Infrastructure

12:59 PM
David Oxenstierna, Capco
David Oxenstierna, Capco
Commentary
50%
50%

Change Doesn't Always Have To Be Hard

"Change Sourcing" helps banks transform their cost base by reducing overall project costs, leveraging offshore resources, providing cost predictability and improving cost efficiency and execution.

It is no secret that continuing cost and regulatory pressures are driving banks to fundamentally re-engineer their business and technology architecture to reduce costs.

David Oxenstierna, Capco
David Oxenstierna, Capco

To meet these challenges, many banks are looking for partners to help with the re-achitecting of infrastructures. For instance, "Change Sourcing" allows banks to enter into a strategic, long-term partnership with a third-party service provider and work hand-in-hand with their change management professionals on transformation initiatives. The external service provider does not usually take the project over completely but rather acts as a partner with the bank and supplies skilled resources in a strategic way.

The Change Sourcing model helps banks transform their cost base in several ways:

Reduce costs: An external service provider has an existing pool of experienced, trained and skilled resources that can be deployed in a cost-effective and efficient manner. The third party can assign people with the right skill sets to the right jobs, oftentimes reducing the average seniority level, which helps drive down overall project costs.

Leverage Near And Offshore Resources: An external service provider has well-established capabilities in nearshore and offshore locations and experience working on sophisticated business and technology change projects in a way that does not compromise service quality and reliability. This provides banks access to a nearshore/offshore resource pool with advanced skill sets and up-to-date training.

Provide Cost Predictability: The Change Sourcing model combines a long-term fixed-rate contract, typically five years, with options for rapid short-term increases and decreases in resources in response to budget fluctuations and project demands, an attractive feature for banks looking for flexibility and cost predictability. The model also provides the potential for risk-sharing and gain-sharing contractual arrangements.

Improve Project Efficiency: By partnering with change professionals who are highly skilled in executing business and technology change projects, banks can execute their transformation initiatives more efficiently, thereby driving down the average cost per project. The Change Sourcing model includes a number of Centers of Excellence (CoEs), such as PMO Services, Test and Release Management and Business Analysis/Test Planning. These CoEs enable banks to leverage preexisting and battle-tested models, contributing to improved project efficiency.

Strengthen Management Efficiency: Managing change portfolios is difficult and costly. The Change Sourcing model includes standardized and highly efficient managed service infrastructure processes, including metrics dashboards, performance management, learning and development, near/offshore transformation, portfolio analytics and so forth. Like the CoEs, these management services have been deployed and battle-tested, meaning that banks can manage their change portfolio and implement the Change Sourcing model in a highly efficient and predictable manner.

About The Author:David Oxenstierna is a Partner in Capco's Capital Markets group. He has 15 years of experience in capital markets operations across asset classes and markets including the US, Latin America, UK, and Europe. Oxenstierna also has eight years of corporate banking experience.

Prior to joining Capco, Oxenstierna worked at Morgan Stanley in a variety of operations management roles, including global head of change the bank; Americas head of equity operations; head of Latin America, Mexico, and Canada operations; global head of cash equity operations; and global head of client service. Prior to Morgan Stanley, Oxenstierna was with Citibank's Corporate Bank in the Global Transaction Services business.

Comment  | 
Print  | 
More Insights
More Commentary
BYOD Policy: Don't Reinvent the Wheel
Financial firms still feel overwhelmed by BYOD risks and challenges. But these can be addressed by a good policy, and the guidelines are already out there.
The BYOD Challenge
Having a policy in place to manage mobile devices used by employees for work purposes is necessary in this current day.
Getting Onboarding Right in the Age of the Customer
Disparate “Frankenstein” systems slow down the onboarding process and impede customer service, says Pegasystems.
Performance Monitoring Key to Smooth Infrastructure Modernization
As banks consider how to shift infrastructure and storage solutions, they can’t afford to lose visibility into performance.
Accuracy in the Financial Data Supply Chain
Some of the best-practices from the retail world’s physical supply chain, including data standards and visibility, can be leveraged for efficiency in financial services.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.