In the Internet age, China's four modernizations (agriculture, industry, national defense and scientific and technological modernization) cannot be separated from informationization. Similarly, the modernization of service industry is inseparable from informationization. The modernization of financial services is inseparable from informatization, because it is the largest data (and risk) intensive industry. Information in the financial industry is highly intensive and asymmetric, and risk management and management modernization are highly dependent on informationization!

Financial industry is the largest data and risk-intensive industry and the most important service industry for China to open to the outside world after its entry into WTO. In order to be in line with international standards in technology, business and management, many financial enterprises in China (including banks, insurance and securities) are considering or have chosen to implement international standard application software. Although their situations are different, most financial enterprises will encounter the following seven common problems in the selection or implementation of application software: First, go to the system first or do business process reengineering (BPR) first? Second, when local customs are inconsistent with international practices, who will rely on whom? Third, should we choose an enterprise-level suite or use multiple departmental software combinations? Fourth, what should be served first, and then what? Fifth, is it development-oriented or configuration-oriented? Sixth, who will lead the project, the business department or the IT department? Seventh, how much money and time will it take? What are the rewards and risks? In addition to the second question, these are also the main problems encountered by many financial enterprises in the world in the past 20 or 20 years and now. The first three questions mainly involve software selection, including consulting or choosing first, adopting domestic software or international software, and choosing enterprise-level software or department-level software. Questions 4 to 6 mainly involve software implementation or project management, including the management of time (schedule), content (task) and resources (personnel). The last question is the return on investment or project evaluation, that is, whether to invest or how big the project is.

First, go to the system first or do business process reengineering (BPR) first? A lot of experience at home and abroad has proved that the most effective way is parallelization, that is, according to the current situation, needs and software functions of enterprises, design and realize feasible business processes. In other words, BPR is completed in the process of software implementation.

In the past, many enterprises made separate BPR out of thin air. As a result, the business process blueprint in BPR report is drawn too far and too beautiful, like the moon in the sky, we can't reach it! This problem is more serious in China at present, because there is a big gap between China and the world in management practice. Although we now have the most open ideas in human history, the content of management reform involves changes in management ideas, management processes and management systems at the enterprise level, as well as changes in employees' (personal) understanding, habits and interests. These can only be changed gradually, not suddenly. About enterprise management ideas and personal cognitive habits, some can be solidified in the computer system, and the other part can be clearly defined in business rules and processes. Most of the rest are intangible and play a key role (such as intentionally or unintentionally inputting wrong data alone or in collusion, with serious consequences), but they cannot be forced to change overnight. The change of cognition is limited by the study and change of conscious thinking, and the change of habit is limited by the study and change of unconscious emotion. The former can be realized through ordinary study and training (depending on the classroom and books), while the latter needs to be realized through repeated practice training; Both are influenced by interests. Interestingly, both "idea" and "software" belong to "uncertain durable goods" and will not depreciate, so we should adopt them as soon as possible to reduce TCO and improve ROI. At the same time, it is necessary to constantly update the concept and software and upgrade the version. The international leading standard application software embodies advanced management concepts and best business practices. Through its implementation, training and application, management change and process improvement can be realized. The most effective way is to carry out unified planning and step-by-step implementation around the overall solution provided by the most mature international standard application software (industry or enterprise level). Consulting and planning out of thin air can only be air to air!

Second, when local customs are inconsistent with international practices, who will rely on whom? In most cases, if we can approach international best practices, we should approach them step by step.

