Turkey’s İşbank drives huge back-office efficiencies by digitising operations

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Isbank is currently nearing the end of a three-year BPM technology implementation programme, put in place as part of a wider operational excellence programme that has worked across the bank’s shared services centre and its branch back-offices. Through this programme the bank has deployed BPM technology to support nearly 300 business processes – with around 50 of these supported by specialised business process applications, and the remainder supported by a ‘generic process application’ that businesspeople can configure themselves with minimum assistance from IT staff.

Case study key facts

Organisation İşbank – Turkey’s first national bank.
Industry Financial services
Current goals Shift from an initial BPM implementation programme across the bank’s Shared Services Centre and branch back-offices to a continuous improvement programme.
Current approach İşbank is currently nearing the end of a three-year BPM technology implementation programme, put in place as part of a wider operational excellence programme that has worked across the bank’s shared services centre and its branch back-offices. Through this programme the bank has deployed BPM technology to support nearly 300 business processes – with around 50 of these supported by specialised business process applications, and the remainder supported by a ‘generic process application’ that businesspeople can configure themselves with minimum assistance from IT staff.
Outcome Over a three-year period, İşbank has achieved major efficiency savings in its shared services centre, enabling many staff to be redeployed to more value-adding, customer-facing work; and enabling the bank to grow its business significantly without requiring any additional headcount growth in its shared services centre.
Tools and suppliers used Pegasystems.

Organisation background

İşbank was founded in 1924, when the Turkish Republic came into being, as the country’s national bank. It’s one of the country’s major retail banks and owns over 1,300 branches (most of them within Turkey). The bank introduced ATMs and electronic banking to Turkey, and was the first to make Internet Banking services available (in 1997). In 2014 the bank had total assets of around TL 237bn.

Project background and drivers

The initial spur for investment in BPM technology within İşbank came from a wider operational excellence programme that it was conducting within its shared services centres located in Istanbul and Ankara.

The shared services centres (SSCs) were founded in 2005 as a way to centralise a large part of the back office processing from the bank’s branches. In 2011 the operations of the bank as a whole were benchmarked against other Turkish banks, and this process identified a number of areas within the SSCs and branch back offices where operational efficiency and quality could be improved.

The operational excellence programme identified around 500 business processes being enacted mostly in the SSCs; it was clear that operations could be simplified and many processes eliminated.

At the same time, the existing technology foundation for many of these business processes was found to be problematic. The bank’s IT staff found it challenging to scale the platform in place to drive application and process integration, and were also finding that the building solutions on the platform required a larger than expected number of development resources – across front-end developers, process developers, integration developers, business analysts and more.

Partly as a result of this there was growing platform proliferation – with some cross-application processes utilising the ‘preferred’ platform, and other applications using embedded workflow facilities – with the result that it was very difficult for managers to understand how work was really flowing through the business processes enacted by the SSCs.

Implementation characteristics and status

After considering technology from several major vendors, in 2012 İşbank chose to work with Pegasystems. The bank already had an investment in the Chordiant CRM technology, and İşbank was impressed by the Pega platform’s ability to manage process variation at scale as well as its ability to deliver process application user interfaces from models (rather than by relying on detailed UI development work).

After a three-year-long work programme at İşbank there are now around 5,000 concurrent users (and around 20,000 users in total) of Pega applications working across around 270 business processes, handling over 60,000 cases on a normal day (with a programme goal of increasing the volume to around 75,000 cases per day). The implementation of the Pega platform, called OPERA in İşbank, is employed in two principal ways in support of the SSC’s business processes:

  • Specialised process applications. There are 15 targeted, specialised process applications in production supporting the most high-volume, complicated processes. 10 of these are deeply integrated with existing systems: process participants don’t interact with any of the remaining back-end applications used to store and manage business data – they only interact with OPERA applications. Examples include applications for; creation of legal authority letters; money transfer orders; letters of guarantee; and cheque processing.
  • A ‘generic process’ application that provides a number of configuration options that business teams can use to help them support and manage lower-volume, low-complexity processes (such as simple approvals), and targeted at replacing the spreadsheets-over-email work co-ordination approach that was prevalent previously. Around 200 business processes within the SSCs now take advantage of the generic process application to co-ordinate the work of teams. The generic process application is used to specify how work needs to flow; but when enacting such processes, individuals use existing business applications to manage information rather than using a Pega application user interface.

