How a Financial Institution achieved Cost Transparency through a complex EMEA technology integration

Working with a Japanese financial group, our engagement began by helping the CIO plan and execute a complex integration strategy in EMEA for the Securities and Corporate Banking technology group. Our team focused first on achieving a high level of trust with senior leaders and obtaining a deep understanding of the organisation’s technology operating model.

The language barrier

Our client wanted to reduce IT costs, yet there was a lack of accountability for these costs and a limited understanding of the costs of each of the services that technology supported. It was extremely difficult to make strategic decisions when components such as worker costs, component costs and infrastructure costs could not be clearly identified.

In effect, there was a language barrier between IT and the rest of the business. The client thought they knew what their IT costs were but during this project discovered they had greatly underestimated the true figure.

So, we developed a service catalogue to provide a granular view of the costs associated with the different technology systems employed by the organisation.

This cost analysis was essential to help the key stakeholders make strategic decisions around their system services, deciding not only where to make cost reductions but also where to invest.
Once they had an insight into the costs of their technology, spending could be optimised. For example, identifying departments with surplus software licences offered a way to make uncomplicated cost savings.

An invoice of IT spending

The first step with this client was to dive into the data. We collaborated closely with key stakeholders to gather the most reliable sources, including the general ledger and HR data.

We assessed the quality of the data and, where needed, carried out remediation and cleansing to ensure accuracy. At the same time, we engaged with stakeholders to gain a deep understanding of the costs related to people, maintenance, and infrastructure.

Once we had a clean and complete dataset, our team mapped the information down to a detailed system and service level. We then built a custom Excel solution to bring everything together and presented it to the client. In some cases, Excel may not be the ideal tool, and we are always ready to adapt our approach to identify the platform that best fits a client’s specific needs.

Thanks to our experience with similar projects, our data specialists have become highly skilled at bridging the gap between IT and the broader business. In essence, we provided the client with a clear and structured invoice of their IT spending.

Helping to deliver €21 m of savings over 3 years

The main outcome of this cost transparency project was providing a clear explanation of €300 million in technology spend per year. Over three years, this has helped them to save many millions of Euros. Our task was to provide the client with the granular insight needed to understand their cost base.

An additional, and unexpected outcome, was the resulting cultural shift that emerged from this cost transparency. Once people become aware of the costs that they themselves were driving, they took steps to initiate conversations about how to streamline processes within their own departments. These discussions later developed from regional to global conversations. Achieving cost transparency enabled the conversation about spending optimisation to begin.

We run this process annually for our client, starting at the beginning of their financial year, with a typical duration of around four months. While it now operates as a fully managed service, we can also step into an organisation to set it up and provide the necessary training, enabling the client to manage it themselves going forward.

Conclusion

We delivered improved cost transparency and cost control for IT systems and services for a Japanese financial group. This was achieved by designing an integrated delivery plan spanning performance and business management activities, and by working closely with the client’s planning teams in Japan and their CIO leaders.

Delivering a technology ‘service catalogue’ toolset allowed business and functional leaders (CFO, COO, heads of businesses) to understand their global technology costs as well as their key drivers.

The client gained greater governance over technology spend and budgeting. Complex end to end process maps were also used to visualise the current state processes across departments and functions and highlighted critical pain points and metrics.

The main outcome of this cost transparency project was providing a clear explanation of €300 million in technology spend per year to the client. Over three years, this has helped them to save many millions of Euros.