This study is based on analysis of IT related 129 tenders, RFP, RFI, EOI issued during between 1st January 2003 and 31st December 2003, by the Indian Financial Sector. This study provide fascinating insights on guidelines for procurement, stages in procurement process, types of tenders being floated, operational areas being computerized and the type of work being outsourced by the banks, FIs & insurance companies. Study has identified the requirements brought out by the banks/FIs into 16 broad areas. ...
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Edition: May 2004
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Preview of special study of IT Procurement in the Financial Sector
This is a must read for the senior professionals of the financial sector and service providers (IT/BPO/ITES companies). Consultants, marketing professionals, academicians and research companies will find this study of immense help in understanding the complexities of procurement, tender activities in the financial sector.
IT procurement unlike procurement of other materials, requires certain skills of selection, and entails huge costs, which could have effects on the future profile of transactions. Transparency practices require that the practices of IT procurement are the best and are subject to accountability. Tendering process help procure best of technologies at reasonable cost.
This study has been conducted to know the procurement practices that have been adopted by banks and other financial institutions in India. This study provide fascinating insights on
guidelines for procurement, stages in procurement process, types of tenders being floated, operational areas being computerized and the type of work being outsourced by the banks, FIs & insurance companies.
Study has identified and segregated the requirements brought out by the banks/FIs into 16 broad areas. Study reveal an increasing preference by banks and other financial bodies to outsource some of their technology related work.
It also covers in detail the International norms for tendering process, with special reference to World Bank's Two-Stage Bidding.
A total of 129 tenders, RFP, RFI, EOI issued during between 1st January 2003 and 31st December 2003, by the Indian Financial Sector were analyzed. CTO's/Senior IT professionals from 45 financial organizations were asked about procurement process for IT related products and services. Banknet India research team also studied practices & guidelines of major organisations regulatory authorities worldwide.
1. In India there is no central law or defined guidelines for public bodies to follow for their procurement. However to bring about greater transparency in the procurement and tendering processes, Central Vigilance Commission (CVC) has brought out some Guidelines.
2. With large-scale recruitment of senior IT professionals, dependence on outside professionals and consultancy organizations is expected to reduce in the financial sector.
3. The Indian commercial banks and other financial bodies normally follow a 3-stage procurement process.
4. The Top choice of financial sector for their IT procurement requirements is through Expression of Interest. RFI/RFP were preferred for 23% of the total requirements.
5. The percentage of closed tenders was only 11% reflecting the shift of public sector organizations to move towards a more transparent system.
6. Public Sector banks accounted for 68% of the total tenders brought out. It is important to mention that Private sector banks do not advertise procurement/tender related information.
7. An increasing preference by banks and other financial bodies to outsource their technology related work, resulted in 28% of the total tenders being floated for the outsourcing related requirements.
CONTENT OF THE STUDY
(I) EXECUTIVE SUMMARY
(II) KEY FINDINGS
(III) WHY TENDERING PROCESS
(IV) PROCUREMENT & TENDERING PROCESS: A GLOBAL PERSPECTIVE
1 Open Tendering
2. Two-stage Tendering
3. Restricted Tendering
4. Request for Proposals
5. Request for Quotations
6. Single-source Procurement
7. World Bank's Two-Stage Bidding
(V) FINDINGS OF BANKNET INDIA'S STUDY
1. Guidelines For IT Procurement
2. In-house Technology Expertise
3. Stages in IT Procurement Process
4. Methods of Procurement
5. Operational areas in demand
6. Most Transparent organizations
7. Major Players in the Financial sector (other than banks)
8. Most Pro-active banks
9. Active Period for IT Procurement
10. Outsourcing of requirements
11. Type of work being outsourced