The field study: 2006

Abstract

This report documents the findings and recommendations of a field study, which was conducted as part of a post implementation evaluation of a project at Stanbic Bank Botswana.The project titled "Botswana Transactability Project" entailed the introduction of VISA debit and credit cards as well supporting infrastructure and systems for the use of both VISA and MasterCard products. As the project had already been implemented during the 2005 financial year, our study was a post implementation evaluation.The project management theories of Graham & Englund (2004) and Bolles (2002) were used as the main guidelines for the evaluation of the project. Stanbic Bank Botswana, is a fully owned subsidiary of Standard Bank (South Africa) and falls under the Stanbic Africa Division. Stanbic entered the banking market in Botswana in 1992. At that stage the three main banks in Botswana were Barclays Bank, Standard Chartered Bank and First National Bank. Stanbic used a niche market entry strategy by concentrated on serving only the corporate client market. However, in 2000 the company decided to expand its business to serve the retail banking market as well. By that time Stanbic Botswana had established a branch network of 8 branches throughout the country, which had already been electronically networked. Right from the start Stanbic found itself in catch up mode. It was a new bank competing against three major players who had well-established brands and branch networks. Furthermore, competition in Botswana was very stiff due to its fairly small population of around 1,5 million people dispersed over a vast country. Nevertheless, the bank developed a reputation for providing excellent service and was able to slowly gain market share and brand recognition. Its reputation for excellent service was one of the motivating forces behind corporate clients requests for the bank to venture into the retail banking market. Soon its three main competitors installed automatic teller machines (ATM's) and Stanbic was forced to follow suite. The bank responded by installing 6 teller machines throughout the country. The introduction of the ATM's increased convenience for the bank and its clients as it reduced queues in the banks and gave customers greater access to their money. However, just as Stanbic thought they had levelled the playing field by also introducing ATM's, the other three banks embarked on new projects to offer their customers' greater flexibility and increased access to money both locally and internationally. All three main competitors had linked their ATM's to the VISA/ MasterCard network and began offering their clients debit and credit cards. Stanbic found itself in a huge disadvantage for various reasons related specifically to their ATM's: • Stanbic ATM's were not linked to the VISA/MasterCard network, • The bank did not have debit or credit card products, • The bank had only 6 ATM's, dispersed throughout the country. This meant that their clients had comparatively limited access to their money, which resulted in clients withdrawing large sums of money at a time, thus quickly depleting their accounts, • Stanbic clients could only access their money within Botswana and only in towns where Stanbic specific ATM's were located (only 6), while their competitors clients could access their money 24 hours a day anywhere in the world from any VISA or MasterCard linked ATM or at any merchant with a point of sale (POS) facility, and • Stanbic was also losing out on lucrative additional income streams that could have been realised had their machines been linked to the VISA/MasterCard network. These included among others increased income from their own clients leaving their cash in their accounts for longer periods; from the increased activity from their own clients; from their own clients using other banks ATM's; from their own clients accessing their funds internationally (international charges are much higher than local charges) and from clients of other banks using Stanbic ATM's. Stanbic's lack of competing products placed a huge strain on the banks ability to attract and retain clients as well as realise additional income streams. Once again Stanbic found itself in catch up mode and acknowledged that it could not afford to ignore the fact that they had to take action. However, Stanbic was slow on reacting, and it was only in 2003, which was almost three years after its competitors launched their products, that Stanbic began working on introducing competing products. The slow reaction by Stanbic could be attributed to the group structure of the bank. Being part of the Africa division it appeared as if the bank's group head office in South Africa waited until there was a need for similar products in most of the other 17 countries making up the Stanbic Africa Division, before deciding to launch what was called the Transactability Project. The Transactability Project was launched to introduce debit and credit card offerings to Stanbic Africa clients, to link the Stanbic Africa ATM's to the VISA/MasterCard network as well as offer Stanbic clients the convenience of transacting at merchants with VISA/MasterCard linked POS terminals. The project also included the introduction of pin authorisation for POS transactions, which was a security feature not provided by competitors. Stanbic Africa management made a decision that the introduction of these products to 12 of the 17 Stanbic Africa banks be handled as one project. This field study focuses mainly on the project in relation to Stanbic Botswana. Our data was collected through inteiviews with the project manager in Botswana as well as the project manager from the group project office in South Africa. Both managers provided us with various company and project specific documentation, which was used in our analysis and evaluation. In the sections that follow we will give a brief background to the company and the project. Thereatter we will briefly discuss how projects are managed within the Stanbic Africa division and at Stanbic Botswana. Finally we will highlight the major findings of our analysis, before providing a brief conclusion. Standard Bank's group project office is based in Johannesburg, South Africa and is responsible for all projects for the group. The Stanbic Africa project office forms part of the group project function. In most instances, projects originate and are implemented by the group project office first in South Africa. A pool of tried and tested projects is then made available to the banks in the rest of Africa for implementation as and when the need arises. There are certain exceptions as would be the case when a project has relevance only in a specific country. Nevertheless, the group project office will still be involved in the project. The management of projects at Stanbic Africa is tackled in two distinct phases. The first phase, which covers the project solution development, is centralized at the group project office in Johannesburg while the second phase, project implementation, is decentralized within the specific country. Each phase has its own project team and project manager. However, the Stanbic Africa project manager from the solution development project team also serves as the overall project manager for both phases and acts as the main link between both teams. The group project team also provides support services to the country project team. The solution development phase culminated in the development of a project budget and schedule. The project schedule was then passed onto the in country project team for implementation. Budget control for the project was centralised at the group project office. Our review of the project management practices and procedures at Stanbic Africa revealed that project management is a high priority function at Standard Bank. Standard Bank makes use of highly detailed and comprehensive project management tools that generally adhere to project management theory. The sequence of events from project idea to implementation and evaluation are as follows. The group Customer Strategy Unit arranges for new ideas to be researched to confirm the need; a business case document, which motivates the project, is then prepared for the solution/s; once the business case proposal is accepted the solution development phase is started which culminates in the preparation of a project budget and a project schedule.

