Automation of SACCOs - FSD Kenya

4 • AUTOMATION OF SACCOS: ASSESSMENT OF POTENTIAL SOLUTIONS
The requirements matrix served as the structure supporting the requirements
gathering during the project but it also serves a purpose after the project as
a tool any SACCO can use to make the final evaluation of a system they are
interested in. The requirements matrix, provided as a template in Annex 1,
contains the following:
ID: A unique serial number used to identify the requirement.
Category: Categorisation in three levels. The categories are just used
to organise the requirements and provide an overview of what is
required in each area. The functional categories follow the project team
understanding of the SACCO operating model.
Description: Clarifies and provides further information about the
requirement or examples. Does not introduce additional requirements or
expand the requirement.
Purpose: In order to clarify the requirements the purpose is described.
Commonly as a situation in which the requirement is used. Priority: the
project has not set a limitation in scope. All requirements of relevance
for the system that have been expressed have been included. In order
to practically separate them they are prioritised by the project team as
follows:
• High: The SACCO cannot perform daily and basic tasks without this
requirement. Example: General ledger (GL) module.
• Medium: SACCOs need this requirement to improve business.
Example: Flexibility in creating additional reports.
• Low: This requirement is beneficial for SACCOs but not required to
fulfil short/medium term goals. Example: Multi-currency feature.
Source: The project has derived requirements from SACCOs, by analysing
what the regulatory framework will require and what is required to
achieve best practice. These are listed as sources.
In addition to the functional and technical dimensions we approached the
requirements gathering from five additional directions challenging the
findings:
Best practice: On an operative level what is best practice and what
does the system need to provide to enable the SACCO to close any gap
between current processes and best practice?
Restrictions to change: Is the SACCO able to practically realise the
identified opportunities by implementing and utilising the system fully?
Several factors could be restrictive such as the internal capacity to read,
write and review software code in order to internally administrate the
system, the operational staff’s information technology literacy, what
dependency on IT vendors is acceptable across the need to maintain
the application, are branches sufficiently connected and can any legacy
systems integrate with the new core SACCO solution?
Regulations: We have reviewed available and indicative information
about the regulations in order to understand what explicit and implicit
requirements it places on the SACCO in order to operate legally.
Strategy: Several factors in the marketplace indicate that the SACCOs’
environment and requirements might change drastically in the near
future. Achieving regulatory compliance results in a change journey that
is strategic in itself but we are also conscious of the radical growth rates
some SACCOs have experienced (e.g. 100% growth in members over
three years) and the significant fragmentation of the part of the market
for financial services that the SACCOs operate in (in one municipality with
approximately 39,000 inhabitants, out of which 14,000 live in the urban
area, there were 14-21 institutions offering savings and credit products).
The impact of this change needs to be understood in order to identify a
solution viable in the long term.
Budget: The project team is conscious of the fact that even if a system
or system feature is identified as helpful a SACCO’s profitability might not
be sufficient to acquire it. However, it has been assumed that automation
through increased use of appropriate technology solutions is necessary
sooner or later for all SACCOs and thus have we not developed a detailed
business case to assess the exact monetary value that can be created.
A proper financial evaluation of automation using business case depends on
input such as the detailed impact the automation has on revenue and cost
and the risks associated with the project. In order to decide which system to
chose or which adaptations to make each SACCO is highly recommended to
capture this input and produce a business case tailored to their organisation
and the decision at hand. It might be that, regardless of how well the SACCO
documents and analyses the costs and benefits of automation, the costs
exceed the benefits under all circumstances depending on the fundamental
viability and proficiency of each SACCO.
Disregarding the possibility of any external financing free of charge (grants,
subsidies etc.) we have gathered requirements to understand alternative
options for how to deploy automation solutions to mitigate financial
constraints. These include the option to standardise requirements in order
to pool the acquisition with other SACCOs and the option to outsource.
Outsourcing is commonly referred to as software as a service (SaaS) and
provided by an application service provider.
2.1.3 Sample selection and segmentation
Given the complexity of the topic and the need to have a dialogue to discuss
the issues at hand field visits to SACCOs was decided to be the most suitable
method of collecting information. The alternative would have been a survey
which would have allowed the project to include a larger number of SACCOs if
not all FOSA SACCOs. The survey method was abandoned as the project team
would have limited means of confirming the SACCOs understanding of the
survey questions or to capture any assumptions made.