PKO Bank Polski
Case Study
The scale of complexity, extensive structure, broad business requirements and, above all, a tight schedule subordinated to the planning process for 2016, made the scale of the challenge posed to the project, as well as the expected business results, very high. However, we knew that we could rely on our team and an experienced partner, which Cogit undoubtedly is. - Anna Oleksów - Team Manager PKO Bank Polski
Solution category
The PKO Bank Polski Group is one of the largest financial institutions in Poland and one of the leading financial groups in Central and Eastern Europe. PKO BP is the undisputed leader of the Polish banking sector, both in terms of scale of operations, equity, assets, number of clients, as well as the breadth of its distribution network.
Challenge
The Bank's solution no longer met its dynamically growing needs. The Bank had to decide whether to expand the current system or, using the experience gained, to implement a new solution tailored to new expectations. After the analysis, it was decided that a more effective solution would be to replace the system with a new one.
Due to the increased demand for faster and more intuitive generation of more accurate and extensive management information, the Bank planned to implement a new IT system, expanded with additional capabilities for the analysis of different variants and scenarios of plans.
The Bank's budgeting process required the implementation of complex yet powerful calculations of interest income, amortisation of costs and reporting items of the Income Statement and Balance Sheet.
The Bank also wanted to integrate the independent cost calculation modules with the income and interest result module, while retaining the ability to handle a highly variable organisational structure.
Solution
Despite long-lasting cooperation with PKO Bank Polski, knowledge of the Bank's needs and expectations, the project started with a detailed pre-implementation analysis which, combined with full professionalism and the Client's commitment, went very smoothly.
The system was deployed on a modern 64-bit architecture, located in three environments: development, test and production.
"At Cogit, we approach each case individually, trying to get to the heart of our clients' needs. We are confident in our competence and individually prepared solutions, which allows us to build long-term, trust-based relationships with our clients." - Marek Łatuszko, Cogit project manager.
An important assumption of the implementation was to obtain functionalities allowing to carry out a full planning process for 2016, therefore, each of the initial stages of work ended with the production release of complete system modules.
First stage
The aim of the first stage was to prepare the system to carry out the full planning process of the Bank in 2016. The system consisted of 4 basic budget models: project, cost, central (Bank reporting), and SGKB (PKO Capital Group reporting).
Project model
Used to enter, calculate and present project costs (direct
depreciation) with division into individual projects, aggregated cost items, currencies and units.
Cost model
Used for entering, calculating and presenting the Bank's costs (direct
and bearing costs) broken down into cost items, cost categories, currencies
and organisational units (including Head Office departments). The model is equipped with a mechanism for feeding aggregated data from the project model.
Central model
It is used for calculating detailed interest income on old and new sales (by products and currencies), commissions, provisions, write-offs and shadow-accounting. The central model is equipped with a mechanism for feeding aggregated data from the cost model. In addition, the presentation of the Bank's final reports takes place in this model: Balance Sheet and Income Statement by divisions and profit-center units.
SGKB model
It is used to input data of other companies of the Bank's Capital Group and to report the plan and performance of the entire PKO Bank Polski Group. The SGKB model is equipped with a mechanism for feeding aggregated PKO BP data from the central model. In this model, PKO Bank Polski Group Companies plan their costs, Balance Sheet and Income Statement.
As part of the work of the first stage, the system was installed and configured on new environments, the Bank's budget models were built together with a mechanism for exchanging data between them and user rights were assigned. Training in the use of the new system was also conducted for a group of about 150 end users (Bank employees) and administrative training for business administrators of the system from the Planning and Controlling Department.
Second stage
In the next step, the system was extended by the cost cascade model. At the same time, the system support was provided during the budgeting session conducted with the use of models implemented in the previous stage.
Costs cascade model
It is used for detailed quarterly cost forecasting at the level of all Bank units (including individual retail and corporate branches).
The model implements a multi-stage process of verification and correction of forecast data by users at the central (administrators and cost controllers) and regional level.
As part of the work on the cascade model, the organisational structure and the structure of cost accounts were made consistent between the cost, project and cascade models.
"The core part of the system, enabling the planning process, was built, aligned to the 2016 planning requirements and implemented in production within 6 months of the work commencing. Considering the scale of the project, this is a spectacular result, but on the other hand in line with the project objectives. This is largely due to the high commitment of the Bank's employees and the application of a structured approach to work." - Rafał Kokorzycki, Chief Analyst, Cogit
As part of the third stage, functions automating the work of business administrators were implemented.
Results
Cogit implemented a multi-stage budgeting and forecasting process in PKO BP Bank and the entire PKO Capital Group in just 6 months, and its functionality is used by approximately 200 employees. The implemented system streamlines the process of budgeting, forecasting and monitoring of plan execution in PKO Bank Polski and the PKO Capital Group.
The improvement of the aforementioned processes was possible thanks to, among other things:
• improvement of model calculation algorithms
• optimisation of model efficiency through implementation of a new solution,
• calculation of partial results for particular divisions,
• calculation and analysis of different versions of parameter and result scenarios,
• construction of the entire Bank budget from various partial scenarios.
„The Bank's growing requirements in the area of detailed, multi-variant analyses, as well as efficiency aspects, contributed to the decision to implement a new flexible solution that will significantly improve the Bank's operations. To carry out these tasks we chose Cogit - our reliable partner who was responsible for the full implementation of the previous system.”
Mirosław Grzelak, Director of the Planning and Controlling Department.
