAT training by Temenos lifted the UAT pass rate to 96%.

“The implementation of the integrated Temenos solution in such a short timeframe was made possible by extremely efficient project planning and execution, impeccable professionalism and the fact that 85% of our requirements were met out-of-the-box. With T24, we now have a modern platform that integrates with any external system and has the flexibility and scalability to grow with us.” Fahad Al Khalifa, Group Chief Executive Officer, al khaliji Bank

Temenos  Case Study 03

al khaliji, the next-generation bank

Selection of Temenos

al khaliji, established in 2007 and already one of Qatar’s leading banks with USD 13 billion in total assets, offers a full range of banking products and services to premium, Business banking “SME’s” and corporate customers in Qatar, UAE and France. Positioned as the Qatar’s “next generation bank”, it has placed innovation in technology, products and services at the heart of its operating model.

al khaliji examined bids from all major core banking providers. It selected the solution proposed by Temenos, the only vendor to offer a fully integrated and highly-scalable solution that spanned the bank’s broad requirements, namely: superior customer experience, massive scalability, cost-efficiency and easy integration with third-party systems.

Since 2010, its focus areas have been corporate banking, treasury as well as affluent and wealthy customers for which it has created a distinctive Premium Banking offering. al khaliji’s strategy has been eminently successful and has generated total asset growth of 39%, loans growth of 54% and deposits growth of 44%, respectively, at the end of Q3 2014 compared to Q3 2013.

Three things made al khaliji confident that Temenos would deliver the solution to specifications, on time and on budget and with minimal deviations to the rollout plan: the solution’s high level of pre-configuration, the tried-and-tested Temenos Implementation Methodology (TIM), and support from the right experts at the right time. Also, because Temenos banking solutions are widely u sed throughout the world and the Middle-East, al khaliji knew that it would not struggle to find the right expertise over the solution’s lifecycle.

The need for swift transformation Scope of the implementation In 2012, with the assistance of Platinion, a Boston Consulting Group (BCG) company, al khaliji completed an assessment that found that its fragmented systems platform could not support its mid- and longterm business goals. The bank decided to move its operations on to a unified, functionallyrich core banking platform that would support fast growth in Qatar and internationally, sustainably reduce operating costs, improve the customer experience and upgrade easily. Most importantly, al khaliji needed to complete this transformation fast in order to protect and exploit its hard-earned position in the competitive domestic and GCC markets.

The integrated Temenos solution replaces al khaliji’s fragmented legacy core systems (provided by leading names in the industry) and covers personal and commercial banking, treasury operations, treasury front office, trade finance, CRM and business intelligence. At the heart of the integrated Temenos solution at al khaliji is the award-winning Temenos T24 core banking platform. T24’s Arrangement Architecture module offers outstanding flexibility and efficiency in banking product design and i nnovation. The two other key elements of the integrated solution are Temenos Treasury Trader for advanced front/middle-office international treasury operations and Temenos Insight which provides powerful risk-mitigation and profitability-calculation capabilities to facilitate informed business decisions.

“The solution was deployed in a very short time, and we were confident from the start that it would be. Knowing that Temenos was adhering to a tried-andtested implementation methodology gave us a lot of comfort. The bank was racing against time and wanted to get some quick wins out the project. We got these and much more. We would do it all over again.” Hesham EzzEldin, GCOO, al khaliji Bank

Temenos  Case Study 04

A highly successful implementation The implementation of the Temenos solution was a resounding success from both al khaliji’s and Temenos’ view. First, all key expectations were met. The full solution went live in November 2013, respecting the planned 15-month implementation timeline and budget.

integrated platform giving the business holistic v iews, streamlined and automated processes, faster go-to-market and massive scalab ility. Moreover, the platform interfaces seamlessly with multiple local systems, and accommodates all local regulatory requirements. Also, operating efficiency has been dramatically improved: 91% of processes have been fully automated, including regulatory and management reporting.

Second, from the very outset of (and throughou t) the project, al khaliji felt certain that it would reap the full benefits of the transformation in As a result there has been a considerable reduction in IT costs as a a timely manner. percentage of total operating costs. Third, a collegial and trust-based working relationship was built and maintained between al khaliji and Temenos throughout.

The question we will address now is: how did al khaliji and Temenos turn a complex and potentially risky transformation i nto such a success?

Fourth, al khaliji’s business is better off. The Temenos solution has replaced a number of scattered legacy systems with a single

Key success factors To answer this question, this section looks at five key success factors that encompass people, process and product:

Clear expectations, scope and accountability from the start

The right expertise at the right time

4

0

Only 4 material change requests, minimal impact on the pre-agreed timeline

unplanned changes in the Temenos core delivery team during the project

Often, project expectations, scope and accountabilities are not detailed early enough, forcing the project manager to revisit them instead of focusing on delivery.

When an implementation lacks a solid plan or drifts from the timeline, the lack of synchronization between needs and specialized resources can become a costly and complex problem.

To avoid these problems, al khaliji and Temenos first devised a detailed project plan that included clearly defined deliverables, specific delivery dates, clear responsibilities for each role and explicit ownership. This enabled both parties to secure resources in their respective organizations and focus on execution.

