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Slide 1: FINANCE ON WINDOWS FINANCE SPRING 2009 MICROSOFT TECHNOLOGY IN THE FINANCIAL SERVICES INDUSTRY ON WINDOWS BRANCH BANKING GOVERNANCE, RISK MANAGEMENT AND COMPLIANCE FROM BRICKS TO CLICKS How CIBER UK helped Endsleigh Insurance Services embrace a digitally focused business model with Dynamics CRM ISSUE 32 SPRING 2009 Find out the latest news on how Microsoft and its partners are helping to address the unique challenges faced by London Market insurers. Page 8 Visit onwindows.com for news and views in financial services “Newer, proven software technologies make it possible to reliably and cost-effectively backup branch offices at the central data centre.” Ian Masters, UK Sales and Marketing Director, Double-Take Software
Slide 3: SPRING 2009 FOREWORD In tough times, the tough survive – and these are certainly tough times for financial firms. As banks and customers alike continue to rein in their budgets, those that are well prepared will be best placed to ride out the economic crisis. Often in challenging conditions, success depends on being in the right place at the right time, and today’s technologies play a key role in enabling banks to do just that. In our cover story on page 16, we find out how working with CIBER UK to upgrade to Dynamics CRM 4.0 helped Endsleigh Insurance adopt a new, digitally focused business model and develop client relationships. As many banks have found out, customers demand a branch presence. But increasingly, they will also use channels such as the Internet, making branch profitability a challenge. Our feature on page 20 looks at how banks can make their branches attractive and relevant to the demands of today’s customers. Particularly in the current economic environment, customers are attracted to reputation as well as service. By the same token, financial firms need to know they can build their business while minimising risk. On page 26, we look at how banks can improve risk analysis and reporting, arguably the foundation on which business success and customer trust are built. You’ll also find our usual selection of incisive commentary and news from the industry. Don’t forget to visit us at www.onwindows.com/finance for the latest news updates across the region. Enjoy the issue. Anders Abrahamsson Managing Director, EMEA Financial Services Microsoft FINANCE ON WINDOWS EDITORIAL Editor Jacqui Griffiths jacqui.griffiths@tudor-rose.co.uk Assistant Editors James Dodd james.dodd@tudor-rose.co.uk Lindsay James lindsay.james@tudor-rose.co.uk Rebecca Lambert rebecca.lambert@tudor-rose.co.uk Group Editor Adam Lawrence adam.lawrence@tudor-rose.co.uk Editorial Contributors Mike Amato, Barclays Anthony Baron, Dimension Data Michael Bush, Business Control Solutions David Edison, Moore Stephens Consulting Tony Emerson, Microsoft Claude Goudreault, VM6 Brian Henry, CIBER UK Peter Leahy, Endsleigh Insurance Nigel Lee, Financial Architects Adrian Maconick, Finsbury Solutions Dermot McCauley, Singularity Ian Masters, Double-Take Software Alexander Millington, Formicary Chris Moxon, Methodware Jeff Napper, Bank of America Dawie Olivier, Sasfin Bank Sai Sireesh Pachava, Microsoft Justin Parks, visionapp Brian Scott, Microsoft Nick Sears, FaceTime Communications Rebecca Smith, Endsleigh Insurance Todd Stone, ProcessUnity Howard Travers, Formicary Nigel Walder, Business Control Solutions Ian Warford, Microsoft Green IT Advisor Dr Bernd Kosch, Fujitsu Siemens Computers MICROSOFT EDITORIAL ADVISORY BOARD Anders Abrahamsson Managing Director EMEA Financial Services Andreas Drescher EMEA Partner Manager Gordon Ejsmond-Frey EMEA Industry Director, Insurance Andrew Longstaff Industry Marketing Manager Tony Emerson EMEA Industry Director, Banking Ian Warford EMEA Industry Director, Capital Markets COMMERCIAL Advertising Claire Brown claire.brown@tudor-rose.co.uk Christian Jones christian.jones@tudor-rose.co.uk Ryan Kenward ryan.kenward@tudor-rose.co.uk Ben Mayer ben.mayer@tudor-rose.co.uk Marcus Miola marcus.miola@tudor-rose.co.uk Ricky Popat ricky.popat@tudor-rose.co.uk Amandip Singh amandip.singh@tudor-rose.co.uk Partner Director Paul Simpson paul.simpson@tudor-rose.co.uk Subscriptions Ewan Campbell ewan.campbell@tudor-rose.co.uk Reprints Stuart Fairbrother stuart.fairbrother@tudor-rose.co.uk Business Manager Richard Pepperman Publisher Paul Simpson PRODUCTION Creative Director Leigh Trowbridge Designers Bruce Graham Kelvin Jones Paul Robinson Web Site Manager – onwindows.com Dan Dore COVER PHOTOGRAPHY Rohan Van Twest www.rohanvantwest.com 3
Slide 4: SPRING 2009 CONTENTS 16 26 20 08 46 50 COVER STORY FROM BRICKS TO CLICKS How CIBER UK helped Endsleigh Insurance Services embrace a new business model COMMENTARY 16 OUT ON A LIMB New technologies can cut the cost of branch data protection PROFILED 34 HBOS When HBOS moved from three IT services partners to one, it chose Fujitsu Siemens Computers 50 FEATURES BARKING UP THE RIGHT TREE In a challenging business environment, bank branches must adapt to survive MAKING THE BEST OF UNCERTAINTY 20 How key technology trends can help banks rise to new economic challenges 36 FORUM DON’T LOOK BACK 52 38 How forecasting can steer insurance firms through challenging times BUILDING SUCCESS FOR SUPERBANKS Why transparency is vital for merged banks KNOW YOUR RISK Accurate analysis is key to managing risk 26 SEE WHAT YOU SAY How companies can ensure regulatory compliance for Group Chat 40 MARKETWATCH NEWS DIGEST The latest news from technology providers across the region 8 IT STRATEGIES CONQUER THE CRUNCH IT suppliers can support improved service at reduced cost 42 GOVERNANCE, RISK MANAGEMENT AND COMPLIANCE TAKING STOCK A year of challenges has seen governments taking a more prominent role in financial services CAN UC THE DANGERS? Unified communications can deliver great benefits if the risks are mitigated 44 32 FAST ROUTE TO EFFICIENCY Rapid process reengineering can enable quick efficiencies 46 MODELLING YOUR MATURITY 48 Assessing IT infrastructure maturity helps ensure benefits when deploying Microsoft technologies 5
Slide 5: SPRING 2009 PUBLISHING PARTNERS Finance on Windows is produced as a partnership between Microsoft and selected key organisations from the financial services technology sector. These partners are responsible for the editorial direction of Finance on Windows, and collaborate to provide you with content that covers the key issues facing financial services executives, and technology solutions that can address these issues. www.ciber.co.uk CIBER UK is Microsoft’s leading partner for Microsoft Dynamics CRM (licence revenues 2008). A certified Gold Partner with accreditations in seven competencies, we help our customers derive maximum advantage from individual Microsoft technologies, and from their effective integration with each other. CIBER UK works closely with some of the country’s leading financial companies. www.dimensiondata.com Dimension Data is a specialist IT solution provider that helps clients plan, build, support and manage their IT infrastructures. Dimension Data combines its expertise in networking, IP convergence, security, operating environments, storage and contact centre technologies with its unique skills in consulting, integration and managed services, to create customised client solutions. www.facetime.com FaceTime Communications enables the safe and productive use of instant messaging, Web usage and Unified Communications platforms. Ranked number one by IDC in IM management for five consecutive years, FaceTime's award-winning solutions are used by more than 1,000 customers for security, management and compliance of real-time communications. www.fujitsu-siemens.com Fujitsu Siemens Computers − a Microsoft Gold Certified Partner − is the leading European IT infrastructure provider. By delivering infrastructure products, solutions and services as well as Managed Infrastructure or a combination of these offerings, our customers have the freedom to choose whatever IT infrastructure fits best to their specific needs. Fujitsu Siemens Computers is one of the pioneers in offering a complete range of environmentally conscious products and in using environmentally friendly technologies and processes throughout the entire lifecycle of a product. FINANCE ON WINDOWS Published by Tudor Rose Tudor House 6 Friar Lane, Leicester LE1 5RA, England Tel: +44 116 222 9900 Fax: +44 116 222 9901 info@tudor-rose.co.uk www.tudor-rose.co.uk Managing Director: Jon Ingleton ISSN 1473-2173 Finance on Windows is published quarterly and is available via subscription. Please visit: www.onwindows.com/subscribe for more information. Printed in Great Britain by The Manson Group. The Microsoft vision is to enable every business enterprise to use the Internet to build richer customer experiences. Microsoft sees e-business as more than just transactions over the Web, it is a means for establishing a closer relationship with customers and trading partners and Microsoft .NET is the evolutionary strategy behind this vision. www.microsoft.com © 2009 Tudor Rose Holdings Ltd. All rights reserved. No part of this publication may be stored or transmitted or reproduced in any form or by any means, including whether by photocopying, scanning, downloading onto computer or otherwise without the prior written permission from Tudor Rose Holdings Ltd. Active Directory, BizTalk, Microsoft, Outlook, SharePoint, Visual Studio and Windows are either registered trademarks or trademarks of Microsoft in the US and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. Views expressed in this magazine are not necessarily those of Microsoft or the publishers. Acceptance of advertisements does not imply official endorsement of the products or services concerned. While every care has been taken to ensure accuracy of content, no responsibility can be taken for any errors and/or omissions. Readers should take appropriate professional advice before acting on any issue raised herein. The publisher reserves the right to accept or reject advertising material and editorial contributions. The publisher assumes no liability for the return or safety of unsolicited art, photography or manuscripts. 7
Slide 6: M A R K E T WATC H | N E W S M A R K E T WATC H | N E W S IN THIS ISSUE MICROSOFT .NET Dynamics CRM Group Chat HPC Server 2008 London Market Network Office Communications Server REPORT by Jacqui Griffiths 10, 12, 14 8 13 14 8 13 8 8, 10, 13 12 10 10 SharePoint SQL Server Surface Visual Studio Windows SURE SUCCESS FOR LONDON MARKET NETWORK PARTNERS MICROSOFT PARTNER INITIATIVE DELIVERS BUSINESS VALUE TECHNOLOGY PARTNERS Acette Technologies 14 10 10 10 14 14 14 10, 13 8, 14 14 12 13 12 14 8 14 12 8 14 14 10 12 13 SEQUEL DELIVERS PHASE ONE FOR FARADAY Faraday and Sequel Business Solutions have completed the first phase of Faraday’s strategic, end-to-end underwriting system, on time and on budget. Lloyd’s and London Market insurer/reinsurer Faraday signed a contract for the implementation of Sequel’s Eclipse Underwriting software solution in April 2008, following an extensive selection process and a three-month ‘model office’ project which determined the size, shape and cost of the full implementation. “We chose Eclipse Underwriting as we needed a modern, flexible system which would not only integrate seamlessly with all our other business systems, but would also place us in the best possible position to trade and connect electronically with our external counterparties,” said John Connors, head of operations at Faraday. “Sequel has an excellent reputation for delivery and has demonstrated this quality in its recent completion of the first of two phases. THE NETWORK DELIVERS PRE-INTEGRATED SOLUTIONS TO ADDRESS THE UNIQUE CHALLENGES OF LONDON MARKET INSURERS Asysco Business Control Solutions Cadis Compassoft Crystal Software Derdack FinArch Finsbury Solutions Fiserv Focus Solutions Group Formicary IE Group Intel K2 MBA Systems Program Framework Sequel Business Solutions Sun Microsystems SunGard Total Information Management Trillium Software Xenomorph Together, we undertook an enormous amount of planning and preparation, which gives me confidence that the programme will continue to run to schedule. We now focus with confidence on the final deliverable – live rollout to all users across Faraday’s London Market operation in summer 2009.” “Faraday is taking a forward-looking but lower risk approach to software replacement by partnering with Sequel,” said Sequel director Michael Graham, who believes more companies should follow Faraday’s strategy of replacing core processing systems. “We are leading insurance software specialists, and our Microsoft-based systems are being used by world-class carriers and brokers in the London Market. We deliver proven and well designed software solutions through collaboration with our clients.” www.faraday.com www.sequel.com ondon Market Network partners Finsbury Solutions and Sequel Business Solutions have announced major new projects. Launched by Microsoft in February 2008, the London Market Network is a group of software and service providers that offer pre-integrated industry software solutions based on a common Microsoft technology platform. It brings together a set of complementary solutions to address the unique business and technology challenges facing companies in the London Market. “We are delighted that the Microsoft London Market Network is delivering significant business value to our clients,” said Bruce McKee, insurance industry manager at Microsoft. “Sequel and Finsbury Solutions are both founding members of the network, and play important roles in our industry solution. The Eclipse Underwriting L system from Sequel Business Solutions is key to enabling data flow to other systems – such as Dynamics CRM, SharePoint and K2 Workflow – to work together and access information, while the market leading capabilities of Finsbury’s Spreadsheet Workbench, combined with its use of SharePoint, delivers the high levels operational control that insurance firms require.” FINANCIAL SERVICES PROVIDERS Aberdeen Asset Management 10 12 13 12 9 WILLIS SPEEDS UP STP WITH SEQUEL Global insurance broker Willis Group Holdings has speeded up its transactional processing with the implementation of Sequel’s Eclipse broking software solution. Willis chose Sequel to support its ‘Shaping our Future – London’ modernisation strategy. Sequel worked in close cooperation with Willis to deliver the new system in less than six months, and more than 1,000 Willis associates worldwide now use the application for straight-through processing of placements, claims and accounting transactions in the UK and other countries. Rollout to additional business units is planned for 2009. “This major implementation has been an outstanding success,” said Grahame Millwater, group president of Willis. “Many ambitious plans are announced in the market place, but the great implementations that really work are rare and worthy of celebration. The Eclipse application is a cornerstone of our London-based business and positions us well for future developments in London Market Reform.” “Our implementation was all about people,” said Sequel CEO David Smith. “The teams from both companies have worked impressively together and delivered against an aggressive timescale. We are incredibly proud of our achievements so far, and we look forward to a successful ongoing partnership with Willis.” www.sequel.com www.willis.com Bank of Ireland Life Banque Chaabi du Maroc Barclays Faraday Fidelity National Information Services 10 HBOS Heritage Managing Agency Hoodless Brennan HSBC Oman Arab bank Piraeus Bank The Motley Fool Willis Group Holdings 10 8 14 10 14 14 14 9 FINSBURY WORKS MAGIC AT HERITAGE Insurance underwriting firm Heritage Managing Agency has implemented Finsbury Solutions’ Spreadsheet Workbench to improve control and compliance of its business critical spreadsheets. Heritage was introduced to Finsbury Solutions via the Microsoft London Market Network, which it cofounded a year ago. “We welcome Heritage as our latest client,” said Jeremy Wood, director and co-founder of Finsbury Solutions. “Heritage is a recognised leader in the London insurance market and for Spreadsheet Workbench to be selected is a great endorsement of our products capabilities and appeal.” Spreadsheet Workbench is based on the latest Microsoft technologies including SQL Server 2005 and SharePoint 2007. www.finsburysolutions.com www.heritage-plc.com ANALYSTS AND ASSOCIATIONS Datamonitor Financial Services Authority Javelin Strategy & Research 10 12 10 www.onwindows.com 9
