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Righting the Ship

How one of the largest universal banks transformed its infrastructure to regain its competitive footing


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Abstract

With operations in more than 50 countries and tens of millions of customers, this leading global universal bank was no stranger to regulation. However, the bank was facing unprecedented levels of scrutiny from regulators due to instability in regional markets on issues ranging from disaster recovery to platform instability, information security and risk.

At the same time, the bank was looking to cut costs by 25 to 30 percent to remain competitive. That wouldn’t be easy in light of a series of large acquisitions and an infrastructure that had grown significantly – with no end in sight.

Not only were these issues dragging down performance, but they were highly visible to both regulators and the investor community. Something had to change – and company leaders looked to leverage their technology infrastructure as  one of the enablers for business performance improvement.

The Challenge

What happens when a company grows rapidly through a combination of rapid mergers, acquisitions and uncontrolled organic growth, in geographies spanning the globe?  In this case, like so many others, business leaders are left holding the bag – a massive, tangled mess of technology investments that were not really meant to work together and don’t. Many of these investments were nearing end-of-life, or were several versions behind. While the bank was sorting through this inherited mess, competitors were harvesting capital and redeploying, on everything from branch of the future and workplace transformation to platform virtualization and capability clouds and beyond.

Rationalizing and streamlining these investments behind a common, shared strategic goal was widely viewed as the right thing to do. But when it came to determining exactly how to do it, there were far more questions than answers. After all, this was one of the largest and most complex technology infrastructures in the industry. It would take a team with a strong strategic vision and the intestinal fortitude and discipline to execute quickly. 

How We Helped

We recognized that in order to effect any meaningful change at the enterprise level, a clear strategy wouldn’t be enough. Our strategy would have to be results-oriented and supported by an efficient approach with disciplined execution. With that in mind, the Deloitte team led an initial sprint to define issues, establish targets and create a host of different options and scenarios for addressing those issues, taking into account factors including costs, Profit and Loss (P&L) impact, service delivery and regulatory compliance. Eventually, the bank’s board of directors accepted the multi-billion dollar plan with aggressive goals for cost reduction.

Over the course of the next few years, working closely with client teams, we methodically examined and reshaped nearly every component of the bank’s technology infrastructure that had its own P&L, starting with data centers and moving on to storage, networks and more. In each instance, we developed a business case for change – a direct offshoot of our belief that infrastructure can and should be run like a business. Some of the initiatives that the Deloitte team helped drive included:

  • Data center rationalization
  • Server and storage consolidation
  • Network and voice redesign
  • Desktop standardization
  • Software license management
  • Strategic sourcing
  • Service quality enhancement
  • Labor reengineering / transformation
  • IT Risk Management  

The program established an ongoing ‘factory’ approach to transformation, identifying areas of opportunity, incubating specific ideas before launching them into projects with clear accountability and benefits tracking. Once this multi-year transformation was in full swing, the program had over 400 individual projects underway at any given time. A rigorous, disciplined approach kept everything on track over the course of this multi-year initiative.

Solution

While this transformation was effectively completed, the client is continuing to drive continuous improvement and drive subsequent refreshes. As a result of the program, the bank has significantly controlled its sprawl, enhanced service quality and platform stability, addressed regulatory concerns, established a platform for growth and positioned itself as one of the leaders in the industry. As a result, business leaders can deploy new products and services more quickly and can deliver enhanced performance, as well as reliability and security, just to name a few important advances.

Just as important, the bank has reduced its P&L on overall technology infrastructure spending by nearly 35 percent, which translated into billions of dollars in savings. Plus, by giving business leaders greater transparency and more control over costs, the bank empowered its employees to drive down costs on their own and allowed them to better team with IT to position the business more competitively in the marketplace.

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

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