The Reliable Finance Company (widely known as the RFC) is an Australia based financial organization that lends money to individuals. The organization started operating from one of the small towns of the country in the year 1990 and has grown steadily over the years to such an extent that at present there are as many as187 branches of the organization located at several nooks and corners of the country.
This report has been documented with the aim of providing an outline of the project aimed at developing an information system for RFC that would be capable of supporting the transaction system utilized for the processing, payment and settlement of loans.
The stakeholders associated with the project under consideration are being outlined in the section below:
- The clients of Reliable Finance Company who take loans from the organization and repay the same.
- The branch personnel in charge of managing the customer loan repayment process.
- The officials and clacks associated with Home Office Payment Processing Department, as they are responsible the centralized management of all loan accounts.
Project scope: Project description
Bryce Clarkson, the current owner of the Reliable Finance Company has expressed his interests in re-designing the payment processing system that currently exists in the organization. Clarkson is of the opinion that this redesigning process would allow the organization to move on step closer to the process of implementing an information system for the management of the entire payment system, which would in turn facilitate his plans of expanding the operations of RFC.
Processes to be included in the project
At present, the following three systems are utilized across all the branches of the Reliable Finance Company for the successful processing of loan requests and their repayments:
- The Payment Processing System:The Payment Processing System, as the name suggests is associated with the management of the payments made by the customers, along with maintaining the records of the same. This particular process I also associated with the process of updating the loan records and files of each customer as maintained in the head office.
- Delinquency Analysis System: It is an automated system that considers the data recorded in the Outstanding Loans File, as maintained by the Home Office Payment Processing Department and identifies those customers who have not paid their loans after 15, 30, 45, and 60 days of the due date. In the next step, computer generated reminders are sent the customers informing of their delinquency.
- Settlement Accounting System: The settlement accounting system is utilize for calculating the settlement amounts in case a customer expresses his or her interest in paying off the entire loan amount before the due date.
The information included in the section above is indicative of the fact that both the Delinquency Analysis System and the Settlement Accounting System have already been automated. Moreover, then efficiency of these two systems depends significantly on the outcome of the Payment Processing System, which, as of now, is managed manually. In fact, the current owner of the organization, Bryce Clarkson has instructed the MIS department to redesign the payment processing system that currently exists in the organization. Hence, the project being discussed in this report would essentially take into consideration the Payment Processing System of RFC.
Scope boundaries of the project
The following elements are included within the scope of the project under discussion:
- The identification of the major steps associated with the Payment Processing System currently utilized by Reliable Finance Company.
- The identification of the changes that can be include in the existing system such that the issues currently associated with the same can be resolved.
- To define the changes to be include in the existing Payment Processing Systemof RFC through the development of the ‘To be’ process model.
However, the following elements are not included within the scope of the project:
- Redesigning the Delinquency Analysis System and the Settlement Accounting Systems currently utilized by the Reliable Finance Company.
- The implementation of the changes recommended for redesigning the Payment Processing System currently utilized by Reliable Finance Company.
Current process model for payment processing
The following diagram provides an insight into the operational steps associated with the payment processing system.
Figure: Current process model for payment processing (BPMN model)
Figure: Current process model for payment processing (UML Activity diagram)
As shown in the figures above, at present, the customers are capable of paying their loan amounts at both the home branch or at the home office branch of RFC. Outstanding Loans Files are managed separately at both the home branches and the home office for each of the loans taken by the customers. However, an Advice of Payment Received (APR) is maintained at each of the offices: the same is updated for each of the payments made and are then mailed (to the home office if the payment is made at the home branch and vice versa) for making updates to the Outstanding Loans Files. Besides this a batch payment processing system is also run at the end of the day for updating all customer accounts centrally.
Changes to be included
It has been mentioned in the case study that although about 80 percent of the loan payments are made at the home branches, the payment voucher indicating thee detail of the payment are often found to be missing from the voucher booklet in half of the cases which makes it difficult for the Home Office Payment Processing Department to track the payments. The management of the unidentified payments leads to severe clerical work pressure, besides delaying the posting of the payments in the respective customer accounts which in turn leads to the generation falsi-positive delinquency messages. Excessive clerical overhead occurs significantly in the process, courtesy to efforts required for managing the loan documents manually. Besides this, the Outstanding Loans File is often found to be outdated, which hampers the Delinquency Analysis process even further.
Such being the circumstances, the following changes are being recommended so as to be included in the payment processing system:
- The development and implementation of a centralized Outstanding Loans File that can be accessed and updated from all the branch offices and home office (Oliveira & Belo, 2012, December).
- The online generation and processing of a centralized APR File
New process model for a re-designing payment processing system
The news process model for redesigning the existing payment processing system is being depicted in the figure below:
Figure: New process model for a re-designing payment processing system
Strengths and weaknesses of modelling techniques
BPM modelling technique
Following are the strengths of the BPM modeling technique:
- It acts a tool for understanding the primary elements of any existing system, along with the identification of the strategies/ techniques that can be utilized for the enhancement of the system , besides facilitating the process of planning (López-Campos et al.2103).
- The BPM modelling technique also allows the graphical representation of the proposed model, thus providing the end users with an idea of the step through which the proposed system would function.
However, the BPM technique has several weaknesses associated with it, the first one being the fact that there exists a very high probability that the process under design is overanalysed, thus making the task of proposing a new model significantly critical (Snoeck et al. 2015).
UML modelling technique:
The UML modelling technique provides the user with the advantages of providing graphical representation of any process under consideration. It allows for the documentation and graphical representation of the process models, thus developing a common language of communication with the client organization (?abiak et al. 2012).
On the other hand, the utilization of several different models for representing any process often makes the process of maintaining consistency of the designing process. Hence the BPMN technique is preferred more over the UML modelling technique (Evans et al. 2014).
Technical and business complexities and their mitigation strategies
The following technical and business complexities are likely to be associated with the project under consideration:
Type of Complexity
Lack of skilled resources
New resources having required skill set should be employed (Burke, 2013).
Resistance to change
Discussions should be made with the existing employees so as to highlight the positive aspects of the change,
Appropriate technological tools not identified (Schwalbe, 2015).
The identification of tools must be based on the efficiency of the same in the said purposes.
The most important aspect of this project would be to redesign the payment processing system that currently exists in the organization.
It is worth mentioning that the Reliable Finance Company has operational branches running across all major cities of the country, including Sydney, Brisbane, Melbourne and Adelaide. Thus recommendations have been made to the owners of the organization to implement a centralized outstanding Loans File that can be accessed and updated from all the branch offices and home office. It is expected that the centralization of the loan documenting process would indeed help in the process of overcoming the issues that the organization currently experiences.
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