The World Bank Group has a massive mission to “help developing countries escape poverty and share prosperity,” says Vijay Yellai, program manager for enterprise resource planning transformation at the World Bank Group. For example, it provides an wide array of financial products and technical know-how in a complex and ever-changing global setting.
Therefore, for an institution like the World Bank Group, which provides funding and resources to countries with low bandwidth and infrastructure, IT modernization is no small feat.
“So in an ever-changing environment–complexity, risk, and security threats with a global workforce–the World Bank is under pressure to do more with less,” says Yellai. He explains that the challenge is to increase real-time business, as well as quickly respond to changing needs of customers and employees. But also, Yellai continues, “security, risk, and data are key elements. Not to mention the continuous need for business intelligence and quick decision making.” The ultimate goal is to “capitalize on technology to meet our mission and goals.”
And although data collection and processing is key to IT systems, an agile and adaptive approach is needed to keep operational and financial systems current in each business. “Data is very fundamental to that. And data and research help us understand how we are addressing the needs, helps us set up priorities, helps us share knowledge, and helps us measure progress.” Yellai says.
With a modernized IT system, Yellai says, there are a number of innovations that become possible. Predictive analytics, natural language processing, blockchain, and process automation are a few of the technologies emerging to allow for quicker decision-making and efficiency.
“Anything we can do to reduce the work we need to do in technology, but let the technology do more for us, so we can focus our time on the strategic priorities, will be the most exciting thing for us,” says Yellai.
This episode of Business Lab is produced in partnership with Infosys Cobalt.
Laurel Ruma: From MIT Technology Review. I’m Laurel Ruma and this is Business Lab, the show that helps business leaders make sense of new technologies coming out of the lab and into the marketplace.
Our topic today is IT modernization. To succeed with digital transformation, a lot has to happen behind the scenes to improve access to data for employees and to create better experiences for customers. This is not an easy task for any legacy enterprise, especially one that is highly regulated.
Two words for you: real-time evolution.
My guest is Vijay Yellai, who is the program manager for enterprise resource planning transformation at the World Bank Group.
This podcast is produced in partnership with Infosys Cobalt.
Vijay Yellai: Thank you.
Laurel: Could you give us an overview of how the World Bank operates and then perhaps some of the ways it helps countries with innovation and digital solutions that will create that economic transformation?
Vijay: So before I do that, let me first brief you on the name World Bank and as an organization itself. World Bank, as everyone knows, is actually one of the five institutions of what is actually the World Bank Group. The legal name, the official name of the institution is called the International Bank for Reconstruction Development (IBRD), which was created after World War II, which is what we all know as the World Bank today. But there are four other institutions that, along with this, that form the World Bank Group itself. So the IBRD focuses on helping the low and the middle income countries by providing development and policy financing. There is another institution in the World Bank Group, called the International Development Association, which provides a very similar kind of help to developing countries, but it focuses more on low income countries, not the middle income countries, providing them zero to low interest loans and grants.
Both of these institutions focus on almost like the public sector of a given country. Then we have the International Finance Corporation, which focuses on the private sector of a given country to help meet its goals, mobilizing private sector investment and provides technical advice. Then we have two other institutions that provide a different kind of financial support for these. Multilateral Investment Guarantee Agency provides political risk insurance for private investors in foreign countries. So they come forward not worried about political risks and their money not being utilized well. Then we have the International Center for Settling Investment Disputes, which focus on settling disputes between countries. So these five institutions of the World Bank Group work towards two common goals, as we all know, which is to reduce poverty and build shared prosperity. So that goes with the background of the World Bank Group itself. So fundamentally what is that we do?
We are trying to help developing countries escape poverty and share prosperity. So how do we do that? We are not a profit making company. We do not sell products and services. We cannot compete in the private markets in that sense. So how do we operate? We mobilize money from various sources. We have many financial resources that come for help. One is our member countries subscribe for capital for voting rights. We borrow money through bonds from the capital markets at low interest rate, owing to a triple AAA credit rating that we have, and we also have donor contribution. So we mobilize financial resources from multiple channels and put them to use to help our developing countries that are in need of our financial assistance and technical advice and services. So this is what the World Bank Group does.
