Product Silos Case Sudy

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1. What are the issues associated with product silos
Westpac bank has approximately 80 applications to manage their core product functions and 100 more applications to provide additional capabilities. A core product application supports only a small number of products such as bank accounts, credit cards, investments etc. Delivery mechanism of the core product is tightly coupled in the core product application, thus resulting into a product silos. Figure 1 explains the product silos high level view of product silos.

Delivery Channel
Core Product Application
Core Product
Delivery Channel
Core Product Application
Core Product

Figure 1. Product applications in product silos

Product silos like architecture cause serious implications for a bank. Inconsistent Customer Experience:
As explained in the case study, the very evident disadvantage of product silos is inconsistent customer experience. For example if an existing customer of a bank walks into a branch, he/she is unable to get information about his/her investments. Thus a single delivery channel (in this case branch) fails to give customer information about his/her products of the same bank.

Product silos also cause issues in various areas including business process and data: Inability to assess customer’s profile:
Due to a product silos bank cannot get a complete a view of customer’s portfolio. This puts restriction on bank in assessing the customer’s real time risk profile. Inability to view customer’s real time portfolio can also result into the loss of sales opportunity. Inefficient management of customer information

With the product silos, customer’s information with the bank is scattered across the various product applications. Collecting all the customer information from different product applications becomes a costly activity that uses more resources and time. Duplication of information

Product silos results in maintaining the same information at multiple places. Different product applications may store and retrieve the same set of information in their own databases. Maintaining the same information at different places makes synchronization of the information difficult. Lack of process standardization

Processing of some common tasks can be standardized across all the products of the bank. However, a product silos like structure encourages maintaining different process models within the same enterprise. Common tasks may follow different process flow depending on for which product they are being performed. 2. What is the approach adopted by the bank to address the issues? Westpac bank has approximately 80 applications to supports its core products. The product applications supporting these core products are tightly coupled with their respective delivery channels. Westpac tried to build point to point interfaces between some product applications. However this resulted in additional interfaces, complicating the situation. Figure 2 explains the product silo and complex web of point-to-point interfaces. Westpac needed to simplify the complex web of interfaces among the various product applications.

Delivery Channel 1

Delivery Channel 2

Delivery Channel N

Product 1 Application
Product 2 Application
Product N Application
Product 1
Product 2

Product N

Delivery Channel 1

Delivery Channel 2

Delivery Channel N

Product 1 Application
Product 2 Application
Product N Application
Product 1
Product 2

Product N

Figure 2 Product silos & Complex web of point to point interfaces

Approach
To achieve this Westpac took approach that supported a Service Oriented Architecture (SOA) that was linked by a common infrastructure. With this approach, applications interact to each other via infrastructure. The infrastructure acts like a hub. Thus point to point contact between the applications is avoided. Due to cost constraints, the infrastructure was initially built by “line of business”. This also helped to keep...
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