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Determining Optimum Software Requirements for Improving a Business Process

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The purpose of this document is to specify the optimum requirements for improving a business process eg check processing of a bank For determing the optimum role of Software the Role of all process elements like People Software Computing Hardware NonComputing Hardware Database and Communication network have been identified and assed Based on this assessment optimum role of Software has been determined

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									Assignment – 1 (Process Modeling)

Software Requirements for Improving the Check Processing Operation

Software Engineering Concepts SEN-545

S.M. Saiful Islam ID # 0712004 Program - MSE

September 21, 2007

1. INTRODUCTION............................................................................................................................. 3 1.1 PURPOSE ........................................................................................................................................ 3 1.2 DESCRIPTION OF CLIENT ............................................................................................................... 3 1.3 SCOPE ............................................................................................................................................ 3 2. CURRENT SYSTEM ....................................................................................................................... 3 2.1 FUNCTIOANL CAPABILITY ............................................................................................................. 3 2.2 PROCESS MODEL ........................................................................................................................... 3 2.3 PERFORMANCE PARAMETERS ....................................................................................................... 4 2.4 ROLE OF SYSTEM COMPONENTS ................................................................................................... 5 2.4.1 People .................................................................................................................................... 5 2.4.2 Machine/Tools........................................................................................................................ 5 2.5 RELATIONSHIPS OF COMPONENTS ROLES TO PERFOMANCE PARAMETERS ................................... 6 3. OPTIMUM ROLES FOR SYSTEM COMPONENTS ................................................................. 6 4. EVISIONED SYSTEM..................................................................................................................... 7 4.1 FUNCTIOANL CAPABILITY ............................................................................................................. 7 4.2 NEW PROCESS MODEL .................................................................................................................. 8 4.3 NEW PERFORMANCE PARAMETERS............................................................................................... 8 4.4 NEW ROLE OF SYSTEM COMPONENTS .......................................................................................... 9 4.4.1 People .................................................................................................................................... 9 4.4.2 Machine/Tools........................................................................................................................ 9 4.5 RELATIONSHIPS OF COMPONENTS ROLES TO PERFOMANCE PARAMETERS ................................. 10 5. NEW POLICY, PROCEDURE AND STANDARD .................................................................... 11 6. ROLE OF ENVISIONED SOFTWARE....................................................................................... 11 7. CONCLUSION ............................................................................................................................... 11

1. Introduction
1.1 Purpose
The purpose of this document is to specify the requirements for improving the method of check processing operation of the Chartered bank.

1.2 Description of Client
The Chartered Bank is one of the leading foreign banks operating in Bangladesh. This bank is fully equipped with worlds leading banking software and providing the very high standard services to the clients. The bank has local as well as global network and providing online banking services. As the bank is well equipped with software, it doesn’t really need any more software right now. But, the bank will highly appreciate if any body can come up with any innovative proposals.

1.3 Scope
The study has been conducted in its Banani branch targeting improvement of check processing system of this bank. This document only considers the existing method of check processing (only cash dispensing) of this bank not the core banking system as a whole, and analyzing the existing system identify the requirements for the envisioned system that could improve the present one.

2. Current System
2.1 Functioanl Capability
The concerned functional capability of the bank is to receive a check from the customer and dispense right amount of cash to the customer upon verification of check information, signature and account balance.

2.2 Process Model
A customer deposits a check to the teller to draw the specified amount of cash. Upon receipt the check, after initial verification the teller request for customer and account information typing the account no to his terminal to the core banking system. Then teller verifies check signature (Eye Verification) with the stored signature retrieved from the core banking database. If the teller satisfies with signature and the account balance he then makes the corresponding transaction entry using his terminal. Upon confirmation of the transaction he counts cash using cash counter and dispense to the customer.