The customer (in the case of the Transactability Project it was the executive management of each affected Stanbic Africa branch) had to sign off each stage before the next stage could progress. The business case definition serves to motivate the project and includes among other issues the strategic alignment of the project. The solution development phase follows a comprehensive process, which Standard Bank calls the 'Blue Process'. The Blue Process is a detailed plan for project development that directs the project team so that all aspects of the project are taken into account and planned for. The project manager (in- country project manager) and implementation project team in Botswana were not involved in the first phase of the project. Once the project schedule was finalised, the project was launched to staff at the Botswana operation and handed over to the in-country project manager. The in-country project manager then assembled a project team of local staff, who were responsible for implementing the project. Although project management is quite advanced at the Standard Bank group level, the same cannot be said for the Stanbic Botswana operation. Project management is still in its infancy in Botswana. The Stanbic Botswana project office has only a project manager, who was employed about two years ago. The implementation team in Botswana was composed of a fulltime project manager while all other team members were seconded from the affected departments, while still being held responsible for departmental responsibilities. Implementation of the Botswana Transactability Project eventually started at the end of January 2005. Although the implementation team did accomplish most of their objectives, the project did experience some setbacks. The implementation phase took 203 days compared to the planned 98 days and the project budget was significantly exceeded. The delays and budget overspends were due to various factors, however, the most significant factors was the inclusion of unplanned activities during the course of the implementation phase as well as project team members being taken off the project to handle departmental responsibilities.

A major setback for the project was the decision to eventually abort the pin authorisation feature at POS terminals. After the project went live to the public, problems with the PIN authorisation system surfaced. Customers' transactions were being declined at the POS terminals even though they were using the correct PIN's. This was embarrassing for both customers and the bank and also a huge customer service issue. Attempts to rectify the problem failed. In the end, the bank realised that the VISA network did not support PIN authorisation. A decision was taken to disable the feature. As mentioned earlier, the group found the level of project management at Standard Bank to be of a high standard. However, our analysis identified some areas in Stanbic Africa's approach to project management that requires attention: • The Stanbic group project office handled the total project development and budget development and control. The in-country project manager and project team were not involved in nor had much knowledge of the project budget. Hence budget control was not high on the in-country's priority list. The in-country project manager could not provide our team with any information about the project budget. The in-country project manager and team were also not involved in the project development phase. This approach of excluding critical players in the early stages of a project does not necessarily promote commitment to the project by the parties left out. It also allows for the excluded parties to deflect accountability when necessary, as they can claim that they did not put the plan together. We recommend that at least the in-country project manager be included in the solution development phase of the project. • Still on the topic of involving country project staff on the early stages we are of the opinion that the in-country project manager should have been allowed to work alongside the Stanbic Africa project manager right from the beginning of the project. Although the in-country project manager may be the most qualified and experienced person in project management at Stanbic Botswana, she still lacks sufficient experience and should therefore be developed to become a fully-fledged project manager. Her experience is usually limited to implementing projects. She requires exposure to the early stages, of a project and working alongside the Stanbic Africa project manager would provide this opportunity. • Expenses were incurred as and when necessary and accumulated at the group project office without much control or feedback on progress against budget. It was only at the end of the project that costs were totalled and allocated to the individual countries. The method of allocation was based on the customer base and number of ATM's per country. This arbitrary method of cost allocation could end up benefiting some countries while at the same time being unfair to certain other countries. This method also does not motivate project teams to be cost conscious. In the case of the Transactabllity Project certain final costs ended up being three times the budgeted costs (appox. R12 million versus an actual budget of R4, 5 million). Our recommendation is for the implementation project teams to be involved in controlling their own budgets, thus promoting accountability and better cost management. Overall, our study group are of the opinion that Standard Bank has a wellstructured and comprehensive approach to project management that is fairly well aligned to project management theory. The recommendations made in this report will assist the company in improving an already well-managed project management effort.