Slide 7: M A R K E T WATC H | N E W S IN BRIEF Fidelity National Information Services (FIS) and Microsoft have signed a groundbreaking agreement to make upto-date financial news from MSN Money available on client Web sites. The agreement is the first of its kind between Microsoft and a financial services technology provider. It enables client financial institutions using FIS Web hosting services to subscribe to four MSN Money authors, providing their customers with current financial news, commentary and advice. www.fidelityinfoservices.com A report by Datamonitor, From compliance to improved business performance through operational risk management, has found that financial firms are recognising the operational performance benefits being unlocked by leveraging operational risk controls and reporting data, rather than seeing operational risk purely as compliance and reporting function. It predicts that IT will play a key role in facilitating operational risk management through process monitoring and the automation of reporting. www.datamonitor.com Business Control Solutions (BCS) has signed a contract with HSBC to supply BCS Agent Reconciliation Control (Arc), which enables the centralisation of agent bank fee data. By acting as a single source of data, the application will enable HSBC to validate costs accurately each month and assess the most efficient fee models in order to save money and accurately apportion fees against trading desks. www.bcsplc.com www.hsbc.com The Unified Communications Expo takes place on 11-12 March 2009 in London, UK. The event showcases nextgeneration business communications solutions and allows visitors to see for themselves the benefits of real-time integration across communications platforms. More than 500 unified communications will be showcased and around 60 seminars will take place over the course of the two days. www.ucexpo.co.uk UK bank HBOS has completed a mainframe migration project, converting its previous Unisys environment to Asysco Migration Technology Visual Studio (AMTVS). The first phase of the project began in 2004, with HBOS using Asysco’s AMT-Lion to migrate applications and data onto a Windows-based platform. Phase two then saw the conversion of the environment into C# code. www.hbosplc.com www.asysco.com Aberdeen implements Cadis EDM Aberdeen Asset Management has implemented the Cadis EDM Suite to enable greater control over data, improve efficiencies and lower operational costs. Cadis specialises in enterprise data management (EDM) solutions using a multi-tier, distributed architecture based on Microsoft .NET and SQL Server. Aberdeen selected Cadis after a rigorous selection process, due to the solution’s ability to provide a data control layer between the company and its market data vendors and outsourced back office providers. The company will also be able to quickly integrate multiple data sources and use the information in its front-office systems. “Cadis provides us with an enterprisewide data management platform,” said Richard Large, global head of front-office technology at Aberdeen. “It feeds our single global trading platform and data warehouse environments and allows us to maintain control over our data, which is sourced from a variety of vendors and third-party administrators. After a rigorous best-of-breed search and selection process, Cadis clearly emerged as a highly effective solution that would enable us to achieve our goal of a global data hub, allowing us to source, consolidate, validate and distribute our investment management data worldwide.” “Aberdeen’s decision is testament to the strengths of our solution in helping firms fully integrate their global operating environments and ultimately get the most out of their data and their technology,” said Daniel Simpson, CEO of Cadis. www.cadisedm.com www.aberdeenasset.com Knowledge bank CLUB 18-30 74 per cent of 18-30-year-olds go online to view their bank account balances, with 70 per cent using Web channels to pay bills. Source: Javelin Strategy & Research EastWest Bank goes live with Financial Studio EastWest Bank has gone live with its FinArch Financial Studio ledger system, marking the first milestone in its financial transformation programme in the Philippines. The bank worked with FinArch and its local partner Total Information Management (TIM) to implement the solution in just seven months. Financial Studio provides the bank with timely, granular and more accurate internal reporting. EastWest Bank also runs Financial Studio’s event-based accounting engine to generate the accounting entries from transactions which existing systems do not provide, and to execute balance sheet transfers for the dynamic reporting requirements of bank management and regulators. The solution is expected to reduce manual entries and reconciliation effort while improving the workflow and efficiency of the accounting division. “The Financial Studio ledger solution is pivotal to the bank’s aim of consolidating its financial management efforts,” said Antonio Moncupa, president of EastWest Bank. “Giving bank management ready access to financial information from a single version perspective puts the bank in a more competitive position in realising its strategies. The bank is truly glad to have partnered with FinArch and TIM, who shared our objective of achieving financial transformation.” The next phase of the programme will entail the implementation of regulatory reports (BSP and FRP), MIS, and internal and external risk reporting (Basel II and Anti-money Laundering). www.finarch.com www.timcorp.net www.eastwestbanker.com www.onwindows.com
Slide 8: M A R K E T WATC H | N E W S IN BRIEF M A R K E T WATC H | N E W S IN BRIEF Program Framework has achieved Microsoft Gold Certified Partner status. The achievement puts the company in the top one per cent of all Microsoft partners worldwide, acknowledging its high level of competence and expertise with Microsoft technologies. “This provides a great boost for the company and represents external recognition of the increasing breadth and depth of our capabilities,” said Paul Major, CEO of Program Framework. www.programframework.com The Financial Services Authority has issued a consultation paper urging UK banks to spend almost £900 million on new IT systems to speed up the payment of compensation to savers if they collapse. The paper advises that banks must ensure they hold up-to-date information to allow fast processing of claims. In order to achieve this, it proposes that banks set up new IT systems for quick claims processing, at an estimated cost of £891.8 million over five years. www.fsa.gov.uk Trillium Software, a Harte-Hanks business, has delivered its Data Intelligence and Governance (DIG) solution specifically for the financial services, insurance and compliance markets. DIG is a combination of data analysis, data quality and reporting software technology based on the Trillium Software System, with targeted, packaged financial and governance consulting services provided by the company. It includes built-in intelligence for and about the financial services industry to improve data validation, rules compliance, and business processes germane to the financial and insurance industries. www.trilliumsoftware.com The High Tech Forecasting and Planning Summit takes place on 22-23 April 2009 at Le Meridien in San Francisco, USA. This IE Group-organised summit brings business leaders together to shape revolutionary ideas and spark innovation in forecasting and planning within the high-tech industry. Around 200 high level executives are expected to attend, with guest speakers including the chief technology strategist at Microsoft; the vice president of technology and strategy at Nokia; the vice president of strategy and planning at Cisco; and the director of planning and innovation at Panasonic. www.09.ie-grp.com/hightech/overview.html Barclays banks on Surface Banque Chaabi chooses FinArch Banque Chaabi du Maroc, a key institution of the Moroccan financial services holding Groupe Banques Populaires, has selected FinArch Financial Studio as the regulatory reporting system across its European branches. Following a rigorous competitive bid, FinArch was chosen to equip Banque Chaabi’s branches in Spain, the Netherlands, the UK and Belgium with Financial Studio, its best-in-class integrated platform for finance and risk. FinArch will initially serve a large number of users to automate and manage their daily activities around regulatory reporting requirements. The system achieves significant increases in productivity and allows a high degree of automation and compliance. Banque Chaabi du Maroc has made no secret of its ambitions in Europe, with over 40 branches scheduled to open. It wanted to equip its European branches with a banking software suite that can handle both the technological development of the initial architecture and the evolution of regulatory requirements across selected geographies. “FinArch’s main strengths are its local presence across Europe’s main financial hubs, highly qualified support, training and implementation teams, proven knowledge of banking business lines and activities, and a state-of-the-art technology base,” said Mohamed Allouch, general manager of Banque Chaabi’s European network. www.finarch.com www.gbp.ma Xenomorph and Microsoft have completed a benchmark project to ensure that IT directors, risk managers and trading staff have access to high-performance tick and time-series analysis within a standards-based architecture. Xenomorph’s specialist time-series technology will be able to run within Microsoft SQL Server 2008 – resulting in easier database management and administration while allowing IT developers to build on existing skills in SQL and Microsoft reporting tools. www.xenomorph.com Formicary has released the FastTrack implementation solution and the latest version of its ChatSeer enterprise chat monitoring and compliance tool. Both releases are built for the Group Chat feature of Microsoft Office Communications Server 2007 R2. “FastTrack is a cost and time-effective solution for both implementation for first time clients and migration of existing MindAlign (predecessor of Group Chat) clients,” said Philip Miller, intelligent messaging director at Formicary. www.formicary.net BARCLAYS IS PIONEERING SURFACE TECHNOLOGY IN ITS PICADILLY CIRCUS BRANCH Barclays has become the first bank to pilot Microsoft Surface technology in its new flagship branch at Piccadilly Circus in London. Described as the first ‘brand concept’ bank branch in the UK, the branch has 8,000 square feet of retail space over three floors, and makes extensive use of new technology and design. The Surface technology will allow users to grab digital content with their hands and navigate information with simple gestures and touches. A major feature of the branch is Being:London, an interactive and evolving installation representing the interests, conversation and activities of people in London. Outside opening hours, the front of the branch will be transformed into the ‘Night Life’ screen, which picks up the image of passers using face recognition technology and cameras and displays moving silhouettes with thought bubbles containing random messages. Piccadilly is the first Barclays branch to have totally open cashier counters with no glass screens, while an innovative curved queue rail softens the waiting area. Handheld PCs will allow floorwalking staff to help customers with queries without the need to wait, while a large self-service area includes a foreign ATM dispensing dollars and Euros, and deposit machines for cash, cheques and coins. “This is the first time that a bank has opened a store such as this,” said Mike Amato, chief distribution and product officer for Barclays. “We have taken inspiration from retailers and developed a space that attracts and engages individuals while conveying what the Barclays brand represents.” Barclays is refurbishing its entire 1,733 branch network in the UK after extensive staff and customer consultation. www.barclays.com www.microsoft.com/surface Focus signs up Bank of Ireland Life Focus Solutions Group is to implement its focus:360° solution at Bank of Ireland Life. The company has signed the first phase of a five-year contract, under which it will configure the solution to meet Bank of Irelands Life’s specific business and technical requirements. Based on Microsoft .NET technology, focus:360° has been designed to operate both online and offline, and will support a number of distribution channels going forward. “Focus continues to build upon its extensive experience of delivering multichannel point-of-sale systems within the bancassurance sector with the acquisition of its first focus:360° customer,” said Richard Stevenson, chief executive of Focus Solutions Group. “We firmly believe that we are in a unique position to provide Bank of Ireland Life with a compelling, high quality solution that will enhance the customer experience, improve adviser productivity and increase sales revenues for the business. This contract further underlines our expansion into the Irish market.” www.focus-solutions.co.uk www.bankofirelandlife.ie www.onwindows.com
Slide 9: M A R K E T WATC H | N E W S IN BRIEF Finsbury Solutions has strengthened its product coverage with the acquisition of US governance, risk and compliance software vendor Compassoft. The move will see Finsbury further supporting and developing Compassoft’s End User Computing (EUC) products, which will be integrated with its own Spreadsheet Workbench solution to produce an advanced product suite for the management of spreadsheets and end user databases. www.finsburysolutions.com www.compassoft.com Oman Arab Bank has achieved significant efficiencies in customer service and opened up new revenue streams by adopting an SMS-based mobile banking service. The Tawasul service, which uses Banksmart implemented by Acette Technologies and is powered by Derdack’s message master XSP, allows the bank to offer its customers a range of options that can be accessed using SMS, including account transfers, utility payments, smartcard top-ups and realtime payments to mobile operators. www.derdack.com www.acette.com www.omanab.com Stockbroker Hoodless Brennan has won several key awards following enhancements to its Internet Broker software, supplied by MBA Systems. During the same week, the company won the 2008 Daily Telegraph Award for Best Online Service and six further accolades from the 2008 Financial Times and Investors Chronicle Investment Awards, including Best Execution Only Stockbroker, Best Online Stockbroker and Stockbroker of the Year 2008. www.mbasys.co.uk www.hoodlessbrennan.com Piraeus Bank, one of Greece’s leading financial institutions, has gone live on the Fiserv Universal Banking solution at its Cyprus operations, following an eightmonth implementation. The offering is Fiserv CBS Worldwide’s integrated realtime solution for retail, trade and treasury markets. It incorporates the Microsoftbased Fiserv Aperio customer interaction management solution, Fiserv CBS Teller, Communicator, ICBS core, CBS Data Warehouse, Fiserv Treasury, AquaGlobal/E2Gen for international payments, and Fiserv Trade Finance. www.piraeusbank.gr www.fiservcbs.com SunGard adds HPC to hosted iWorks Prophet SunGard has added more than 500 cores to a grid computing cluster set up to host its iWorks Prophet actuarial solution, the enterprise risk management application in the iWorks solution suite. The grid uses Sun Microsystems’ Sun Blade X6250 server modules, Intel’s QuadCore Xeon processors, and software from Microsoft to achieve high-performance computing (HPC) capacity that facilitates the development, execution and support of actuarial models. The use of networkdistributed parallel processing clusters, which can be integrated into any Microsoftbased platform, will help improve processing times for real-time risk management. SunGard plans to expand this environment to accommodate a services offering, whereby users may lease cores when needed. “Advanced technology is playing an increasingly prominent role in the insurance industry,” said Rick Echevarria, vice president of Intel’s sales and marketing group and general manager of its enterprise solution sales. “That is why we are proud that SunGard has chosen Intel Xeon quadcore processors, with their performanceper-watt strengths, to form the hardware platform for iWorks Prophet.” “Microsoft is pleased to be working with SunGard in the development of its nextgeneration actuarial modelling solution,” said Gordon Ejsmond-Frey, insurance industry director, Microsoft EMEA. “Windows HPC Server 2008 delivers the ability to spread calculations across a large number of computers using industry standard tools that are well understood and easily integrated into the IT environments of SunGard and other members of the insurance industry. As demands increase for faster, more flexible and robust risk modelling solutions, SunGard is investing in delivering enterprise-class modelling with iWorks Prophet, which will help insurers to improve their modelling and reporting capabilities.” “Increasing the capacity of iWorks Prophet will help reduce our customers’ model runtime, so that actuaries can focus on the development of sound risk management practices rather than worry about their organisation’s IT infrastructure,” added Marc Fakkel, head of operations for SunGard’s iWorks Prophet business unit. “The team effort between Microsoft, Intel, Sun Microsystems and SunGard proves our commitment to improve the reliability, scalability and power of the iWorks Prophet enterprise framework.” www.sungard.com www.sun.com www.intel.com Crystal puts Momentum into Fool The Motley Fool has selected Crystal’s Momentum software system for the new financial services division of its UK Web site Fool.co.uk. Use of the software has helped the site to start up its mortgage business more rapidly than previously anticipated. The system has provided an integrated channel solution for the advised sale of mortgage and insurance products through the Fool.co.uk sales team, with leads coming from its site. “We wanted one integrated solution that would cover our CRM, point of sale, compliance and back-office needs,” said Paul Warburton, senior product manager at Fool.co.uk. “After an extensive evaluation of a number of providers, we selected Crystal because of its ability to adapt to our needs and to supply and implement a custom solution within two months, which was crucial to our business.” Built using the latest Microsoft .NET technology, Momentum has over 7,000 users, including Halifax, Bank of Scotland, L&G, Paymentshield and Assurant. “Fool.co.uk is a fantastic client for us to win and will help us strengthen our functionality in Web site-led call centre environments, which is a growth area of our marketplace,” said Patrick Shuker, director at Crystal. “It’s great to hear a success story in a difficult market place and it has been a great pleasure to work with such an innovative, entrepreneurial company.” www.crystalss.co.uk www.fool.co.uk www.onwindows.com
