IT Strategy Implementation in BaoMinh

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IT Strategy Implementation in BaoMinh
Vietnam ICT in Finance 2006
Nguyen Kha NhanGeneral Manager IT Division -
BaoMinh Insurance Corporation
30-31 August, 2006
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Agenda

• Background Information
• SAP R/3 FI-CO Implementation
• Near Future Plan

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• Background Information
• Corporation Profile
• Implementation of IT strategic plan as a key
  corporate strategy
• SAP R/3 FI-CO Implementation
• Near Future Plan

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Corporation Profile

• Business Operations
• Registered Name Bao Minh Insurance Corporation
• Trading Name BAOMINH
• Starting date October 1st 2004
• Charter Capital VND 1,100 Billions
• Total Assets 2004 VND 1,400 Billions
• Shareholders
• States shares 63
• 10 Main Shareholders 25 (Mostly 90-91
  State-Owned Corporations)
• Other Shareholders 12 (including Foreign
  Entities and Individuals)

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Corporation Profile

• Business Operations
• Head Office in HoChiMinh City
• Corporation Network 58 Member-companies in 55
  provinces and a Training Center
• Total Number of Staff 1,500
• Total Number of Agents gt 5,000
• Insurance JV Companies BAOMINHCMG UIC
• Invested Companies PTI,

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Corporation Profile

• Scope of Business
• Insurance business activities including direct
  insurance and reinsurance Related services such
  as survey, lost adjustment, survey/ claim
  handling agent Capital investment
• Product Lines gt100 products, grouped in lines as
• Automobile Insurance
• Personal Insurance
• Marine Insurance Marine Cargo, Hull and PI
• Property Engineering and Misc. Insurance
  Property, Engineering Liability
• Aviation Insurance
• Reinsurance Outwards, Inwards

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Corporation Profile

• FY 2005
• Premium Income VND 1,209 Billions
• Non-life Insurance Market Share 21.76
  (Vietnamese Market)
• First Half of FY 2006
• Premium Income VND 780 Billions
• Non-life Insurance Market Share 22

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Corporation Profile

• Vision Statement
• To turn BaoMinh into the first class
  Joint-stock Insurance Corporation in Vietnam
  which operates in various financial areas with
  reputation and major insurance market share
• CEO, Dr. Tran Vinh Duc

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High-level of IT Strategy

• Implementation of IT strategic plan as a key
  corporate strategy
• Using IT as a strategic tool to support Bao Minh
  s business strategy.
• Leveraging IT as a competitive advantage in the
  market place.
• Provide business information on an
  enterprise-wide scale utilising IT. This will be
  a cost-saving measure for Bao Minh in the long
  run.
• Increase the efficiency of internal management.
• Improve client service.
• Automation of business processes when possible

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• Background Information
• SAP R/3 FI-CO Implementation
• Brief of Project
• Key learning lessons
• Near Future Plan

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SAP R/3 FI-CO Implementation

• First local companys sucessful implementation
  SAP R/3 solution for financial information system
• Brief of Project
• First step of IT strategic plan implementation
• Implemented Modules FI, CO with integration
  with legacy systems (statistics, reinsurance)
• Project Kick-off March 2003
• System Go-live April 2004
• Implementation methodology ASAP
• Rolling-out for HeadOffice and 38 member companies

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SAP R/3 FI-CO Implementation

• Project Organisation Chart

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SAP R/3 FI-CO Implementation

• Project Resources
• 10 20 technical functional staffs (internal
  resources consultants / experts)
• Consultancy PriceWaterhouseCoopers (PwC)
• TCO USD 600K, including
• Software licenses 15
• Hardware infrastructure 17
• Consultancy 60
• Misc. 8

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SAP R/3 FI-CO Implementation

• Challenges
• GAPs
• Business processes could be adapted by SAP but
  not best practices
• Critical functionalities but not completely
  supported by SAP
• Data input from other legacy systems
• Infrastructure is underdeveloped, not completely
  meet production environment requirements
  (Internet, WAN, )
• Change capability
• Change as evolution or revolution ?
• Resistance of being change rule 20-60-20

