Managing The Voucher Less System Change In Commercial Bank

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Executive Summary

Main objective of this report is to discuss the background for a Managing Changes in organizations. Change of Voucher Less System and alternative models of its management in Commercial Bank Of Ceylon PLC has been discussed in the report as the real world example.

With the modern world competition in banking industry Commercial bank had to find an alternatives for the current process which are lacking of new technologies, increase counter rush, more time consuming and anxious, etc... By studding the current operations of Commercial bank it's obvious to say Voucher less system is more dynamic and towards to the knowledge-based economy.

Proposed system is beneficial for all the internal and external stakeholders in the Commercial bank. Main feature of proposed system is the deviation from aged Bureaucratic processes. Following are the set of main requirements that targeting to achieve from the proposed system.

• Fast voucher posting

• Standardize vouchers

• Enhance the teller authority level

• No voucher stocks maintain

• Reducing paper and filling work

• Fast service

• No queues

• Less stationery required

Another important goal of research is to address and hint some of required business process re-engineering at Commercial Bank.


This Assignment is mainly focus on the reasons for Voucher Less System change in the Commercial Bank Of Ceylon PLC. And alternative models of its management. So it is essential to discuss What is Change Management, what is the background to the change, company structure & various methods of applying the change management to this ongoing process by minimizing the risk of failure during the change.

Introduction to the Commercial Bank of Ceylon PLC.

The birth of Commercial Bank roots back to 1920s' during the British colonial regime when trade, commerce & enterprises like Banks opened up in Sri Lanka. In 1969 Commercial Bank of Ceylon gathered momentum when it became a totally independent entity.

During the late 1980's business expanded; two associate companies Commercial Insurance Services (Pvt.) Ltd. & Commercial Leasing Ltd. were formed. Then again in 1991, associate Company Commercial Stock Brokers (Pvt.) Ltd., commenced operations with the bank owning 40% equity participation. Then in 1992, Commercial Fund Management (Pvt.) Ltd. was formed for the purpose of operating unit trusts where the bank enjoyed 50% equity participation. In 1996, the bank increased its shareholding in Commercial Development Company Ltd. (an independent entity, dealing in property development) to 94.55% by means of a share swap.

1998 witnessed the installation of a sophisticated Online Banking System linking all branches &, paving way for the clients to conduct a variety of banking transactions through their personal telephone, personal computer or laptop. The onset of millennium 2000 saw the launch of Commercial Bank internet banking facility giving every benefit of internet technology to their long standing & potential clientele.

The expansion of Commercial Bank had evolved throughout the country's political & economic transition. It has transformed so much that today it has been highly renowned for its service excellence even in the international arena. It was rated as the Best Bank in Sri Lanka by Global Finance in 1999 & then for 11 consecutive years - a record breaking achievement received by none other banks in Sri Lanka.


"To be the most technologically advanced, innovative & customer friendly financial services organisation in Sri Lanka, poised for further expansion in South Asia"


"Providing reliable, innovative, customer friendly financial services, utilising cutting edge technology & focusing continuously on productivity improvement whilst developing our staff & acquiring necessary expertise to expand locally & regionally"

What are the current operations of the Commercial Bank.

Commercial Bank is the most leading No 1 Bank In Sri Lanka. It has four major functions as a bank. Those are;

Providing payment mechanism

Pooling of money

Extending credit facilities

Other financial services

Providing payment mechanism

As a bank the commercial bank providing the cheque books, ATM, direct debits, standing orders, debit cards, internet banking, SLIP transactions, etc…those are the functions that the customers can do there day today payments with taking any hassle.

Pooling of money

The commercial bank collect the money from the public as savings deposits, fixed deposits, Minor Savings, RFC & NRFC deposits by giving them a interests to their money. Commercial Bank has its own unique savings products, namely Super-sever, Power Saver, Dot Com, Isuru Minor Savings, Arunaqlu Savings, etc.. These are the main fund collecting operations of the bank. That is what mean by the polling of money.

Extending credit facilities

Extending the credit facilities to the potential customers is the main income of a bank. This is how the bank earn money from the interest payments of the instalments of credit facilities. In commercial bank there are various categories of loan schemas for the different type of its customers. There are personal loan schemes "Pahana", Housing loans "Nivahana", Commercial loans "Diribala", Leasing Facilities "Com Leasing", Pawning Facilities etc… to serve their customers for their loan requirements. Also permanent overdraft facilities & temporary overdraft facilities extent to the Current Accounts can be taken as the Credit income to the bank.

