© OCTO Technology 2008 An MFI story MicroFinance & New Technologies Summit 2008 Pierre Pezziardi ([email protected]) Octopus Founder CEO, OCTO Images by Bidulz.com
© OCTO Technology 2008
An MF I s toryMic roF ina nc e & Ne w Te c h nolog ie s
S um mit 2008
Pierre Pezziardi ([email protected])Octopus Founder
CEO, OCTO
Images by Bidulz.com
© OCTO Technology 2008
E rrors
Too bad, these amounts have not
been inputted in the correct cells
We now believe that customer #12 has paid,
whereas he hasn’t.. And customer #13 is now delinquent whereas
he has actually paid !
© OCTO Technology 2008
F ra udsThis loan has been discretely
inserted without following the standard appraisal
process
Money has been disbursed to someone
we don’t know .. How many fake loans have we got now ??
© OCTO Technology 2008
Ope ra ting c os ts inc re a s e
2,4 M€ OLB
1,6 M€ OLB
.. Extra staff to control and
consolidate information
© OCTO Technology 2008
THE s o lution : A MIS !
Excel(2005)
Flexible
Secured & automated
Excel(2006)
MIS(2007)
© OCTO Technology 2008
An 8 month s ma ra thon …
Loan + Grant Requirements analysis RFP Configuration & Migration
SoftwareProposals
1 M€ OLB80 k€ IT
Local ITexpertise
Technical Assistance
© OCTO Technology 2008
MIS doe s n’t s upport our ne w loc a l-c urre nc y produc ts
€ OLB
DH OLB
Never mind, I will manage the Dirham portfolio
aside in Excel
I had to pay my Value Added Reseller (VAR) for an import/export
program
5 k€ Requirements analysis Development, Test & Migration
© OCTO Technology 2008
Ca n’t improve s te e ring : bre a kdown rura l/non rura l
€ OLB
I will ask my Value Added Reseller to
develop this feature
Breakdown by Rural / Non Rural
Autres Amélioration continue des
processus
Changement & Dynamique
d'équipe
Ergo/IHM
MDM
Productivité des dévsSécurité
SOA
10 k€ Requirements analysis Development, Test & Migration
© OCTO Technology 2008
Ca n’t improve ope ra tions : bulk colle c tive re pa yme nts
€ OLB
I will ask my Value Added Reseller to
develop this feature
10 k€ Requirements analysis Development, Test & Migration
© OCTO Technology 2008
Ca n’t c h a ng e Ac c ounting me th od
VAR says he can’t handle such a big change in the
software : accrual accounting seems very different from cash
accounting
We’ll have to wait for a new release from
the Vendor…
© OCTO Technology 2008
Mid-2008 : S pe c ific de ve lopm e nt is a de a d e nd
€ OLB
DH OLB
New release
Local adaptations make the migration to the next Vendor
version very difficult
And my VAR now proposes a 70k€ shift to a new technical solution …
© OCTO Technology 2008
Los t E de n …
Flexible
Secured & automated
Excel(2005)Excel
(2006)
MIS(2007)
MIS ?
Is it impossible to streamline innovation while being secured &
automated ?
© OCTO Technology 2008
Automated testing
Development
3 weeks
Demand posted in our MIS’ backlog
Demand#233 : Check customer duplicate
When a customer is entered, a dialog …
S tre a mlining Innova tion th roug h a n a da ptive MIS
Listen, there are too many customer duplicates in the system, it should check if a
customer already exists !
Automatic upgrade on the MFI’s side
Flexible
Secured & automated
MIS ?
© OCTO Technology 2008
B e ne fits
MFI empowerment, not alienation Release every month, automated tests ensuring software stability Open Source ensuring transparence & autonomy Auto Update mechanism ensuring fast & secure release updates Education of local teams ensuring technical alignment & quality
Best practices aggregation Your best ideas aimed at maximizing social impact in one simple
& robust product
Bulk repayments
Partner remote offices
Loan Officer roadmap optim
PPI social impact reporting
© OCTO Technology 2008
Va lue o f IT …
Like 80% of his peers, Omar is unsatisfied (Source CGAP)
Yet, he has spent an average 4% of its revenues in IT+ hidden costs of its best internal staff time
In Western countries, IT costs about 10% of Banks revenues …
Growth, competition and regulation deprecate the IT at high speed
k€ 2005 2006 2007 2008
OLB 1,400 4,000 8,000 13,000
Revenues 280 800 1,600 2,500
IT* (in % of revenues) 0 40 (5%) 65 (4%) >70 (>3%)
* excluding hardware & network
© OCTO Technology 2008
Unre fus a b le o ffe r
Imagine : you manage your computers and network
Now, what would you pay, per year, for an adaptable-guaranteed MIS running on this hardware ?
You can find an Octopus VAR and deal such an unrefusable offer
k€ 2005 2006 2007 2008
OLB 1,400 4,000 8,000 13,000
Revenues 280 800 1,600 2,500
IT (in % of revenues) 0 40 (5%) 65 (4%) 70 (3%)
IT (in % of revenues) 0 16 (2%) 32 (2%) 50 (2%)
© OCTO Technology 2008
Wh a t you s h ould re m e m be r
Don’t think static, think dynamic : things change fast, MIS must change fast
Don’t buy a box or a list of features, build a team able to embrace the everlasting change
MIS decay, the piece of code you write alone is your next year’s nightmare … find VARs who can share their code
Provision more than 2% of your revenues for IT investments & expenses per year