When you slump into your aircraft seat you don’t give a seconds thought to whether the aircraft is properly maintained. Same on the Eurostar or TGV, and you don’t worry either about the air traffic control systems or the railway signalling systems. We certainly don’t give any consideration to our bank’s systems . . . until last week when the RBS core banking system fell apart. Tens of millions of customers in the UK and Ireland were unable to draw cash, pay bills, check balances. And most of them found they relied on their bank more than they realized as mortgage payments were not paid, credit limits were exceeded and individual’s credit ratings were downgraded.
The bank responded with good PR but abysymal action. A week later many customers are still in trouble. The PR spin on the cause of the crash has been attributed to a misapplied patch. On the Internet, the cause is being attributed to:
– Total lack of investment in modernizing ancient core banking systems because of perceived cost and risk by the Leadership Team too busy counting their huge bonuses . . .
– Who instead cut costs by outsourcing the core banking systems support to India to be supported by people with weeks of experience at best . . .
– To be trained in a few weeks by highly skilled staff that have decades of experience who are now being made redundant . . .
– Who will now be blamed (because they are no longer there) for the totally inadequate change control, contingency planning, fall back procedures . . .
– The absence of which will be effeciently swept under the carpet so that . . .
– The regulators inquiry will find the management’s explanation of the “Act of God” as entirely believable and will report same so that . . .
– Levels of government funding (this is a bailed out bank) will be continued and senior management bonuses will be paid as usual.
We live in a real time world. Core banking systems (and other businesss domains also ) should be managed in the same manner as aricraft and air traffic control systems. They should be architected and designed to undergo constant change and supported by security, contingency and fail safe systems that are tested by independent experts on a frequent basis. Continuous investment in modernizing core systems and the surrounding ecosystem is necessary housekeeping. Further modern architecture approaches and methodology enable progressive modernization and continuous evolution in a properly managed environment. Continued investment in skills is equally important by maintaining continuity of personnel and investing in their education in the new architectures and methodology to complement their deep, core business expertise.
Outsourcing and or offshoring just just save money is analagous to finding ways to keep the Boeing 747 running for another 20 years by bringing in maintenance engineers skilled on single engine turboprops and expecting them to acquire 30 years of experience in weeks. Similarly architecture led application modernization is a new IT discipline that banks and other organizations need to understand and deploy. You don’t find this level of expertise by offshoring to a company that advertises on the open market in February 15th 2012 for “4 – 7 years experience of Batch Administration using CA7 tool. Urgent Requirement by RBS.” Location: Amberpet, Hyderabad, India. Nuff said!