Now, how does it operate? Very critical and essential to the World Bank Group success are a couple of things. This information, which is the raw form of, as we call this data, the knowledge, and our workforce. Our workforce is nomadic. It’s a global workforce, always on the move. Reaching out to countries and going out to places that usually are not the most exciting for a regular person. With all of this, technology plays a very big role, not only for us but also our clients. We do help many of the developing countries in using technology to help their own internal processes and innovations. For example, we do help countries establish procurement systems as a grant and a technical advice. Then we are providing a loan to construct a bridge. Because it’s very important for us to ensure that the money is being spent efficiently and we’re able to trace the results. We’re able to control, we’re able to supervise the investment, and some of the developing countries may not be able to do that by themselves, so we help them.
And the other way we also help those, our IT colleagues do work with our operational staff and provide a lot of solutions that work on low bandwidth, low infrastructure because we are working with countries where infrastructure cannot be taken for granted. I remember back in early 2000s where in countries like Africa or India, text messages are the only best possible and accessible technology. So we have to help them come up with solutions that can work on low bandwidth infrastructure as well. While advanced countries like the United States and Europe may have a lot of modern technologies in place, innovating in a place where technology and infrastructure are not at its best actually increases the challenges for an organization like the World Bank Group in helping countries do that. So technology and innovation is part and parcel of what we try to do in helping various client countries in terms of agriculture, in terms of irrigation systems, wherever, whatever sector we work on, technology plays a role and we try to see how best to help utilize that.
Laurel: So considering that kind of breadth of client that you do have, what does the World Bank Group’s own IT modernization journey look like right now?
Vijay: So again, going back to the roots of the World Bank Group and how we operate and why we even exist. Yes, we are operating in an ever growing complex environment with a global workforce and we’re constantly operating under many constraints that come from within the organization and outside. So why do I say that? World Bank is constantly under a pressure to do more with less, as we call it. So we need to mobilize more finance, lot of finance, and continue to help the developing countries where the needs are constantly increasing. So in an ever-changing environment, by complexity, risk, and security threats with a global workforce, and the World Bank being under pressure to do more with less, we look to capitalize on technology to meet our mission and goals. So our business and IT go hand in hand to help deliver the World Bank Group’s mission.
So, what are we focusing on as IT modernization journey? Before I talk about what exactly we are doing, let me talk about what we’re aiming towards. We’re aiming towards enabling business to be more agile, be able to respond to the changing needs around us in a constrained environment quicker, help our staff be more productive, and collaborate from wherever they’re working from across the globe. And security and risk and data are key elements. Not to mention the continuous need for business intelligence and quick decision making. So with that said, our IT modernization journey is focusing on multiple streams. Data using modern technology, modernizing the platforms and modernizing the way our clients and our internal users can consume data is a critical aspect. It’s one element of data modernization where we’re moving our systems and data platforms to the cloud to be more accessible, more secure, and faster from low network parts of the world.
Then we are also focusing on systems that are our systems of record, like our human resources, our financial resource planning systems, our treasury and risk systems where we continuously have to make sure we hold a triple AAA credit rating, we are transparent, we are accountable, and we are able to trace every single dollar that comes in and goes out. So another segment of IT modernization is focusing on financial systems. Then we have project portfolio management systems where some other systems that help our external staff, when they say external staff that are always operating in the front lines. Modernizing operational systems to help them. And modernizing systems that are related to our back office. So we focus on IT modernization based on the business we are helping, and each of them will have a different flavor of modernization techniques and technology that need to come into play. But common to all of this is going to be agility, risk management, productivity, and quicker decision making.
Laurel: So, to kind of tackle all of these challenges both internally and externally, in 2018, the World Bank Group started a cloud transformation project to improve all those types of internal processes and help build those complex financial systems. Could you give us an overview of some of the challenges that are improved by moving processes and systems to the cloud?
