tata home finance ltd

KEY CONCEPTS

• Enterprise approach to MIS. • Organisation structuring principles. • Life cycle model of system development. • Modeling of different views of business. • Business analysis and strategy. • MIS goal supporting business goal. • MIS strategy supporting business strategy. • User driven information system. • Shift to just-in-time information. • Integration of business rules in the system. • Use of business growth cycle. • MIS focus on decision-making, access and availability of information. • MIS focus on critical success factors and mission critical applications. • Choice of technology and architecture to suit business operations and business management. • Meeting needs of statutory information, decision support information and just-in-time informa-

tion simultaneously. • Business knowledge, rules and policies, process knowledge readily available on database.

CASE INDEX

1. Introduction 2. Business Infrastructure 3. Business

TATA HOME FINANCE LTD.

(A Comprehensive Case Study on MIS)

CASE STUDY 1

* Information stated here is true at a point of time when collected for presenting as live case for analysis and understanding of a business scenario. The contents would undergo change as the time goes by. The purpose is to use the case as a learning medium and the author has no intention to commercial or give suggestion on the company’s business operations. Author is grateful to the management of Tata Home Finance (THF) for giving information to build this case.

Management Information Systems

4. THF organisation : THF Enterprise Model : THF Business Model 5. Current System and Technology 6. MIS Reports Currently in use 7. Guidelines for Customer 8. Key Features, Rules and Control Points 9. Processing a Loan Proposal 10. Moving THF to Information Driven Organisation 10.1 Business Analysis and Strategy 10.2 Effectiveness of Business Strategies 10.3 Information Management Strategy (IMS) 10.4 Information System Architecture Models • THF Business Function Architecture • Relation Model • Core Business Model 10.5 Technology Platform for IMS Strategy 10.6 Application Systems Architecture 11. Management Information System: A Model

1. INTRODUCTION

Tata Home Finance Ltd. (THF) is located at Shivajinagar, Pune-411 004, India. THF was established in the year 1999 to serve the home market need of funds for buying a new house or to improve the ex-isting house. In addition to head offi ce in Pune, THF has branches at Mumbai, New Delhi, Bangalore, Ahmedabad, Hyderabad and Chennai. THF’s well-trained personnel assist the customer in offering a Total Home Solution that is right from funding to helping the customer to build a dream home. The personnel are trained to answer all kinds of questions, doubts across the table.

The total funds disbursed since inception are Rs.500 million against the total number of over 1000 accounts. Total Employee strength is a little over hundred today and is planned to grow to 200 in next two or three years.

THF right now is in home fi nance products business but has plans to diversify into other products and services in Insurance, Deposits, Credit Cards, Mutual Funds, Customer Durables, and Property Ad-visory Services. It is estimated the total housing shortage in urban Indian is to the tune of 6.6 millions. The housing fi nance market is Rs. 250 million and is expected to grow at 10 to 12% per annum. Because of Government initiatives on a number of fronts such as modifi cation of rent control act, increase in the interest exemption to Rs. 150000, 40% tax depreciation on housing investments by corporate and many more; the market for housing is expected grow at the rate of 30% annually.

Tata Home Finance Ltd.

THF therefore feels strongly that there is perceptible shift towards formal funding sources and THF could be an additional player in the Home Finance Market. The competitors of THF are HDFC, ICICI, LIC housing, and all banks. These organisation are already established and they enjoy brand image and loyalty from their existing customers. The present Home Finance Market is a buyer’s market, therefore the competition is well placed in this market and THF has a challenge to become successful in a short duration. The challenge is accepted on the strategy of leveraging on ‘TATA’ strong brand equity refl ect-ing Trust, Stability, and Integrity, the values home owner respects most. The business in % by product is given in Table 1.1.

The Mission Statement of THF is‘To be the fi rst choice in fulfi lling the needs for a home, by providing fi nancial and other value added services through personalised and world class service at competitive rates’.

