ASSIGNMENT-1

MGT - 438

MGT 438

S/07/735

Introduction
Peoples bank of Gampola was established in 1989 with a specific mandate to promote certain major components of rural development. It was established under the peoples bank act no 29 of 1961 by dissolving assets and liabilities of corporative federal bank and commerce operation July 1961. Peoples bank of Gampola is a one of the (state bank) branch of Peoples bank having largest customer base.

Vision of the Peoples Bank To be the best bank in Gampola and bank of the aspiring People who live in coverage area: empowering people to become value creating, competitive and self-reliant. Mission of the Peoples Bank Serve for our Customers Serve for our Owners Serve for our Employees Serve for Society

Under the control of Peoples bank of Gampola, there are 3 sub-branches are operating. They are Gelioya Pawning Centre. Gampola bazar sub-bank. Kurunduwatte sub-branch.

Contact details of Peoples bank of Gampola

Branch Code Address Telephone no Fax E-mail 018 No 05, Gnanasiri Mawatha, Gampola 081-2352350, 081-2352444 081-2352875 gampo018@peoplesbank.lk

Three type of business processes in Peoples bank of Gampola

(3)Management Processes

Customer Request

(1)Core Business Process PProcess

Customer Satisfaction

(2)Support processes

1) Core business processes

Core business can be further divided into 2 parts. They are

Core business processes

Primary processes

Secondary processes

Primary processes
Accepting deposits. Receiving of deposit is one of the primary functions of a commercial bank. Banks usually accept deposits from those people who can save and cannot profitably use their surpluses. There are three types of deposits like: I. Fixed deposit: II. Current deposit: III. Savings Bank deposit: Granting loans and advances. The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts.

The contents of this category are I. Long term loans: II. Short term loans: III. Bank over draft: IV. Discounting bills:

Secondary processes
Issuing letters of credit, travelers cheques, circular notes etc. Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers; Providing customers with facilities of foreign exchange. Transferring money from one place to another; and from one branch to another branch of the bank. Standing guarantee on behalf of its customers, for making payments for purchase of goods, machinery, vehicles etc. Collecting and supplying business information. Issuing demand drafts and pay orders; and Providing reports on the credit worthiness of customers.

2) Supporting Processes
Process of customer relationship management Process of financial management Process of infrastructure management Process of information system management Process of human resource management Process of environmental management Process of security management

3) Management Processes
Planning. Monitoring/Supervising. Organizing the resources in the organization. Motivating. Negotiating Representing.

Peoples bank of Gampola as a system

A system is a set of interacting or interdependent components forming an integrated whole or in simple it is a collection of parts that interact with each other to function as a whole.

Characteristics of a system Comply with the Peoples bank of Gampola

Every system has a pre defined goal or objective towards which it works. As a system, Peoples bank of Gampola also have pre defined long term vision, mission as mentioned above and short term objectives & goals Every system whether it is natural or manmade co-exists with an environment. Its very important for a system to adopt itself to its environment. As a system, Peoples bank of Gampola also responds to the changes of environment, for example because of the increase in elder people in Srilanka as well as in Gampola, they introduced several products for elder peoples such parinatha saving account, 60+ etc. And it also co-exists with environment. Peoples bank should be adopted and react changes occurred in external environment such as political environment, technological environment, demographic environment so on. If else it will fail. Feedback is an important element of a system. Peoples bank of Gampola uses the feedback (from customer) techniques to evaluate their performance. Every firm has defined boundaries within which it operates. Beyond these limits the system has to interact with the other system. The boundary in which Peoples bank operate is determined by parliament acts, for example peoples bank act no 29 of 196, Banking Act No. 30 of 1988, financial act no 05 of 2005, company act no 07 of 2007 etc. It cant operates beyond its limit. But it can render services from other systems if they need, such as IT services, Security services etc. Systems have structure, defined by parts and their composition. Peoples bank of Gampola has its own structure defined by their operational strategic business units as illustrated in the following figure.

Gampola Peoples Bank System

IT SYSTEM
Manager and Operational manager

SECURITY SYSTEM

Inquiry Subsystem

Pawning Subsystem

Cashier Subsystem

IT SYSTEM

Loan Subsystem

ATM & Mobile bankking Subsystem

IT SYSTEM

Systems have behavior, which involves inputs, processing and output of material, energy and information. Peoples bank of Gampola also processing inputs such as HR, IT, management skills, money etc to produce outputs such as satisfaction of customer, profit etc.