The approach

In line with its operational excellence philosophy, İşbank first started by analysing its shared services processes to understand where it could first eliminate, and then simplify, existing processes before applying technology to automate the coordination of work. This initial effort by itself identified around 200 of the 500 total SSC business processes in use that were redundant.

In its process analysis work, the programme team started out with whiteboards and simple mapping tools, running improvement workshops to understand improvement opportunities at a high level. Then the team used systems prototyping tools to identify further opportunities for improvement once the technology was in place.

Prior to starting its BPM initiative, SoftTech (a Turkish systems integration services provider originally spun out of İşbank, regularly providing İşbank with IT resources) highlights that it existing software development practice followed a traditional waterfall methodology. Keen to transition its work to the agile practices recommended by Pegasystems, the team is open about the fact that in the initial enablement phase its approach was “more chaos than agile” – it took a concerted effort for the team to transition. Now, though, the team has settled on a blended approach that it calls “SoftBPM” which can be described as “between Waterfall and full agile.”

In this approach, an inception phase scopes and sizes the project, while also identifying and clarifying high-risk integration points and dependencies – as planning for these items should be completed to have the commitment of all parties. The project continues with iterative elaboration and construction cycles where each use case is further detailed.

In the development and continued improvement of the OPERA platform, around 30 developers from SoftTech work together with around 15 business analysts from İşbank. Although SoftTech works for multiple clients across multiple industries in Turkey, the team working on this programme is dedicated to İşbank.

Strategy

At the current time, İşbank regards BPM as an extension of its operational excellence capability – BPM is seen as a combination of the methodology and technology for improving the effectiveness of processes in particular business areas.

In line with this, the bank has been dedicated from the programme’s outset to taking careful measurements and benchmarking its processes so it can understand the results of its improvement efforts in support of the company’s strategy.

Within the operational excellence programme, İşbank has defined its aim as “to provide 3S’s in the processes: Simplicity, Standardisation and Sustainability”. Following the achievements in the programme so far, İşbank has strategically positioned this approach and practice as an area of strategic competency/capability, which needs to be expanded into other areas of its business where the processes are a good fit for Case Management/BPM. The prime candidate business areas identified for development are loan allocation, pricing, and fulfilment of sales leads. After this expansion, İşbank estimates that the number of cases addressed by OPERA platform will reach 130,000/day.

In addition, the bank’s BPM infrastructure is planned to be used in the deployment of “seamless digital E2E processes” where back-office processes will be integrated with “customer processes” conducted through web and mobile channels.

Architecture

At the business process architecture level, İşbank uses ARIS as an Enterprise Architecture modelling and business process repository and toolset. ARIS is principally used by operational excellence teams to document and understand as-is business processes before improvement projects come into play; and then, following improvements, ARIS is used again to document the effects on business processes.

In the context of its application of Pega BPM technology, one of the key architectural influences on the OPERA programme at İşbank relates to its work identifying and implementing reusable components across its portfolio of process applications – particularly relating to user interface elements.

The team realised early on that with such a large user population, the immediacy and usability of process applications would make a massive difference to application adoption and usage. Consequently it worked hard to identify a set of key user interface elements (information search components, for example) that would be used extensively by people across the portfolio of applications, and ensure that they were well-designed as well as being implemented consistently across the portfolio.