Figure 1: Hierarchical view of Current Check Processing System

Detail descriptions of the check processing system relating with performance parameters Time, Quality and Cost has been depicted bellow.
Initial Verification of Check info Purpose Check Input Initially Verified Check Output Account No Input Retrieval of Account Inormation Purpose Account Info: Signature, Balance Output Verification of Signature & Account Balance Check, Account Info: Signature & Balance Input Time : The teller enters account no into his terminal and retrieves account info – signature, account balance from core banking system data base. It takes some time for typing the account no and getting the information. On an average it takes 30 seconds. Quality : Satisfactory. But typing is sometimes error prone. Cost : As here people intervention is required some costs in terms of staff salary involves here. Purpose Check Verified : Amount, Signature Output

Step 1

Performance Time : The teller receives the check and takes some time to verify whether all information has been filled in properly. It takes on an average 20 seconds. Quality: Satisfactory Cost : As this is manual process some cost in terms of staff salary involves here.

Step 2

Performance

Step 3

Performance Time : The teller verifies the check signature and the stored signature with eye. Then checks whether account balance is sufficient. As this is a manual process it takes some time for getting sure about the signature. On an average it takes 40 seconds. Quality : Not satisfactory. As the verification is simply eye verification there is some chances of errors. Cost : As here people intervention is required some costs in terms of staff salary involves here.

Making Account Transaction Check no, amount, date Input Purpose Transaction Confirmed Output Cash Input

Dispensing Cash Purpose Cash Dispensed

Step 4

Performance Time : The teller enters check no, amount and date to the terminal and make transaction. It takes some time make all the entry. It takes on an average 45 seconds. Quality: Satisfactory. But there is chance of making error due to typing. Cost : As this is manual process some cost in terms of staff salary involves here.

Step 5
Performance

Output

Time : The teller counts the cash by cash counter and pay that to the customer. It takes some time for counting the cash. On an average it takes 45 seconds. Quality : Satisfactory. Cost : As here people intervention is required some costs in terms of staff salary involves here.

Figure 2: Basic Structure of Check Processing System

2.3 Performance Parameters
Three performance parameters – Time, Quality and Cost have been taken into consideration and study finds the following result. 1. Stepwise break down of time taken from receiving the check to dispensing the cash. Step-1
Mi n Sec 15 Av g Sec 20 Ma x Sec 35 Mi n Sec 20

Step-2
Av g Sec 30 Ma x Sec 40 Mi n Sec 30

Step-3
Av g Sec 40 Ma x Sec 50 Mi n Sec 35

Step-4
Av g Sec 45 Ma x Sec 60 Mi n Sec 30

Step-5
Av g Sec 45 Ma x Sec 75 Mi n Sec 120

Total
Av g Sec 180 Ma x Sec 260

2. Per check processing cost in terms of Staff Salary Average salary per month per teller = 30,000/Monthly working hour = 22 * 7 = 154 hours Average cost per hour per teller = 192 /No. of checks processed per hour Min 14 Avg 20 Max 30 Cost of processing per check (Taka) Min 6.40 Avg 9.60 Max 13.71

3. Quality – Overall quality is satisfactory though there is chance of making errors.

2.4 Role of System Components
Following roles are played by the existing system components. 2.4.1 People A Teller is a man/woman who is a staff of the bank plays the following roles: Receive the check and conducts initial verification - checking whether required information filled in like Date, Signature, Amount, etc.; checks whether there is any overwriting. Request account information (signature, available balance) by typing account number to his terminal/work station. Verifies the check signature by eye with stored signature and checks the available balance. Make transaction entry to the system by typing check no, check data and check amount. Counts cash by cash counter and dispense the cash to the customer 2.4.2 Machine/Tools

2.4.2.1 Software
Provides interface to teller to communicate with main system – input account no and request for information. Process the client request (teller’s request) and provides account information to the teller Process the account transactions and auto update of balance Manages and controls all banking operations

2.4.2.2 Database
Stores general account information – customer info, signature, etc. Stores all transaction data – transaction history, account balance

2.4.2.3 Hardware
2.4.2.3.1 Computing Database Server Computer – Runs database system Application Server Computer – Runs main banking software. Workstation /Terminal Computer- Runs client software for teller.

2.4.2.3.2 Non-Computing Cash Counter Stamp Pen, etc.

2.4.2.4 Communication Network
There is LAN within office premises for data transfer and communication with the servers and workstations. There is distributed communication network (MAN/WAN) across the branches and central banking system.

