Royal Bank of Canada Executive Summary and Analysis
Royal Bank of Canada was founded in 1864 and chartered in 1869. It became Canada’s largest bank and was the first bank in Canada to install computer technology. On May 31,2004 RDC decided to have a programming upgrade. Unfortunately, a glitch caused by a programming error resulted in massive compter failure that affected millions of banking customers around the country. Actually, the programming error was fixed on early Tuesday, June 1st; however, several days later, millions of RBC customers were still unable to check their account balances, had not received their paychecks, or had automatic payments or transfers delayed. The problem was that program changes were implemented simultaneously to both the primary and back up facilities – this is a very fundemental error in project management. In addition, the new code was not tested before being deployed. Finally, the IT team did not have any plan for the situation of unsuccessful upgrading program case. The technology factor that contributed to the control problems at RBC was not simply a programming error leading to a glitch in the system. Programming errors made by individuals are common. RBC had a rule to test software upgrades, but that rule was not followed. Testing the software upgrade before fully implementing it would have prevented the problem, this was the main technology factor. Another factor was that the upgrade was installed on the back up facilities at the same time it was implemented on the primary computer facilities, virtually made the backup facilities useless in the first place. The procedure that was followed for installing the upgrade simultaneously on both the primary and backup systems was actually part of RBC policy. That policy should be reviewed and possibily changed. Under the assumption that the problem could be solved in a short period of time, the RBC made another ill-considered decision by pending all the transactions to avoid the incomplete or inaccurate data process