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SAP R/3 FI-CO Implementation

• Critical Success Factors
• Communicate, Communicate, Communicate
• Top Management Support
• Assign the best people
• Develop a clear business case and expectation
• Request regular progress reports and act on it

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SAP R/3 FI-CO Implementation

• Critical Success Factors
• Develop organization discipline
• Sustain standardized processes and data
• Understand that standardization is key to
  flexibility
• Create the capability to change
• Quick and decisive desicion making process
• Ongoing training - forever - on the system,
  process, and business
• Cataloging and continual analysis of business
  processes
• Process accountability structures
• Metrics that specify process outcomes and
  performance targets

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SAP R/3 FI-CO Implementation

• Experience in working with consultant
• It takes a long time to build the required trust
  between client and consultant
• Consultant will be ineffective if client cannot
  share information bad or good, positive or
  negative
• A good solution is a solution that is incubated,
  designed, and implemented by BOTH consultant and
  client
• No consultant can do its job alone
• Consultants can only be as good as the client can
  manage them

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SAP R/3 FI-CO Implementation

• Benefits from new system
• Ensure the consistent application of the
  companys policy over member-companies.
• Support automatic foreign exchange difference
  calculation
• Support automatic inter-company transaction to
  minimize the reconciliation process between
  member-companies and Head Office.
• Support the credit management at the company
  level.
• Support many ad-hoc and online reports for
  decision making purposes
• Tight control on closing procedures to meet
  report deadline
• Tight control on authorization to ensure data
  integrity.
• Centralize database for the ease of consolidation
  purposes.

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• Background Information
• SAP FI-CO Implementation
• Near Future Plan
• Core Business Systems

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Ideal IS Model
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Core Business Systems

• Next step of implementing corporate IT strategic
  plan
• Focus on core business processes management
• Replace data silos and technical backward
  information systems

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Core Business Systems

• Business Drivers
• Customer Services Issues
• Lack of customer visibility
• Loss of customer information
• Delay in resolving claims
• Difficult for customers to reach customer care

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Core Business Systems

• Business Drivers
• Business Operations Issues
• Poor control while rapid growth
• Poor adherence to standards and guidelines issued
  by the headoffice
• Inability to closely monitor member companies
• Limited information on claims paid, claims
  history mostly maintained at member company
  level
• Lack of accurate data for reinsurance

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Core Business Systems

• Technical Drivers
• Most core business processes are manually or
  partially supported by technology
• Fragmented islands of key business data
• Key business data is captured by technologically
  backward system
• No / minimal integration
• Closed-loop processes not automated

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Core Business Systems

• Objectives
• Implement standardized business processes and
  systems to support corporate business strategy
• Implement the new system which will replace the
  outdated data silos systems such as statistics
  system, re-insurance system interface with SAP
  R/3 Finance System
• Management decision support
• Effective risk management

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Core Business Systems

• Scope
• Underwriting and policy administration,
• Sales,
• Claims management,
• Reinsurance mangement,
• Product development (non-life)

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Core Business Systems

• Principles
• Standardizing application systems
• Apply software package solutions as much as
  possible instead of custom build in house
• Balance business process redesign and software
  customization
• Centralized application and data
• Updated technology comprehensive functionality
• Overall planning, implementing separate on
  project basis, achieving the target quickly
• Balance resources needed in each phase

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Core Business Systems

• Approach Methodology
• 2 stages Software Selection Implementation

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Core Business Systems

• Software Selection
• Research and Planning
• Requirements Identification Proposal
  Preparation
• Supplier Evaluation
• Supplier Selection
• Implementation
• Preparation
• Business Blueprint
• Realization
• Final Preparation
• GoLive Support

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Thanks for Your Attention
Vietnam ICT in Finance 2006

• Nguyen Kha Nhan
• General Manager IT Division Bao Minh Insurance
  Corporation
• Email nknhan_at_baominh.com.vn

30-31 August, 2006