ADB’s Digital Transformation Journey

1. ADB’s Digital Transformation Journey 27 June 2019

2. Asian Development Bank(ADB) at a glance • Founded in 1966 - 31 founding members: 19 regional members, 12 non-regional members - 68 current members: 49 regional members, 19 non-regional members • Headquartered in Manila, Philippines • Bonds issued first in Germany (1969), followed by in Austria (1970), Japan (1970), and the U.S. (1971) • Main Roles: help developing member countries in Asia and Pacific through: (i) combining finance and knowledge; (ii) promoting good policies; and (iii) catalyzing regional corporation and friendship. • 3,374 Staff (including international staff 1,242)

3. Annual Commitments of Loans and Grants Ordinary Capital Resources (OCR) and Asian Development Fund Operations (ADF) ($ billion) To date, ADB’s cumulative assistance to the Philippines has reached $19.3 billion in public sector loans, grants, and technical assistance.

4. Our Digital Transformation Journey

5. ADB’s IT Special Capital Investment IT Strategy 1993-1996 Technology Foundation ISTS I 1998-2002 Integra (ERP)Backend automation ISTS II 2004-2009 Operations automation ISTS III 2013-2018 IT Reforms Modernization program Digital Agenda 2030 Stage 1: 2019-2023 $ 29.84 M $ 55.47 M $ 118.3 M $ 6.44 M $ 64.97 M 5

6. We’ve Come a Long Way We arehere IT Craftsmanship IT Industrialization Digitalization Reference: 2019 CIO Agenda Southeast Asia Perspective Gartner

7. Role of the Chief Information Officer (CIO) • Closely work with Management and other executives to create a digital vision for the organization. • Leads the development of the digital strategy and roadmap, and ensures its integration with the organization strategy. • Ensures that the enterprise is developing the digital assets and capabilities that will be needed to survive and thrive in the midterm and long term. • Acts as a champion in leading the organizational changes required to create and sustain organizational digital capabilities. • Defines and reports on digital KPIs and metrics that represent progress against digital goals. • Builds and maintains external relationships in academia, as well as with industry bodies, vendors and technology analysts to learn and influence. Source: Gartner, Gartner for IT Leaders Tool, 2018 January

8. Role of the CIO CIO Top Priorities Source: Gartner, Defining the Office of the CIO, 2018 Gartner OCIO Survey

9. ADB IT Structure and Functions Shirin Principal Director • Information Security Strategy & Policies • Incident Response • Information Risk Management • IT Assurance • Business Continuity / Organizational Resilience • Governance & Reporting • Demand Management • People Management Peter Jean OIOD OIOD-SR Alain Ozzeir Brian Naoto Pierre OIOD-AC OIPM OIRS OISD OIID • Resource Management • Financial, Budget, Procurement & Contract Management • Customer Support Services • Communications • Solutions Delivery Governance • Operations, Finance & Banking Services • Corporate Services • Information Mgt. Services • App Architecture • Technology Ops Governance • Innovation & Engineering • Security Monitoring • App Production Support • Infrastructure Operations • Disaster Recovery • IT Strategy & Innovation • Enterprise Architecture • Portfolio Management • Program Management

10. Real-Time Agile ADB’s IT Reforms Modernization Effort Real-Time ADB (2016 – 2019) Single Source of Truth Resilient Management decisions driven by real-time data Organizational resiliency allowing staff to work anywhere, anytime Today: Information not accessible on any devices Real-time visual reports, dashboards and analytics Today: Inadequate business intelligence tools Single source of truth Today: unreconciled data spread across 1000s of spreadsheets Consolidated, simplified, modern systemsFinancial | HR & Admin | SOV & NSOV | KM Today: Multiple, unintegrated, and difficult-to-use IT solutions