Systems have interconnectivity: the various parts of a system have functional as well as structural relationship between each other. As above figure illustrated, we can see the functional relationships between subsystems in the peoples bank of Gampola. So, we can come in to a conclusion that is peoples bank of Gampola is a system. The following diagram illustrates this.

Peoples bank of Gampola as a system

Banking System

Servises

Identifying sub-systems in the Peoples bank of gampola

As the 1st diagram illustrated the sub-systems of the Peoples bank of Gampola can be listed as follows. Pawning sub-system. Its a main sub-system which Obtaining cash advances against customers gold jewelers, gold biscuits or gold coins can often be the quickest and most convenient method for obtaining shortterm finance. To testing the authenticity and value of the gold, Peoples bank of Gampola have sub-subsystems called ureka testing, acid testing techniques. If we input the pawn in both testing equipments, they will give the quality of gold in terms of karate as the output. There are some activities carrying out inside the black box as a closed system. Loan sub-system The loan sub-system following several set of procedures for different kinds of loans. Inside the loan system, there is a sub-system called Risk evaluation system to evaluate the risk of loan. A small team is allocated to do this task. They get information from loan maintenance system as inputs, processing that information (Field work, evaluation etc) and providing some decision making information to chief of the loan system as well as manager. Cashier system Here also we can find some sub-sub-systems such as system for deposits, systems for withdrawals etc. Inquiry system Sub-system for creating new accounts is come under this sub-system. Security system Security alarm sub-sub-system, Walt sub-sub-system are the some systems come under the security system. If we consider the security alarm system, pressure on the alarm switch board consider as the input to the system. There are some processes carried out in the black box of security system and finally give the output to nearest police station as the alarm beep sound. ATM and Mobile banking system. Mobile banking system of the Peoples bank of Gampola, consider portable connected palmtop with portable printer. Both printer & palmtop consider as a separate system. In palmtop the operator give the branch code(018 for Peoples bank of gampola), account code(1001 for current account and 2001 for saving account), account number(10 digit numbers) and the amount that the customer going to deposit or withdraw as input, then some processes are carrying out by palmtop, such as searching, updating, printing etc, to get the printed receipt for withdrawal/deposit as the output. IT system As the 1st diagram shows, IT system is aligned with all other sub-system in the bank in order to provide IT services to all sub-system.

Identifying inputs in the Peoples bank of gampola Inputs are the things which are given to the system in order to get the outcomes. The inputs of the Peoples bank of Gampola can be listed as follows. In general, vision, mission, goals and objectives are the inputs given to the bank system in order to get the customer satisfaction as output.

Banks subsystems Mobile banking & ATM

Inputs to the system Customer details, PIN number, Account number, Operation options (Balance inquiry/ deposit/withdrawal), Labor forces, Physical resources such as computers. Loan request from the customer, Labor forces Customer details, Account details, Operation option (Deposit/ withdrawals), Cash. Jewelry, Gold coins, Gold biscuits, Details of customer, Testing equipments, Computers Communication skills, Labor forces, Photocopy machines, Computers, Request from customer (To open new account/currency details etc) Request from other sub-systems in the bank

Processes

Outputs from the system

Check the validity of PIN Updated accounts no, Check available balance, Update account balances Evaluate the ability to Reject or accept loan repay loan, Record & application. maintain customer details Record data, Update Updated account, cash account, Transfer balance
Evaluate the authenticity and value of the gold, Record and maintain customer data. Opening new accounts, Providing requested details to customer, Providing gifts on targeted balances of minor accounts. Providing IT solutions, advises, IT infrastructures to the bank

Loan system

Cashier system Pawning system

Cash based on the value of gold New accounts, Customer satisfaction, Gifts

Inquiry system

IT system

High performance, High quality in works

SWOT analysis
The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. Its simply illustrated in the following diagram.

Internal conditions of the bank that is fair to them.

Internal conditions of the bank that is not fair to them.