Other financial services

Other than the above main banking facilities Commercial bank facilitate its customers by offering Safe lockers, Credit Cards, Letter of Credits, Advisory services, issuing of TCs & Foreign Currencies, etc..,

To proved the above mention services Commercial bank following lots of rules and regulations to follow as the operation procedures to ensure about the accuracy and the secrecy of the customers trans actions.

So to provide quick and fast service to their customers commercial bank thought of a new process of doing there transaction that can eliminate all the idling time of the current operations.

That is they are having the lot of vouchers for the different transactions, and before the transaction come to an proceed the teller have to write the voucher and enter in to the ledger record book and get the voucher signed by the authorized officer or officers, before the posting of the voucher to the system. After the posting part done it has to be check by the officer and then only the customer get the work done. That is the operation procedure of doing a one transaction. That transaction time is comparatively high, although the banks is doing a high risk transactions with the money. But the expectation of the customers are also demanding high from the commercial bank, by been the best bank of Sri Lanka they ask why you take that much time to doing the single transaction? etc…

So the research and development team of the bank has to come across with the new process, to reduce the transaction time delay and counter rush & also how can we cater to the customer demand by ensuring the all accuracy and secrecy with the loyal to the government rules & regulations.

Background to change

In today's environment the market is moving towards to knowledge-based economy. Most of the companies are investing more & more on the research & development to "upgrade" their products & services to provide better services to their customers. Also the employers & employees have improve their skills & work quality of the process. With this new knowledge & information the organisations are growing rapidly, and this growth leads organisation to change.

Other than the knowledge the SLEPT factors mainly course the organisation to change.







This factor heavily depend on the people & their attitudes & believes in the country. For the Commercial Bank this social factor is very much important to do their business & to attract the customers from their competitors. Because every banks provides almost same products & services to the customers, but the way of the service is been delivered is how they make the difference. How the society take this service to them & their likes & dislikes depend the business to the bank.

So the banks have to change their all products & services according to the societies requirement. If not it'll be difficult to survive in dynamic business world.


Legal factor refers to the government laws & legislations relates to a company & its business processes. Mainly the Banking Act & the Central Bank of Ceylon are the governing bodies to all banks & financial Organisations in Sri Lanka. Also banks have to make sure that their each and every functions are according to the law because they are dealing with the other people's money.

Since the Legal factor is very important to the Banks and it is given the first priority to search before the implementation of changes to the Organisation whether these changes are in order with the rules & regulations.


Environmental factors to the bank is how the ecological ,environmental & geographical aspect influence the business of the bank. To make changes of the products of the bank according to the environmental factor they have to first identify the requirements of the people in this geographical area and focusing on their needs and bank has to introduce the banking products which suits to needs & wants.

Eg > In an agricultural area bank have to promote eco friendly paddy cultivation advances. If it is for gem mining area bank have to promote more safe lockers, more fixed deposits, current accounts to the gem businessmen.

So this environmental factor is also having major potion to change banks to do the business.


The political factor is the government view towards the country's economy and their economic policies.

That is political party views, impact on security situations, policy issues such as labour regulations, and countries stability.

When it come to Banking industry the Tax policies, labour laws, statutory reserves with the central bank, RAPO rates, influence on interest rates, and tariffs and chargers will have an impact on day to day businesses.


This is one of the most important aspect for any competing business scenario. specially in banking industry bank teller cards, e-banking ,credit cards, on line payment systems have improved with the time and with the use of new technology. With the competition of the market and increasing of customer expectation an individual bank cannot survive with the old out dated technology. To reduce transaction cost , time, to provide better service also to be the benchmark banks has to move with the changing technology.

The Commercial Bank have to change with its customer expectations towards the bank to fulfill up to the satisfactory levels of them. So the main factors to the above identified change is Social , Environmental & Technological factors. Because this change is to increase the Quality of the work done by day today banking, the political & legal factors are not much important.

Bureaucratic Organisation

A bureaucratic organisation is manage on impersonal and rational basis. In these kinds of organisations there are lot of rules and regulations involved in. That means for a one particular work to be done, it has to be passed through the different heads of authorities. It was felt that such organisations, based on rational authority would be more effective and adaptable to change because continuity is related to formal structure & positions rather than to a single person, who is at his own point of view.