Why is this happening? This is because the western economic and financial markets have accumulated more than 100 years of mature management experience, while our market economy is being established and "market finance" has just started. Without market, there is no market management; Without a mature market, there is no mature market management, including management experience, ideas, models and algorithms. This determines the upper limit of the management level contained in domestic software at present. On the other hand, due to the Internet, WTO and Basel II, the business and regulatory norms of the global banking industry are increasingly converging. Therefore, in order to participate in the international financial market and become a qualified competitor, we must abide by the international rules of the game and absorb international best practices. Due to the gradual principle of the first problem analysis, the integration should be gradual. Compared with Europe and America, our financial products, prices and channels are very simple. What we have now, it has been in foreign countries for a long time, but it is in many foreign countries, and we don't have it now (such as derivatives and asset securitization). Therefore, there is no need to worry that international standard application software cannot meet the existing domestic business needs. At the same time, our financial processes, regulations and systems are very extensive and imperfect; We need to learn from it boldly, gradually improve it and finally improve it. This is a problem that domestic software can't solve in a short time. On the other hand, due to the specific local language, regulations, habits and support requirements, not all international software can be successfully adopted in China. The most important thing is to choose "software with high degree of internationalization and complete localization". A high degree of internationalization requires various practices in Europe, North America and Asia-Pacific, while complete localization requires four aspects: local language, local laws and regulations, local business practices and local service support. Take the HR system of SAP as an example. Support the personnel system and wage accounting system in more than 40 countries in Europe, America and Asia-Pacific. There is a simplified Chinese version in China, which conforms to the national and local labor laws and regulations, and conforms to the wage and welfare accounting and political, economic and personnel management system of China. In addition, SAP has dozens of local support and HR localization development and implementation teams in Shanghai and Beijing, and SAP HR has been successfully adopted by more than 40 users in China.

Third, should we choose an enterprise-level suite or use multiple departmental software combinations? The international trend is: if possible, choose one or several enterprise-level suite suppliers, as few as possible. No matter whether you choose one or more, you should make unified planning and realize it step by step.

Why? Because in the current computer industry, the standardization of application software is far less than that of hardware, database and operating system, a large number of data interfaces are usually needed between application software from different manufacturers, and more importantly, they contain different industry business processes, rules and terms. Therefore, with the increase of suppliers and historical systems, the difficulty of data interface, project management and system maintenance will increase geometrically. Finally, it will cost a lot to replace, transform and integrate a large number of old systems, just like tearing down old houses. Just like housing construction or urban construction, unified planning and phased implementation are very necessary for the construction of management system (no matter how many manufacturers you choose). Because all parts of the information system are highly complementary, centralized management is the general trend, so unified planning is very necessary. Because enterprise resources and employees' learning ability are limited, it takes time for employees to change their understanding and habits, and the redistribution of benefits will encounter resistance, so it should be realized in stages, including gradually advancing within the functional scope and geographical scope. The general practice is to select a consulting service company after determining the software supplier, implement and train in the head office (head office) and a branch office (branch office), and then the consulting company and users will promote it in the whole bank (company). Some people worry that if only one application software supplier is selected, there may be a monopoly problem. In fact, this problem is not as serious as it seems. For example, aren't we all using Microsoft's Windows and Office suites (including Word, Excel, Power Point and Access)? Why don't we worry about Microsoft monopoly? Because there are existing or potential Microsoft competitors. If the price or service of Microsoft is too unreasonable, it will lose a large number of existing customers, and it will be difficult to attract new customers, and will eventually be replaced by existing or potential competitors. The important thing is that as long as there are potential competitors, there will be no real monopoly. In fact, Gates often reminds himself and his employees that Microsoft may be only 18 months away from collapse. If one day it is really necessary to change suppliers, it is much easier to replace an old system than to replace multiple sets. There are three types of enterprise application software systems in the market: department-level, enterprise-level and industry-level or enterprise-level application software. For example, Siebel only provides management software CRM for customer service department, which belongs to department-level software; PeopleSoft and Oracle provide ERP and CRM, but do not provide the core business system of the bank, which belongs to enterprise-level software; SAP also provides core business systems such as ERP, CRM, banking and insurance, supports the New Basel Accord, and belongs to industry-level software. Industry-level solutions in the Internet era not only provide business processing within a single enterprise, but also provide cross-enterprise business transaction realization. This is collaborative e-commerce; Through the establishment of standardized industry business processes (rules and terms) and e-commerce trading platform. Transactions include interbank transactions, such as interbank transactions and interbank transactions. The core business system of bank A needs to be connected with the internal financial system of the bank, with the core business system of other bank B (indirect connection), and with the financial system of enterprise C (whose customer is A). If A and B adopt systems such as SAP core banking and C adopt systems such as SAP finance, then A, B and C can realize complete real-time integration and realize straight-through process (STP). This is a big advantage of industry-level standard software.

