Evolution Of Enterprise Systems Architecture In Banking Industry: A Case Study Of Westpac Banking Corporation Essay.

Discuss about the Evolution of Enterprise Systems Architecture.

Enterprise resource planning (ERP) remains digital process management system that integrates various information system for better business operation. A more understanding of the ERP rests on the business processes that are enhanced by the system. One industry with high ERP application or implementation is the banking industry due to the high volume of sensitive data. A close a look at the banking industry in Australia, Westpac Banking Corporation remains one of the top four banks within the industry. Some of the banking processes evidenced within the Westpac are customer service management, new customer acquisition processes, accounting processes, online banking operation and insurance management processes. Banking business requirement is technical with high specifications and these are part of ERP selection. Many software vendors are available with Oracle being one of the considered software vendor able to supply the software that meets the banking requirement. The software has high security features, faster operational services, high software integrations and scalability. These features make the Oracle ERP software the best that can be adopted by the Westpac Bank to reduce the integration issues that has been affecting the bank. The following paper explores enterprise resource planning (ERP) and its application within the banking industry with a focus on Westpac Banking Corporation.

Westpac Banking Corporation is the second largest bank in Australia and one of the largest within the regions. The bank offer variety of banking services that include customer service, online banking, insurance services and lending services among other services. The business has various operational processes that enable the company’s service provision. Westpac Banking Corporation is one of the fast expanding banks within the Australia banking industry (Westpac Banking Corporation 2018). Optimization of the operational processes is important for continuous excellent service provision that forms the main goal of the bank. The Westpac Banking Corporation has many different departments that include human resource management, banking department, operational department, lending, and insurance department, international business department and marketing department. The numerous departments that the business has need to function efficiently and coherently without slow or inefficiencies and this can be enabled using enterprise resource planning system. The business has been using other ERP software such as SAP that has some security and operational processes (Keating, Quazi, Kriz & Coltman 2008, pp 175–79). 

ERP has been in the forefront in the performance of banking operational processes. Some of the processes that the ERP need to perform include customer relationship management, Consumer and commercial lending, Account servicing processes, customer acquisition services and insurance management. Firstly, banking processes that the Westpac banking corporation majorly is customer relationship management that include service offered to the customer through banking hall and online banking platform (Malakooti 2013). The online business platform entails self-banking services that are also integrated into the ERP system that the bank uses. Secondly, consumer and commercial lending is another business process that the ERP will serve and mainly consist of offering loans to the customer through the ERP system with the capability to monitor the compliance or risk (Pegasystems 2018). Thirdly, account service processes entail payment management system that also reconciles various accounting transactions and customer support. Fourthly, customers acquisition processes are a business process that involves registration new customer into the system and marketing drives to attract customers. Lastly, insurance management as part of business processes involves the provision of insurance service to customers and some of the processes include risk, fraud, and compliance management processes (Kirchmer 2017, pp. 1–28).

Determine the systems requirements

The banking business requirement in the current business setting entails digitalization of business processes to increase efficiencies, integrate financial system, banking intelligence monitoring system and increase profitability. Firstly, banking sector digitalization process has been the trend with more banks integrates its processes through enterprise resource planning system for smooth operations (Shaul & Tauber 2013, pp 4). Secondly, integration of financial system comes with benefits that include faster financial assistance and flexibility of the system that enables transaction from any point globally. Modern banking system integrates both in-house banking system and the online banking system that enables faster transaction and operation management. Thirdly, automated intelligence system is another area the bank requires ERP for monitoring of risk, fraud, and compliance and this also come along with data enabling reporting. Lastly, the business system functions to reduce the operation cost and increase the profitability. The development of the ERP into the banking business enable reduction of operational cost and time taken to process customer transactions and this reduces the cost hence the whole process become profitable to the business (O'Brien 2011, p. 324).