Table 1.1 Product and Percentage of Business

Product name Percentage of business

Individual home loans 90

Home improvements/Extension 2

Loan against home 2

LOC thru corporate loans 6

Land fi nance (Plot)

Project fi nance

Loan take-over

IHL undertaken by CO with DAS

Step up/Down repayment plan

Loan against lease rentals

All products 100

2. BUSINESS INFRASTRUCTURE

The business infrastructure is small today but is planned to grow rapidly in next one year. The Infrastruc-ture Business Model is given in Fig. 1.1.

The infrastructure scope is so determined that customer can get all services at single window for building a dream home. The structure is designed to reach anybody any where also caters to all kinds of customers, namely Corporates, Group Housing, Family and Individuals, who wish to go for Housing Complex, Apartments, Flats, Plots and bungalows.

THF has its own infrastructure of alliances and partners working in building and construction indus-try to meet multi dimensional needs of the customers, spreads across the society.

3. BUSINESS

THF, besides offering initial services to build confi dence in the customer, has several innovative prod-ucts carefully built for all types and kinds of customers. The products currently offered and their busi-ness in percentage is given in Table 1.1.


The business is obtained through several channels. Each branch deals with Walk-in customers and helps them to run through a process of request for loan, starting from Assessment, Requirement, Ap-plication submitting, Sizing and Costing, Technical and Legal guidance, Facilitation, Processing and Disbursement.

Next important business sourcing is through Builders and Real Estate Developers through Project Tie-ups. The personal approach to customers is through DSAs.

DSA visits prospects and solicits business. The corporate business is brought through Sales Manager who interacts with CEO and MD of the organisation.

The break up of business by channels is shown in Table 1.2.

Table 1.2 Breakup of Business by Channels

Channels Percentage of business

Branch 80

Builders –

DSAs 5

Sales Mangers 15

Total 100

4. THE ORGANISATION

THF Enterprise Model

THF organisation structure is fl at, built over fi ve levels (Figs 1.2 and 1.3). The structuring principles are single window service concept, Dual approval, segregation of competencies, select jobs multi-skilled. The formal communication channels are

Fig. 1.1 Business Infrastructure

Head Office

Regional Offices

Branch Offices

Builder FranchiseeDirect Sales Agency

(DSA)

Network of Organisation,Interior Designers, Furniture Makers, etc.


• Branch to Region to Head offi ce. • Functional reporting as per levels within the branch and dual reporting to Regional and Head

offi ce functionaries.

THF Business Model

THF Business model is based on fi ve business functions, namely Resourcing of Funds, Marketing and Sales, Legal and Commercials, Finance and Accounting and Services. THF Business Model is shown in Fig. 1.4.

5. CURRENT SYSTEMS AND TECHNOLOGY

The Current Uses

• Business software Loan Management Solution (LMS) for Front End Loan Management operation

COO Ex. VP

CMOMarketing

GMResources

GM Legaland CS

GMHR

NMA/C

GMControl andCompliance

GMCredit

Collections

Board

Managing Director

Fig. 1.2 THF Enterprise Model

Board

Legal CommercialOficer

CustomerRelations

Officer

TechOfficer

A/CsOfficer

Fixed DepositOfficer

CollectionOfficer

TechOfficer

SalesOfficer(S)

Fig. 1.3 A Typical Branch Model


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• Accounting Software: Tally – for Financial Accounting • An Integrated Software for Loan Management and Accounting with interface to back end Finan-

cial Accounting SoftwareTHF has realised the need of a better system to overcome the problems faced due to current software

application systems. Besides non availability of on-line real time information for operations and deci-sion making, following diffi culties are encountered in the information management. • Open separate set of books for each branch. • Make accounting entries separately for each branch. • Consolidate manually the accounts for each branch and then at head offi ce.

To overcome these problems the information management strategy is evolved. It has components. • ERP Systems. • For centralised accounting for branches and head offi ce. • Loan Management System. • Front End Customer Interaction System. • For handling queries, assisting customers in proposal building, proposal Application Processing

and decision making.As a step towards implementation of this strategy, THF evaluated number of ERP packages most

suited for Finance/management industry and have signed for ORACLE-Financials.It is also working with a local software company to build integrated loan management system for

front end interaction and back end integration with provision to go on web a year later.