2.5 Relationships of components roles to Perfomance Parameters
Following table shows the relationships of component roles to the performance parameters (PP). Only time has been considered here. Breakdown of time other than people has been assumed not the exact ones.
People Software Hardware Database Communication Network Role Initial Check Verification Request Account Info PP Time : 20 sec Time : 20 sec Process request retrieve A/C info Time : 4 sec Take A/C no as input and display info Time: 2 sec Search and Load A/C info Time: 2 sec Communicate request data (account no) and result data (account info ) over network Time: 2 sec Role PP Role PP Role PP Role PP

Signature Verification Making Transaction

Time: 40 sec Time: 25 sec Process transaction request, update A/C balance Time : 10 sec Take check info as input and display confirmation message Cash counting Time : 14 sec Time: 3 sec Store transaction info Time: 5 sec Communicate transaction data and confirmation message over network Time: 2 sec

Cash counting & Dispense Total

Time: 20 sec Time: 125 sec

Time: 25 sec Time : 30 sec Time: 7 sec
Time: 4 sec

3. Optimum Roles for System components
Different roles for check processing system have identified and discussed earlier. Following tables identifies the optimum roles for the system components focusing on the time, cost and quality

performance parameters. Notations : √ - in current system plays role X - in current system doesn’t play role † - in optimized system plays role ^ - in optimized system doesn’t play role Roles Initial Verification Request Account Info / Input check information to the system People Software Hardware Database Comm. Comment Network √ † √ † X ^ √ † X ^ √ † X ^ √ † X ^ √ † The current system of initial check verification is optimized for the people. The current system is not optimized. Here manual entry and both way data communication need to be eliminated. New hardware scanner need to inroduce to scan check and capability of sowftware need to increase to recognize check info. The current system is not optimized as manual verification is done. In optimized system this role would be played by software. The current system is not optimized. Here manual entry and both way data communication need to be reduced. In optimized system people intervention has been eliminated. Here software will play the main role. The current system is optimized. Here peoples intervention is required.

Verification of Signature

√ ^

X †

X ^

X ^

X ^

Making Transaction/ Input check information to the system

√ ^

√ †

√ †

√ †

√ †

Cash Counting and Dispensing

√ †

X ^

√ †

X ^

X ^

4. Evisioned System
4.1 Functioanl Capability
In the envisioned system existing functional capability of the bank to receive a check from the

customer and dispense right amount of cash to the customer upon verification of check information, signature and account balance would be same but its performance would be significantly improved in terms of Time, Quality and Cost.

4.2 New Process Model
A customer deposits a check to the teller to draw the specified amount of cash. Upon receipt the check, after initial verification the teller request the system to make transaction upon verification of check info scanning the check through a scanner machine. The system identifies the check info from the scan and upon verification makes transaction. Upon confirmation of the transaction the teller counts cash using cash counter and dispense cash to the customer.
Envisioned Check Processing System

Step 1 Initial Verification of Check Info

Step 2 Scanning of Check

Step 3 Dispense of Cash

Figure 3: Hierarchical view of Envisioned Check Processing System Detail descriptions of the check processing system relating with performance parameters Time, Quality and Cost has been depicted bellow.
Initial Verification of Check info Purpose Check Input Initially Verified Check Output Initially Verified Check Input Scanning of Check Purpose Transaction Confirmed Output Cash Input Time : The teller scans the check. It sends check scan info to the banking system. The system will recognize the check info, verify signature and account balance and make transactions. On an average it takes 35 seconds. Quality : Satisfactory. Cost : As here people intervention is nominal so the cost would be also nominal. Dispensing Cash Purpose Cash Dispensed

Step 1

Performance Time : The teller receives the check and takes some time to verify whether all information has been filled in properly. It takes on an average 20 seconds. Quality: Satisfactory Cost : As this is manual process some cost in terms of staff salary involves here.

Step 2

Performance

Step 3
Performance

Output

Time : The teller counts the cash by cash counter and pay that to the customer. It takes some time for counting the cash. On an average it takes 45 seconds. Quality : Satisfactory. Cost : As here people intervention is required some costs in terms of staff salary involves here.

Figure 4: Basic Structure of Envisioned Check Processing System

4.3 New Performance Parameters
Three performance parameters – Time, Quality and Cost have been taken into consideration and the following targets have been set.