Slide 10: COVER STORY: ENDSLEIGH INSURANCE SERVICES FROM BRICKS WHEN ENDSLEIGH INSURANCE SERVICES ADOPTED A NEW BUSINESS MODEL, IT CALLED ON CIBER UK TO HELP IT IMPROVE THE PRODUCTIVITY, PERFORMANCE, REPORTING AND PROFITABILITY OF ITS MARKETING ENVIRONMENT ndsleigh Insurance Services has rapidly grown to become one of the UK insurance industry’s most respected household names. With around 800 employees and 30 relationship managers in the field, the company has an excellent market reputation. But reputation is not the sole guarantor of continuing success. With 85 per cent of new sales originating from the Web, Endsleigh wanted to adopt a new business model, making its business more digitally focused using multimedia touch points with a major target on students and recent graduates. “As a result, we will no longer operate as a branchbased business with bricks and mortar and leases to pay for 119 offices across the country,” says Peter Leahy, head of IT at Endsleigh. “We want to use these efficiency savings to support our relationship managers working from home or remote locations, with new tools and faster access to our core business systems.” Endsleigh had used Voice over IP telephony to network its branch offices, but with the company’s planned transition to two geographically based service centres, this was no longer cost effective as a communications channel. The company’s data was being stored in various fragmented systems with no uniform way of identifying lead conversion rates for the marketing team. Endsleigh had to spend excessive time and cost on setting up agents on various systems, the number of which also impacted security across the enterprise. In addition, Endsleigh needed better features to help TO CLICKS E develop client relationships in the face of changing regulations. In particular, it wanted to offer better service to trading partners including travel agents, which were regulated to sell travel insurance by the Financial Services Authority for the first time from January 2009. Although Endsleigh has a substantial in-house IT department, its technicians were working on several ongoing projects and wanted to avoid tackling any large new development. They required a solution that was multi-company, and which would integrate with Microsoft Dynamics GP for financial management and other business management systems, including its existing investment in Microsoft Dynamics CRM 3.0 customer relationship management (CRM) software. The company uses an in-house CRM system for business-to-consumer clients that is integrated with its in-house policy administration system. Dynamics CRM is used for business-to-business operations and integrates with Dynamics GP. In its search for a solution, Endsleigh worked with Microsoft Gold Certified Partner CIBER UK to upgrade its existing Microsoft CRM software to Dynamics CRM 4.0, integrating with Microsoft Exchange Server 2007 communication technology. At the same time, the company opted for a Microsoft Enterprise Agreement for low-cost volume licences to provide a low total cost of ownership. “We wanted to time the upgrade to correspond with the changes in our business model, with the introduction of a cost-effective infrastructure for unified communications by investing in Microsoft “By automating commission payments through Microsoft Dynamics CRM, we have increased one segment of business tenfold without needing extra accounts people to manage the business processes” Peter Leahy, Head of IT, Endsleigh Insurance Services www.onwindows.com 17
Slide 11: COVER STORY: ENDSLEIGH INSURANCE SERVICES Office Communications Server 2007,” explains Leahy. “This was especially opportune in view of the integration we could achieve between Exchange Server 2007 and Microsoft Dynamics CRM. Previously, we had relied on local area network connections with variable reliability – in future, our people will always be connected to our core business systems.” Before Dynamics CRM 3.0, Endsleigh had errorprone manual processes for managing contracts between partners and making their commission payments. It lacked a central repository to manage partners and prospects. Having started with Dynamics CRM 3.0, these improvements have been consolidated and further refined. Now, Dynamics CRM 4.0 helps each sales team at Endsleigh to view information relevant to its division without having to search an entire database. The upgrade provides a suite of powerful marketing, sales and service features, all with a familiar and consistent experience based on Microsoft Office and Microsoft Office Outlook 2007 for the client device. Due to the integration with Exchange Server 2007, staff will be able to receive push e-mails, an always-on service in which users receive messages to their client device as if they were in an office environment. Furthermore, Dynamics CRM acts as a powerful and intuitive business intelligence system because it integrates information from multiple sources. The ENDSLEIGH HAS 800 EMPLOYEES AND 30 RELATIONSHIP MANAGERS IN THE FIELD solution is also designed to operate with the company’s existing Microsoft Office SharePoint Server 2007 collaboration technology as well as other Microsoft technologies and services. The new implementation also enables each team to benefit from the seamless integration of Dynamics CRM and SQL Server 2005 Reporting Services. This provides interactive personalised business reports, which improve the productivity of staff and, in turn, help them take on a new wave of sales prospects. Dynamics CRM 4.0 includes several new features, such as simplified workflow and up-to-the-minute reporting, as well as multi-language and currency capabilities. Dynamics CRM can be shaped to support the business and provide a robust environment for future growth. The product comes complete with sales, marketing and customer services modules. When the credit crunch forced most insurance companies to re-evaluate their businesses, Endsleigh was strongly placed to change its model due to its investment in Microsoft technologies. Its move into digital marketing has been fully supported by the upgrade to Microsoft Dynamics CRM 4.0, which has helped automate many more processes and integrated easily with the company’s new unified communications strategy. “This investment will help us to drive bigger, better, and more targeted marketing campaigns using new skills to attract business from our customer base,” comments Leahy. The CRM software is helping sales executives increase digital marketing successes in line with the company’s new approach to customers. Yet, at the same time, it adds no extra costs to the business or burdensome work for technicians. According to Leahy, this is all the more important now that Endsleigh plans to rely in future on more mobile sales employees backed up by two communications centres. “With the previous systems, we had lost faith in the manual processes and did not feel confident in managing leads and opportunities,” he says. “By automating commission payments through Microsoft Dynamics CRM, we have increased one segment of business tenfold without needing extra accounts people to manage the business processes.” The integration features in Dynamics CRM 4.0 have helped Endsleigh prepare itself to work through different communication channels to help its partners adapt to new markets. Previously, the business team responsible for affiliated services did not have a reliable communication tool that let it engage with agents – Leahy says it had “hit a brick wall” in terms of taking on new prospects and simply could not manage any more customers. “We’ve improved the efficiency and accuracy of our frontline sales staff,” says Paul Nicholas, business project manager at Endsleigh. “When they’re dealing with customers, we have a full record of the history. We deal with them in a more prompt and quality-driven way and we have a single source of information for all our customer activities.” “At a time of rapid business change, Endsleigh has continued to invest in Microsoft Dynamics CRM because it is based on an environment that is understood, not just by us, but universally,” says Brian Henry, head of sales for financial services at CIBER UK. “The seamless integration of Microsoft products is a critical factor in our future growth strategy. The similar look and feel of Microsoft products means that not only is integration simple, but fast adoption is also guaranteed. Together with SQL Server 2005, Dynamics GP and the Active Directory service for identity management, Microsoft Dynamics CRM 4.0 will improve group-wide efficiency and help Endsleigh employees convert prospects into valuable clients.” “Upgrading to the latest version of Dynamics CRM, clearly shows that we have faith in both the Microsoft solution and CIBER UK as our implementation partner,” adds Leahy. “The scalability of the solution, supported by the fact that we’ve used previous versions, reinforces our decision to select this product.” A further benefit of the implementation is that it enables Endsleigh to support flexible working for staff. “The killer benefit for me, as well as the organisation, is improved business continuity with greater flexibility of working,” says Leahy. “With unified communications, Endsleigh employees can easily transpose their working environment for their home environment. If an incident occurs, our employees now have the ability to access their Office SharePoint Server 2007, e-mail and telephone, as well as our Dynamics CRM system. This has led to better offline working, making us more responsive and effective as a business.” “Overall, the transition has been relatively seamless,” concludes Rebecca Smith, business project manager at Endsleigh. “As business project managers we’ve been involved in implementing a number of third-party solutions written by external software houses, such as a letting agency system and a tenant reference system. But Dynamics CRM has proved that with easy-tounderstand technology and a committed business partner such as CIBER UK, implementation is a hassle-free process.” F DYNAMIC IMPLEMENTATION Endsleigh Insurance needed a new business management system to help adapt to changing market conditions. CIBER UK worked with Endsleigh to update its Microsoft system, implementing Microsoft Dynamics CRM 4.0 and a related suite of Microsoft technologies. The new technology was quickly adopted across the company, enabling Endsleigh to work through different communication channels and help its partners adapt to new markets. The company can now access interactive, personalised business reports, which improve productivity and help staff to take on a new wave of sales prospects. Endsleigh is also able to support mobile working, enabling better offline working and making the business more responsive. PAUL NICHOLAS, REBECCA SMITH AND PETER LEAHY OF ENDSLEIGH INSURANCE SERVICES ENDSLEIGH AT A GLANCE As a leading UK specialist in insurance and financial services products for career people, Endsleigh prides itself on its status as an independent intermediary: – Founded in 1965 by the National Union of Students – Quickly expanded into offering financial services to graduates and career people – Ranked one of the UK’s fastest-growing businesses in 2003 – 85 per cent of new sales originate from the Web. www.onwindows.com 19
Slide 12: BRANCH BANKING BARKING UP THE RIGHT TREE BANK BRANCHES HAVE BEEN ON THE HIGH STREET FOR SUCH A LONG TIME THAT MANY OF US TAKE THEM FOR GRANTED. BUT WITH AN INCREASING NUMBER OF BUSY CUSTOMERS PREFERRING MORE MODERN CHANNELS, BRANCHES MUST ADAPT IN ORDER TO SURVIVE. JAMES DODD TAKES A LOOK he pressure that branches face in today’s market comes from multiple directions. Protecting the bottom line is currently a massive priority, but at the same time a competitive edge must be maintained so as not to lose ground to competitors. While the obvious rival comes in the form of high-tech, multi-channel banking, pressure also comes, less directly, from the retail industry. “The expectations banking customers have for the kind of service that they get in the branch has been influenced by the service that they have experienced in retail establishments,” says Tony Emerson, banking industry director, EMEA for Microsoft. “To a certain degree, banks are starting to compare themselves more with retailers than they are with other financial institutions.” The widespread implication is that branches need to make a major shift towards a more customer-centric attitude and mode of operation. There is also much that branches can learn from online banking and its multi-channel, hi-tech brethren. The expectations of the online generation are explored in the survey Millennials in Banking Survey 2008, which was conducted by Javelin Strategy & Research on behalf of Microsoft. The survey suggests that to engage with customers of the ‘Millennial’ generation – people between the ages of 18 and 30 – banks must embrace a higher-tech, multichannel approach. T Furthermore, findings suggest that Millennials go online for most basic transactions with their banks, such as viewing an account balance (74 per cent) or paying bills (70 per cent). But crucially, when it comes to complex transactions – such as opening a new account (57 per cent) and applying for a loan (52 per cent) – they prefer to do it in person. So while the trend certainly leans towards high-tech channels, the humble branch clearly still has hope. In addition, while branches can certainly learn from other channels of banking, it is also important that they maximise their own strengths by providing a more rounded and tangible customer experience. Staff need to be better prepared and trained, while advanced technology can be used in-branch to entice customers and smooth transactions. So how are branches attempting to deal with the numerous customer-centric directions that they are being drawn in? A current major trend is to tailor branches to geographical area. “Banks are increasingly stratifying branches, setting them up according to the kind of market they are in,” says Emerson. “Branches are specifically designed for the new urban environment or the small rural environment, for example – with each having a very different set of features and functions.” The banking industry has realised that different geographic communities want and require different services. Providing a more focused service is also manifesting in less obvious ways. www.onwindows.com 21
Slide 13: BRANCH BANKING Doing more with fewer staff at branches may at first seem like a cost-reduction measure, but actually it can produce a more impressive, efficient and specified customer experience. Primarily, it is transactional operations that slow the branch experience and automating these represents one way that brick-and-mortar can catch up with online banking in terms of speed and efficiency. “Cashless branches are becoming popular, especially in northern Europe,” says Emerson. “They have automated currency counting, recycling and replenishment all built into advanced ATM machines – which means a quicker and more effective customer experience. In addition, there’s no longer any need for a till, or a vault. This reduces cost and improves flexibility, allowing a branch to open in a much shorter timeframe and focus more of its staff on selling and advice.” The trend of doing more with less can be furthered with the use of advanced technology to engage and enable the customer. “A major UK clearing bank is using Microsoft’s Unified Communications to speak remotely with video to a mortgage specialist,” says Emerson. “Clearly, if you tell me that I can speak with a relevant expert I’m much more likely to come into the branch, sit down and talk to you than if you just offer me a generic branch advisor. If you can improve the customer experience you’re going to differentiate yourself over other banks, which grows your relative market share. The market itself is pretty much fixed – it’s your share of it that makes the big difference.” Improving the customer experience through technology is where Microsoft’s contribution comes into play. Its expertise in the user interface is the area in which it can most VIRTUAL REALITY Claude Goudreault, chief operating officer of VM6 explains Microsoft’s contribution to the world of branch virtualisation. “Microsoft technologies, namely Microsoft Windows server 2008, contribute in many ways to successful branch strategies, including: – Security (network access, authentication and audit) – Reliability (high availability, file security, data replication) – Manageability (resource management, remote management) – Cost reduction (server consolidation with Hyper-V) – Business continuity (high availability, disaster recovery) – Desktop management (desktop imaging and deployment). Microsoft’s Hyper-V virtualisation technology combined with VM6’s VMex 2008 software (which runs on Microsoft’s Windows platform) is the ultimate game changer for ROBO. This combination brings virtualisation to the branch level at a lower cost than other such technologies. It also brings all the benefits of virtualisation to the branches such as decreased downtime, lower maintenance costs and easier upgrades.” Clearly the focus in this example is on achieving a customer-centric branch through advanced technology such as Surface. However, it’s not just the bleeding edge that Microsoft is involved