Max Weber(1864 -1920 ,The German Sociologist)

According to the Weber's The Theory of Social and Economic Organisations (1947),the term bureaucracy in terms of an organisation and management function refers to the following Six characteristics:

Rules & Regulations - The formal set of rules & controls defines clearly to the employees while they are working. This formal system help to maintain the discipline and uniformity of the procedures and operations. Even though Managers and employees changes or leave the organization rules and regulations help to maintain the Organisational stability.

Impersonality - Depending on rules and regulations leads to impersonality. Which protect employees from the personal thinking of managers. Impersonality heightens a managers' objectivity and minimise discretion or favouritism.

Division of labour- Managers and employees are clearly define and officially sanctioned. Job descriptions are specified with responsibilities and line of authority levels. This enables the management to set people to work on jobs that are relatively easy to learn and control.

Hierarchical structure - An organisation is organised into a hierarchy which ranked vertically by the amount of authority and a clear chain of command. Each lower position is under the control and direction of a higher position.

Authority structure - A system based on rules & regulations, impressionability, division of labour and hierarchical structure is tied together by an authority structure.

Rationality - Refers to using the most efficient means to achieve the organisational objectives by managing logically and scientifically.

By looking at the structure of Commercial Bank, it is much more similar to the Bureaucratic organisation. Because it has clearly define its rules and regulations, there is a clear chain of command and it has hierarchy which ranked vertically by the amount of authority, each and every employee has a clear job description and levels of authority and impersonal evaluation schemas based on performance. And also clear organisational goals and objectives to achieve.

Hierarchal Structure Of Commercial Bank


Comparing with the commercial banks structure and the Culture with Bureaucratic organization structure it has lots of similarities with the Bureaucratic Organization.

Strength & weakness of Bureaucratic Organization



Formal rules and behaviour bounded by rules 

Uniformity of operations continuity despite

Changes in personnel, and the quality will


Functional division of labour based on functional specialization

Easy for monitoring the tasks and rectification can be done easily.

Rational allocation of tasks makes everyone responsible and accountable on their work

Impersonal orientation 

Membership constitutes a career 

Promotion based on technical competence 

Employment based on merit-no ascribed status 

Qualifications are tested 

Proscribed authority-legally defined 

Limited discretion of officers 

Specific sphere of competence 

Legally based tenure 

There are too many levels in the hierarchy.

The decision making and most of the other processes are very slow

The job may become boring and stresfull for the employees.

No direct communication or bottom-up communication.

Since the communication has to go through heaps of levels that it gets distorted.

Too much control discourages innovation and creativity.

Lack in identifying employee needs and poor handling of grievances.

The bureaucracy itself encourages political behavior and race try to use other means to go up the hierarchy.

Comparison of Alternative forms of Organizational Development

Business Process re-engineering


The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. (Reengineering The Corporation; A Manifesto For Business Revolution, Michael Hammer and James Champy)

In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute of Technology (MIT), published an article in the Harvard Business Review, The term "re-engineering" is introduce to the society and concept of business process re-engineering is introduce with the publication of 1993 book Reengineering The Corporation; A Manifesto For Business Revolution, Michael Hammer and James Champy. In BPR concept first of all it is essential to identify the fundamental operations and to verify why the previous rules and assumptions exist, and radically redesign all the structure and the processes, procedures into completely new ways of doing the same work done. The dynamic improvement in performance by re-engineering the process of work leads to improve the organisational efficiency by 10%.

This change is considered as a "Second order" change, which is a planned, radical and has a holistic approach in changing processes.

Kaizen Concept


Kaizen as "a means of continuous incremental improvement in personal life, home life, social life, and working life. At the workplace, Kaizen means continuing improvement involving everyone-managers and workers alike. The Kaizen business strategy involves everyone in an organization working together to make improvements without large capital investments."

Kaizen method is originally Japanese management system for incremental change.(The term Kaizen is a Japanese word, 'Kai'- to mean continuous and 'zen' means improvement.) this concept is mainly consist of three key elements; such as, Elimination of Waste, Inefficiency, Standardisation and Kaizen Five S frame work for good housekeeping.

Five S letter consist of following:

Seiri - Tidiness.

Seiton - Orderliness.

Seiso - Cleanliness.

Seiketsu - Standardised clean-up.

Shitsuke - Discipline.