1. Stepwise break down of time taken from receiving the check to dispensing the cash. Step-1
Min Sec 15 Avg Sec 20 Max Sec 35 Min Sec 20

Step-2
Avg Sec 35 Max Sec 40 Min Sec 30

Step-3
Avg Sec 45 Max Sec 75 Min Sec 65

Total
Avg Sec 100 Max Sec 150

2. Per check processing cost in terms of Staff Salary Average salary per month per teller = 30,000/Monthly working hour = 22 * 7 = 154 hours Average cost per hour per teller = 192 /No. of checks processed per hour Min 24 Avg 36 Max 55 Cost of processing per check (Taka) Min 3.50 Avg 5.30 Max 8.00

3. Quality – Overall quality would be excellent.

4.4 New Role of System Components
Following roles are played by the system components. 4.4.1 People A Teller is a man/woman who is a staff of the bank plays the following roles: Receive the check and conducting the initial verification - checking whether required information filled in like Date, Signature, Amount, etc.; check whether is there any overwriting. Request the account transaction through scanning the check. Counts cash by cash counter and dispense the cash to the customer 4.4.2 Machine/Tools

4.4.2.1 Software
Processes the check-scan and recognizes check information – account no, check no, check date, check amount and signature. Verifies the check info with stored info – signature, amount. Processes the account transactions and auto update of balance Manages and controls all banking operations

4.4.2.2 Database
Stores general account information – customer info, signature, etc. Stores check scan Stores all transaction data – transaction history, account balance

4.4.2.3 Hardware
4.4.2.3.1 Computing Database Server Computer – Runs database system Application Server Computer – Runs main banking software. Workstation /Terminal Computer- Runs client software for teller. Scanner – Scans the check and sends data to the main banking software via workstation. 4.4.2.3.2 Non-Computing Cash Counter Stamp, Pen, etc.

4.4.2.4 Communication Network
Same as existing one. There is LAN within office premises to communicate with the servers and workstations. There is distributed communication network (MAN/WAN) across the branches and central banking system.

4.5 Relationships of components roles to Perfomance Parameters
Following table shows the relationships of roles to the performance parameters. Only time has been considered here.
People Role Initial Check Verification Scan the Check PP Time : 20 sec Time : 5 sec Recognize scan info Signature Verification Process transaction, update A/C balance Cash counting & Dispense Total Time : 20 sec Time : 3 sec Time : 2 sec Time : 10 sec Display confirmation message Cash counting Time: 1 sec Store transaction info Time: 5 sec Communicate data over network Time: 1 sec Scan the check Time: 5 sec Store the Scan Time: 2 sec Communicate data over network Time: 2 sec Role Software PP Role Hardware PP Role Database PP Comm. Network Role PP

Time: 24 sec

Time: 45 sec

Time: 15 sec

Time : 30 sec

Time: 7 sec

Time: 3 sec

5. New Policy, Procedure and Standard
To implement the new check processessing system new policy needs to be formulated . The policy would be taken to redisign the coventional check. The current procedure might need to be adjusted to adapt the new system. The role of the pople would be changed. New standards need to be set to redesin the check to facilitate efficient and accurate reading by the scanning system.

6. Role of Envisioned Software
The bank has already the core banking software. But they don’t have any check scanning and check information processing system. That’s why new software will be required which will work with the help and co-ordination of the core system. • • • The envisioned software will work with the check scan. From scan, it will recognize all the check information – account number, check date, customer signature and check authenticity. Then it will retrieve customer signature from customer database using core banking system and will match both the signature. If the signature is okay, then it gets available balance from the core system. If the balance is sufficient then it commits the transaction and generates the confirmation message.

The software will play the key role to develop the envisioned check processing system. This will definitely improve the quality of the service. The waiting time for the customer in the bank office will be significantly reduced as the teller’s efficiency and productivity will be increased greatly. In turn, the operating cost will be significantly reduced and this will add great business value which will ultimately increase the profitability and competitiveness highly.

7. Conclusion
The check processing system is the part of the big banking system. The system has been thought of from very high level view. And this system is highly dependent on other subsystem. If all other systems work as expected, then the envisioned system will benefit a lot and will produce the desired business value.


								
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