6. MIS REPORTS CURRENTLY IN USE

Since THF has started operations very recently the management feels that MIS needs improvement for effective business operations achieve customer satisfaction. The current list of MIS reports is shown in Table 1.3.

THF generates 11 reports through present MIS. The 11 reports can be classifi ed in the following category.

7. GUIDELINES FOR CUSTOEMR

THF Offers Loan for Following Purposes

• Buy a new house/Flat (Under construction or ready possession) • Buy an existing well maintained house/fl at • Construct a house on a plot of land • Home improvement Loan • Purchase of Plot


THF gives general guidelines through a brochure to the prospect in Question-Answer form. A pros-pect interaction begins with this brochure and discussion an additional queries is handled on front desk.

The guidelines not only answer FAQs but state business rules and policies to be used in application processing. The few typical rules as illustration are as mentioned. • Applicant age should be greater than 21 years. • Maximum loan possible Rs.10 million. • Maximum loan amount is 85% of cost of property.

Table 1.3 MIS Reports

No. Report Frequency Orgainator and Recipient Contents Purpose Responsibility

1. Disbursement Daily Branch Accounts Central Accounts Details of disbur- Accounting

Details Offi cer sements made entry

during a day

2. Pay-in-Slip Daily Branch Accounts Central Accounts Details of bank Accounting entiry

depositions at

offi cer branch

3. Section Report Every day Branch Manager CMO Business of Bran- Assess

ch for the day performance

4. Rolling Weekly Every Friday Branch Manager Central Resources Disbursement Funding

‘Disbursement Dept. forcast of next arrangements

year

5. Weekly Every Branch Manager CMO Status on Deciding

Corporate on Monday delinquent course of action on

DSA cases delinquent cases

6. Weekly report Every Branch Manager CMP Perfornance of Assess

on DSA Monday operations performance

7. 10 Day Every Branch Manager CMO Overall review of Perfornnce Report-

Performance 10th operations ing to Board

8. Expenses 15 days Branch Accounts Central Accounts Expenses incurred Accounting entry

Statement Offi cer by the branch in and cash imprest

cash replenishment

9. 10 Day Every AO, Central Sr. Vice Presidents Performance of Reporting to the

Perfornance 11th Day Acounts the Company Sr. Manag ement

10. Monthly On 5th AO,Central Sr. Vice Presidents Financial Data for Reporting to the

Financial day of Accounts the month and Board

month YTD

11. Monthly First Work- Branch Central Collection Status on Deciding courses

Delinquency ing day of Manager Department delinquent cases of action on

Report month delinquent cases


• Maximum repayment period is 15 years but not extending beyond age 65. • Loan against home is 50% of market value of the property. • And other.

For all categories of product offers, THF has prepared checklists to ensure, ascertain and confi rm number of key aspects fo the proposal. The checklists are part of the new proposed MIS. This ensures impersonal scrutiny, objective assessment, no processing error and no human error in viewing and deci-sion making. Following is the list of FAQs for variety of products offered by THF.

HOME LOAN

Can I apply a home loan from Tata Home Finance?

Yes, you can. If you are at least 21 years of age and are employed or self employed with a regular in-come. You can apply for a home loan even before you have identifi ed your home.

Can I have a co-applicant?

You can include your spouse/parents/brother/sister as co-applicant. We will be glad to include his/her income in enhancing your loan amount (provided the co-applicant meets certain conditions).

You can even have your fi nance/fi nance as a co-applicant.

How much loan can I get?

The loan amount you are eligible for will be based on your repayment capacity. This can then help you decide the budget for your home. You can get a loan from Rs. 10,000 up to a maximum of Rs. 10 million. Your loan amount will depend upon your repayment capacity, as mutually determined by you and Tata Home Finance (subject to a maximum of 85% of the cost of property).

In case you wish to construct a house on a plot of land, the loan amount could go up to 100% of the cost of construction.

What will be the repayment period for my loan?

We give you an option to select your term of loan. Depending on you convenience, you can decide the number of years you want to take to repay your loan. The maximum repayment period is 15 years and should not extend beyond your retirement age of 65 years if you are self employed, which is even ear-lier.