Because planning was done rigorously with al khaliji, Temenos was able to provide the right expertise (business, technical, data migration and project management specialists) at the right time and for the right duration, which kept the efficiency of the project team extremely high. For instance, Temenos’ development team came onsite during testing to resolve issues rapidly. al khaliji engaged two Temenos premium support specialists full-time, five months before go-live, to fix issues identified by the delivery specialists.

As the project plan and scope was not prone to interpretation, only four material changes were made to the scope during the project. These were dealt with rapidly through a change-management mechanism with an efficient decision-making process to minimize impact on the overall timeline. To foster accountability, a weekly report was sent to the steering committees, detailing what was on track or not, why so, and who was responsible. Because no one wanted their name to be on this simple report, it became a strong motivator for anticipating issues.

The absence of improvisation also fostered strong trust and collegiality within the joint project team.

Temenos  Case Study 05

A clear scope supported by an out-of-the-box solution

5%

additional development man-days identified during the project.

When a bank tries to adapt a solution instead of adopting it, the project invariably suffers from “scope creep” (insidious growth), entailing extra time and costs and distracting delivery teams. Rather than adapt them, al khaliji chose to adopt the solution’s model configurations and processes (which encapsulate the experience of over a thousand Temenos implementations) because they covered over 85% of the bank’s long-term business requirements. Some custom development was required to address new local regulatory requirements, but its scope was locked down in detail before the project began. Development and change requests during the course of the project increased development man-days by less than 5% (versus the initial estimate).

Involvement of banking business representatives

60%

of the bank’s project team members from the business side (not IT)

Banking managers often fear changes to the way banking tasks are performed. In reaction, they tend to disengage from systems projects, and the projects end up addressing IT issues instead of business requirements. At al khaliji, bank-wide buy-in was secured to ensure the project would be a business-led transformation rather than an IT system delivery. The bank’s Group Chief Operating Officer (GCOO), a member of its executive committee, was made the project sponsor. The business heads of premium banking, corporate banking, treasury, the GCRO, the GCFO and the GCEO were members of the project steering committee. The GCOO updated the board of directors bi-monthly, with the project progress. Teams of empowered business people (not business analysts) were made to report directly to the GCOO during the project in addition to the IT and project management teams. In the planning phase, the bank requested all stakeholders to define their deliverables, testing scenarios and UATs. During the project, the GCOO was involved on a daily basis, attending the morning and evening project meetings, which enabled faster and binding decisions to be made at all times.

85%

of al khaliji’s requirements until 2016 catered for out-of-the-box.

Temenos  Case Study 06

Highly structured data migration, training and UAT

99%

data accuracy at time of migration

Upon go live, business people often find themselves confronted with unreliable data because they remained disengaged from the data migration process (despite being the real owners o f data). Also, because they are neither properly trained nor sufficiently involved in UAT, they might perceive that the new system is not performing as expected. al khaliji and Temenos took a highly structured data migration approach (extract, transform, upload reconcile), staggered in 12 clearly defined cycles to make space for improvement. The business people who own and use the data were required to reconcile data themselves and sign off on it. As a result, the cycle completion time rapidly fell from mu ltiple weeks to the targeted 6 hours, and data accuracy hit 99% at the time of migration. Before UAT, Temenos trained the business users to proficiently operate the system in their respective domains and the IT staff to administer and manage the system independently from the UAT onwards. Business users were also required to set clear acceptance criteria before the start.

The Temenos implementation team

96%

pass rate in last cycle of UAT

The project team enforced structured UAT cycles during which al khaliji ran almost 5000 test cases in 9 test cycles and achieved a 96% pass rate (last cycle). At this stage, al khaliji took the decision to take the new system live. Since go-live, the number of issues reported by users has dramatically diminished. Half of the issues are u ser-knowledge-related and usually caused by the expectation that the Temenos solution does exactly what the previous system did with similar screens. al khaliji has been able to resolve 95% of these issues and stabilize the daily operations in less than three month with the help of Temenos supp ort services.

Temenos  Case Study 07

Conclusion Planned and executed together, these five key factors let al khaliji and Temenos turn a complex and potentially risky transformation into a success. In the space of 15 months, the bank and Temenos managed to replace a fragmented legacy core environment with a fullyintegrated and highly-scalable Temenos platform covering all lines of business. The success of the implementation earned al khaliji recognition in 2014 as the “Best Operational Bank Qatar” by Global Financial Market Review (GFMR). Also named “Best Premium Bank” in the Middle East and “Best Commercial Bank of the Year in Qatar” in 2014, al khaliji is now well set to become a leading bank in the GCC region. Moreover, the cost to al khaliji of maintaining its core system has substantially decreased and is forecast to fall further over the coming years. The cost for the bank of keeping up with functional and technological innovation has also fallen; al khaliji now has full access to Temenos’ regular upgrades and expert services. This case study shows that, by implementing Temenos solutions, any bank can undertake a core system renovation without significant risk and become more competitive, cost-efficient and scalable.

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