ERP system is a huge volume system that requires a robust system that can support and reduce slow response during operations. It is important to understand the minimum system requirement that can support the ERP. Firstly, cloud server system is one system requirement that is needed to support the software. Cloud software is an important integrating element that enables the business to connects various applications within the system. For instance, Fitrix software is used for cloud hosting and can also be used on other hosted ERP system such as Software-As-A-Service (SAAS). Secondly, server hardware requirement is also an important system requirement as this increases the speed of operational processes.  Various sizes of the ERP require different hardware and this includes minimal of 10 users require single CPU for good operation. Over 100 users require Xenon type of CPU and more than 4 CPUs, RAM of 32GB, 64-bit system, 160GB hard disk, and a speed of 2.0ghz+. Thirdly, Server Operating System Requirements that the ERP software will support VMware virtual environment. Moreover, the operating software that supports the ERP can be Windows, Linux, ESX, ESXi operating systems. Fourthly, furthermore, the customers need to have some specific requirement that will make the ERP supported by their devices. Some of these are Intel processor, more than 10 MB available hard drive space, more than 32 MB RAM, TCP/IP and Telnet connection to Linux Host, and Windows XP or better (Fourth Generation Software Solutions 2018).

ERP software vendors are many in the current banking market and some of the common vendors are Microsoft, SAP, Oracle, FIS Global, Fiserv and SS&C Technologies among others. These are top-ranked ERP software vendors that have been used in the banking sector for operational management. Microsoft provides ERP software under the name of Microsoft Dynamics 365 enabling various customer relationship management systems (Lapalme 2010, pp. 37–43). SAP provides SAP ERP suite that is used by over 7000 customers worldwide. Oracle is another commons ERP software vendor that sells Expanding CX Cloud Suite. FIS Global is currently the top-ranked banking ERP vendor and provides SunGard Financials which is an integrated financial service. Based on the advantages of the ERP vendor listed, the best ERP vendor is Oracle ERP software is the best software. Oracle ERP is selected due to its flexibility, relatively low cost as compared to other ERPs, high-security features and easy integration of cloud and on-premise ERP systems (Arif 2018).

Vendor selection can be based on some factors and some of the factors considered in selecting the software vendor for the bank include functional fit, market position, vendor support, the total cost of the software ownership and customer reviews. Firstly, functional fits encompass various functions that the software will fulfill within the bank’s operations (Rosing, Foldager & Hove 2015, pp. 265–341). Secondly, the total cost of ownership of the software is another important factor that defines the cost of the ERP and any maintenance cost requirement that will be incurred in the course of using the software. Thirdly, market position of the software vendor determines the continuous provision of service to customers and those ERP software vendors without the capability of operation are most likely to bring problems to the business. Fourthly, vendor customer support system is another important factor and involves various customer support services that enable the software maintenance. Lastly, customer reviews on the level of satisfaction play role as it determine the overall importance of the software to past customers (Arif 2018).

Banking industry utilizes the ERP for various purpose and these include customer service, integration of information system, streamline processes, reporting and scalability, cost service and faster processes. These banking processes are interlinked to form a system that works smoothly to enhance customer services and achieve a profitable business system.

The ERP system especially Oracle ERP offers an efficient customer service management that allows the business integrate various customer services. Firstly, the online banking service is one such customer service that the Westpac can use ERP to provide to customers. Online services allow customers to obtain banking services such as transactions, payment, insurance and personal savings (Kirchmer 2017, pp. 1–28). Secondly, ERP enables the bank to process customer transaction through payment, credit card, and products purchases.  Thirdly, the Oracle ERP being cloud-based ERP offers faster customer service that customer can access from the bank from any location via mobile devices. In addition, the bank is able to manage its customer service data in a more efficient. Lastly, the ERP enable registration of new customers into the system and this can be done through self-registration or bank registration. Moreover, the software has the capability to incorporate customer service information with the marketing data to reconcile marketing data with new customers (Coelho 2015).