Can I repay the loan ahead of schedule?

Yes, you have the option of prepaying the loan either in part or in full.

What is the security for the loan?

The primary security for the home loan shall be fi rst mortgage of the home being purchased/constructed. It is in your interest to ensure that the title of the house is clear, marketable and free from encumbrances. Further co-lateral security by way of providing guarantee of individual guarantor acceptable to Tata Home Finance and/or assignment of Life Insurance policy on a case to case basis.


How will my home loan get disbursed?

Once you accept the sanction letter, your home loan will be disbursed on the basis of the following. • Selection of the property. • Submission of legal and property documents as acceptable to THF. • Payments of your own contribution.

The loan amount will be disbursed in full or in installments depending on the progress of construc-tion.

HOME EXTENSION LOAN

How does a home extension loan from Tata Home Finance help me?

A home extension loan is just one of the means by which your dream of extending your existing home can come true. You can use it for the following. • Add a room. • Have an additional or bigger bathroom/toilet. • Construct an extra room on the terrace.

How much loan I get?

You can get a loan from Rs.10,000 up to a maximum of Rs. 1 Crore. Your loan amount will depend on you repayment capacity, as mutually determined by you and Tata Homefi nance (subject to a maximum of 85 per cent of the cost of extension).

In certain cases, we would fi nance even 100 per cent of the extension cost.

What will be repayment period for my loan?

The maximum repayment period is 15 years and should not extend beyond your retirement age or 65 years if you are self employed which ever is earlier.

How will the home extension loan get disbursed?

Once you accept the sanction letter, your home extension loan will be disbursed on meeting the follow-ing. • Submission of legal and property documents. • Investment of your own contribution

The loan amount will be disbursed in full or in installments depending on the progress of the exten-sion work.

Other vital details for the Home Extension Loan like the co-applicant, repayment of the loan and security for the loan are same as the Home Loan from Tata Homefi nance.

How does a home improvement loan from Tata Home Finance help me?

A home improvement loan is just one of the means by which your dream of adding life and value to your existing home can come true. You can use if for:


• Internal and External repairs • Internal and external painting • Tiling and fl ooring • Water proofi ng on terrace • Roofi ng • Plumbing • Grills and aluminium windows • Enclosing an open balcony • Bore-well • Construction of water tank • Paving of compound wall…….


You can get a loan from Rs. 10,000 up to a maximum of Rs. 20 Lakhs. Your loan amount will depend on your repayment capacity, as mutually determined by you and Tata Homefi nance (subject to a maxi-mum of 70% of the cost of improvement.) In certain cases, we could fi nance even 10% of the improve-ment cost.

What will be the repayment period for may loan?

The maximum repayment period is 8 years and should not extend beyond your retirement age or 65 years if you are self employed, which ever is earlier.

How will the home improvement loan get disbursed?

Once you accept the sanction letter, your home extension loan will be disbursed on meeting the follow-ing. • Submission of legal and property documents • Investment of your own contribution

The loan amount will be disbursed in full or in installments depending on the progress of the im-provement work.

Other vital details for the Home Improvement Loan like the co-applicant, repayment, pre-payment of the loan and security for the loan are same as the Home Loan from Tata Homefi nance.

LOAN AGAINST HOME

How does a loan against home from Tata Home Finance help me?

A loan against home is just one of the means by which you can encash your investment in your existing home without having to dispose it off. You can use the loan amount for different purposes for instance, to: • Finance higher studies of your children. • Meet the wedding expenses of your daughter. • Invest in business. • Even to buy a second home.

The loan amount can be used for any purpose, other than speculative or illegal purpose.



You can get a loan from Rs. 10000 up to a maximum of Rs. 1 crore. Your loan amount will depend on your repayment capacity, as mutually determined by you and Tata Homefi nance (subject to a maximum of 50% of the market value of property, as evaluated by our valuer).

What will be the repayment period for my loan?

The maximum repayment period is 8 years and should not extend beyond you retirement age or 65 days if you are self-employed, which ever is earlier.

How will the home extension loan get disbursed?