Fourth, what should be served first, and then what? The mainstream in the world is to adopt advanced standard application software, update the management (analysis) system first, and then gradually replace the core business (operation) system. The process of application system standardization is generally divided into three stages: business support system standardization, analysis system standardization and processing system standardization. First, we usually start with the standardization of business support systems, namely ERP, and establish or update standardized business support systems, including the management of people, finances and materials, namely human resource management, financial management and fixed assets (and procurement) management. Most of them start with the establishment of a standardized financial system (including financial accounting and management accounting). Secondly, on the basis of ERP, establish a standardized financial analysis system, including profitability analysis (such as FTP), risk analysis (such as ALM) and performance (value) analysis (such as EVA). Most of them start with the analysis of profitability. The third is to establish or update centralized and standardized customer information and relationship management system, standardized deposit system and loan system, standardized fund transaction and payment system and other business processing systems. Because the human resource management system is relatively independent of the business line, it can be advanced or postponed.

The reason behind this is what I call the "four lines" and "three standards" of modern financial management. The four lines refer to customer line, product line, employee line and financial line. What management cares about is how much money each customer, product and employee earns (or spends), that is, the contribution of the first three lines to the fourth line. These three standards refer to (accounting) profit, (comprehensive) performance and (economic) value. The goals that shareholders care about are: the company's current profit, future potential and market value. The company's current profit is the accounting profit realized by the company's past performance. The future potential of the company depends on four lines, such as customer satisfaction and market share, product innovation and business processing ability, employee training and organizational development, cash flow and investment return and risk. How to turn future strategic goals into actual actions now? Use the balanced scorecard to establish an incentive mechanism, unify the four lines, and realize comprehensive performance evaluation and risk management. The value of the company in the market is equal to the sum of the net present value of the company's current profit and future expected profit (risk-adjusted profit). The risk-adjusted return on capital is RAROC. Furthermore, from the perspective of shareholders' return on investment, we should consider economic profit, that is, accounting profit MINUS opportunity cost (for example, money from investment banks can also be invested in securities or real estate). On the other hand, some traditional accounting expenses may actually be investment projects, for example, the training of bank employees should be regarded as human capital investment. In fact, the most important assets of banks or other financial enterprises are human capital (not land and machinery), so human capital investment (such as training) is very important. Ignoring or distorting such projects will seriously affect long-term development. Through these adjustments (risk, opportunity cost and investment cost), accounting profit will become economic added value, namely EVA. How to turn shareholders' value goals into concrete actions of management and employees? Using the balanced scorecard of EVA index to realize value management. Corresponding to the four lines of customers, products, employees and finance are CRM, core business, HR and financial department management system and (overall) enterprise strategic management system. Enterprise strategic management system is a cross-departmental (enterprise level) management system, which realizes the unified management of the four lines. How to realize profit management, performance management and value management through these systems? Take the management system construction of modern commercial banks as an example to discuss.

A. Through the implementation of financial accounting, cost accounting and capital transfer pricing system, profitability analysis and basic financial budget control are realized, and the goal of profit management is achieved. Financial accounting, cost accounting and FTP constitute the bank management accounting system. Financial accounting is used to record, collect and report income and expenditure, assets and liabilities, cash flow, etc. Cost accounting is used to allocate (non-capital) expenses; FTP is used for internal capital pricing, namely "capital cost allocation". Limited by the functions of the existing core banking system and the specific requirements of internal and external statements, the general ledger system in financial accounting can be gradually separated from the core business system and become a hub connecting the business system and the expense system. Limited by data, norms and interests, cost accounting can gradually transition from the traditional "departmental cost method" to "activity-based cost method". Similarly, limited by data and other factors, FTP can start from the single warehouse method, transition to the multi-warehouse method and single transaction method, and gradually realize profitability analysis according to customers, products, business units and channels, and classify them according to different degrees.