in, but also more vanilla enterprise implementations. For example, American bank Wells Fargo uses Silverlight, a Web-based subset of Windows Presentation Foundation, to stream full motion video to its ATM screens. “Most ATMs have the dullest screen interfaces you’ve ever seen,” says Emerson. “And yet if you go online you’ll find a much richer, interactive environment. Customers are saying: the Web technology is so good, why am I not seeing that in the branch?” In another example of Microsoft’s presence, the Bank of Montreal uses the Virtual Earth platform as its branch locator. Users can establish their nearest branch and view it at street level, as well as access a wealth of other information including the services it offers, what advisors it has and whether they are free, and even what languages are spoken there. This is a major customer tool for banks but, crucially, it combines the branch with the online channel. This fusion is the crux for successful branch operation; as the Millennials in Banking Survey 2008 indicates, multi-channel is the direction for the future. While improving the customer experience at the front end is undoubtedly important, changes to the back office can also have a positive effect on the customer experience. Perhaps most notable in this vein is virtualisation. “With branch offices we have seen increased autonomy in a decentralised environment with overall cost containment a priority,” says Claude Goudreault, chief operating officer of VM6, a professional services and software development company dedicated to IT infrastructure virtualisation. “We used this as the groundwork for the development of our VMex 2008 software product. It brings virtualisation high availability to branch offices at an economical price point.” Virtualisation’s back office credentials are impeccable – it can make branches more efficient and independent and thus more cost-effective. But how does this permeate through to the customer experience? Virtualisation can improve system availability and performance, as well as data security and integrity, both of which are a high priority for the customer. It also enables multi-channel access to banking services – which is a crucial part of the customer experience. “Customers expect the branch experience to be exactly the same as the head office one,” explains Goudreault. “From a technology point of view, it translates into all data applications being available at the branch level at all times. The branch should be able to access all relevant customer data to ensure that the service level is seamless between the branch and the head office.” help branches deal with customers. A prominent example is Barclays’ pilot implementation of Microsoft Surface technology in its new flagship branch at Piccadilly Circus, London. The technology allows users to grab digital content with their hands and navigate information about Barclays’ Premier banking offering with simple gestures and touches. Commenting on the opening of the flagship store Mike Amato, chief distribution and product officer for Barclays, said: “This is the first time that a bank has opened a store such as this. We have taken inspiration from retailers and developed a space that attracts and engages individuals whilst conveying what the Barclays brand represents. “Our plan for Piccadilly has been to build not only a branch of the future but a branch befitting the iconic setting. We have embraced innovative technology and design which we expect to attract the interest of the Piccadilly community in an innovative and generous way and of course enable our customers to be able to interact with us in the way that suits them and in surroundings that are comfortable and accessible for all.” www.onwindows.com
Slide 14: BRANCH BANKING Virtualisation seems to focus somewhat on the technical and operational enablement of the branch – but what of the humble advisor? Will the future see this role slowly but surely diminish? The consensus seems to be that the advisor will always have a role alongside, and indeed complemented by, improved technology and systems. “Today’s branch advisor needs to have all the tools available at all times,” says Goudreault. “Technology needs to ensure this occurs for the advisor to be successful. As well, technology must be dynamic to respond to the changing business environment and customer.” Though fewer employees may be part of a more streamlined branch, it seems the combination of high-tech tools and well-trained, well-informed staff is the real recipe for success. “The expectations banking customers have for the kind of service that they get in the branch have been influenced by the service that they have experienced in retail establishments” Tony Emerson, Banking Industry Director, EMEA, Microsoft GREEN BRANCHES Banking organisation UniCredit Group wanted to overhaul its Italian branch office servers, with an equal emphasis on increased efficiency and reduced environmental impact. The company sought to streamline its software and hardware management, as well as scale performance to meet growing needs. At the same time UniCredit wanted an implementation that met its corporate social responsibility guidelines, which included keeping power consumption to a minimum and improving working conditions for branch office employees. At UniCredit space is at a premium, with it being necessary for servers to be housed in the same office space as employees. This is one of the reasons the organisation ultimately selected a Primergy TX120 server offering from Fujitsu Siemens Computers (FSC) as the most appropriate for its needs. This range of servers has a compact design, low operational noise and so is barely noticeable in an office space – to employees or customers. They also have what FSC calls a ‘green design’, which focuses on energy efficiency to reduce both cost and effect on the environment. The new servers are expected to produce savings of 230,000 kW/h, or more than 300,000 over their estimated useful life. In addition, UniCredit will be able to improve the availability of its business applications and improve capacity to accommodate future business growth. Branches will be quieter and cooler for employees and customers alike, improving the overall surrounds and hopefully business as well. Emerson hints at this balance in his vision for the future: “The development of the branch is linked intrinsically with the development of the technology it adopts. I see them becoming more highly automated and less people intense, but at the same time friendlier, coffee-house type environments, where you’re encouraged to come in and loiter.” Such an environment is practically inconceivable without some human presence to provide a welcoming atmosphere and guidance with regard to the technology available. The key here is a multi-channel approach – not just in the sense of technology, but in the sense of an entire ideology. Banks must consider every avenue of approach to the branch and all of its intrinsic traits. An all-embracing attitude is necessary because that is how today’s generation – today’s potential customers – operate. “The reality is that the generation entering the workforce at the moment has less differentiation between work-time and fun-time,” Emerson continues. “If we can’t make going into a branch even a little bit fun, online banking may well take over completely.” Thus a successful branch must combine many ingredients from virtualisation and customer engagement to branch stratification. Ultimately branches have no need, or hope, of defeating the other channels available in banking. Rather, they must find their niche in the rich ecosystem of the connected customer experience. “Banks have a choice to make – to either retrench or drive growth by attracting new customers,” concludes Emerson. “How do banks do this? We believe it’s by providing what we call a ‘connected experience’. We all know that customers have many ways in which they choose to interact with their banks, whether it’s via the phone, Web or branch. Couple this with the emergence of new digital and consumer technologies and you have the clear emergence of a consumer-centric, experience-based market. This ultimately requires banks to engage them in a consistent way across all touch points. “Microsoft is unique in that we have technology across the consumer and enterprise space. We’re uniquely able to help banks connect these consumer and business technologies together to better build relationships and loyalty with customers.” F www.onwindows.com
Slide 15: RISK ANALYTICS AND REPORTING KNOW YOUR RISK RISK ANALYSIS IS FUNDAMENTAL TO EFFECTIVE RISK MANAGEMENT. JACQUI GRIFFITHS ASKS HOW FINANCIAL FIRMS CAN ENSURE THEY GET IT RIGHT FROM THE START inancial organisations face a paradoxical situation when it comes to risk – they need to minimise it, but they can’t grow without it. In today’s economic climate, it is more important than ever to identify, measure and minimise risk in order to reap its attendant rewards. Alexander Millington, head of risk management software at Formicary, explains: “Financial organisations thrive on taking risk, but understanding and giving clarity to that risk is more important than ever in a complex trading environment.” However, banks face many challenges in accurately assessing the risks they face, and there is consensus among the experts that risk analysis methods have previously fallen short. “How you value the risk is obviously key to determining the size of the reward,” says Michael Bush, head of product management at Business Control Solutions. “But how do you value risk that only has a ‘potential’ to take place?” “Margin pressure in core business has driven many organisations to seek greater return in the capital markets, fundamentally carrying a greater risk to their business,” says Nigel Lee, chief commercial officer at Financial Architects (FinArch). “A failure to correctly assess risk and risk-adjust business performance has exposed these organisations, their customers and their shareholders.” “Financial organisations are still searching for the appropriate balance,” adds Chris Moxon, chief executive officer of Methodware. “The herd mentality prevalent in many large financial organisations, driven by pressure to maximise profits, has produced a bias to F ‘reward’ in spite of the associated risks. Controls applied in recent years have not been effective, and some banks have focused more on controlling small fraud exposures than managing advanced credit instruments or systemic institutional issues. Clearly, this needs to change.” That change is on the horizon, according to Adrian Maconick, director of Finsbury Solutions: “We are in the middle of the biggest banking crisis in my lifetime,” he says. “This will trigger a complete re-evaluation of risk management which will cover the regulators, the role of government, the role and status of risk management in the organisation, the measurement of risk and the systems used to provide risk management information.” “For many firms the number one issue right now is basic survival and recovery from their direct participation in or exposure to the credit crisis in all its forms, especially as it relates to the underlying securities risk,” comments Todd Stone, chief executive officer of ProcessUnity. “After that, managing and controlling both existing and new financial products and services is critical to all financial firms.” Moxon agrees: “The two most significant issues facing banks in this context are institutionalising a risk management culture and obtaining a true enterprise view of risk,” he says. “Most financial managers and executives have never faced a business environment this challenging in their professional lifetimes. They need to increase awareness of proactive risk management practices and the discipline across the organisation. In conjunction with this, financial firms www.onwindows.com 27
Slide 16: RISK ANALYTICS AND REPORTING need the ability to take risks out of their individual business unit silos and understand the collective impact on the entire organisation.” “At Formicary, we’ve found that making consistent information, particularly market information, available across the institution is a top priority now for firms,” says Millington. “The ability to provide coherent pricing and risk analysis rapidly, across systems, from audited information sources, is critical in providing a level of confidence that the information on which business decisions are made is accurate, across the board. But accurate information is nothing without the ability to report and analyse it. Providing straightforward, easy access to a flexible reporting framework enables business decisions to be based on timely data in a way that is relevant to the business.” Perhaps it should come as no surprise, then, that even in these straitened times, analysts are predicting that risk management and compliance will be the area where most money is spent. “As we talk to our customers, the area where we consistently see spending is risk management and controls,” says Ian Warford, EMEA industry director for capital markets at Microsoft. “Firms will now begin to increase investment in effective internal control and risk management on one hand, and meeting regulatory requirements on the other,” says Stone. “But they should take care not to overreact. Large, complicated, enterprise-wide risk management approaches will cause more harm than good. They delay the benefits of effective internal control, end up increasing risk, and cost a fortune at a time when financial services firms need to spend wisely.” Warford concurs: “Customers know that additional regulation will be coming towards them – it always does after a period of financial turmoil. But they’re not looking to replace their systems – they’re trying to use what they have to address the processing problem around risk.” PERFECT MATCH The good news is that the key to solving the risk analysis conundrum may lie in a simple, if wellthought-out, shift of focus that tallies exactly with the ethos of using existing technologies – the technologies that end users are already familiar with. A major obstacle for banks has been their historical reliance on algorithmic techniques for risk analysis. As Lee explains: “The calculation of risk is difficult, and unfortunately not a science. Reliance on statistical models and the algorithmic exploitation of historic data has detached many organisations from sound judgement.” People across the enterprise can give valuable context to that data. Indeed, by returning their focus to their people, banks can efficiently nurture a context-rich, enterprise-wide risk culture. “Most financial managers and executives have never faced a business environment this challenging in their professional lifetimes” Chris Moxon, CEO, Methodware “Most importantly, people need to be at the centre of risk management,” says Warford. “They need to have the tools to manage risk themselves. For example, instead of having a business intelligence group somewhere embedded in the IT department, everybody should be able to use business intelligence tools.” “There’s no need to re-invent the wheel here,” adds Stone. “Most of the information is readily available. The trick is to establish the right relationships between this information and make it easily and widely accessible. There is more detail of course, but there is often more value in improving basic management visibility and transparency than in abstract risk engines.” “Where formal transaction processing systems exist, it is relatively easy to extract data from these and use them to feed risk management systems,” adds Maconick. “The hardest problem is to find and extract data from the myriad of informal systems on spreadsheets and PC databases. Some people have suggested that all spreadsheets should be migrated to formal systems, but this is just wishful thinking – our work shows end user computing applications growing at around ten per cent per annum in most organisations. When a new product area emerges they have to act fast and rely on spreadsheets to process. The best way to deal with the problem is to embrace spreadsheets and other end-user applications, but make them acceptable by providing the right tools to manage and control them.” “Risk analysis has a significant dependency on the underlying data and the analyst’s ability to access and aggregate it,” says Moxon. “The use of robust database technology and browser-based delivery channels allows easier access, and the flexibility of the risk analysis tool allows the best possible solution fit. Methodware’s flagship risk management solution, ERA, leverages Microsoft technology to provide a central, integrated repository that clients can configure according to their specific needs.” Lee expands the point: “For a tool to be effective it has to be easy to use and familiar,” he says. “Microsoft provides the most prolific tool in the risk and finance function – Excel – and some of its partners have built A SOUND VISION BANK OF AMERICA Microsoft’s future-state vision of risk analytics and reporting is based on four key principles: – People are at the centre of risk management with ‘do it yourself’ tools – Results are presented in a simple, visual, easyto-understand interface – Analytics and risk reports are delivered in real time – The right information is delivered in the right format, at the right time, to the right people. “Microsoft Office SharePoint Server is at the heart of our risk processes and workflow control solution,” says Ian Warford. “It allows organisations to embed workflows around documents. For Excel spreadsheets, SharePoint enables full control of versioning, so firms can identify who did what, when. “Microsoft’s high-performance computing (HPC) offering – Windows HPC Server 2008 – enables faster computing and modelling so that banks can make faster decisions about risk. In addition, Microsoft PerformancePoint Server can enable visualisation of complex risk data and a single view of structured and unstructured data. It can sit on top of SQL Server, which pulls together various data sources from around the organisation which can then be served up for PerformancePoint to do business analytics.” Bank of America needed a robust and scalable way to meet the compliance challenge of the Basel II Accord, which mandates an entirely new approach to measuring, monitoring, reviewing and reporting operational risk. After considering off-the-shelf solutions, the bank decided to build its own system using tools and an environment that would be familiar to developers and users. Within four months it designed, developed and deployed a portal solution based on Microsoft Office SharePoint Server 2007 with a data-input mechanism based on the Office InfoPath information-gathering program, part of Microsoft Office Enterprise 2007. To help ensure that only fully authorised users could access sensitive data, developers created highly customised views and controls based on the native security features in SharePoint Server 2007. “Because we based the solution on a development and deployment environment as efficient as Microsoft Office Enterprise 2007 and SharePoint Server 2007, the bank is well positioned to effectively manage operational and compliance risk, now and well into the future,” says Jeff Napper, senior vice president of enterprise operational risk management at Bank of America. www.onwindows.com