External conditions of the environment that is fair to the bank

External conditions of the environment that is not fair to the bank

SWOT analysis of the existing bank system Strengths

Peoples bank has a widespread global presence, allowing it to spread risk and enjoy economies of scale. The Peoples bank brand is well-established historically and continually promoted. As its a state bank, the reliability preference of people is very high. So, can easily create a strong customer base. New palmtop mobile banking system of the bank. Through this system, bank tries to reach people who cant have enough time to come to the bank. (E+G): Owner managers of small & medium retail shops As it is the 2nd bank established in Gampola, There are some good personnel relationships between bank staffs customers. Bank provide several differentiated, specific products such as sisu udana, Isuru udana, 18+, Vanitha wasana, Parinatha in order to satisfy and attract different kinds of customers.

Weaknesses
Approval of loans is Very slower. Because of the longer traditional procedures to approve the loan, customer may choose another bank. Poor IT capability of the bank compare to the other private banks. The bank operating in an unattractive environment. (e+g) No air conditioner facilities. Poor quality of services in terms of customer services & service time. Focus on quantity of work, rather than quality of bank. Most of the employees are very conventional and poor knowledge in new marketing concepts. Lack of motivations to employees. Employees suddenly and continuously transfer from one area to another place, Employees do the same job for long period, lack of chances for promotions etc.

Opportunities
The Bank is very well placed with a good and assured customer base from the level of the government and the public sector business. Many patriotic Nationals are doing business with Peoples bank PLC.Because they know that the profits of the Bank belong to the people of the country and are used for the countrys development. Since its a government bank, its scope is defined in the bank act as customer service focused rather than profit focus. Therefore their products are attractable and low cost. As it is a government bank formed by the parliament act, long term survival of the bank is ensured by the government. Reputation of the customer regarding Peoples bank is high.

Threats
It is a government owned organization. So, political interference or changes often affect the customers confidence in the Bank. Peoples bank of Gampola may be unable to attract certain customers because it is Government owned and there is the perception that their account information is open to the Government and its agencies. The latest trend of economic environment shows that the considerable economic crisis, which causes to decline the level of real income. Because of this situation the outflow of cash from the bank is become high. So the source to make profit & sources to make investment to bank is low. Technological advances such as online banking, SMS banking. Large number of new entrances to the banking industry as well as to Gampola. Because of this, Peoples bank of Gampola has to face several competitions from them. The Bank is facing huge competition from regional banks that are better equipped and prepared to meet the changing needs of customers. And also have to compete with banks from abroad as a result of globalization.

 There is increased competition from the non-blank financial sector, the credit unions, the savings & loans bank, the building & loans association and the insurance companies. These institutions are not regulated by different laws and hence they are less restricted in their operations. They have been paying very high rates on deposits and have also been offering more and more of the services which were traditionally offered by commercial banks.

How Peoples bank of Gampola can overcome from the Weaknesses and Threats using the concept of MIS

To overcome from weaknesses

Computerize or digitalize the bank. To overcome from slower day to day procedures, Bank can be digitalized. Through this improvement service time to customer can be reduced as well as service quality can be improved. So bank can reach and serve for large number of customer. Provide and establish IT capabilities and form IT department as a separate unit as in Sampath bank. As it is the IT era, to handle IT issues in the bank, it can form IT department as a separate unit. So that, it can improve the IT aspects, IT capabilities, IT infrastructure so on. Through this step, bank can improve its performance. Improve the supportiveness of employees in order to achieve corporate goals of bank with the application of MIS. Supervising employees through the alignment of IT and management. Use some advanced techniques to supervise employees such as camera monitoring systems, digital attendance counting machines and follow the successful management thoughts such as Japanese 5s model to manage HR as well as other aspects. Develop the well known internet and online services. Bank can provide internet banking services such as fund transfer, balance inquiry, standing orders etc.

To overcome from Threats

Bank cant adjust the changes occurred in external environment. So, that they have to adjust the internal capabilities of them to react and survive. Produce innovative products such as online depositing facilities and differentiate the products of bank in terms of reaching different kinds of customers (normal customers, businessman, minors, elders etc). Through this bank can overcome from heavy competitions prevailing currently in the banking industry. Absorb the technological advances in the current world. Mobile banking and internet banking are some examples for technological advances, which should be adopted by bank. Introduce suitable products and services as matched with current economic situations. Bank should produce different products and services in growth period and in recession period of economy.

References www.wikkipediya.com class materials - regarding system concepts, MIS concepts. Text book - Corporate information system - Applegate & Robert D.A(2003) Text book - Management information system 7th edition. - James A.O & George M(2007)