IT and Operations
Over the long term, 10-25% of banks' and insurance companies' budgets and staff are tied up in IT. Despite this, only a few companies have an IT strategy/IT governance which is consistent with their strategic goals and embedded in their top and middle management. The result: Potential from actively managing IT goes untapped.
We at Roland Berger work together with our clients' business units and IT departments to develop their IT strategy. In doing so, we help our clients develop the right strategy as well as actively implement this strategy throughout the company.
In brief
The Financial Services Competence Center's "IT and Operations"-Segment has extensive experience in
- Developing IT strategies, IT architectures and IT governance
- Designing and optimizing IT organizational and process models that focus on IT core competencies, IT governance and collaboration models with the business units and within IT
- Dealing with changes in business models and their impact on IT
- Defining a sourcing strategy for IT and back-office services that is tailored to the specific regional market situation
- Helping banks and insurance companies in pre- and post-merger management
- Implementing sustainable cost-cutting programs
- Managing complex programs and multiple projects
Sample projects
The following sample projects illustrate some of our international experience in the Financial Services Competence Center's "IT and Operations" segment.
Optimizing the cost of IT infrastructure following the merger of two universal banks
Background
The merger of two large universal banks had led to a 15% integration-induced increase in total IT operating costs in the new group. Costs rose to around EUR 1 billion within two years and there was limited cost transparency because of different financial control systems. Substantial savings had been planned for as part of the integration, but had not been fully backed up with cost-cutting actions. The aim of the infrastructure cost optimization program was to implement identified actions (about EUR 30 million a year), specify other planned actions (roughly EUR 20-30 million a year) and also identify further savings potential.
Approach
The projects implemented in the program were optimizing LAN and WAN services, optimizing the technical and commercial aspects of the server landscape, optimizing IT processes, converting the IT landscape of a group subsidiary and reducing the number of desktop computers. At the same time, costs were made transparent and action packages prioritized using stringent cost control. Other cost-saving actions were also highlighted. These included data-storage systems, host/mainframe, eliminating certain services within departments, and setting up cost-focused IT governance.
Results
The actions taken produced annual savings of EUR 70-85 million. Using strict project management, Roland Berger ensured the actions were implemented in order to tap that potential, and supported client project managers with professional and technical input. Business cases and decision-making documentation were also produced. Ongoing implementation monitoring (planning and reporting) and program risk assessment were set up. Costs were made transparent and possible risks relating to the achievement of savings targets were identified.
Supporting IT application architecture design, implementation planning and IT system selection for a bank in the Middle East
Background
A mid-sized corporate bank had decided to set up a new retail business and to enhance its existing range of corporate banking services. Roland Berger supported several modules of the bank's transformation project, among them PMO, retail setup, wholesale transformation, HR & change management, risk management and IT. As the bank's existing IT infrastructure did not support all of the required future products, channels and functionalities, it needed to migrate to a new core banking solution. Thus, the IT module was responsible for designing an IT application architecture across all business lines and support functions. This involved designing the business processes, defining the requirements as well as selecting the core banking system and satellite systems.
Approach
To compile all existing and potential future business requirements, we conducted extensive requirements workshops with all relevant business lines and support functions. During these workshops, the potential future product offering was drafted front-to-back and related business processes were mapped out. Identified requirements were matched to a functional architecture framework and prioritized according to targeted implementation phases.
At the same time, we researched major core banking system providers in the bank's target markets in the Middle East. After drawing up a long-list of providers, we distributed a request for information to gather more detailed information on their coverage of the bank's requirements. Based on this analysis, a short-list of CBS providers received a comprehensive request for proposal containing approx. 1,100 questions drawn from the results of the internal requirements workshops.
After receiving the vendors' request for proposal responses and having the short-listed vendors present their proposed solutions to the bank, we moderated an evaluation panel to discuss their strategic fit to the bank and evaluate them using over 80 criteria. The evaluation panel selected two potential providers, with which over 20 gap workshops were conducted. These comprehensive workshops aimed to identify detailed gaps between each provider's standard CBS functionalities and the bank's current and future requirements. All identified gaps were subsequently translated into implementation tasks, aiming to close the gaps through parameterization, customization or additional third-party satellite systems.
Results
Based on all these inputs, we worked closely with the bank's business lines and support functions as well as with each of the CBS providers to develop various potential scenarios. These scenarios included interim and target application architectures (both core and required satellite systems), several options for the sequence of the implementation ("retail-first", "wholesale-first" and "big-bang") and detailed implementation plans (incl. project schedules, scope and required resources).
Based on the detailed scenario planning, the bank was able to assess strategic options related to both its business and IT transformation and was able to commence detailed contract negotiations with IT systems providers.
Conducting quality assurance as part of launching a core banking system at a large retail bank
Background
A large German retail bank had decided to implement a new core banking system. To do so, the bank selected a standard software package from a leading provider (for savings and checking accounts, etc.). During the two-year launch phase, up to 500 people worked on the project. Within the scope of regular and independent reviews, Roland Berger was assigned to assure the quality of the project from an external perspective.
Approach
Various reviews were carried out as part of the external quality assurance assignment. These focused on assessing the project contents, approach, progress and the risk situation. Furthermore, we estimated the feasibility of the project in terms of its technical, timeframe and resource aspects and provided recommendations for further steps. To obtain an overview of the overall project mood and potential project improvements, we regularly surveyed the project team members using an anonymous survey.
To keep the operational burden of the external quality reviews down to a minimum, we first examined relevant documents and current assessments of the project work. Based on this, we prepared checklists and questionnaires, which provided guidelines for the reviews and relevant interviews.
Results
The review findings were comprehensively documented in a review report and discussed with the relevant bodies (project management, steering committee, board). Nearly all of the recommendations stated in the review were adopted. The reviews played a major role in moving the project forward, reducing risks and improving project quality.
