Automation of SACCOs - FSD Kenya

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2 • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS The objective of this study differs from the assessments that are currently available: by focusing on the impact that forthcoming regulations have on selection of a viable solution; by providing advice on how to automate a SACCO that is applicable across the industry; by providing an current list of viable solution vendors; by analysing the strengths and weaknesses of the solutions in detail as well as examining some of the solutions in a live setting; and by assessing potential challenges to implementation. 1.4 orGAnISATIon oF rEPorT The present report is organised as follows. Chapter 2 gives an overview of the methodology applied during this project. It provides information on the approach chosen by the project team with regard to requirements gathering and solution assessment. While section 2.1 explains how the project team went about requirements gathering, the selection of the sample SACCOs, and the procedure followed during the site visits, section 2.2 provides details on the project team’s approach to soliciting information about available solutions, short-listing selected vendors, and finally attending demonstrations of their products. Chapter 3 explains the project team’s understanding of the anticipated regulations. It analyses the regulations’ impact on SACCOs and details how they need to change their operations in order to comply with upcoming regulations and the role that information technology plays in that process, i.e. which requirements on a system arise due to the regulatory framework. Chapter 4 presents the field visits’ findings, divided into three sections. Section 4.1 describes experiences the project team gained with regards to specific conditions of the SACCOs that are very important to understand as they have a direct bearing on the probability of a successful system acquisition, implementation, and operation. Section 4.2 describes the actual outcome of the requirements gathering phase: approximately 190 functional and technical requirements stretching across the SACCO operating model. Finally, section 4.3 lists several opportunities for business process improvement that the project team identified in addition to the observations and specific system requirements. Chapter 5 presents the outcome of assessing available automation solutions. Sections 5.1 and 5.2 present how the project team short-listed the six vendors to be invited for the final round of screening while section 5.3 describes the findings made during the software demonstrations held by the vendors. In detail, the latter section lists minimum requirements on viable solutions, observed common weaknesses of the screened systems, and noticed strengths as well as weaknesses of the individual solutions. Chapter 6 presents the project team’s recommendations, based on the findings and their analysis. Section 6.1 describes a number of issues every SACCO needs to consider when implementing a new system in order to be able to fully benefit from the implementation. Section 6.2 lists the potential strategic options a SACCO has and analyses their particular strengths and weaknesses in the given context. It also evaluates the six screened solutions with regard to fulfilment of requirements, cost, and application maintenance and makes a corresponding recommendation. Finally, section 6.3 provides SACCOs with an overview of the necessary steps towards automation. Section 7 concludes.
Chapter 2 projeCt methoDology 2.1 rEQuIrEMEnTS GATHErInG AnD BuSInESS AnALYSIS 2.1.1 Approach The project has taken a fundamental approach to identifying automation solutions by understanding requirements as captured from visits to a sample of SACCOs. This is logical given the notion that technology is an enabler facilitating a sustainable, competitive and regulatory compliant SACCO operating model. If strategy and operative needs are neglected the risk is that SACCOs will increasingly be required to adapt their business models to the structure and capability of the automation solution and vendor rather than vice versa. Even though no known vendor offers solutions built purposely for a specific type of SACCO the project team is cautious of that there are significantly different operating models across the Kenyan SACCO industry. This emphasised the benefit of a fundamental approach as it allowed team to identify which those models are and what these SACCOs should consider when selecting a system. 2.1.2 Scope and categorisation The scope of the study has been fully comprehensive. Technology solutions have been regarded as an opportunity across the SACCO operating model, organisational and hierarchical boundaries including all applicable departments and the products and services they offer to the customer, the regulator, suppliers and internally have been included. The study covers how the system is and would be used by senior and junior staff across FOSA, BOSA, accounting and finance, human resources, internal audit and marketing. One reason for this approach is that even though this project was initiated to support SACCOs to specifically overcome the challenges implied in complying with regulations the solutions will need to support the SACCOs for several years. Additionally the SACCOs are unlikely to benefit from using several systems. Consequently the solutions need to be comprehensive considering current and future requirements. We have gathered requirements organised in ten categories, five functional and five technical: 1. Functional - FOSA 1.1. Teller operations 1.2. Deposit Processing 1.3. Insurance 1.4. Reporting 1.5. Customer data management 1.6. Customer Service 1.7. General 2. Functional - BOSA 2.1. Share and dividend processing 2.2. Lending AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS • 3 2.3. Reporting 2.4. Customer data management 2.5. Credit 2.6. Collections 3. Functional - Accounting 3.1. General accounting 3.2. Expense Management 3.3. Product Costing 3.4. Payroll 3.5. Reporting 4. Functional - Finance 4.1. Planning 4.2. Treasury and cash management 4.3. Tax 4.4. Reporting 5. Functional - Risk management 5.1. Financial Risk management 5.2. Non-financial Risk management 6. Technical - Application 6.1. General 6.2. Flexibility and Scalability 6.3. Performance 6.4. Usability 7. Technical - Data 7.1. Interfaces 7.2. Data 8. Technical - Security and Control 8.1. Access Authorisation 8.2. Audit Trail and Logging 9. Technical - Environment 9.1. Technology 9.2. Operations 9.3. Backup and recovery 10. Technical - Documentation and Support 10.1. Documentation 10.2. Training 10.3. Support 10.4. Maintenance
Page 1 and 2: AutomAtion oF SACCoS ASSeSSment oF
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Customer data management All detail
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noteS AUTOMATION OF SACCOS: ASSESSM
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FSD Kenya Financial Sector Deepenin
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