B. Through the implementation of asset-liability management system (ALM) and credit risk management system, risk analysis and basic capital budget control can be realized, and the goal of risk management can be achieved. According to the framework of the New Basel Accord, risk management includes market risk, credit risk and operational risk management. Among them, there are mature models and systems for market risk management, such as ALM (mainly used for interest rate risk management of on-balance-sheet business). ALM mainly has three tools: in-table memory update matching, off-balance-sheet hedging (using linear contracts such as futures and hedging, or nonlinear contracts such as options and limits) and asset securitization (changing balance sheet). Credit risk management is the core of the New Basel Accord. The credit risk management system should support three credit risk measurement methods (namely, standard method, basic internal method and advanced internal method) and credit risk resolution principles (such as mortgage, hedging and decentralization) required by the new agreement. Operational risk management is a new concept. The operational risk management system should be combined with the loan management system to optimize the loan process and approval. It is worth noting that although it will take after 2005 to finally meet the requirements of the New Basel Accord, due to the data requirements of risk assessment and calculation methods (such as historical simulation method), data preparation needs to start now. The combination of profit analysis system and risk management system can form a basic business pricing system. Business pricing includes product pricing and service pricing. Take the pricing of loan products as an example. The loan interest rate should reflect the loan cost, risk and profit, namely

Loan interest rate = loan (marginal) cost+loan (marginal) risk value+loan profit rate.

Costs include direct costs and indirect costs. Direct costs can be determined by FTP system, and indirect costs are non-capital costs shared by management accounting system. Risk pricing should reflect the credit risk of the lender and the risk of the loan project (depending on the loan term and collateral, etc.). ) and decided by the credit risk management system (including the collateral management system). Finally, the determination of loan profit rate also needs to consider the average profit rate in the market, the interest rate of competitors and the future value of lenders to banks.

C. Through the implementation of human resources and enterprise strategic management system, comprehensive performance evaluation and strategic development planning are initially realized, and the primary goal of performance management is achieved. According to the strategic development goal of the bank, determine the business plan, financial budget and key performance indicators (KPI) of each department and its related responsible persons, and use the balanced scorecard to evaluate and motivate them. It should be pointed out that if the profit analysis system and risk management system are not combined, the performance management system may be incomplete (such as not considering risk factors), untimely (such as non-real-time data) and semi-artificial. The combination of A, B and C systems can form a comprehensive, timely and straight-through (STP) value management system, which can carry out comprehensive planning and budgeting, comprehensive cost and risk control, comprehensive business pricing and comprehensive performance management, and realize the advanced goal of value management.

Fifth, is it development-oriented or configuration-oriented? If possible, mature standard application software should be selected, with (parameter) configuration as the main factor and (program) development as little as possible.

This problem involves the difference between "development software" and "standard software". Developing software is the result of developing according to the specific needs of specific customers, which is practical; Generally, it can't meet the needs of other customers or emerging needs in the future, and it lacks universality and predictability. Whenever new products are introduced, new laws and regulations require or organizational structure changes, enterprises need to redevelop the system, which is not only long in cycle (months or years), high in cost, but also has a large number of interfaces, resulting in slow operation and complex maintenance of the system. The emergence of standard application software is to solve these problems. Its success is based on the standardization of business processes and program technology. Although enterprises in different countries in the world operate and manage in different ways, the basic elements of their business processes and business objectives are the same, that is, people, finance, materials, production, supply, sales (or deposits, loans, intermediary business) and profit maximization. Although there are infinitely many feasible business processes or combinations of elements, there is usually only one or several optimal business processes or combinations of elements. The standardization of application software program technology itself is based on object-oriented programming language, modular structure, parameter configuration design and workflow technology. The result is "standardization of software system components", which can be reused like building blocks, flexibly docked, assembled and replaced. Mature standard software should be able to meet more than 90% of the needs of most customers, shorten the cycle of supporting the launch of ordinary new products to weeks or even days, and reduce the cost of traditional IT by 30% or even more than 50%. Therefore, standard software should be adopted, mainly based on parameter configuration, supplemented by programming and development. Choosing mature standard software is relatively easy, just like buying commercial aircraft or fitness equipment; As long as you choose the best supplier, you don't need to care too much about the detailed functions of the software. However, after determining the software supplier, it is necessary to choose a consulting service company to conduct demand research, system configuration and user training. Excellent consulting companies will enable users to obtain significant use effects and complete knowledge transfer. Limited and precious time should not be wasted on software selection, but should be focused on implementation, namely process design, system configuration, data interface and change management.