11. Real-Time ADB Key Accomplishments 14 Projects Endorsed by IT and Data Committee, 6 Projects Completed and Many Milestones Achieved Operations Procurement & HR Financials *1. Nonsovereign Operations (NSO) 4. Partner Fund Mgt. System Phase 1 3. Treasury System Improvement • *2.Disbursement Financial System 5. Institutional eProcurement CRM CreditLens Summit RM Rollout Invoicing, Accruals & Budget Integration Procure to Order Inventory & Sourcing • Introduced new systems for better work productivity • Improved organizational resiliency and IT Security • Streamlined business processes • Provided the tools for work anytime, anywhere • Introduced innovative solutions • Established Hybrid Integration Platform, “War room” Project Monitoring and re-organized IT Structure Post Trade Processing (MUST) Mainframe Loan IQ NSO Data Mart *6. Talent Management TA Claims Portal Pricing • Talent Mgt Foundation Workforce Compensation • Performance and Goals Mgt HR4U Business Foundation 7. Microsoft Office 365 Implementation 8. Content and Collaboration Wave 3: SharePoint OnPrem/ Hybrid Discoverability of TA reports, TORs Wave 1: O365 installation Wave 2: Mail Migration Community Building Improve Briefing Notes Process Tacit knowledge harvesting Team Collaboration With SharePoint Rationalize and Migrate Content to SharePoint Adoption and Change Security Classification Wave 4: Unified Communication Infrastructure Foundation 9. IT Mobility Cloud Services Globe SIM Macbook and Hybrid Notebook distribution iPhone and iPad distribution Mobile Phone Mgt Windows 10 and Macbook Baseline Config 12. Enhanced DR infrastructure OR Phase 2B 11. Foundation Services** 10. OR Active Data Center Roaming Control Mobile Apps 13. IT Security 14. IT Services* Security Configuration Mgt Payment Systems Security Review eLearning Identity Mgt (MyAccess) Privileged Access Mgt Unified IT Service Desk Proximity Center Pilot Chatbot Pilot New IT Service Desk Tool ITSM Standards and Best Practices Data Masking Network Threat Behavior Analysis Endpoint Detection and Response and Application Control Penetration Test Overall Security Review Specialized IT Service Desk Work spaces Legend: Completed projects In Progress *Originally not in ISTS III ** Business case split into 2 11 11

12. Updated Policy: Principle-Based Procurement • ADB revised its procurement policy from rule-based to principle-based procurement • “Various sourcing strategies may be adopted provided that it can be demonstrated that the strategy proposed is consistent with the principles described herein … would improve the procurement outcome for ADB … These strategies may include inter-alia: agile sourcing …” • - Appendix 1 Paragraph 2.7

13. Updated Policy: Principle-Based Procurement • Adopted elements of agile sourcing on the IT Reforms project. Typical Phases of an Agile Approach includes: • Discovery • Request for Information • Refinement/Shortlisting • Negotiation of scope • Negotiation of legal and commercial issues • The Contract • Implementation Note, “typical” not all are present in all transactions • To effectively track and monitor progress, we have developed project procurement plans, timelines, and online Dashboard $ $

14. ADB’s Strategy 2030 and Digital Agenda 2030

15. Strategy 2030 Responds to the Region’s Changing Needs • Vision • Achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining efforts to eradicate extreme poverty • Value Addition • Finance • Knowledge • Partnerships • Guiding Principles • Using country-focused approach • Promoting the use of innovating technology • Delivering integrated solutions

16. Strategy 2030: Stronger, Better, and Faster ADB • Ensure ADB’s robust financial resource base • Rationalizing internal administrative and operational costs and exploring various options to generate organic capital • Improving ADB products and instruments • Responding to diverse client needs by more effective use of tools including PBL (Policy-Based Loan), RBL (Results-Based Lending), credit enhancement products, and local currency financing • Enhance ADB’s human resources • Ensuring staff mobility, gender and diversity, respectful workplace, performance management system • Maintain a strong country presence • Advancing “one ADB” approach: further collaboration between private sector/sovereign operations, knowledge work and public relations • Strengthening field presence in FCAS (Fragile and Conflict Affected States) and SIDS (Small Islands Developing States) • Modernizing business processes and improving operational efficiency • Enhancing data management, promoting digital transformation

17. Strategy 2030: Stronger, Better, and Faster ADB • 101 Enhancing human resources. • ADB will expand its talent pool, hire experts in new priority areas, and streamline recruitment processes with the triple objectives of speed, quality, and transparency. It will invest in the training and development of its staff(including operations, leadership, digital technologies, and change management). Training programs will support understanding and collaboration between staff working on public and private sector operations. ADB’s performance management system will be further strengthened to motivate staff and enable a high-performing culture. Staff mobility, including short-term assignments and rotations, across departments and between resident missions and headquarters will be enhanced to broaden staff skills, facilitate knowledge sharing, and promote innovations. ADB is committed to diversity in the workforce, including promoting gender balance and a respectful work environment for all. 105. Promoting digital transformation. To complement business process modernization, ADB will make optimal use of secure, modern information technology systems and digital processes to enhance its effectiveness, efficiency, and resilience. ADB’s digital transformation will facilitate real-time access to data on all aspects of its operations and administration. It will create digital platformsthat facilitate the production of a wide range of knowledge products and services and make them readily accessible to partners and stakeholders. It will also support innovative financial products and facilitate a culture of innovation and responsiveness to changing client needs. 

