Shakti Fails; Finacle Jumps Legacy Hurdle At PNB

by Hinesh Jethwani    May 13, 2004

Shakti (an innovative, low cost, MS Office alternative developed by Chennai Kavigal) has failed to clinch a massive 10,000-seat deal with the undisputed technology pioneer of the Indian banking industry - Punjab National Bank (PNB) - delivering a significant setback to the future of Indian software adoption.

PNB had earlier expressed its dissatisfaction with Microsoft’s pricing policies, and was actively scouting for an MS Office alternative (Read the complete story on CXOtoday). Shakti, priced at just one tenth of MS Office, would have saved PNB at least Rs 9 crore in terms of license expenses. PNB has established a reputation of sorts, for its radically innovative technology decisions, and the deal was poised to deliver a much-needed push to Indian software adoption in large enterprises.

So why did the Shakti-PNB deal go sour? Speaking to CXOtoday, K.S. Bajwa, deputy general manager- IT, Punjab National Bank, replied, “Our technical committee has decided after careful consideration that although Shakti is a really innovative product, it isn’t stabilized for a large scale deployment that our organizational structure demands. With 3,473 computerized branches in the country, we really didn’t want to experiment and disrupt our routine workflow. Training users in all the branches would be a gargantuan task, and getting timely service and support was also a limiting factor. The product needs more maturity and will have to go through more iterations to adapt to the needs of large enterprises.”

PNB has also undertaken a massive exercise of connecting almost 2,000 branches through Infosys’ Core Banking System (CBS), Finacle. So far, the CBS had been implemented at 504 branches, but the project ran into ’legacy turbulence’, which stalled the expansion process temporarily for 2 months.

However, PNB has successfully overcome the tremendous challenge posed by legacy applications, and the process of mapping more branches on the CBS will continue from next week onwards. Bajwa explained, “There was a need for tremendous stabilization and customization, as migrating legacy applications - some of them running seven different software packages - was difficult. Any other bank would have found it extremely difficult to get past the manual processes being used at some branches, and the complexities involved, but we managed to overcome the legacy hurdle in just two months. PNB plans to implement the CBS at another 500-700 branches this year.”

PNB had also recently signed an agreement with NCR Corporation, for implementing the first image-based cheque clearing system in India. The installation, training and archiving of data is still on, and the solution is expected to go live this month. “Security is a critical aspect in the ’Intra Bank Inter City Cheque’ system, and we had to scrutinize the entire process with a microscopic examination spread over 8-9 months. Digital certificates and a series of control points will ensure that data extracted from cheques will be transmitted securely.”

Around 6 months back, PNB was a victim of a virus outbreak, which had slowed down systems to such an extent that some zones found it difficult to transact their daily business. The infection took 15-20 days to clean up, and PNB realized that it was time to do away with its localized security system. The bank now boasts of a centralized Antivirus system, courtesy Symantec.

PNB has also made a huge investment in Sun’s server family for the CBS, and has signed a corporate agreement with the vendor. Bajwa reasoned, “Selecting a single vendor is always better, as disparate systems call for a lot of expertise. We are happy with selecting Sun as long as they provide us with good service and support. Our agreement with them also brings in significant discounts.”

Detailing the future roadmap, Bajwa said, “We are planning to achieve best practices in the world for handling business processes in the banking vertical. An alternate data center is in the pipeline, which will be realized in the next 6-7 months. Our disaster recovery site is already up in Mumbai, and we plan to make more server and networking equipment purchases for the data center.”

PNB’s 150 crore CBS has revolutionized its processes, passing significant benefits to its customers.