Kaizen concept can be considered as a 1st order type change as it is a planned and incremental change that enhances or corrects existing aspects of an organization.

De-layering & Downsizing

De-layering is mainly involves eliminating layers of middle management to reduced cost & hopefully, improve efficiency, by reducing staff cost.

De-layering tends to be associated with the development of more 'flexible' contractual arrangements such as;

Part-time & short-term contracted employees.

Bought-in contractees.


Home working concept.(virtual organizations)

Downsizing is reducing the number of employees is an organizations without reducing the work or output. Downsizing is offend closely linked to de-layering, which is the process of removing layers of management to change the organization from one of with a rigid hierarchical framework with numerous layers of supervisory grades into a 'flatter' organization. Which includes optimization of it's employees and simplification of processes.

This is considered as a major and a radical second order (Transformational) change in an organization and is often linked up with organizational re-structuring and changing the culture of the organization.

Stakeholder Analyses & Introduction of Change to the Commercial Bank of Ceylon PLC.

Who are Stakeholders ?.

Stakeholders can be an individual, organization, or an unorganized groups that can affect or be affected by the organization's actions. Stakeholders can be identified as key-stakeholders (those who are directly affected positively or negatively during the changes of the organization or after completion of the change.) & non-key stakeholders ( those who are indirectly affected by the project, those who need not to be recognized in order to successful completion of the change.).

Also in most organizations stakeholders can be categories in to the following:

International actors, national or political actors.

Public sector agencies interested groups.

Commercial/privet for-profit, non-profit organizations.

Stakeholders of Commercial Bank

Before the implementation of the change, it is very important to analysis the key-stakeholders of the Commercial Bank of Ceylon PLC. As this is a service oriented organization to the wide range of services area there lots of key-stakeholders & non-key stakeholders.

Top management

Senior managers

Operational level Branch managers

Executive officers & Junior executive officers

Junior executive assistants Internal stakeholders

Banking trainees

Clerical staff

Bank employees union

Bank executive union

Shear holders

Central bank

Corporate Customers

General customers

Ordinary Clients External stakeholders

Stationery and other suppliers

General public

Other competitive banks & financial institutes

Auditing companies

Identify the stakeholders who will be impacted from the change


Current Operations

Proposed Change

Executive officers & Junior executive officers

Have to Check the vouchers before posting and sign on the vouchers

Check the vouchers after the posting in to the system & authorize in the system.

Voucher checking is done by after the posting to the system

Junior executive assistants & Banking trainees

Produce different type if the vouchers according to customer equipment

Have to write the voucher , enter in to the Ledgers, & get the authority from the officer

After obtaining the authorization posting the voucher to the system

Get the posted voucher signed by the authorized officer.

Standardize voucher to main function of banking

Enhance the teller authority level

Vouchers checking done by the officer after the posting

No voucher stocks maintain

Clerical staff

Have to bundle the lots of vouchers

Maintain the correct level of lots of vouchers relating to different operations

Lot of filling work to be done

Only one stationery item for all of the transaction

Filling work reducing by big percentage


Have to fill different type of forms for the various transactions

Have to wait lot of time to get the work done

Lots of queues in the counters

Difficult to identify the correct voucher

Less vouchers to fill

On different type of forms & vouchers

Quick service

No big queues

Stationery and other suppliers

Have to supply lots of stationery

Lots of verities of stationery vouchers

Have to maintain continuous supply

No lots of stationery required

Only one standard stationery item for every transaction

Introduce the change to the Stockholders


Attitude for change

Power and Influence






Executive officers & Junior executive officers

Junior executive assistants & Banking trainees

Clerical staff


Stationery and other suppliers

Identifying the Systems & Sub-Systems in Commercial Bank

System is an assembly of equipment, skills and techniques established or formulated to carry out specific activity, perform a duty, or solve a problem. A complete system includes all equipment, related facilities, materials, software, services and personal required for its operation and support to be the degree that it can be considered a self-sufficient item in its intended operational environment. Also the system have boundaries that are usually defined by the system observer and what is outside the boundary is environment.

7 S model & Commercial Bank

This model describes the interconnected 7 factors to organize a company. These factors are all independent so if failure in one will affect all the others as well.

The role played systems within an organization can be understood with reference to the 7 Ss model.