Vijay: So our cloud journey actually started even before 2018. We focus more on the financial systems where we had to take more time, wait for the cloud infrastructure to mature, considering the risk profile of the data and the decision making. But cloud journey, as such, did start earlier than 2018 in the World Bank Group. Like I said previously, we have a technology strategy which is very tailored to the line of business that we’re serving. So the cloud journey started much ahead, where we started focusing on much of our infrastructure moving to the cloud, and then we focused on our development platforms because we do develop a lot of home grown solutions for the internal and external clients. So moving those applications to the cloud also started much before that. It is in the recent years that we started focusing on financial systems and some of the human resource, human capital management capabilities, if I may use the word, moving to the cloud. And what were the challenges or some of the pain points we were able to address?
Covid is an excellent example of how that thing came to our help. Covid is one of the instances where we could immediately see the value of migrating some of our technology and some of our processes to the cloud. That actually helped our global workforce operate seamlessly from wherever they are, even though travel was locked down for the last couple of years. The same applies to our back office, and IT, and other support systems as well. So that is one aspect.
And the second aspect of it is our infrastructure footprint has started reducing and helping us respond to security and other risks much faster, and in a much more robust way. There are some more challenges that continue to prevail and we are tackling them as we go along because not all of the challenges we have are internal. Some of our vendor partners need to catch up as well. Case in point being the ERP vendors. There are different ERP vendors that have different pace and different positions or junctures in that journey of cloud transformation. So there is a little bit of alignment that needs to take place with that as well, which I presume we’ll be talking about in the rest of the session of how the financial ERP systems are moving in that direction.
Laurel: And so right now you have a very large project happening to modernize enterprise resource planning or ERP systems, which includes a lot of back office functions, like travel expenses and keeping track of payments. So, what will a modern ERP system help the bank do?
Vijay: The modern ERP system is going to help us do more with less, which is what I quoted earlier on. World Bank Group manages quite a lot of financial resources that come from many different channels and we are responsible to manage them well, be accountable for them, be very transparent in how the money is being spent, and put the money to good use to its intended purpose and achieve the outcomes. So, our financial administration departments have quite a lot of business processes that help them do this, and do this well, in a way that we are able to trace transparently all the financial activities that take place and be accountable for them and report back to our member countries, our donors, and other client countries. So one of the things we are looking for as part of the ERP modernization is how nimble can we get?
How can we help business be agile? As you all might know, financial constraints are prevailing all over the place. So mobilizing funds is not the easiest thing at this time. That is indeed generating more and more needs on the client country side for financial assistance. So the ERP is going to help us be more productive internally, reduce more of the manual work, and help us integrate our workforce, our data, our processes across organization and our officers across the globe. So eventually it’ll help us do more with less. Productivity, agility to respond to business needs, manage business risk, and quicker decision making is what we are looking to get out of this modern ERP.
Laurel: So specifically, how does that modernized ERP system help with internal needs like compliance and financial reporting? You mentioned it briefly, but there’s got to be quite a bit of that there.
Vijay: Compliance and controls and financial reporting are inherent requirements in WBG’s business processes. They’re really fundamental to all of our systems implementations that we have in place. We have been doing this with help of multiple technologies that integrate and we orchestrate them. And we are noticing that as integration technologies improved, some of our manual work was reduced over time. But what is getting us excited more with modern ERPs is, not only do they reduce the need for integrating multiple technologies by offering these capabilities inherently in them, but they’ve gone one step further. They’ve embedded artificial intelligence and predictive analytics and prescriptive analytics that can help organizations like us, not only stay in compliance and implement controls and automate financial reporting, but proactively catch data anomalies that we might see in them. And also prescribing certain corrections that might have to take place in the system rather than waiting for it and patching that in rather than having to redo the manual work again.
So, this is something which is looking very promising out there in the modern ERPs and we are evaluating them as we speak. And we are hoping to really have a good intelligent system that can help reduce much of the manual work and stay in compliance with the external and internal requirements that we have.
Laurel: And then how will it help meet the external or customer demands, like you said, transparency and loan management?
Vijay: So let us talk about what transparency means to our clients and our donors and member countries. For donors, the transparency is, all the funds that the bank raised, where did it go? Did it get put to use for the intended purpose? Did it meet the goals? Were the results achieved? And not just whether the client country achieved it, but did it actually result in benefit to the ultimate beneficiary? So the needs they have are constantly evolving and they’re getting more innovative and creative in what they would like to see. How much would they like to see when it comes to traceability? Similarly, clients want to do the same. Our client countries want to know how much of the money raised is coming to them, how is it helping them, and what is the role the bank is playing in ensuring everybody is getting the money and getting the financial assistance they are supposed to get.