Once you accept the sanction letter, your loan against home will be disbursed on meeting the follow-ing. • Submission of legal and property documents. • Investment of your own contribution.

The loan amount will be disbursed in full or in installments depending on the progress of the exten-sion work.

Other vital details for the Loan Against Home like the co-applicant, repayment, pre-payment of he loan and security for the loan are same as the Home Loan from Tata Homefi nance.

What documents will I require while applying for the loan?

The following list of documents will be needed while applying for a loan. • Residence and age proof, which can be established from the Ration Card, Birth Certifi cate,

School Leaving Certifi cate, Election ID, PAN Card, Drivers License or Passport (any one).For salaried individuals:

• Latest salary slip • Form 16 from the employer

For salaried individuals: • Certifi ed copies of Balance Sheet and Profi t and Loss account, Income Tax Returns’ acknowl-

edgements, Advance Tax challans (for both company/fi rm and personal account) for the last three years.

• Memorandum/Articles of Association for companies/partnership deed for fi rms and a brief pro-fi le or your company/fi rm.

For Home Improvement loan and home extension loan

• Detailed cost estimate of the extension from your Architect Engineer/Interior Designer.

What will be the rate of interest?

For the latest interest rates, please refer to the enclosed rate card.


What are the fees applicable?

For the applicable fees, please refer to the enclosed rate card.

How do I repay the loan?

Repayment of your loan will be in equated monthly installments (EMIs) which will commence from the month following full and fi nal disbursement.

The EMIs are payable every month and will be collected in the form of post dated cheques or directly deducted from your salary by your employer.

In case of part disbursal of the loan, a pre-EMI interest is payable till the full and fi nal disbursal is made.

8. KEY FEATURES, RULES AND CONTROL POINTS

Home Loan

• Loan Application Eligibility 21 years • Loan Amount limit 85% of cost of property • Loan Amount (Flat) Rs. 10000 to Rs. 1000000 • Loan Amount for plot of land for Maximum 100% of cost of construction home construction • Security against loan Maximum 15 years not exceeding 65 yeas of age First mortgage against home with conditions or Individual guarantor or Assignment of Life Policy • Loan disbursement • Selection and submission of legal and property documents and • Initial payment of your own contribution • Payment of processing fees • Payment of administrative charges

Home Extension Loan

• Loan application eligibility 21 years • Loan amount possibility 85% of cost of property • Loan amount (Flat) Rs. 10,000 to Rs. 10,000,000 • Loan amount for plot of land for Maximum 100% of cost of production home construction


• Security against loan Maximum 15 years not exceeding of age 65 years • Security against loan First mortgage against home with conditions or Individual guarantor or Assignment of Life Policy • Loan disbursement • Selection and submission of legal and property documents and • Initial payment of your own contribution • Payment of processing fees • Payment of administrative charges

Home Improvement Loan

• Loan application eligibility 21 years • Loan amount possibility 70% of cost of improvement • Loan amount (Flat) Rs. 10,000 to Rs. 2,00,000 • Security against loan Maximum 15 years not exceeding of age 65 years • Security against loan First mortgage against home with conditions or Individual guarantor or Assignment of Life Policy • Loan disbursement • Selection and submission of legal and property documents and • Initial payment of your own contribution • Payment of processing fees • Payment of administrative charges

Loan Against Home

• Loan application eligibility 21 years • Loan amount possibility 85% of cost of property • Loan amount (Flat) Rs. 10,000 to Rs. 10,00,000 • Loan amount for plot of land Maximum 100% of cost of production for home construction • Security against loan Maximum 15 years not exceeding 65 years of age


• Security against loan First mortgage against home with conditions or Individual guarantor or Assignment of Life Policy • Loan disbursement • Selection and submission of legal and property documents and • Initial payment of your own contribution • Payment of processing fees • Payment of administrative charges

Support Documents to Loan Application

• List of Documents Residence and Proof of Age, Latest Salary Slip, Form 16 from the Employer, Certifi ed copies

of Balance Sheet and P & L Account, IT returns and acknowledgement, Advance Tax Challans, Memorandum and Articles of Association.