Slide 17: RISK ANALYTICS AND REPORTING risk and finance solutions that rely heavily on Microsoft. The Financial Studio product from Financial Architects is exactly this kind of platform. It is based on the finance resource planning concept, and has been developed by bankers for bankers. Financial Studio exploits Excel via Microsoft Reporting Services to provide information for both internal and external use in an environment which is both familiar and easy to use.” “Two main capabilities are particularly relevant here,” adds Maconick. “Cataloguing, controlling and incorporating all types of data into the risk management systems is relatively easy in formal systems, as most are based on modern database systems such as Microsoft SQL Server. For end-user systems, an end-user computing control system such as Finsbury’s Spreadsheet Workbench is required. Once identified as providing business-critical information, the spreadsheets can be analysed and key cell data extracted for input into risk management systems. The second key capability is computing power – most risk management calculations require large numbers of scenarios to be calculated. This is an inherently parallel process, so technology such as highperformance computing (HPC) is of significant value.” Howard Travers, director of sales at Formicary, stresses the importance of including all methods of communication in risk analysis. “With the introduction of Microsoft Office Communications Server (OCS) R2 2007, firms are recognising the huge benefits derived from VoIP, presence and unified communications,” he says. “Firms continue to look for methods to streamline communication and retain knowledge, and recent additions to OCS such as Group Chat are going to make a huge difference. The biggest issue they face is making sure there are mechanisms available to accurately search and identify unauthorised conversations and information. This is why Formicary introduced ChatSeer, which is used by several tier-one investment banks to natively search instant messaging and Group Chat communications and help them ensure they are analysing the right information.” It seems that in order to achieve a more accurate view of the risk/reward balance, banks must also strike a balance between people and technology; between the subjective context and insight that staff can offer, and the objective data that runs through their systems. Using familiar technologies not only helps put people at the centre of the risk culture, but can also create efficiencies in terms of resources, organisation and cost. “When it comes to cost, many people already have licences for SQL Server, PerformancePoint, and even HPC Server,” concludes Warford. “If financial firms deploy these technologies they can save a tremendous amount of money as opposed to buying new licences. Many firms are realising that they can save money by deploying the licences they already have. They’re trying to use what they have to address the processing problem around risk, and because the toolset is familiar to everybody who uses Microsoft Office, it’s a very compelling opportunity for them.” F SASFIN BANK South Africa’s Sasfin Bank serves commercial customers, with a focus on entrepreneurs. Siloed information gathering and management made it difficult for employees to access a unified view of the customer, and Sasfin also faced challenges in addressing the reporting requirements of Basel II regulations. Sasfin executives joined the Microsoft Office 2007 Rapid Deployment Technology Adoption Program to deploy a single, consolidated content management solution and Web portal. Structured information-gathering capabilities now enable employees to capture data in a repeatable and easily validated manner, while XML capabilities mean forms data can be uploaded automatically to customer data systems. The solution delivers greater process efficiency and more comprehensive information for Sasfin staff, enabling stronger decision-making capabilities. New data analysis capabilities offered through the Microsoft Office Excel 2007 spreadsheet software, as well as the enhanced reporting capabilities of Office SharePoint Server 2007, give users greater insight into customer interactions and sales opportunities. “We expect help-desk calls relating to the Office products to be considerably lower than after prior deployments,” says Dawie Olivier, IT project manager at Sasfin Bank. www.onwindows.com
Slide 18: GOVERNANCE, RISK MANAGEMENT AND COMPLIANCE SERIES TAKING STOCK SAI SIREESH PACHAVA TAKES STOCK OF THE RISK AND COMPLIANCE SITUATION AFTER A YEAR OF CHALLENGES THAT HAVE SEEN GOVERNMENTS TAKING A MORE PROMINENT ROLE IN THE FINANCIAL SERVICES INDUSTRY he financial services industry is continuously evolving at a rapid pace. Besides the challenges posed by emerging technologies, expanded business strategies, redefined business processes, new financial instruments and regulatory frameworks, 2008 has thrown up the additional trials of the global credit crisis and government interventions that have increased the scale, scope and interconnectivity of financial institutions. Correspondingly, enterprise risk management across multiple business units within increasingly complex organisations is under increasing scrutiny, and rightfully so given what is at stake to investors, creditors and clients, and more broadly, to the global economies and financial markets. The past year has been humbling and disruptive for the financial sector – perhaps especially for the large investment banks, but also for the risk management profession as a whole. Many epitaphs will be written T for legendary institutions that disappeared overnight, and the demise of these organisations will be spoken about for decades to come in terms of the crunching global impact and associated lessons. In the US, about US$650 billion of sub-prime bonds were outstanding in March 2008, about 75 per cent of which were rated ‘triple A’ at issuance, and across the world, banks raised around US$600 billion in 2008 worldwide in order to survive. This global development has broad, long-term implications for the risk management role and the function of governments and sovereign wealth funds. With government bailouts for banks across Europe and the US Federal Deposit Insurance Corporation’s recent suggestion of using an aggregator bank, there is a fascinating convergence of free markets and the role of governments as risk managers of last resort. This complements an ongoing global risk management effort that, although coordinated in some parts of the world (for example G7 and the European Union) and disparate in others, does show signs of an orchestrated effort. But as governments around the world continue their efforts to bolster financial firms’ defences against risk, there are also lessons to be learned from the current situation, in order to guard against the need to resort to such measures again. Because of the sheer magnitude and ubiquity of government interventions and bailout funding, many people see the situation as tantamount to nationalisation. However, the free market economies are fully aware of the economic distortions and allocation inefficiencies involved, and their objective is not to widen the sphere of the state in financial markets (as in nationalisation), but simply to provide temporary support to sustain the market mechanism by throwing a lifeline. The function of this sovereign funding is to act as a safeguard against market failure – what must be taken into account, though, is that it has serious implications and consequences for risk management. There are several potential effects to consider. First, the regulatory burden may increase because, having channelled tax revenues to address the problem, governments will want banks to show tax payers, and to justify to the wider world, how that money is being used. In addition to this, the natural tendency of regulatory regimes to expand their footprint will be boosted. Further, risk-taking by banks may be more guided by the perceptions and preferences of government policies than by portfolio considerations. There is also an attendant risk of over-regulation, as governments seek to compensate for a diminished trust in bank management by implementing detailed transaction-oriented examinations. The current situation raises an additional dimension for chief risk officers to deal with, if their institution is subject to government risk management activities. The lessons learned from government risk management will also feed into a heavier touch from regulators in industry risk management. In addition, the knowledge that governments around the world gain from their experience of rescuing ‘too big to fail’ firms will have an impact on the future viability and ambitions of ‘financial supermarts’ around the world. Finally, this government risk management effort will have far-reaching impacts on the risk management role of governments in the future and, implicitly, the role of risk management in society. For years, financial institutions have faced the ongoing challenge of meeting new levels of risk management and greater demands for compliance. As in previous times of crisis, that challenge is now intensifying alongside the global economic situation. As the role of governments continues to intensify and transform these challenges, it is perhaps more important than ever for financial firms to take a holistic approach to risk and compliance, based on a strong and flexible IT infrastructure. RISING TO THE CHALLENGE Microsoft works with leading partners that deliver solutions to address the spectrum of risk management and compliance needs. These solutions take advantage of Microsoft’s focus on strong infrastructure and reusable business components, while using enterprise-ready products and technologies and taking advantage of the tight connection of the back end to Microsoft’s leadership in client devices. A key strength of this approach lies in the familiarity of end users across the organisation with Microsoft tools and capabilities, which are ubiquitous in many organisations as well as in users’ homes. In enabling users to embrace and use information technology that aligns with a company’s business process, this minimises training needs and helps to build an integrated risk management and compliance culture across the organisation. In these difficult times, our efforts at Microsoft are focused first and foremost on helping our customers maximise the existing investments they have made with us. The latest guidance around IT compliance management is a good example of these efforts. We are also starting work on a Future State of Risk Management global study and will be releasing this in the middle of this year. F Sai Sireesh Pachava is the worldwide director for risk management and compliance industry solutions at Microsoft. He also serves as the co-regional director for the Professional Risk Managers’ International Association (PRMIA) Seattle chapter MICROSOFT RELEASES IT COMPLIANCE GUIDE Microsoft has released the IT Compliance Management Guide, a free, authoritative Microsoft Operations Framework (MOF) 4.0 companion guide based on the Regulatory Compliance Planning Guide. The guide aims to help financial firms address their governance, risk management and compliance (GRC) needs using existing technologies. It offers a range of resources to help organisations shift their GRC efforts from people to technology, including configuration guidance to help efficiently address GRC objectives. This acts as an accelerator to help businesses better understand how an IT process framework can help them implement GRC controls within their Microsoft infrastructure. A workbook, IT Compliance Management Resources, accompanies the guide, providing an extensive inventory of GRC-related configuration and management guidance organised by Microsoft product. By viewing compliance obligations through a ‘lens’ of eight authority documents, including Sarbanes-Oxley and ISO 27002, the guide helps to reduce the complexity often associated with GRC. It provides guidance to consolidate and address GRC requirements from multiple authority documents such as regulations, publications and agreements. The guide has been well received by reviewers, with auditing firm Grant Thornton commenting: “The Microsoft Operations Framework referenced in the guide is both a reasonable and extensible framework by which an organisation may manage GRC requirements and solutions.” The IT Compliance Management Guide is free to download at www.microsoft.com/solutionaccelerators www.onwindows.com 33
Slide 19: COMMENTARY OUT ON A LIMB NEW TECHNOLOGIES CAN REDUCE THE COST OF BRANCH OFFICE DATA PROTECTION WITH REAL-TIME DATA REPLICATION AND CENTRALISED STORAGE, SAYS IAN MASTERS probably have to allow about one hour per branch for weekly technical maintenance and verification and with 34 branches, the support would equate to roughly the cost of a full-time employee. By implementing a solution that replicates and transports byte-level changes only, the bank could move data to a central location. By eliminating the need for backup, technical maintenance and assistance, you could save around £33,000 annually. Plus there is no recurring hardware maintenance cost and no loss of employee time in supervising the backup process. With no user intervention and no additional bandwidth required between the branch offices and the central data centre, real-time data replication gives a backup and recovery solution without bottlenecks, allowing operations to continue unimpeded. The result: cost-effective quality service, up-to-the-minute data protection and economical use of existing bandwidth. Summing up, therefore, it would appear that continuous access to key business information is a critical requirement for both corporate headquarters and branch locations. But many companies have not adjusted to this reality, and “Newer, proven software technologies make it possible to reliably and cost-effectively backup branch offices at the central data centre” continue to rely on tape backup to protect their branch offices. The tape backup and recovery processes are complex, labour intensive and prone to errors – especially when untrained branch employees are asked to execute them. In short, tape backup for branches is a costly and risky data protection strategy. New solutions that use realtime data replication software to automatically backup branch office data to a central server provide a simpler, more reliable and cost-effective way to protect your branch offices. F Ian Masters is UK sales and marketing director at Double-Take Software: www.doubletake.com ost organisations understand the importance of deploying the right resources, processes and technology to protect key information and minimise downtime at their main headquarters. But too many companies don’t have the adequate resources or technology in place for protecting invaluable data in branch or remote offices. Their data protection strategies do not encompass the fact that branch offices now contain customer databases, e-mail servers or financial information that are critical to the company’s day-to-day operations. The traditional approach – relying on tape backup for branch office data protection – is both costly and risky. In addition to the initial tape backup hardware, software and installation costs for each branch, there are the continual costs of tape media, maintenance and off-site transport and storage. Most companies can’t afford to have IT staff in branch offices, so they incur traditional IT support costs for the weekly maintenance and verification of branch backups. Even with weekly support, central IT ends up finding out about gaps in the branch data backup after important information has already been lost. Often, untrained non-technical staff in the branches have to be responsible for consistent, reliable backup – but given the wide variety of things that could go