China-based software developer, acquired Giantstone for approximately $45 million. Derek Palaschuk, Longtop’s CFO, believed that CMBC’s reasons for selecting Giantstone to take over the integration were the vendor’s knowledge and expertise of the local market, its business practices, architecture and regulatory requirements. Giantstone was also among the developers of legacy systems at CMBC. He was confident the project would eventually be successful, but declined to provide any timeframes or milestones. Some modules of SAP’s system were apparently in the testing phase at this time at 15 branches of the bank, but Palaschuk admitted that a lot of work needed to be done before the system was rolled out across the entire branch network. ‘Interfaces, data integration, customisation – all this needs to be developed as SAP’s system has only a limited amount of business requirements in China,’ he explained. ‘This will be the main bulk of the work over the next number of years. There are literally hundreds of different projects that need to be undertaken. These applications include the agency system, payment engine, risk management, various treasury management functions, localisation of financial and tax reporting requirements, and building an e-commerce platform.’ Longtop was also building an enterprise customer information file (ECIF) – a data warehouse to collect and process customer data on a nationwide basis – which Palaschuk described as ‘a huge project’. Furthermore, CMBC did not have a large in-house IT department, so it relied heavily on third parties like Longtop and Giantstone. He hoped that once this project was successful, other banking heavyweights in China would follow, and the vendor might offer a localised version of SAP’s banking software and the implementation know-how. ‘What is holding these big banks back is that there hasn’t been a successful implementation of a foreign core banking system yet. We are very confident that Giantstone will be one of the first, or maybe the first, to do so.’ In the long run, this offering, as well as a lower end core banking system for smaller banks that had been developed by Giantstone, might be brought into other Asian and south-east Asian markets, said Palaschuk. However, in 2011 Longtop was the victim of an accounting scandal and its shares ceased trading, leaving the SAP plans in doubt. In 2006, ABN Amro took Deposits Management in a deal with a corporate-oriented slant, for the management of client account information across its global cash management operations. However, the project was not completed. In Belarus, Belarusbank signed in mid-2006 to implement a centralised core banking system. According to Vladimir


Novik, board member at the bank, about $10 million would be used for software licences, implementation and training with another $10 million to construct a purpose built computer centre, purchase new IBM mainframes, provide disaster recovery facilities and build a communication infrastructure to link the bank’s branches. The bank selected SAP after a long tender process, deciding that the vendor’s solution most closely met its requirements for functionality, safety and scalability. The bank took all of the modules in SAP for Banking including Loans Management and Deposits Management. SAP’s ERP and CRM systems were also taken, the latter to enable the bank to view its combined customer data, which was previously distributed among individual branches. Between 50 and 60 bank staff were expected to be involved in the first stage of the project, with around 30 being supplied by SAP. The project was planned to run until 2008, although here was another major overrun and it was still ongoing in 2012. Along the same lines was a first deal for SAP in Russia, at


Center-Invest, one of the largest banks in the south of the country. The IT modernisation project kicked off with Russian IT services company, OTR, and was meant to see automation of all activities of the bank. SAP had tied up with OTR to market SAP for Banking in Russia and the neighbouring states. The bank took SAP for Banking for its core systems, mySAP Business Suite for ERP, SAP BW (data warehouse), and Netweaver as its technical platform. One other piece was BSC Gemini, a remote banking and branch system from BSC Praha in the Czech Republic. Svetlana Orlova, head of IT and clearing systems and co-ordinator of the project, said: ‘We were choosing the system, not the supplier, and SAP solutions were most suitable for our requirements.’ Center-Invest was a joint stock company with two major


foreign shareholders, Deutsche Investitions-und Entwicklungs GmbH, with 20 per cent, and the EBRD with 25 per cent. It was a fast-growing bank. At the time of signing it had 90 branches across southern Russia and Moscow, with this number on the increase. It provided corporate, investment and retail services, the latter being actively developed. The project was expected to take three years. However, the bank was planning to open its first pilot branch in a year and a half, according to Orlova. Nonetheless, as with all other international core software implementations in Russia, the venture at Center-Invest was beset by difficulties. Hence, the scope of the implementation was subsequently revised and the CFT-Bank system from domestic vendor, CFT, was deployed alongside SAP for Banking. Those involved in this project, including the bank itself, have remained tight-lipped about the results and current state-of-play here. ‘The system is being used at the


Universal Banking Systems Market Report | www.ibsintelligence.com 383


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