• Detailed Cost Estimate from Architect/Engineer, etc.

Repayment Choices

• Post dated cheques • Deduction from salary

9. MOVING THF TO INFORMATION DRIVEN ORGANISATION

The management of THF has taken a bold step to modernise the business processes in line with the mis-sion statement and with the objective of cutting cost of business operations and maximising the gains to shareholders. THF approached the problem systematically using Life Cycle Model of system develop-ment and using the increment model of development.

9.1 Business Analysis and Strategy

THF faces competition from established organisation such as HDFC, ICICI, LIC Housing and some leading banks. Since, all players are attacking the same market segments; the prospective customer can be win over only through creation of broad image of a trusted fund provider with the difference. The Strategy is to attract the prospects to THF by providing broad band of services at competitive rates.

THF is now riding the growth phase in Sigmoid or S curve after just coming out from the phase of Introduction. It would therefore need business strategies that will accelerate the pace of growth in next year or two. To build business strategy for rapid growth THF has focused on customer and customer services that would bring rapid growth and attain a position of strength in the Home fi nance market.

The strategy is built on the following four factors.


• Products to meet most sought requirements of customer • Cost benefi t ratio attractive to the customer. • Service excellence through effective response. • Total solution assistance to build a dream home.

THF has 11 different home fi nance products meeting the needs of individuals, groups and corporates for new home, home improvements, plots and bungalow. The products are so designed that they can be customised to specifi c requirements of the customer. The product design is such that if information is complete and correct, the funds can be sanctioned and disbursed in less than 48 hours.

THF product and service strategy is such, that the benefi ts the customer gets are signifi cant compared to cost of loan servicing. The strategy is backed by wide range of techno-commercial information sup-port for quick and better decision making.

THF has taken care for providing excellent service across all stages of home fi nance servicing. It has a information rich web site giving information on products, facilities and answers to frequently asked questions. It has a four tier organisation infrastructure where customer can fi nd a service provider of his choice. The service and interaction is possible through web site, direct sales agents (DSA), branch offi c-es, regional offi ces, builder partners, franchisees and will snit network or reputed manufactures, traders, specialists and consultants in home making industry. This kind of support base creates confi dence and comfort in the mind of customer to come under the umbrella of THF. All this support provides reach, knowledge, funds and assistance at every stage of home building.

The fourth strategy is to provide total solution to the customer, through offer of funds at the least cost, technical and legal assistance to complete the home fast, beyond home construction and offer services through THF partners at attractive discounts to make a beautiful home. THF has now competed strategy build up and they are operative in most of the regions of the country.

9.2 Effectiveness of Business Strategies

All the four strategies and critical resource management, that is funds, empowered, people, products, Business partners, systems and solutions. While THF has good resource management skills, it is neces-sary to manage them cost effectively to achieve dual objective of performance excellence and highest customer satisfaction. This is possible through continuous monitoring and mending of strategies and evaluating the business performance against these strategies; THF recognises that this can be achieved through information support to customer as well as to THF personnel at any level, when needed any-where.

THF therefore has gone into detail requirement study of information needs required to manage the following • Customer servicing • Customer performance monitoring • THF performance evaluation • Cost control; Finance and operations • Credit appraisal • Risk assessment


• Adherence to service standards, evaluation and monitoring • Proposal processing: entry to disbursement to collection and recovery

THF has identifi ed following business processes as mission critical applications. • Loan application processing system • Credit risk appraisal system • Customer relations management system • Funds management system

All other functional systems such as Accounting, HR, Purchase etc. are important but do not have di-rect impact on the business of THF. All such systems will be either integrated or interfaced with mainly the business system mentioned above through suitable system architecture.

9.3 Information Management Strategy (IMS)

Objective

• Provide access to information from anywhere any time. • Customer access to the proposal for status monitoring and tracking. • Near ‘Paperless’ transaction processing to cut and control cost of customer servicing through

reduction in processing time, overheads defaulters and bad debts. • Do additional business to the tune of 30% within same manpower through quick decisions and

better control on cost and performance, resource. • Create a business management database/data warehouse that is useful to customer, DSAs, Sales

Managers and Marketing Managers. • Besides real time on line systems develop data mining application for strategic management of

business.