wrong, this is an unrealistic responsibility. Backup fails without the branch staff even noticing. Shortcuts taken to save time unwittingly sabotage the process. Improperly labelling, rotating and removing tapes, results in lost data and slow recovery. Since the branch employees have never tested the recovery process, they aren’t familiar with how to execute the recovery when a disruption occurs. So the branch is down for hours, or even days, and often requires the assistance of the central IT staff. M “With no user intervention and no additional bandwidth required between the branch offices and the central data centre, real-time data replication gives a backup and recovery solution without bottlenecks, allowing operations to continue unimpeded” distances. With real-time data replication, file changes on branch office servers are automatically copied and transferred to a target server at a central location – using your existing network bandwidth. The replication occurs automatically, relieving branch office staff from their duties as backup administrators and giving IT staff confidence that reliable backups are occurring in the branches – without a lot of branch support calls and headaches. And because the replication is occurring constantly, the window of data loss is dramatically smaller compared to once-a-day tape backup. Imagine a bank with 34 offices, with each branch having to spend £4,500-£6,500 for backup hardware and software, in addition to set-up time. In addition to this, there would be the ongoing costs of media, maintenance, communications, transport and storage. Even with all this capital outlay the system would fail to guarantee the protection of all records because tape backup is not constant, since it occurs just once daily. If a failure should occur, the gap between the last backup and the failure would result in the irretrievable loss of transactions and records. Without trained IT staff at each branch the bank would be dependent on non-technical staff for tape management. People trained to serve customers would be inexpertly changing tapes. As the IT manager you should be asking yourself: did they make the tape change? Did they do it correctly? Did they install new tape or erase data? Whilst relying on tape backup alone, you would ANOTHER WAY What is surprising is that few companies realise that there are alternatives to this costly and risky approach to branch office data protection. Newer, proven software technologies make it possible to reliably and cost-effectively backup branch offices at the central data centre. In the past, centrally backing up remote locations was not feasible for most businesses because the solutions available were hard to manage and required costly WAN bandwidth. New remote backup solutions that use data replication software are dramatically easier to manage and work effectively over low bandwidth connections and long www.onwindows.com 35
Slide 20: COMMENTARY MAKING THE BEST OF UNCERTAINTY AS BANKS FACE A NEW SET OF ECONOMIC CHALLENGES, KEY TECHNOLOGY TRENDS CAN HELP THEM THROUGH, SAYS BRIAN SCOTT s instability continues to ripple through the global economy, it’s clear that no one is immune to the effects of tighter credit and slower consumer and business spending. But while it’s impossible to predict the duration of this uncertainty or its final impact on jobs and growth, I am optimistic about long-term economic prospects around the world. The trends that have made the last decade so dynamic for businesses haven’t changed – technology continues to improve, productivity continues to rise, and new business opportunities continue to emerge. At the same time, there’s no doubt that thoughtful business leaders must carefully assess how best to use their resources in these uncertain times. IT can play an important role in helping financial firms of every size to respond to this difficult and rapidly changing economic environment. In the near term, many organisations will focus on cutting costs and reducing risk, and a number of technologies are helping companies to lower expenses and improve effectiveness and efficiency. One example is virtualisation. By making it possible to run more than one operating system on a single computer, virtualisation reduces costs and lowers energy consumption, enabling organisations to use more of the computing power they already own. Another example is unified communications technologies that bring together voice, email and instant messaging, allowing organisations to replace traditional phone systems with integrated software solutions that reduce hardware and maintenance costs. Today’s video conferencing and collaboration tools are making virtual meetings much more like face-to-face interaction, enabling people to share and collaborate more effectively while reducing travel costs, and companies are finding that reducing computer energy usage is one of the most effective ways to lower costs without hampering organisational capabilities. At Microsoft, our internal IT department saved more than US$10 million by moving 25 per cent of its servers into a virtualised environment during 2007. Now, it takes just four people to manage the group’s 3,500 servers, and after implementing a unified messaging system we are saving US$5 million each year in hardware and maintenance costs. Large companies are not the only ones benefiting from software that can help reduce expense. For example, deploying Windows Server 2008 Hyper-V has helped Egypt’s first credit bureau I-Score, which has 50 employees, to consolidate hardware and reduce the cost of A “There is no doubt that companies and individuals now face a new set of economic challenges. But at the same time, key technology trends are converging in ways that will revolutionise the role computing plays in our lives” implementing a new disaster recovery site. I-Score also expects to reduce energy consumption and cooling costs. While cutting costs is important in responding to current economic challenges, it’s also possible to see some of these challenges as opportunities. Many new technologies are enabling forward-looking financial firms to build systems that are more cost-effective while enabling people to understand and respond to changing business conditions with greater insight and speed than ever before. This focus on people is critical. In any economy, innovation is the foundation for creating opportunity and success – and innovation is built on the ability of people to transform new ideas into products that deliver value to customers. The danger is that as the global economy slows, companies will shift focus to controlling expenses rather than investment in innovation. But companies that continue to pursue innovation will position themselves better to weather difficult economic times and create the conditions for more rapid growth when the economic climate improves. There is no doubt that companies and individuals now face a new set of economic challenges. But at the same time, key technology trends are converging in ways that will revolutionise the role computing plays in our lives. Financial institutions that take advantage of these trends to transform their businesses and deliver new innovations to customers will have an important competitive advantage, today and in the future. F Brian Scott is vice president, worldwide industry at Microsoft www.onwindows.com
Slide 21: COMMENTARY BUILDING SUCCESS FOR SUPERBANKS TRANSPARENCY IS VITAL IF MERGED BANKS ARE TO ACHIEVE TRUE SUPERBANK STATUS, SAYS NIGEL WALDER hile many firms and individuals have suffered huge financial pain over recent months, some have prospered and bought fire-sale assets that lift them overnight into the new ‘superbank’ category. However, where there is reward there is risk, and these superbanks face significant integration challenges. There are several key aspects superbanks need to consider in order to build success. For example, in a merger between two large banks, what should the new entity be called? Should both brands be kept because each has brand value? If so, how can the bank create a unified institution-wide culture? In addition, the movement of many firms towards a ‘one bank’ mentality by leveraging shared infrastructure often results in hybrid operating models whereby the business line with most power ends up with the better service, creating pressure for poorer performing businesses. It is crucial that all factors are taken into account and that integration is swift. Since most banks align themselves by product, difficulties can arise when trying to service customers with multiproduct needs when the products are spread out across the two entities. Superbanks face an internal battle over who owns the client relationship, which can take precedence over the best interests of the client. Superbanks also need to reaffirm the confidence of regulators and shareholders by taking a holistic view of risk that is easy to understand and to act upon. While easy to accept as a concept, this is more challenging to implement. Market and credit risk methodologies are relatively mature, but operational risk is still developing and is often the bucket in which other risks are put. Many banks have also focused their efforts on minimising the cost of regulations, rather than embracing the spirit of what’s intended. I’m not suggesting that the current crisis was caused by operational risk. However, as operational risk departments tend to be pretty isolated from units such as finance and operations, there is often a lack of understanding as to where problems occur, who should follow them up and how they should be reported, W especially in large firms. So, what is needed to monitor the risk within these operational units? The answer is transparency, which can only come about via effective communication between senior management and people in the line functions. Given the size and reach of superbanks this can’t be done verbally. It has to be systemised. Operational risk needs to be embedded in the fabric of an organisation – its people, who can provide the context that numbers might lack. Tightly coupled to operational risk is governance over the balance sheet. Superbanks have millions of accounts that are subject to millions of transactions daily. During integration this is amplified when aggregated financial management and reporting is required across multiple platforms, with finance departments having to temporally bridge the gap. In order for firms to sign off comfortably on their balance sheet, total transparency is needed. This should be capable of showing problematic accounts and identifying patterns, so when aggregated up, the warning bells proactively go off to senior management. It should also provide an opportunity for management to attribute a relative risk weighting over the accounts. Operational risk is an art not a science, and it needs to be treated as such. The next two to three years will see intensive activity within the newly-created superbanks as they battle to extract costs while keeping key employees and clients. Speed of execution and total transparency of risk will be vital if they are to succeed. F Nigel Walder is CEO of Business Control Solutions: www.bcsplc.com USE THIS JPEG RATHER THAN PDF www.onwindows.com
Slide 22: COMMENTARY SEE WHAT YOU SAY WHEN IT COMES TO IM AND GROUP CHAT THERE ARE MANY IMPORTANT ISSUES TO CONSIDER, ESPECIALLY IN REGULATORY AND COMPLIANCE RISK. LUCKILY, HELP IS AT HAND, SAYS HOWARD TRAVERS he use of instant messaging (IM) is growing at an exponential rate and with the recent release of Microsoft’s Unified Communications (UC) suite, Office Communications Server (OCS) R2 2007, this is set to continue. While IM technologies have simplified and replaced e-mail for one-to-one conversations, chat is the natural extension for the replacement of group meetings, and a major new feature in OCS R2 2007 Group Chat. Internet relay chat has been around for years, but the breakthrough came when innovative organisations like UBS extended that protocol to develop a persistent group chat product, resulting in a separate company called Parlano and the MindAlign product. Microsoft acquired MindAlign in 2007, and its adoption by many of the world’s largest financial institutions has shaped the functionality of Microsoft’s Group Chat, as many of those companies now plan to move to the UC platform. When I was sales manager of Parlano in Europe, CXOs often questioned why they would need persistent group chat when they had e-mail, phones and portals. But once the penny dropped (often after a successful pilot) those same CXOs rapidly championed the concept and adopted it across the enterprise. Traders were attracted because they could create different ‘rooms’ for each market and conduct virtual meetings without leaving their desks. Group Chat offers a means of managing far-flung project teams and enabling faster, more informed investment decisionmaking. There are, however, important issues to consider around IM and Group Chat, especially concerning regulatory and compliance risk. IM, including persistent group chat, is subject to the same stringent compliance regulations as email. Many organisations are required to record and archive all communication data for differing retention periods in secure, tamper-proof storage facilities. They must also be able to readily retrieve the data when required for audit, compliance or e-discovery purposes, or face hefty fines for non-compliance. Existing compliance solutions archive IM communications in e-mail format, which is not 100 per cent compatible with the persistent group chat feature. Group Chat data does not translate easily into e-mail format, so there is a possibility of data being lost, manipulated or corrupted before it reaches the secure data storage unit. Compliance officers need to know who spoke to whom and when, and the retrieval of data for e-discovery and audit purpose breaks down and T “Traders were attracted because they could create different ‘rooms’ for each market and conduct virtual meetings without leaving their desks” becomes complex when you have a chat room with hundreds or thousands of users. Converting Group Chat into e-mail can only be achieved by putting the recipients into the body of the text. That makes reconstruction and interpretation of Group Chat conversations almost impossible and highly time consuming. In line with the recent launch of Microsoft OCS 2007 R2 Group Chat, Formicary released the latest version of ChatSeer. Unlike other compliance solutions, ChatSeer identifies and indexes all IM communication, including attachments in their native format, enabling simple, quick and precise response to discovery and litigation requests. It was built based on two top-tier global investment banks’ demand for a powerful compliance solution that would enable secure archiving and deliver fast, accurate response to all discovery requests while allowing users to communicate both internally and externally through all available channels improving collaboration, business relationships and information flow. Some organisations may already have an archiving solution and require only a solution to store IM and Group Chat data in the same place. Others just don’t need ediscovery tools beyond the basic ones that they have. For these companies, ChatSeer Lite logs all message traffic on IM and persistent group chat, and supports the native integration of EIM message traffic, access and permission controls. The launch of OCS R2 2007 and Group Chat spells a new and exciting phase in the development of UC. The right approach can help financial firms to rise to the challenges presented by these new technologies, and make the most of the opportunities they offer. F Howard Travers is business development manager of Formicary: www.formicary.net/microsoft www.onwindows.com