Sixth, who will lead the project, the business department or the IT department? The unified planning of the project can be coordinated and led by the IT department. If mature standard application software is adopted, the main participants in project implementation and maintenance are related business departments. If enterprise-level or industry-level standard application software is adopted, leaders should personally participate in the project implementation process (that is, grasp the first-hand project).

At present, the IT departments of most domestic financial enterprises, such as banks, are in a low position and do not have enough authority to carry out cross-departmental unified planning. As the financial industry is a highly data-intensive industry, the positions of IT department and CTO/CIO should be decisive. On the other hand, at present, most business departments and management have insufficient understanding and participation in the selection, implementation and maintenance of application software. Many business and management personnel believe that the selection, implementation and maintenance of application software are entirely or mainly the work of IT departments. This is a misunderstanding that needs to be changed urgently. In fact, mature enterprise application software is mainly used and maintained by business and management personnel (just like using Microsoft's "personal management software" Office). If immature standard application software is adopted, IT usually requires relatively more IT personnel to participate in the implementation, development and maintenance. If you choose to develop application software, there will be many secondary developments. It may become a bottleneck or even an obstacle to business development. The use of mature standard application software will support, promote and guide the development of business, and at the same time, the role of IT department will change from passive to active, from auxiliary to dominant, and its status will be improved accordingly.

Seventh, how much money and time will it take? What are the rewards and risks? The last application system costs three yuan: hardware, software and implementation. Usually, the ratio of the three in the world is about: 1: 2: 3, that is, the hardware cost of each dollar, the software cost of two dollars and the implementation cost of three dollars. Mature application software itself usually needs hundreds of thousands to millions of yuan to buy; The specific cost depends on the system module used, the number of users and the business volume, ranging from several hundred thousand to tens of millions of yuan. The implementation cost and time depend on the scope of implementation (including functions and regions), the number of old systems, the requirements of new systems, the number and experience of data interfaces and consultants. The implementation time usually takes several months to several years, ranging from one or two months to three to five years. There are two aspects in the return of implementing the management system: value increase and cost reduction. The increase of value is reflected in the improvement of data (completeness, accuracy and timeliness), process and decision-making; These aspects are valuable, but most of them are not easy to quantify, except for the cycle of data and reports. For example, after the adoption of the SAP management system, the period for the First Bank of the United States to generate management reports decreased from one month in the past to less than one week. Cost reduction is reflected in direct IT cost reduction and indirect labor cost reduction, of which the former is easier to measure. For example, after the implementation of SAP core banking and management system, the IT cost of DZ Bank in Germany decreased by more than 70%. Because finance is a data-intensive industry, labor cost and IT cost are the two most important costs, and the ROI of financial enterprises implementing standard application systems can be relatively high, and the TCO can be quite low. What are the risks of implementing application system projects? There are five main risks: the project can not be completed on time and according to the budget, the system can not be used, the system can not be used well, the system can not be used well, and the system can not be used (well).

Given the scope of implementation, there is an alternative relationship among project budget, project time and project risk. The smaller the project budget, or the shorter the project time, the greater the project risk. In fact, too little project budget is often the biggest waste. Why? Because: First, the software budget is too small to buy mature standard application software, and even the selected suppliers will soon quit or go bankrupt. Second, the implementation budget is too small, and there are not enough or good consultants, so it is difficult to ensure the control of implementation time and quality. Third, too small a project budget cannot attract enough attention, participation and support from business and management departments (especially the leadership), and necessary change management and supporting measures may be difficult to start and implement.

These are the seven habits of efficient financial informationization! Get rid of all inefficient habits, the only thing left is lead!