Beyond its creating reusable user interface elements, İşbank has created a common framework layer shared by all applications that provides functionality for common data elements, security, service integration and reusable tasks (e.g. a standard task for rejecting work) and configurable process fragments (e.g. a common flow for approving work). For very common entities such as ‘customer’ and ‘account’ İşbank has built internal business object models, and created translation layers to the service data models that provide and consume this data.

Organisation and people

As is the case with so many other successful change initiatives involving BPM technology implementation, İşbank worked hard to bring a cross-functional team together. Co-location was a particular focus for the first six-month ‘enablement’ phase of the programme, the goal of which was principally to enable İşbank to gain the Pega platform skills and experience it would need to run projects quickly and effectively.

SoftTech and Pegasystems worked together to provide technical staff for the programme. When the programme started in 2012, Pegasystems staff (a Lead Systems Architect / LSA and two Certified Senior System Architects / CSSAs) formed a core part of the team and during this time took responsibility for developing application functionality as well as training the SoftTech team on Pegasystems.

Now it’s three years into its initiative and has rolled out Pegasystems technology across the bulk of the business processes enacted by its SSC (in one way or another), İşbank runs a ‘virtual’ centre of excellence (COE) that’s responsible for maintaining consistency across projects, as well as helping to manage demand for new implementations and change / improvement requests (see below). This is a small group: there are just a couple of part-time resources involved.

When it comes to skills development, there were two main areas where İşbank and SoftTech had to focus: agile software development practices, and use of Pegasystems technology. Before İşbank started working with Pegasystems, there were no Pega-certified development resources locally available in Turkey; the company had to build local skills from scratch, with the help of Pegasystems.

Through the generic process application delivered as part of the OPERA platform, İşbank has created an environment in which non-technical business users can define or change simple processes without IT involvement. This helps İşbank manage demand for business process support and ‘get out of the way’ when it comes to meeting straightforward, low-complexity requirements.

Governance

Now the majority of the initial implementation work is complete, a continuous improvement work stream in the programme is working through a backlog of improvements on a monthly basis. A dedicated team of business analysts evaluates improvements and prioritises them for implementation. This work stream began at the start of 2015 and is steadily working through the improvement backlog identified in the early phases of the programme.

When it comes to enabling bank personnel to get involved in driving business process change and improvement through technology, the generic process application that the team created is the main route. İşbank also uses its generic process application as a way to help it manage a portfolio of technology project demand: when new demand for an OPERA application arises, the COE typically suggests that those asking for new resources starts by using the generic process application, and only after the value of that application has been exhausted does the team look at whether a more targeted implementation of the Pega platform makes sense.

Technology and infrastructure

As mentioned above, the OPERA platform at İşbank is built using Pegasystems’ Pega platform. The 15 individual specialised business process applications created as part of the programme all integrate with multiple existing systems; at the current time, İşbank’s standard approach to integrating business process applications with existing back-end business applications is to use an integration bus (built using IBM’s Websphere ESB and DataPower technologies). The bus primarily exposes and manages back-end resources as SOAP-based web services, which the Pega platform applications make requests of.

The generic process application that İşbank created to support around 200 of the business processes in use across the bank’s shared services centre and its branch back-offices doesn’t integrate with any external applications, but it does have built-in integration to the bank’s standard document management platform – so that any document attached to a workflow is automatically held under management and associated with the relevant customer number.

The generic process application is principally configured by process participants using a spreadsheet-based interface. Using this interface, an individual identifies who can start the process, and who can fulfil the request at the heart of the process. The application also ships with pre-built capture forms for gathering standard forms of data (for example payment and credit card information).

İşbank actively monitors the performance of business processes managed with OPERA applications; most of the time it looks particularly at servicing time, net processing time and reject/return rates. It examines performance across different kinds of cases, too.