Slide 23: COMMENTARY IT STRATEGIES CONQUER THE CRUNCH AS THE CHALLENGES IN CREDIT MARKETS CONTINUE TO AFFECT BANKS AND OTHER BUSINESSES, IT SUPPLIERS CAN SUPPORT IMPROVED SERVICE AT REDUCED COSTS, SAYS JUSTIN PARKS ince late 2007, the credit markets have been in a downward spiral, which is having a domino effect on businesses. The state of the credit markets has had a detrimental effect on the financial services sector, which has then impacted all other sectors due to the reluctance and, sometimes, the inability of banks to open the credit doors. And if companies are not able to extend their loans or take out new loans from the banks, then this position prevents the banks from executing one of their key objectives – to make money from lending money. As a result, many banks have less money available to spend on growing and improving their businesses. Capital investment has to be channelled into those areas of the business which keep the bank operating, often inhibiting spend on other areas such as IT. Although the banks rely heavily on IT and usually set the benchmark for IT strategy, this is often the area where capital investment is frozen. IT projects, outsourcing contracts and service improvements S are directly impacted, with IT suppliers being squeezed to enable more performance at a lower cost. As a result, IT suppliers are being forced to rethink their approach to funding initiatives for improved service and IT projects, and to consider changes to products used in the architecture. At visionapp we promote shared ‘risk and reward’ service contracts with an emphasis on fewer, more skilled IT staff. When IT suppliers diversify into all areas of managed service, there is a tendency to dilute the quality and skills of the resource supporting the service by taking on TUPE’d staff, with no active training strategy or programme to displace redundant staff. Raising the standard of all aspects of the service will allow the IT supplier, in a close working relationship with the bank, to actually realise the service benefits. The improved service should then lead to measurable cost savings or cost avoidance, and subsequently to an improved profit for the bank – and it is this more profitable position that is shared. With a greatly reduced budget, the internal IT organisation will no longer be able to fund all IT projects, so the onus falls on the suppliers to build the business case and develop the funding model for the project. In this respect, the supplier plays a trusted advisor role and shares with the bank its experiences from previous commitments. Service and operational improvements can also be achieved by strategic thinking around the desktop and infrastructure components. Business applications and data accessible to users from any location with an Internet connection brokers more flexible working while significantly reducing costs. A thin client desktop model is less costly to support providing it is the rule and not the exception. Forward thinking IT suppliers are building on these principals while mapping the infrastructure solutions to cloud computing models. This brings shared services onto the horizon of some CIOs where it was previously discounted as a business strategy. During 2009, we will see an increase in the acceptance and deployment of these models as a way to shed high IT operating costs and to ensure alignment with future proofed technologies. Until the credit markets recover and the financial services sector can again support the other sectors, IT spend will continue to fall. Suppliers need to rally on new technologies that support improved service at greatly reduced costs if they are to survive the coming year. F Justin Parks is director at visionapp: www.visionapp.co.uk www.onwindows.com
Slide 24: COMMENTARY CAN UC THE DANGERS? “UC platforms are changing the way people, groups and UNIFIED COMMUNICATIONS PROMISES GREAT BENEFITS, BUT ONLY IF THE RISKS ARE MITIGATED, SAYS NICK SEARS organisations work in many different ways. At the click of a button they can turn ‘chat’ into voice and share their desktop or application in order to explain a situation more clearly” technology to scan, security-check and confirm that the content being sent in and out over e-mail is as safe as they can make it. Unified communications is no different to e-mail. It is more immediate, more instant than e-mail, but it should be treated in exactly the same way. If a company bans Web mail access, then it should do the same with all variants of publicly available IM clients – and it shouldn’t rely on its firewall or URL filter to achieve this. Public IM applications are astoundingly good at circumventing company defences. Talk to any network administrator who has tried to stop them using only traditional security tools, and the conversation begins with a long sigh. The IM networks can’t be blamed; after all it is their business model to allow customers to communicate from anywhere. Therefore they’ve designed their products to be able to jump from port to port and even tunnel through the firewall if required. As soon as one port is blocked, it just looks for another. If not properly controlled, this can open a backdoor into the network, bringing spyware, Trojans and other malware or an exit for corporate information. Social engineering tactics are just as commonplace in real-time communications as they are in e-mail. However, users are still far more likely to click on a link in a chat message without a second thought, than they are in an email. This is because they truly believe that if the message comes from “Nick Sears” then it is Nick Sears that has sent the link, it rarely occurs to anyone to ask Nick if he sent it. Consequently malware is often rife in organisations that have no visibility or control of the real-time communications on their network. One of the more recent trends that the FaceTime Security Labs have seen is malware coming into the network over one IM network, identifying other IM – and even UC – clients installed, and then hopping over. It is very similar to the early days of e-mail viruses – a quick scan of the victim’s contacts, and he reasons for implementing unified communications (UC) are now so strong and the cost savings so wide-reaching that in the present, tough, economic climate it would be difficult not to look at implementing a system. Until recently, concerns over security and compliance have been blamed for the slow uptake to date. However, as financial pressures force organisations to move towards maximising every penny of budget and IT infrastructure, there may now be a temptation for businesses to skip some of the best practice guidelines – and that may be to their chagrin in the medium term. As more companies start to embrace UC, other less obvious benefits start to materialise and it is these, not just the reduced telephony and outsourced conferencing costs, which are really creating the buzz around implementing UC. That said, the saving from telephony costs alone is liable to crack a smile on the financial director’s face. No longer constrained by technology and costs, UC enables collaboration to become far more widespread within organisations. Presence – the ability to see at a glance who is available – has also helped to strengthen this trend. Now virtual meetings can be created on the fly, without the lead times associated with checking who’s available, booking a conference call and notifying everyone for the dial-in. The end result is faster turnaround of projects or problem solving, and not just within the company, but with suppliers, partners and customers too. UC platforms are changing the way people, groups and organisations work in many different ways. At the click of a button they can turn ‘chat’ into voice and share their desktop or application in order to explain a situation more clearly. Previously this was achieved through a mixture of chat programs, such as Messenger, the telephone, and Web conferencing programs, three disparate mediums that often made life more confusing for the uninitiated. The increase in virtual meetings often results in fewer faceto-face meetings, which in turn means lower travelling costs. One CEO remarked at a recent conference that since installing UC his travelling has dropped by 20,000 miles each year! But the benefits don’t just stop at savings on fuel, transportation tickets, hotel, subsistence and car hire. Less travel means that an employee’s availability increases, which in turn boosts productivity levels. It has been reported that since one company installed Microsoft Office Communications Server it achieved dramatic headcount reduction, while its sales volumes T increased by 70 per cent. While not every company will necessarily achieve these kinds of returns, at a time when everyone is looking to do more with less, implementing UC makes sense. Even though many organisations are looking to reduce headcount and costs, there is still a need to provide incentives to encourage productive employees to stay, a difficult task when budgets are being cut and a pay increase is not always available. Working from home is seen as a major perk – not only does it improve the work-life balance, it also adds a few much-needed pounds in the pocket saved from the reduced commute. With UC, employees can still operate as if they were in the office, and often more productively. Interestingly, ill employees, who perhaps when officebased might call in sick, nine times out of ten will drag themselves to a home office and work through bouts of sickness that would have seen them unavailable if they’d had to travel to the office. It could also be said that this improves productivity massively during this season of coughs, colds and the inevitable ‘man-flu’, since it eliminates the spreading of germs in an office. Such great benefits do come with inherent risks. But they are no different to those risks that have been managed effectively in the e-mail world for years. Since the days of the ‘I love you’ virus, every enterprise has had some form of email security – from anti-virus to malware checking and even content filtering. As Exchange and other e-mail services provide a degree of control, organisations still use additional hey presto, they receive a copy of the infection within seconds. If UC-related communications are running without monitoring in place, confidential information can easily leave the company. In a survey conducted in August 2008 sponsored by FaceTime, over a third of people admitted to sending an instant message to the wrong person. Although only five per cent of respondents had sent highly confidential information to the wrong person, one such error resulted in the company’s telephony and Internet access being used by someone else at the organisation’s expense. Nearly 16 per cent of respondents said they had clicked on an attachment or a link within an IM that had turned out to be malware, and 42 per cent of those said their current anti-virus protection did not catch it. Obviously, now is a great time for organisations to start implementing UC. But just as no one would consider rolling out e-mail without properly considering security, management and compliance, so must these three vital areas be addressed with UC. A rush to save costs and neglecting to mitigate the dangers will only result in businesses spending more money clearing up the resulting issues. F Nick Sears is vice president, EMEA at FaceTime Communications: www.facetime.com BEST PRACTICE TIPS FOR UC IMPLEMENTATION 1. Monitor and analyse usage of real-time tools 2. Formulate a strategy and usage policies – to incorporate publicly available tools 3. Standardise on a single messaging client where possible 4. Ensure that all unsanctioned traffic is specifically denied 5. Treat all IM and UC traffic in the same way that you do e-mail. www.onwindows.com 45
Slide 25: COMMENTARY FAST ROUTE TO EFFICIENCY RAPID PROCESS REENGINEERING CAN PROVIDE A WAY FOR FINANCIAL FIRMS TO QUICKLY ACHIEVE EFFICIENCIES, SAYS DERMOT MCCAULEY what is often called the ‘waterfall’ sequence of vision setting, analysis, design, testing, and finally, after months have elapsed, implementation – is simply unacceptable today. Continual, fast iteration lies at the heart of the new rapid reengineering approach. Ironically, some aspects of this fast-iterating approach were being developed in the 1990s, in the IT world under the auspices of a group called the Agile Coalition, while the Hammer-born reengineering wave was at its height. Now, the best elements of these ‘agile methods’ are being adapted to the task of rehabilitating process reengineering for today’s quick-moving world. Drive innovation through internal competition – Consensus and collaboration have been cornerstone principles of almost every change initiative in the past 20 years. Now it’s time to add a dose of competition – not to undermine the virtues of consensus building and collaborative working, but to spark more innovative thinking, to undermine ‘lowest common denominator’ thinking, and to push the pace of change. ASAP – A PROVEN APPROACH Singularity is in business to populate the world with agile companies. Our clients use our rapid reengineering approach, branded ASAP and based “By the end of the 1990s the reengineering wave had itself crashed. In its wake lay a trail of failed initiatives and, among the wreckage, a wealth of lessons to be learned” on the principles above, to become more agile, quickly. ASAP packages the best practices of reengineering and agile methodologies and equips our clients to fuel innovation by unleashing the positive forces of internal competition. It also uses business process management technology as a delivery platform, to enable early visualisation of the result, support rapid implementation and add agility to processes. This approach is not just a new theory of how to make beneficial change achievable quickly for businesses – it’s practical and is proven to work today. F Dermot McCauley is director for banking and capital markets at Singularity: www.singularity.co.uk he downturn in the global economy has gathered pace and businesses everywhere must achieve efficiencies quickly while still serving clients and otherwise ‘getting the job done’. Companies are looking to create efficiencies, and rapid process reengineering could provide a practical way to achieve this. But can you justify a rapid process reengineering project when headcount reduction may seem the only available fast-payback approach? A look at the principles and practicalities of rapid process reengineering will answer this question. T 1990s reengineering approach mean that it cannot be taken unchanged off the shelf for reuse. A new approach is needed that takes advantage of the best practice of 1990s reengineering, adds some new best practice learned since then, and provides a way that works today. Let’s review the principles that underlie a new, rapid reengineering approach that is already proven to work in 2009: Business value quickly – Whatever phrase you use to describe the cost/benefit comparison – return on investment (ROI), business value capture, investment payback – the cost/benefit of reengineering must be understood before the initiative begins. But this is nothing new – it was also true of old-style reengineering. What is new in rapid reengineering is that the ROI timeframe must be short. A period of months is too long to wait for value to emerge. Weeks, and preferably days, is the payback period that matters today. To paraphrase an executive to whom I spoke recently: “I’m not sure what I need, but I need it now!” This executive is not stupid – he’s just under pressure to show results quickly and doesn’t have the luxury of months to analyse his issues. Early visualisation of result – Start prototyping immediately and move rapidly toward implementing the most beneficial solution your prototyping identifies. Develop an early visualisation of the result (within three days) and then build it ‘for real’ in a few short weeks (preferably days). Don’t spend weeks analysing your current processes or defining new ones. Adopt the ‘show me, don’t tell me’ rule – insist on seeing now how your future business will work and don’t rely solely on requirements documents, process analysis reports or graphical models to understand how your future business will work. Agility of result – Implement business processes in a way that equips you to quickly change them when you need to. The processes you implement now must be open to rapid change; after all, your business faces market-driven change every day and if your processes are not agile you cannot respond effectively. Agility of approach – Rapid reengineering does not assume that processes must be designed first and then implemented. Rather, it accepts that processes should be redesigned while they are being implemented. The traditional reengineering approach to change – typified by DIDN’T WE TRY THAT ALREADY? Reengineering is not a new topic. In the 1990s the western world was swept by a wave of reengineering projects that promised to remake major corporations from the ground up. In July 1990, the Harvard Business Review published a now famous (some say infamous) article by reengineering guru Michael Hammer, entitled Reengineering work: don’t automate, obliterate. Hammer’s thesis, widely accepted in corporate board rooms at the time, was that small improvements in working practices were simply not enough to meet the business challenges of the early 1990s. A wave of economic troubles was bearing down on the corporate world and the only option was major change. Tinkering at the edges of business processes would fall short of achieving the change needed – incremental business process improvement was out, and major business process reengineering was in. But the promise of reengineering, though delivered in some cases, was frequently unrealised. While a growing church of reengineering evangelists ministered to the needs and ambitions of executives, the disappointing truth emerged – reengineering often fell short. Reengineering programmes were frequently too big; their ambitions too grand; their results too meagre; their expense too great. By the end of the 1990s the reengineering wave had itself crashed. In its wake lay a trail of failed initiatives and, among the wreckage, a wealth of lessons to be learned. A WAY THAT WORKS TODAY Fast-forward to 2009 and business processes are again centre stage. The scale of today’s challenges is greater and, critically, the challenges are even more urgent. Executives recognise the criticality of efficient and effective business processes to company success and know also that processes must quickly change to meet new realities. Yet the shortcomings of the www.onwindows.com 47