Scope of New System

The scope covers broad band of systems and applications with emphasis on the following. • Customer Interaction • Customer Relations • Resource Management • Marketing and Sales • Product Design and evaluation • Credit appraisal and Risk Assessment • Proposal Processing • Building Support and dedicated database for designing innovative products • Accounting and Finance Management • Customer Servicing • Strategic Management • E-training and Learning


9.4 Information System Architecture

THF Business Function Systems Architecture

The Business System Architecture required for business strategy implementation is given in Fig. 1.5. It has main functions namely • Customer Relations MGT • Disbursement Management • Loan Management System • Marketing and Sales • Resource Management • Training

Relationship Model

• The business model is executed through relations management between major partners in home fi nancing business. THF considers home fi nancing as a ‘people to people’ business where trust, integrity and service are held in high esteem. Relationship Model is shown in Fig. 1.6.

• The core business functions model is given in Fig. 1.7. This business functions is fundamental of THF business operation.

9.5 Technology Platform for IMS Strategy

Keeping in view the dynamic nature of business and need of satisfying the requirement of information at any time and anywhere, THF has chosen following technology platform. • Operating system platform: NT 4.0 Unix • Network: Internet/Internal/Extranet/LAN • Application Technology: Client/Server, Web Enabled applications. • Application Solution: Oracle 8 i, Oracle Financials, Oracle Applications-11 i. • Front End: VB, IIS 4.0 • Back End: Database server, Application server, Microsoft transaction server, web server • Security: Firewall servers and Proxy server

9.6 Application System Architecture

Four-pronged business strategy is supported by state of the art technology based information Manage-ment solution. the solution is designed for THF enterprise as a business solution supporting information needs for Operations management, Business Management and Strategic Management of Resource and Product.

The solution is designed for supporting the following. • Continuous Innovative Product Management. • Fastest Service delivery.


The BusinessFunction System

Architecture

CustomerRelation

Management

CustomerInteraction,

Proposal Building

DocumentationSystems for

Contract

DocumentVerification and

Validity

Approvals andRecommendation

ContractImplementation

Checking BusinessRules Conditionand Constraints

Loan ApplicationProcess

PropertyAppraisal

Credit and RiskAppraisal

Decision, Fundsand Emi

DisbursementManagement

Emi CollectionSystem

Monitoring andDefault Handling

Debt ManagementSystem

RecoveryThrough

Legal System

Loan DisbursementSystem

LoanManagement

System

Marketing andSales

ProductDevelopment

Sales andAdvertisement

Sales ForceManagement

MarketingOperations

BusinessPartners

Management

Training

Resources Management

Relation Management

Customer

Partners

Agencies; Bankers, Investments

Communication

E-learning

Basics of Finance, Banking,Commerce

Statutory Compliance

THF Product

Credit Appraisal

Risk Appraisal

Investment PortfolioManagement

Fixed Deposits Management

Forecasting of Disbursement,Collection and Recovery

Relation Management

Investor

Banker

Tata Finance

Funding Agencies

Fig. 1.5 Business Functions System Architecture


• Cost control, Collection and Recovery Measures, and Resource Management.The solution is expected to build THF towards

• First choice of customer for all home fi nance requirements and offer value added services. • World class services provider at competitive rates.

The solution is made of 17 different applications systems, comprising ERP system, Legacy systems; Groupware Applications, CRM and data warehousing systems.

Figure 1.9 shows application systems architectureEach applications is designed with following characteristic.

• No data redundancy. • Business policy, rules and guidelines embedded in the application. • Layered approval systems with technology application of work group and work fl ow.