The results

Since implementing Pegasystems as part of the operational excellence initiative in its Shared Services Centre, İşbank has seen some very impressive results. The Pega platform has been implemented to support nearly 300 business processes, which in a two-year period is impressive by itself (and the implementation of a ‘generic process application’ is an important and creative factor here); but real and significant business improvements have also been achieved:

  • The SSCs have been able to decrease their headcount by 300 FTEs, and these people have been moved to more customer-facing and sales positions in the bank’s head office and branches. In addition, when the bank estimated it might need an additional 200 FTEs to support a new set of processes to deal with a new regulation regarding handling of customers’ fees, using OPERA the processes were implemented with no SSC headcount increase.
  • The number of back office staff per branch decreased more than 30% within the project period.
  • Within this 3 years period, the bank has been able to grow significantly, leading to a greater than 50% increase in the bank’s balance sheet and a 10% increase in demand for SSC services, without any growth in SSC headcount.
  • İşbank has been able to reduce time-to-deliver process applications (in relation to the time taken to deliver process support on its previous platform) by 60%.
  • The efficiency of many business processes has been significantly improved. For example, the average time taken to produce letters of guarantee has been reduced by around 50%, both in terms of in-branch activity and SSC activity.

There have been challenges along the journey, of course. Initially, the team shares that in its haste to deliver results to a tight schedule, the user experience (UX) aspects of individual process applications weren’t paid enough attention. With a user population of around 20,000 the challenge of delivering applications that are easy and intuitive to use becomes very important to address early. From a development process perspective, the team is clear that a key challenge was to convince programme stakeholders of the value of a proper technology enablement phase (the OPERA programme had such a phase lasting six months, that allowed it to build vital technical skills and capabilities specialised to the needs of the programme). Following the enablement phase, a third key challenge was the ongoing management of agile delivery; maintaining a tight focus within the delivery team required a very hands-on approach from management and it was vital to dedicate highly experienced, skilled resources to this work.

Recommendations for adopters

As part of being interviewed for this case study, Ali Yalcın of İşbank and Darço Akkaranfil of SoftTech shared the following advice for other organisations pursuing similar kinds of initiative.

  • First, it’s important not to underestimate the need for a very talented, knowledgeable, high-quality team. When you want to travel quickly and enable big business changes in a short time, you have to have the best people with you. This is not like ‘ordinary’ application development work. You need people who have knowledge of the BPM technology you’re using; and people who understand the power of lean thinking (people who can “think simple”).
  • Second, if you want to improve any business process you have to have real in-depth knowledge of it. You need to bring people into your working teams that have first-hand experience of the process, and work as closely with them as possible.
  • Third, if you’re working on a significant programme of work that will deliver technology to support many business processes, it pays to dedicate time and effort to understanding opportunities for component reuse. You might particularly want to focus on how you can create reusable user interface components, for example, so that all the applications you create deliver consistent user experiences and you minimise training time (and maximise user productivity).

Best practice insights

Through the implementation of the OPERA programme, İşbank has demonstrated three particular aspects of best practice that you should think about in the context of your own implementation that hold true regardless of your own industry or business domain.

Find ways to empower business people to create their own process implementations to the greatest degree appropriate. Develop a categorisation model for business processes that makes it easy to decide which business process candidates need what level of IT implementation support, and follow different tailored delivery methods accordingly. İşbank has a categorisation model with two alternatives: simple processes, which are addressed using its generic process application; and complicated processes, which are supported using specialised business process applications.

When embarking on a large program of business process improvement through technology, look for patterns in the work or in the ways that applications will be used to that reveal the value of a reusable ‘toolkit’ approach to implementation. If you find patterns of work that are repeated across or within business processes, find ways to create solutions to those challenges once, and then reuse those solutions as much as possible.

Particularly when starting out on a BPM implementation programme, as far as possible co-locate all the members of your team – software developers, business analysts and non-technical businesspeople helping to provide subject-matter expertise. Physically co-locating a diverse team is the fastest way to get the mix of skills you need to combine, working at full strength to address the opportunities and challenges you’ve identified in your programme’s terms of reference.

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