Slide 26: COMMENTARY MODELLING YOUR MATURITY BY ASSESSING THE MATURITY OF THEIR IT INFRASTRUCTURE, BANKS CAN BE CONFIDENT OF REWARD WHEN DEPLOYING TECHNOLOGIES ON THE MICROSOFT PLATFORM. ANTHONY BARON EXPLAINS n challenging times, business confidence can take a battering – something that banks know all too well in today’s economic conditions. But a strong technology base can deliver the support that financial firms need. Increasingly, financial organisations are realising that the Microsoft technology platform offers a cost-effective, flexible and efficient way to support operations across the organisation. Any executive who wants to grow his business constantly asks: ‘How can we complete any given process more efficiently?’ The question applies to every part of the financial business: sales, marketing, product development – and especially IT. In many cases, it can be tempting to reflect on your successes, but in today’s business environment no company can afford to rest on its laurels, and it’s now more important than ever for banks to determine what they can improve. To help organisations tackle this challenge, Microsoft has worked with Gartner to devise an infrastructure model comprised of four levels of maturity. Here we talk about the characteristics of each level and what financial institutions can expect as they move forward. The purpose of the Infrastructure optimisation (IO) model is two-pronged: first, it enables institutions to determine whether their IT infrastructure can deliver the capabilities their business requires. Second, it helps them to systematically improve their infrastructure in order to achieve their goals. As you become more mature in anything, you get better at it, and the model that Microsoft is offering is common sense – a maturity path that says: ‘If you’re at this level, these are your best practices.’ The IO model encompasses Basic, Standardised, Advanced and Dynamic levels of maturity. The Basic stage is characterised by disconnected applications and platforms. A business at this level might find that its processes are poorly defined. It frequently lacks the ability to exchange information among departments and teams, or to collaborate efficiently. A new employee, for instance, will need a computer and a desk. Ideally, a new entry in the human resources system would automatically generate a request to facilities and a computer request based on the new employee’s responsibilities. The IT department, however, lacks insight into the overall health of applications and services due to insufficient tools and resources. Because the IT environment is hard to manage, IT remains a cost I “As you move up the levels of maturity in the model, your capabilities are increasing. You can do more, and do it for less money” centre, with application backlogs and low productivity. At the Standardised stage, an organisation has standardsbased, flexible business applications. Companies begin to adopt XML and other industry standards more broadly across departments and with trusted trading partners. IT has deployed data warehouses so that it can deliver business intelligence reports and business analytics, automatically combining information from multiple internal departments for broader insight. At this level, the IT department is still a cost centre, but is moving toward becoming a business enabler that can build and deploy applications faster. The Advanced level is where the IT department has optimised infrastructure and applications and, as a result, can manage the technology environment well. A company’s core business processes are mature, which helps provide clear insight into performance. For instance, if you have a contract that requires delivering supplies within a certain period of time, the scanning of those supplies at their destination automatically updates your customer’s database and yours, so that there is a record of the completed transaction. At this stage, IT is a true business partner, and it can quickly build applications that take advantage of new business opportunities or cope with competitive threats. The optimum level is the Dynamic stage. By deploying a flexible, adaptive architecture based on Web services, companies at this stage can seamlessly integrate data for employees, customers and partners. Highly automated processes help align IT with business needs and control costs. In this scenario, an executive could follow a product’s progress from its beginning as a collection of components at a factory in one location through its shipment overseas to a different location, its distribution to wholesale and retail locations, and even its sales figures. IT understands how additional incremental investments in technology can yield specific, measurable business benefits. In order to determine whether their infrastructure falls into the Basic, Standardised, Advanced or Dynamic category, businesses should start by taking the online assessment test. The assessment has 32 questions, eight for each level. “Depending on your answers, you’ll be placed in one of the four categories, and you’ll get a better picture of your infrastructure and your practices,” says David Beauparlant, senior product manager for application platform and development marketing at Microsoft. The test rates not only the technology or best practices you have employed, but also the way you use them. “You might be at Basic level in one area, but Advanced level in another,” explains Beauparlant. When it comes to progressing between levels, there are two steps to follow. First, organisations must understand where they currently are in the IO model, and then they need to determine how to arrive at their desired state. Let’s take data management as an example: during your assessment, you will discern all the pertinent aspects of data – where is it, what applications it relates to, and who is authorised to use it. Once you’ve assessed your data management capabilities, you may see that your data is strewn all over the organisation rather than being consolidated in Microsoft SharePoint or on other servers. You might think the process will get harder as you move through the stages, but the truth is just the opposite – the hard part comes first. As you move up the levels of maturity in the model, your capabilities are increasing. You can do more, and do it for less money. F Anthony Baron is global vice president for solution architecture and strategy at Dimension Data: www.dimensiondata.com This commentary is based on an article published at: www.microsoft.com/midsizebusiness/businessvalue/m easure_platform.mspx www.onwindows.com 49
Slide 27: PROFILED “We needed to drive down IT service costs across our operations. But we knew that if we moved to one partner from three, the partner we chose must have impeccable credentials. We found that in Fujitsu Siemens Computers” HBOS www.hbosplc.com ith 65,000 seats across its UK operations, Halifax Bank of Scotland (HBOS) decided in 2007 to move from three suppliers to a single partner for distributed provisioning of its IT services. It wanted to reduce support costs through a transparent pricing model, and the successful partner would also have to maintain existing service level agreements (SLAs) while providing a vehicle to drive a continuous service improvement culture. W In January 2007, HBOS chose Fujitsu Siemens Computers as its preferred partner. The choice was based on the company’s multi-skilled engineers and proven ability to manage large-scale transitions of staff and equipment across multiple locations in very short timescales within the Managed Office service offering. “We needed to drive down IT service costs across our operations,” says Jonathan Ward, head of relationship management at www.onwindows.com HBOS. “But we knew that if we moved to one partner from three, the partner we chose must have impeccable credentials. We found that in Fujitsu Siemens Computers.” The contract, which is based on the support of desktop PCs and servers in office locations, campus sites, headquarters and branch offices throughout the UK, offered a saving of £6 million in the first year, with increased savings over subsequent years. It took just four months to transfer 180 employees to Fujitsu Siemens Computers under existing TUPE regulations. Industry standard SLAs were implemented, and the bank’s day-to-day operation was unaffected by the change. The Fujitsu Siemens Computers User Access Management desk was up and running at the start of the contract, and has since increased the amount of requests it handles by 50 per cent, while the company’s Software Certification and Packaging team has delivered service levels consistently above target. “Fujitsu Siemens Computers delivers what it promises, while at the same time reducing costs on an annual basis” Workshops with HBOS employees demonstrated how Fujitsu Siemens Computers’ cost base is made up, as well as the drivers that affect the outcome of any charges. This gave staff clarity over costs and demonstrated the effectiveness of the model. A business continuity test timetable was also set up to ensure readiness to respond to any business outages. This has twice been used in earnest, and on both occasions it worked smoothly to prevent any loss of business to the bank. In addition, the Fujitsu Siemens Computers remote services team works closely with the HBOS ComputerCall operation, and together they have improved everyday procedures, with a resulting improvement in ComputerCall’s first time fix rate. HBOS has also seen a reduction in the volume of disruptive incidents, with improved availability and end-user productivity. Fujitsu Siemens Computers operates a warehousing and commissioning centre with a purpose-built, state-of-the-art build centre dedicated to HBOS. This enables dedicated production of desktop and laptop products to be built to the HBOS specification. A dedicated team manages the projects services, delivering to HBOS requirements and using a flexible resource model that can adapt to the changing workload. Projects are quoted against an agreed rate card that has been actively managed to provide HBOS with the most competitive options on a range of skill sets. In just 12 months, HBOS has been able to reduce costs and introduce innovative, practical approaches to drive up service quality. Fujitsu Siemens Computers has delivered transparent cost accounting, improved the services to HBOS desktop and server users across all divisions, and significantly reduced server costs. This includes an improved first-time fix rate and better management of service delivery across all operations. The Office of Continuous Improvement and Innovation delivers continuous progression in all areas and drives the improvement culture that underpins the Fujitsu Siemens delivery model. This high performance has been consistently delivered by campus and mobile engineers delivering services that are specific, measurable and improving on a monthly basis. “Fujitsu Siemens Computers delivers what it promises, while at the same time reducing costs on an annual basis,” concludes Bob Smith, head of colleague IT services at HBOS. “The combination of high levels of service and transparent accounting makes a compelling business case that justifies the selection of the company as our strategic support provider for desktop and distributed server support services.” F OVERVIEW Solution: Distributed provisioning of IT services Benefits: Reduced costs; improved fix rate; increased user productivity Technologies: Management of servers and desktops Partner: Fujitsu Siemens Computers. www.fujitsu-siemens.com 51
Slide 28: FORUM - INSURANCE DON’T LOOK BACK DAVID EDISON SAYS THAT FORECASTING IS KEY TO HELPING INSURANCE FIRMS SURVIVE TOUGH TIMES he global economy has entered some truly stormy waters, and it may be some time before things finally settle down. It is not easy to see exactly where things will end, nor when, and nor indeed what further jolts there may be along the way. But there are certainly ways to help ride the storm and reap the rewards during calmer weather to come. “As individual enterprises, there is little we can do to influence either the economy or the overall global environment in which we operate, and predicting the likely state of the economy, even in the very short term, is far from an easy exercise,” says David Edison, head of actuarial services at Moore Stephens Consulting. “However, by implementing and using proven forecasting techniques and integrating them with appropriate technologies, we will be able to better steer our way through T DAVID EDISON Head of Actuarial Services, Moore Stephens Consulting After graduating in Actuarial Science in 1993, David began his insurance career at a Lloyd's Syndicate before joining the non-life actuarial services division of Moore Stephens' insurance group. Moore Stephens Consulting was established in 2002, and David is responsible for the company's actuarial and statistical solutions globally, as well as for data warehousing and designing content and functionality of forecast cubes. www.moorestephens.com the rough patch, and to position ourselves to maximise performance when the tides turn.” While the Internet and new technologies aren’t crystal balls, the amount of information available is phenomenal. We have achieved almost limitless levels of data capture and storage, and our ability to interrogate and analyse this data using business intelligence (BI) tools such as ProClarity has enabled us to understand our business and what drives it, leading us to faster, smarter decisions. Data mining tools go a step further than conventional BI tools, enabling businesses to use unimaginably clever programs and algorithms to hunt out patterns and relationships in the data, sometimes hidden so deep within such masses of data that you couldn’t hope to discover it manually other than by chance. The results of such analysis can change the way in which a business thinks or markets itself. Microsoft’s customer relationship management (CRM) software allows us, having developed a marketing campaign strategy, to implement and monitor that campaign, and to ensure its efficient running. While BI enables companies to monitor business performance, it is essentially a record of the past. Forecasting enables businesses to look forward and make educated decisions. Forecasting requires a plethora of mathematical, statistical, actuarial and scientific techniques and technologies. Take all this data, analyse it, and then use such objective analysis, in conjunction with expert and experienced subjectivity, to project patterns and trends. These projections can be used to learn which way individual business lines are headed, and how we can better control them and maximise their performance. In recent years, the Financial Services Authority (FSA), along with other national and international regulators, has implemented a number of requirements for regulated firms, from ensuring that customers are being treated fairly through to ensuring solvency and capital adequacy. But its motives for requiring firms to perform such analyses are not only so that the FSA will have peace of mind. Encouraging firms to analyse, investigate and forecast their own “By implementing and using proven forecasting techniques and integrating them with appropriate technologies, we will be able to better steer our way through the rough patch” data and business on an ongoing basis will lead them to better understand and manage their business and opportunities. “As individual items BI, CRM and forecasting tools each perform their own functions in helping organisations prove their solvency and other requirements to the regulators,” says Edison. “Regular, structured use of these tools will also enable firms to be increasingly conversant with their business data, and adding Microsoft’s data mining tool will add an entirely new dimension to their understanding and interpretation of key business drivers. However, it is only when these different tools are brought together into a unified environment, where data is automatically sourced on a regular basis from them, that the system starts to become truly integrated.” The results of projections from the forecasting system (be they actuarial chain ladder claims projections at any level of granularity, or any constituent output of a holistic stochastic capital adequacy/solvency model) are brought back into the warehouse and, therefore, back into the BI and dashboards. This creates a circular management system via the monitoring, comparison and interrogation of actual, expected and previously forecast results. Such a system becomes far more embedded in the business psyche and strategy than any series of disparate tools – an approach that will allow both you and the FSA to sleep better at night. F www.onwindows.com
Slide 29: HOW WELL DO YOU KNOW YOUR BROKERS? Landscape.CRM is a comprehensive CRM solution for insurers to manage and communicate with their brokers more dynamically and effectively Based on Microsoft Dynamics CRM, Landscape.CRM from RDT incorporates sales, marketing and customer service modules to deliver a solution that enables insurers to improve and strengthen relationships with their broker community and deliver higher levels of profitability for both parties. Landscape.CRM allows insurers to capture and manage broker information from all areas of the business in one central repository, offering instant access to up-to-date broker contact and contract information, a full history of insurerbroker interactions and incoming requests and leads. Visual dashboards based on key performance indicators also provide insurers with real-time information about the performance of their brokers. This enables insurers to build a clear and accurate picture of their top performing brokers and identify opportunities to increase volumes of business with them. Landscape.CRM helps insurers build lasting profitable relationships with their broker networks: • Increasing broker satisfaction and effectiveness through improved communications and more responsive, consistent service • Growing revenue streams by identifying and acting on opportunities to increase indirect volumes of business • Achieving better response rates to marketing campaigns through more effective targeted marketing to the broker community • Improving broker management by delivering greater visibility and control of the broker channel To find out more, call us today on 01732 220010 or email: info @ rdt.co.uk www.rdt.co.uk