18. Digital Agenda 2030 Journey Preparation of the Digital Agenda 2030 Development of IT Blueprint 2.0 Executive Business Cases (EBCs) Consultations on the IT Blueprint 2.0 Defined ADB’s ICT capabilitiesthrough workshops 3 updates to President 2 Informal Board Seminar 1 dedicated Budget Review Committee 6 consultation sessions with all board suites were conducted prior to Board approval. Approved Digital Agenda 2030 (31 Oct 2018) 100 priorities 16 Executive Business Cases prioritized, developed and approved Organized IT Executive Briefing Mission Develop Digital Agenda 2030 Long term vision & roadmap More than 160 workshops and meetings with Management, key stakeholders, and technology partners. International Financial Institutions (IFI) and Gartner consultations Appointed Core Drafting Team 26 departments participated More than 120 staff across different levels • 19 representatives in the core drafting team from 6 VP groups

19. Transforming ADB… Established IT Core Values and Principles and update as needed

20. Transforming ADB… • Explored the “Art of Possibilities” through IT Executive Briefings in Singapore. • Conducted Design Thinking Workshops to better understand the business needs – people and culture, process, data and technology. • Conducted regularly ”Be in the Know Sessions” and IT Training and Certifications. • Mobilized a network of over 200 departmental champions that advocates and coach on new ways of working in their respective departments. • Gamification of promotional events with activities encouraging the use of mobile devices to apply the learnings and enhance the change in mindset

21. Digital Agenda 2030Long Term Vision

22. Digital Agenda 2030Long Term Roadmap: Run – Grow – Transform Stage 1: 2019 - 2023 Priority 3 Future State “Run” – Establish Core Modern Systems Priority 2 “Grow” – Optimize Core Systems Priority 1 “Transform” – Infuse Innovative technologies

23. Digital Agenda: 6 Programs, 16 Projects III. Admin & Corp. Services (#11) II. Financial Services I. Operations 6. CLASS Upgrade 1. Sovereign Operations 11.1 ERP Modernization Road Map 7. Disbursement System Modernization 2. Nonsovereign Operations 3. Board Information System 8. Cash Operation Optimization 11.2 Travel 11.3 eLearning 11.4 Budget & Time Mgt 4. Partner Fund Mgt System Phase 2 9. Derivative Valuation Adjustments Legend: Business Case Approval 5. Corporate Report Automation 10. Risk Management System IV. Digital Workplace and Connected Data (#12)  2019 – Approved 2019 12.1 Improving ADB’s Data Assets 12.2 Digital Workplace, Search and Content Migration 2020 V. Enabling the Digital Backbone 15. IT Service Delivery Optimization 14. Cybersecurity 13. IT Infrastructure Services 15.4 IT Service Mgt Phase2 15.1 Program & Project Assurance 14.1 Better visibility, detection and response 14.2 Improved cybersecurity practices and controls 13.1 FO Data Center Modernization • 13.5 Infrastructure Services Delivery Optimization • IT Automation • Real-time Monitoring & Anomaly Detection • Data Infrastructure Services 13.2 Robotics Process Automation 15.2 Adoption & Change Mgt 15.5 Vendor & Service Level Mgt • 14.3 Compliance with international standard and practice • 14.4 Regular verification of security controls and tools 13.3 Videoconference Room Modernization 15.6 Advanced IT Learning Environment • 15.3 FO Engagement & Support 13.4 IT Resilience VI. Laying the Foundation for the Future State (#16) 16.1 Digital Innovation Sandbox 16.2 Digital Fitness 23

24. Digital Agenda 2030 Long Term Roadmap

25. Critical Success Factors • Leadership and strong support from Management. • Strong business sponsorship, and active engagement from users. • Commitment to simplification and automation of business processes. • Delivery of Proof(s) of Concept from prospective vendors before choosing preferred approach and solution(s). • Collaboration between ADB and selected strategic partner(s). • Effective adoption and change management program • Openness to an innovative and adaptive culture (e.g. Agile, design thinking, opportunity to optimize structure, managed services and outsourcing) 

26. How do we make all these real? We need to changethe way we work. ? Our Technology Our Future Our Processes Our Culture