BELARUS NEWS AND ANALYSIS

DATE:

25/10/2006

Belarus Working on $20M SAP Rollout

By Marc Songini

Belarusbank JSSB is in the midst of a $20 million implementation of SAP AG business applications that it expects will modernize and improve its operations.

Uladzimir Novik, deputy chairman of the board at the bank, said the mainframe-based SAP software is replacing several systems that had been deployed separately over the years by different company units.

New apps will aid integration efforts, NOVIK says. The Minsk, Belarus-based bank has six regional branches, 24,000 employees and approximately $4 billion in assets. It offers 100 services and products.

The bank began implementing the SAP for Banking package, which includes ERP and CRM applications, in July, Novik said. The project, which will centralize all bank operations for the first time, is expected to be completed by the end of this year, he said.

Novik said when fully implemented, the software will support about 5,000 end users at the bank and process some 2 million transactions daily.

The company is projecting a 10% reduction in employee costs in all bank departments as a result of the project. Novik noted that he expects that the I.T. staff will be cut from 900 to 450 workers through attrition. He also predicted that the software will remove the need for new I.T. workers down the road.

Further savings, Novik said, will come from eliminating excess servers and workstations.

Novik said the cost savings resulting from the SAP implementation should pay for the software in "several years."

The bank began updating its I.T. operations in 2001, when officials decided that it was time for a "radical turn" that would lead to an integration of its various processes and would enable employees to share data stored throughout the company, Novik said.

Belarusbank has been using the SAP for Banking package since July.The company selected the SAP for Banking software after evaluating packages from 24 vendors, Novik said. SAP was selected for its broad functionality and ability to scale. The deal was inked in June, he said.

Belarusbank expects that the SAP software will handle standardized payment, credit and deposit processes -- key requirements for the bank.

The bank also plans to take advantage of the software's support for International Accounting Standards, International Financial Reporting Standards and Basel II financial reporting requirements, Novik said. That support will be necessary as the bank expands its operations and borrows from international money markets.

Belarusbank had long operated under what Novik called a Soviet style of banking, where each bank unit operates with separate accounting, reporting and administration systems and processes. In that style, he said, the I.T. systems were decentralized, inefficient and complex, and relied on paper-based workflows.

Novik noted that the decentralized system required 3,400 employees to handle the bank's accounting functions. Many of these people will be reassigned to other duties once the new software is implemented. The company still pays $8 mil⑬lion a year to maintain the old systems, and Novik said that without the switch to SAP, maintenance costs would have increased by about 20% a year.

He also noted that the older software and processes have held back the bank's efforts to make data and products available online for employees and customers. The SAP software should ease the move to online banking, Novik said.

Bart Narter, an analyst at Celent LLC, said banks in the former Soviet Union are starting to turn to the major application vendors as they do more international business.

He said banks still using homegrown software or packaged applications from local vendors often can't meet reporting requirements of international governing agencies.

Source:

http://www.newsfactor.com/news/Belarus-Working-on--20M-SAP-Rollout/story.xhtml?story_id=121003Y69NXB