Westpac can utilize the ERP system for integration of financial systems and banking operational processes. The ERP system offers an integrated system that combines customer relationship management, financial data, and inventory information in a more accurate and unique way. The ERP system connects various banking components to ensure that customer can access data and services at their convenient (WorkWise 2017). The integration enables storage of data in a single location facilitating faster service management and monitoring of the system.  Another level of integration within the banking information system is the integration of online and offline banking platforms. The linkage between online and offline banking information system make the service provision faster and flexible at any place. Departmental integration is also faceted by the system and this includes various departments such as insurance department, banking department, human resource department and customer support or service department. Integration of these departments enables faster payment and management of these departments within the organization (Palmer 2015, pp. 349–361).

Streamlining of banking process is where the ERP system facilitates faster operations hence high business efficiencies. Oracle ERP through the integration of various banking process enables the business to operate in a more streamlined way with faster processing of information. One advantage of the ERP is that the software is able to organize and store real-time customer data without redundant data. This streamlines the information system with data from online banking platform also being integrated to better banking operations (Shaul & Tauber 2012, pp 360–384). The bank has a high volume of information or data that need to optimize into a more streamlined process for faster operations. More streamlined operational processes ensure that the data are real-time data that can help the business manager for the decision-making process. Westpac Banking Corporation requires a software system that is robust and is able to process data faster and in a more accurate way (Liam 2015).

The ERP system has been utilized for storage of data that is used for reporting. The integration of information system within the bank make storage of the data convenient that is useful for reporting since the data is accurate and specific enabling proper operational reporting. Some of the data that are stored in the system include transaction data, customer demographic data, loan information and other financial data (Kirchmer 2017, pp. 1–28). These data give information about the company that is used for reporting. The ERP due to high data storage and flexibility enables the scalability of the system. The advantage of the Oracle ERP system is flexibility that enables the scalability of the software. The increasing volume of data as the business expands rests on the ability of the system to expand depending on the banking volume of information. For instance, Westpac Banking Corporation has been expanding its information system rapidly and this is catered for under the Oracle ERP system. The software, therefore, allows scalability of the business system (Vilpola 2008, pp 47–76).

Many businesses that have implemented the ERP has reported that the system reduces cost and increase the speed of customers service. The overall benefit of the ERP software is to reduce the cost of operation and increase the speed of customer service and this is readily achieved by implementation of the Oracle ERP system in the bank. Studies into the implementation of the Oracle ERP show that the software work faster as compared to other software with similar function and this is important for the Westpac Bank that process huge transaction information as a single moment (Swenson & von Rosing 2015). Moreover, the company can use the software to can service a huge number of customers at the same time due to its flexibility and high integrations with various banking operational processes. For instance, a close comparison between Oracle ERP and SAP ERP in terms of the implementation show that the Oracle software is faster and high security as compared to other ERP software. The speed of the software is also evident in its background hosting system that is built on the cloud hosting system (Shaul & Tauber 2010).

The efficiency of the ERP can be evaluated based on some factors that are helping within the banking industry. Firstly, integration efficiencies are one area that can be used to evaluate the Oracle ERP since the level of the integration has been the success factor of the software. The software is evaluated based on its ability to efficiently integrate various departments and processes in an organized way for faster information system (Rubina, Paula & Alta 2011). This increase the speed of system process that is important for large organizations such as Westpac Bank. Secondly, the performance of the ERP system is another area that forms the basis for evaluating the efficiencies. The performance of the ERP in terms of the amount of data that is processed within a minimal period of times shows how the software is efficient. This is important for scalability since that software that is not efficient cannot support a huge amount of information hence limits the scalability. Thirdly, the analysis of the communication and the solving connection is an area that gives insight into the banking software with the ability to communicate with other departments within the banking system. For instance, the Oracle ERP has mobile device app that enables faster communication between the web version and the mobile version of the system. This solves the problem of the flexibility of the banking service under the software (Eckartz, Roel & Hillegersberg 2009).