ResourceManagements

Financeand

Accounts

Front Officer

DSA

SM

Franchisee

Builders

Home ServiceProviding

Consultant

BankersInvestors

Funding AgenciesFD Holders

IndividualsCorporates

Groups

Funds

Management

FundsDisbursementMnagement

Dream Home

Service Management

Support ServiceManagement

Loan TranslationManagement

Fig. 1.6 Relationship Model

TheMKT and

Sales

FundsManagement

Customer

THF FinanceAccounts

Credit

ProposalDecision

DisburseFunds

RepaysFunds

Resources Funds

Solicit Business to Business

Repays Funds

Submits Proposal

Fig. 1.7 Business Function Model


• Access to information processing to meet just in time need of decision making. • Capable of information processing analysis and decision making as a support for all personnel

across the organisation.

10. Management Information System (MIS)

With full implementation of this application system architecture, present MIS will be undergoing a sea change. Besides normal status reporting it will provide following additional reports for managers oper-ating at various levels. 1. Project Status Report 2. Rejected Loan Applications

WebServer

Nt 4.0Iis

DatabaseServer

UnixOracle 8i

CorporateApplication

ServerOracle 8iFinancials

LegacySystemsServer

HRPayrolls

TheIntranet

Lan

Internet

FirewallServer

Local ISP

Clients

Regions

Clients

Branches

Clients

Builders

Clients

BusinessPartners

Clients

Dsa

1 MbpsLeased Line

ProxyServer

Fig. 1.8 Technology Solution Architecture


3. Turn Around Time Report 4. Demographic Details Report 5. Refi nance Claim Report 6. Rural Housing Loans Disbursed 7. Repayment Reports

New MIS will strengthen decision making and is expected to improve management of the follow-ing.

Fig. 1.9 Application System Architecture

Customer Relations Management System

Credit ApprovalSystem

DisbursementSystem

Risk AssessmentSystem

Collection System

LegalVerification System

Debt ManagementSystem

Techno-commercialEvaluation

Loan

Proposal

Processing

and

Approval

System

Marketing

Sales

Product

Management

System

Resource Management System Finance and Accounts System

H R Payroll ProcurementDBMS

Builders Architects & Home InteriorProviders

Data Warehouse / Data Mart / Data MiningApplications orf

Strategic Management of Resource Products, Market, CustomersPast/present


• Resource • Risk • Recovery

This will also enable effective control on the following • Cost • Credit • Customer choice

All this will result into a truly world class service company offering a basket of products through single window creating a THF brand loyalty confi rming trust, stability and integrity in Tata Home Fi-nance.

Questions

1. Examine whether new MIS will succeed in giving the following to THF: (a) Competitive advantage (b) Better customer relations (c) Control on fi nancial resource 2. Prepare a reporting format for following reports stated in Table – 1.3. (a) 10- day performance report (b) Monthly delinquency report (c) Expense statement 3. Study Business Function Systems Architecture (Fig. 1.5) and Technology Solution Architecture

(Fig 1.8) and explain to what extent following objectives will be achieved and why? (a) Faster service delivery (b) Better control on collection & recovery

4. Identify from Business Functions Systems Architecture, Critical Information Systems which have strategic importance and offers competitive advantage to THF. Explain why the systems are critical?

5. Which are the DSSs in the THF system suite? Which decisions these systems are empowered to take?

6. You have learnt about CRM package and know its scope, standard features and modular struc-ture. Compare THF Customer Relation Management Scope with this identify the gaps, if any. Suggest a conceptual model of CRM for THF.

7. What is e-learning solution catering to HR of THF? What is the advantage of e-learning pro-cess?

8. THF Data Warehouse (DWH) is an information repository. Identify DWH information entities and sources from where they will be pulled in DWH.

9. Explain the use of fi rewall and proxy servers in THF information system solution? What secu-rity threats THF is perceiving and from which sources?

10. Suggest ten standard queries in following areas of business function:


(a) Loan Proposals. (b) Recovery Status. (c) Default Customers. (d) Customer by THF Products. (e) Customers by Loan Amount Disbursed. (f) Customers Demographics and Segments. 11. THF has a website ‘tata home fi nance’ with standard website features, like home page, products,

services, ready reconers for EMI computations for varying loan amount and period, highlights about fi nancial status of THF; Members of the THF board and News.

THF wants to improve the utility of this site by offering information support on various aspects of home before and after the construction. Suggest which new web pages and links should be added so that customer fi nds THF website a single window source of information.