How PDCC Bank cut its IT costs

Pune District Central Cooperative Bank has seen a significant decrease in its operational costs after deploying a Microsoft stack on x86 hardware, writes Nivedan Prakash

Subsequent to tier I banks, which have clearly taken the lead in adopting technology to support their businesses, smaller banks are now turning to technology in order to optimize resources and improve service rendered to the end customer.

Spurred by the overall improvement of banking infrastructure and increased competition, banks see business intelligence (BI) and data warehousing (DW) solutions as a necessity. These systems assist banks in complying with regulations and they are robust to boot.

After tier 1 and MNC banks took the lead in leveraging technology to support business, tier II banks are following in their footsteps. Specifically, after the RBI mandated IT infrastructure setups for all banks, it is the turn of smaller banks to ride the next wave of technology adoption.

Banking challenges

Pune District Central Cooperative (PDCC) Bank claims to be the third largest district cooperative bank in India. The bank was looking at a centralized CBS solution for its 246 branches. It already had Oracle licenses for existing branch automation for 10 years and had invested heavily in training and licenses.

PDCC Bank had always assumed that the combination of Oracle and Linux would cost it less than the alternative. However, in the long run, PDCC found the reality to be quite different. It was then that the bank started to look for an alternative solution.

Sameer Dhamdhere, Officer - IT, Pune District Central Cooperative Bank, said, “The primary issues faced by PDCCB were high costs, lack of strong IT skills among the bank staff, comfort with existing platforms, support issues in remote branches and the requirement for a high speed deployment to meet government deadlines for computerization.”

“With a vast footprint spread across 246 branches, managing a huge fleet of this type with underequipped systems was becoming a challenge for our bank. Enormous manpower costs and operational costs were the top IT priorities. Lack of relevant, up-to-date information was undermining the efficiency of the bank along with huge overheads and real estate costs,” added Dhamdhere.

The bank’s management was constrained by budgets but wanted a best-in-class solution which would be easy to use, would optimize existing investments in IT, and enable the bank’s staff to be productive without a steep learning curve and assist in deployment at remote branches.

The implementation

Microsoft stepped in to offer PDCC Bank a complete integrated stack. A PoC on Windows, SharePoint and SQL Server was prepared. This convinced the bank that Microsoft’s price/performance was unbeatable. It decided to go ahead and deploy SQL Server and Windows Server (with in-built virtualization).

End benefits

After the deployment of the Microsoft solution, the bank has been able to save $1.44 million.

Data Centre OS: PDCC Bank had deployed 14 4-CPU servers running RHEL Advanced Server and leveraging RHEL virtualization. Using Windows Server’s in-built virtualization capability, it was able to reduce the number of software licenses required from 56 to 14.

Database: By deploying 8 quad core Xeon servers, the bank was able to reduce from 24 Oracle licenses to 8 SQL Server licenses, thereby reducing the overall database TCO. The deployment of Xeon servers also helped the bank reduce the hardware Bill of Materials (BOM) to 40% of the earlier pSeries BOM. With a much lower cost and BI, DW, OLAP built into SQL Server, the value proposition was irresistible for the bank.

“The bank was able to save 60% on hardware cost by going with Xeon servers running Microsoft technologies. By leveraging SQL Server’s in-built BI features and the ISV’s data management and processing, we progressed from a basic to an advanced level in APIO,” pointed out Dhamdhere.

Additionally, the bank’s IT staff who are involved in setting up the data centre realized the ease of use of Microsoft products and found that they did not need to hire DBAs as was planned for fresh Oracle deployments. With plug and play features in Microsoft Windows, the bank’s IT staff believes that they will be more productive than they were on Linux systems which are not easy to use.

The bank’s IT team have also realized that their electricity and cooling needs are much lower with Xeon compared to pSeries and real estate has also been saved leading to greater savings. The deployment has further reduced server ownership costs and it has also resulted in less training being required for the IT staff and it has taken their efficiency level to a higher scale.

The bank has saved $968.33 per server on annual support costs for Linux and Oracle and has been able to consolidate on one vendor (Microsoft), which it believes will be able to meet all of its current as well as future IT needs thus simplifying their procurements, establishing standard IT policies and guidelines and identifying clear roadmaps for future IT deployments without complexity and confusion.

nivedan.prakash@expressindia.com