Research Finds Core Systems Renewal Strategy Lacks Business Critical Vision In Finance Industry
Sterling Commerce has announced the results of its commissioned research, looking at the approach to, and the consequences of, core systems replacement within the finance industry. The research, carried out across France, Germany and the UK, looked at 10 different core systems and found that the financial industry is currently focusing its investment on customer relationship management (CRM) and customer service as the objectives behind system change, as it strives to rebuild confidence and trust to combat the brand and reputation damage incurred during the past 12 months.
The survey also highlights that despite a consensus that core systems replacement is a priority, there remains a lack of clarity on the approach behind those replacements, and the role an enterprise integration strategy can play. The findings were also found to vary significantly across these territories.
Richard Spong, financial services industry marketing manager at Sterling Commerce, EMEA, said: “The need for a wider business strategy for core systems replacement supported by a well-planned enterprise-wide integration approach is paramount to a company’s ability to future-proof itself against regulation and market change. Without this in place on a broader scale, the financial industry will continue to sink money into ad-hoc solutions that limit business growth and opportunity.”
The survey identified that 40% of respondents apply tactical one-off solutions to core change projects, and 92% of these in turn agree that they are building future problems for themselves. The disparity among countries in the lack of core systems future proofing, such as automatic validation for data transfer and business process integration, is further illustrated as follows:
The survey also revealed an interesting issue around the priorities for system change. In comparing common reasons for systems replacement, the objectives of connectivity and consolidation, and therefore integration, received the lowest priority. In comparing common reasons for system change, project complexity and implementation difficulty, a majority of respondents selected integration and connectivity problems. These statistics suggest that, though integration is a low priority, it is the source of problems causing project over-runs in both costs and timescales.
“From these two findings alone, it appears that if the industry gave greater recognition and priority to the business-critical ‘science’ of process integration, system change projects might be accomplished with much less pain,” concludes Spong.