Laurel: So, when we look at all of this, you did mention data and business analytics, but how does the World Bank Group think about world real-time data and analytics to improve that kind of transparency and customer experience of the 180 member countries? Because as you mentioned, it sort of varies and you have a relationship to maintain with each one of those loans that go out, and tracing back every dollar to prove that you are, you’re spending wisely.
Vijay: This is an area that the World Bank Group has continuously been strengthening and enhancing, never taking a pause and never being satisfied with whatever we have. Because the World Bank Group does face many challenges in helping the poorest people, and that everybody sees the benefits from the economic growth. Data is very fundamental to that. And data and research helps us understand how we are addressing the needs, helps us set up priorities, helps us share knowledge, and helps us measure progress. So when I look at it external facing, so the World Bank Group always needs to keep looking at, who have I helped? How has it helped? How do I improve my entire process? What else can I do to help this world better? And World Bank Group also serves as one of the knowledge repositories for the other development banks and other developing countries in how to do various things. How to help other countries. What are the ways in which you can help? What might a particular project or a grant actually help in achieving the results?
And similarly, like I said, information is always on demand. Both for our clients and our donors about how much more can you tell me about what is going on in the world? Who is needing help? And how is our money and solutions, how is it actually helping them? How is it achieving the benefits? With this constant need, we also have our internal financial administrative and operational processes, internally the back-office processes, as you call them, continuously wanting to look at data in real time. Looking at what is my inflow? How is my inflow changing? Is there any adjustments I need to do to the outflow? Am I safe with outflow commitments that I have made.
So data and real-time data analytics and business intelligence is part and parcel of our work that we do. And we have been continuously focusing on that. And we have established quite a strong data governing mechanisms internally. And we are continuing to invest in technology and processes that help us and any modern technology that we look to procure. One of the key elements we look for in that is how does the technology help us with real time insights into the data that is supported within that platform without having to go to 10 different places, if I may say.
Laurel: What are some examples of innovation that you see are possible with a modernized IT system?
Vijay: We see the possibilities of real-time integration of data from various sources and various business units and the global nomadic workforce that we have. We also see the possibility of process automation and improving staff productivity and efficiencies. And we see this in many fronts. And we have set up a lab, the digital lab, just to keep experimenting on technologies such as blockchain, artificial intelligence, machine language, predictive analytics, and so on. And the purpose of this lab is to constantly keep an eye on some of these modern technologies, figure out ways on how it can be applied to the WBG business and how to help staff innovate and selecting new technologies, following these patterns, and applying some of these concepts that we continuously improve.
Laurel: So, with that kind of eye to the future with emerging technologies like blockchain, what are you most excited about?
Vijay: Blockchain is one of the things we are excited about because that does help us provide this trace from the beginning to the end. In fact, we have done some prototypes and proof of concepts already on that. The next thing we are excited about is definitely the predictive analytics, considering that we have been in the business for over half a century. We have technology in place for more than 30 years and we have collected data over these few decades. For us, the biggest thing is, or the most exciting thing would be, business intelligence and predictive analytics where we see patterns, we see emerging patterns, and we see repeating patterns, and we can make quicker decisions and recalibrate ourselves very quickly. And we do deal with a lot of external vendors. So for us, the multi-language capabilities, enterprise-to-enterprise integration, where we can reduce the paperwork and emails, is another exciting thing.
And natural language processing would be another exciting thing for us where we do not have to have our employees logging into a machine with the menu and clicking on buttons here and there, but who can clearly say what they want and the system can quickly respond with information or answers. So these are some of the things that excite us.
Last but not least, anything we can do to reduce the work we need to do in technology, but let the technology do more for us, so we can focus our time on the strategic priorities, will be the most exciting thing for us.
Laurel: Well, that’s very promising Vijay. Thank you so much for joining us today on the Business Lab.
Vijay: Thank you for having me here.
Laurel: That was Vijay Yellai, from the World Bank Group, who I spoke with from Cambridge, Massachusetts, the home of MIT and MIT technology review, overlooking the Charles River.
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