IDBI Federal Life Insurance Issues Regulatory Financial Statements Three-Days Faster and Cuts Purchasing Processes 87% with ERP Upgrade
 
 

IDBI Federal Life Insurance Issues Regulatory Financial Statements Three-Days Faster and Cuts Purchasing Processes 87% with ERP Upgrade

IDBI Federal Life Insurance Co. Ltd. (IDBI Federal) is a joint venture between India’s IDBI Bank and Federal Bank, and Europe-based, insurance giant, Ageas. Established in 2005, the organization provides insurance, wealth management, protection, and retirement products to individuals and businesses through (as at September 2012) 50 offices, 987 IDBI Bank branches, and more than 1,000 Federal Bank locations across India.

By upgrading to Oracle E-Business Suite Release 12.1, IDBI Federal cut its time to respond to changes in Indian taxation rules and regulations, created financial reports faster to assist with decision-making, and gained more control over purchasing activities.

 
The Need for Standardized Processes

A word from IDBI Federal Life Insurance Company

  • “Oracle E-Business Suite Release 12.1 enables us to easily define and meet the requirements of Indian taxation laws that relate to our insurance business. We no longer spend time manually working out tax rates, cutting the time taken to supply monthly financial statements to the IRDA and other regulators by three days.” – Kamlesh Jobanputra, Head of Application Development, IDBI Federal Life Insurance Co. Ltd.

In 2007, IDBI Federal realized the need for standardized financial and purchasing processes, and lease payments. The organization wanted processes that would reduce the time to supply monthly financial statements to the Insurance Regulatory and Development Authority (IRDA), in India, and other regulators.

IDBI Federal was also using spreadsheets to track monthly rental payments for 100 office spaces, and manage purchasing stationery, printing services, and IT equipment.

“These manual processes caused unnecessary delays in rental payments,” said Kamlesh Jobanputra, head of application development, IDBI Federal. “In addition, there were no standard controls for ordering office products and services, which meant that there was the potential for some purchases to be invoiced more than once. We needed to find a way to enforce a consistent process for each purchase order. We also wanted to ensure we deployed automated, best-practice processes from the first day of operations.”

Between 2007 and 2010, IDBI Federal deployed Oracle E-Business Suite 11i modules Oracle Financials, Oracle Purchasing, and Oracle Property Manager. In 2011, the organization upgraded to Oracle E-Business Suite Release 12.1, running on Oracle Database 11g.

 
Faster Response to Changes to Indian Taxation Laws

 
Financial Reports Created in 20 Minutes

 
Purchase Order Generation Cut by 13 Days

 
Lease Management Streamlined

 
Database Upgrade to Ease Transaction Load

 
 

 
 

Challenges

  • Reduce time to supply monthly financial statements to IRDA in India and other regulators
  • Streamline financial, purchasing, and lease payment processes
  • Eliminate the need to use spreadsheets to track monthly rental payments for 100 insurance and bank office spaces, and ensure lease payments are made to landlords on time
  • Eliminate potential for purchases to be overinvoiced for stationery, printing services, and IT equipment
  • Generate monthly financial statements faster to assist in decision-making
  • Reduce the load on the organization’s production database servers

Solutions

  • Created financial reports in about 20 minutes, compared to four hours, enabling managers to quickly identify where to distribute sales and marketing resources to maintain revenue from insurance products
  • Reduced time to close monthly accounts and supply financial statements to the IRDA and other regulators from around 10 days to 7 days
  • Enhanced employee productivity, so that finance staff only needed to be increased by approximately 20% to 30%, despite a four- or five-fold increase in operations
  • Cut the time it takes to request and release a purchase order by 87%—from 15 days to two days
  • Increased database stability by more than 30% by resolving problems in the database faster and more easily
  • Improved database performance significantly by enhancing security controls and memory management
  • Reduced waste and cut procurement costs by providing standardized controls and consistent processes for purchasing stationery, printing services, and IT equipment
  • Ensured Indian taxation rules are interpreted correctly by removing the need to manually calculate tax rates for suppliers’ invoices
  • Eliminated issues related to the incorrect interpretation of the tax-deducted-at-source (TDS) mode of income tax collection
  • Guaranteed rent for 100 properties across India is paid to landlords on time by automatically generating recurring payment schedules for each lease
  • Expected to soon ease the load on core transaction systems at the primary data center by moving database and application reporting to the disaster recovery site


Why Oracle

Oracle E-Business Suite Release 12.1 was the only solution that met IDBI Federal’s need to respond quickly to changes in Indian taxation laws, and streamline its purchasing, financial, and lease-management activities.

“Oracle is also very strong in the financial services market in India,” said Jobanputra. “It was clear that we were going to receive all the support we needed from Oracle, KPMG, and our colleagues at IDBI Bank, which also uses Oracle E-Business Suite.”

Implementation Process

In 2007, IDBI Federal engaged Oracle Specialized Partner KPMG to deploy Oracle E-Business Suite, including Oracle Financials. Oracle Purchasing and Oracle Property Manager were deployed in 2010.

IDBI Federal turned to KPMG again in late 2011 to complete the upgrade to Oracle E-Business Suite Release 12.1. The upgrade was completed in a record time of three and a half months.

Partner

  • Oracle Partner
    KPMG

KPMG has worked closely with a steering committee from IDBI Federal since 2007 and was familiar with the organization’s business processes and requirements. KPMG prepared a detailed project plan for the upgrade to Oracle E-Business Suite Release 12 and Oracle Database 11g.

Weekly reports were circulated to the steering committee to monitor progress and ensure key milestones were met, such as the completion of internal testing by KPMG, and user acceptance testing. There was no need for extensive customization, as Oracle E-Business Suite Release 12.1 contained many of the standard functionalities required by IDBI Federal.

“KPMG ensured the upgrade ran smoothly and with minimal downtime,” said Jobanputra. “We were able to release the system to our users on the day scheduled in our project plan and have not experienced any major issues since going live.”