The three main security concerns are on the data security, data breaches and the possibility of software failure. Firstly, being a cloud-based software that also allows integration of on-premise ERP system poses security challenges that can potentially lead to data loss. This data security challenge though has been addressed by the company, still remains concern by a number of customers. Secondly, recently many businesses have also expressed their concern particularly with the data that is stored by another company (Vedabrata & Lederer 2011). This is an example of the cloud-based ERP system that the Oracle ERP software uses and the main concern in the possibility of data breaches from another party. This shows the possibility of data accessibility since the data that are sensitive are left in the hand of the vendor. The banking sector has high sensitive data or information and these include credit card information, transaction details and other financial information that can be sued by criminals to con customers. Lastly, another concern has been on the fate of data in case of changing software system. The security of the data that will is left with the previous hosting company presents a nightmare from banking industry (Ross 2013).

Cloud-based ERP has received security concerns that focus on the nature of the system. One area that many people has to argue against the cloud-based ERP system is the integration with the local information system. For instance, many businesses currently implement or adopts a hybrid system that combines both cloud and on-premise for the benefit of both systems. Integrating cloud ERP and on-premise ERP has been a problem with some ERPs such as SAGE showing a failure to integrate leading to insecure business data. The integration is also visible on the security side leading to fear of failure or loss of data. In addition, the system integration between departments and process has been a security challenge that is pointing to future changes required (Rosing, Foldager & Hove 2015, pp. 265–341).

The potential risk that may affect the implementation of the ERP in the banking industry has been managed through a number of guidelines. Firstly, the security software is installed within the ERP system with some software are developed with security firewall to prevent any security case. Firewalls are continuously updated to minimize any security risk that may affect the customer using the software (Walsh 2009). Secondly, some software such as Oracle software is developed with intelligence application that is capable of monitoring any risk. The software monitor and report any potential risk within the system to prevent unauthorized entry into the system. The security system of the software has made the vendor to tackle potential security that has affected other similar software in the market. Thirdly, the encryption system that forms the core of the software entry points makes the software secure since the system is protected using end to end encryption that block any an authorized entry into the system. Moreover, the software protection is also fitted with security monitoring system that provides the owner information on any attempt to enter the system by unauthorized persons (Vilpola 2008, pp 47–76).

In light of the benefits of the ERP system, in the business, the recommended software is Expanding CX Cloud Suite. The Expanding CX Cloud Suite is supplied by the vendor Oracle and has some business fit. Firstly, the software meets the business requirement that includes customer relation and service management, business process management, financial integrations and automated intelligence system (Sidorova, Torres & Al Beayeyz 2014, pp. 421–444). The Oracle software provides various levels of integrations that combine different processes and departments for effective operations (Johnson 2012). Secondly, the Expanding CX Cloud Suite as the name suggests is expandable that allows high scalability of the entire system. The software offers a good opportunity for business to expand their system through the Oracle ERP. Thirdly, the software provides the possibility of integration with other ERP system and other platforms. Oracle ERP allow the bank to add other ERP system, for example, SAP ERP is known to easily integrate with Oracle software making the operation more robust. In addition, the software also allows integration with on-premise ERP for backup purposes and this makes the software better for implementation in the banking sector (Hopping 2016).

Conclusion

In conclusion, enterprise resource planning increases the chance of future streamlined operational processes. Enterprise resource planning system offers banking industry better service provision and one such company that show high chances of success is Westpac Banking Corporation. The banking operational processes that the business has include customer service, accounting processes, automated intelligence processes, online banking processes and risk monitoring processes. Some security challenges that affected the ERP implementation are data breaches, data security, and potential security breaches. The recommended ERP system is Expanding CX Cloud Suite supplied by Oracle software vendor. The software was selected based on its security features, scalability, high integration ability and fast operational processes. The Oracle ERP software has a security feature that addresses the security concerns that has been associated with the ERP system through security applications. Therefore, based on ERP software analysis the Oracle ERP is selected as the best banking ERP that will solve various challenges that are affecting the business.

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