Providian Trust: Tradition And Technology (A)

Providian Trust: Tradition and Technology (A)

Principles of Information Systems GIST 500

Dr Goel

CASE SUMMARY

Providian Trust was a major trust company that provided financial and fiduciary services. Its principal source of revenue came from which include residential and commercial mortgages, and consumer and corporate loans. Michael LeBlanc, the Senior Vice President of Trust, Investment and Treasury, led the project aimed at reengineering Providian Trust's business processes by implementing a major software system called Access plus- an asset management system developed by Select One. . LeBlanc believed that the implementation of access plus would give management the power to control client's accounts and improve the operations in both the front and back offices. The project was to last for 20 months and cost $18 million. Several committees were set up to implement and plan the project. LeBlanc had a keen knowledge in the trust market but lacked any IT project management experience, so he asked Todd Benari - the Vice President of Trust operations to head the project team. Even though Providian trust had two IT departments with a team of 270 IT personnel, only the 10 of the 30 personnel in the Trust Operations department were included in the project team. While the project was fraught with good intentions and planning like the revision of the business processes to use technology as an enabling mechanism, centralization and consolidation of administration of trust information, other areas did not go so well.

ANALYSIS OF THE CASE

Based on the facts presented in the case, it may be assumed that while LeBlanc wanted to convert the trust division's information system into a more an efficient one the ultimate result of this project would have been a reengineering of the division's business processes. While the old system allowed agents to be personally involved in customer accounts the proposed new system operations people would be assuming the duties of the trusts officers. According to some studies, on average approximately 70% of reengineering projects fail. This high failure rate is often due to poor planning and the lack of preparation for negative employee reactions. It is therefore likely that Providian Trust will also fall within that 70% bracket based on the poor planning and implementation of the project, the lack of proper leadership and the negative responses displayed by the employees.

Poor Planning and Implementation

From the beginning the project was plagued with problems which stemmed from poor planning and implementation methods.

Dictating Unrealistic Project Deadlines - According to some experts projects often fail due to unrealistic deadlines. This is occurs when the project manager does not effectively break down the project into manageable sections with reasonable milestone dates. It also occurs when too much change is expected in too short a time frame. In the case, Providian was under pressure to match the technical level of its competitors within a year. However, the scope of the project involved changing the processes of a network that involved over 216 branches and was budgeted at $18 million. While a skilled project manager would have been able to do this, the head of the project had no prior experience with undertaking a project of this scope, thus making the time frame unrealistic. Also, as time passed, the pressure to maintain the initial deadline increased resulting in the project committee's decision to drive the project through with little user feedback. The acceleration in the implementation process also resulted in little to no testing taking place to determine whether or not the current employees could work and/or learn the new system. This may have presumably caused problems in the long run as most of the Trust employees who worked with customers knew little about computers.

Failing to Break Projects Into Chunks - As stated before, poor timeline planning is often the result of not breaking down the project into small enough segments. Companies try to rush the implementing process for integrating technology into their business process often fail for this reason. Providian's project team, in its inexperience at undertaking projects, failed to effectively break the project down into small segments.

Lack of Proper Testing - The Simulation Work Environment (SWE) was initially planned to be a live user test (using trust officers) to gauge the effectiveness of the new tool and its corresponding changes in the business processes. The test was also supposed to provide data on the system and its key controls. However, in their efforts to keep the initial deadline SWE never took place as Le Blanc felt uncomfortable with testing the system live with users who were notoriously technologically disadvantaged. Instead the test was done at only 10% capacity so a full load was not tested. Without proper testing it is difficult for any project manger to truly gauge any potential problems that may arise when a new system is fully implemented. One key area of concern in the Providian case was the fact that the division's staff had so little experience with technology. Coupled with the lack of testing there was no way for the project team to know what sort of training needed to be developed to prepare the employees for the change over.

Risk Assessment Poorly Done- In developing a comprehensive implementation plan for a project every effort must be made to anticipate all outcomes and potential risks. It usually is the unanticipated events that make or break a project. In the Providian case such events included the committee disbanding and a key person in the implementation process leaving for a new job. Assessing such potential risks prior to beginning of the project would have permitted the committee to devise alternative plans of actions if/when such events occur and thus minimize an upset in the work flow. It also decreases the likelihood of developing poorly thought out, last minute plans and the risk of a project falling apart. In Providian's case the risk assessment was not properly done and therefore the risk factors were not considered when the budget and timeline of the project was developed as such when the worse case scenarios did take place key processes such as testing were altered and shortened to absorb the loss in time and revenue.

Lack of Proper Leadership

Another reason many projects fail is due to a lack proper leadership. One issue mentioned in the case was the fact that many of the project teams felt they were getting their directives from to many

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