McKinsey 7-S framework

Shared values / Superordinate goals

This is the beliefs, the principle and aims of the bank, where we would like to be or what we would like to become. Basically this is the Vision of the company. The vision of the Commercial bank is to be the most technically advance, innovative & customer friendly service organization in the country. The vision is the main driving force of the bank to perform outstandingly.


This is the hierarchy of the organization and its chain of decision making and planning process. In Commercial Bank almost all the decision making is done by the board of directors and the top management. Only the operational level decisions are taken by the senior managers & branch managers within the guidelines and within the frame work of the banks circulars and regulations. All the commands and the decisions are done in the top down method.


This is the internal processes and tools the organization use to run their business in a smooth way. In Commercial Bank the internal processes are clearly defined and maintaining in very much formal manner. Each and every transaction has the definition of the correct way to be done according to the circulars. There are 6 - Operational Manuals and 3 - Credit Manuals mainly describe the procedures to be followed. Other than these Manuals there are special circulars issued to the specified departments to formalized the work (Eg: Treasure Department, Card Center, e-Banking, Marketing, Logistic, etc…).


This is more commonly express as the "culture" of the organization. The Culture of the Commercial Bank is like more towards to the bureaucratic style. In hear there are immediate officer to each and every employee. The communication can be done through the command chain. And the rewarding system in this organization what gets punished, what the organization is thought about and what it is lenient about. Also in Commercial Bank has two strong employees unions, and it has the ability to make the workers attitudes towards the unions view. Other than these criteria's of the relationship among the workers it is a friendly culture and people very rarely interfere to others personal problems unless it is work related.


This is how the human resource of the organization and its HR polices. In Commercial Bank it has well Qualified and well experienced work force with the capability of doing their work accurately and efficiently. The recruitment processes are very well planed and grab the best selection to the bank. And there are lots of training programmers conducted to upgrade the knowledge of its employees to achive the Banks objectives. Evaluation process is under the grding of the every employees by his superior officer. Mainly there are Top management, Executive grade, Non-executive grades and Clerical staff.


This is what the organization especially good at. In banking industry each and every bank provide the same kind of products and services to the public, with this competition it is not what they give , but it is How they produce their products to the public is the deciding factor to the bank to win the market in the business. The Commercial bank has the customer friendly products & services, introducing the large number of branch network with the largest ATM network, updated systems & newest technologies and well trained staff to provide the customer oriented service to prospect of the company.


Strategy is the long term plan of the organization to achieve the its vision and how it will cope with this environment and how to deal with the competitors. The Strategy of the Commercial Bank is Providing reliable, innovative, customer friendly financial services, utilising cutting edge technology & focusing continuously on productivity improvement whilst developing its staff & acquiring necessary expertise to expand the business locally & regionally.

Identifying the causes to Counter rush of the Commercial Bank by using the Fish Born Diagram

To identify the causes to the counter rush & pre transaction time delay of the bank, I have organized a Brainstorming session with the 15 experienced staff members from different branches & departments, regarding this problem. By analyzing the ideas come up with the following Fish Born Diagram.

By analyzing the above cause & effect diagram the research and development department of the Commercial Bank come up with the following changes as the solution for the above cause;

To introduce new voucher less system

Enhance the teller authority level

Eliminate the unwanted stationery items & standardize the vouchers

Introduce internet banking to customers

Include the all kind of applications & mandates to intranet

Develop BPR Model to change the Commercial Bank's current Voucher posting system.

To implement the above identify changes to the commercial bank, we have to follow the suitable model to the organization. To apply Business Process Re-engineering model, it is necessary to have an understanding about what are the current basic fundamentals which are going to be change with the new process& Why it is to be change, How it is going to be change. Therefore the following steps are recommended to develop BPR model for proposed change.

The main function is to be change is the current voucher posting system of the bank.

Identify what are the unnecessary operation in the current process.

Re-design the all existing structure and procedures.

Evaluate the new business process.

Identifying the new structure and the people who are involved in it.

Develop new system software to the new process.

Test run of the new software into the current it system & checking.

Get the approval from the central bank and relative authority bodies.

Purchase licenses for new software from the current system providers.

Purchase of compatible equipments for the new system.

Order new standardize vouchers stocks from stationery suppliers.

Select the few model branches and introduce new BPR system.

Research on the IT system issues & customer issues with the new process.

Getting the customer and employees feedback.

Before introducing this new process check with the external & internal auditors.

Implement the New process to the all branch network.

Implementation process & Outcomes of the New BPR .