With the global economy still sputtering, Wall Street firms are under more pressure than ever to cut costs, and IT organizations continue to face intense spending scrutiny. As top-level management carefully eyes each IT project and examines how it can impact cost-efficiency, technology chiefs need to be more flexible than ever, often having to address a growing list of essential IT projects and tight timelines while simultaneously coping with shrinking staff and budgets. Credit Suisse CIO Karl Landert, who manages a staff of more than 10,000 employees globally, including 2,700 in New York, spoke to WS&T Senior Editor Melanie Rodier about managing an efficient IT department during the financial crisis.
WS&T: What are some of the challenges of managing a global bank's technology organization in today's economic environment?
Landert: Managing the technology department of a global bank is very challenging anyway -- the economic environment adds one dimension to it. At Credit Suisse we are in pretty good shape; we are doing quite well even in this economic environment, so there is less of an impact on the technology division of Credit Suisse. But the biggest challenge we always have is managing the complexity. When I look at my applications landscape, I have roughly 4,900 business applications in our whole environment. It's a constant struggle to not have even more proliferation of new applications; to harmonize, standardize and really simplify things is one big challenge we face constantly.
The other is building the organization so it can deliver on business requirements on a global scale while remaining very agile to also react to market movements. The agility of the organization is being [tested] in many different contexts, but we have been quite farsighted to have a model that has allowed us to cope with some of the fluctuations and volatility in the demand on the business side. The financial crisis in itself led to some rebalancing of the workforce. But having programs in place that enable shifting people from one area to another -- not only having permanent staff -- and having an operating model that allows you to work with vendors enables you to have the agility and flexibility to react.
WS&T: Has the financial crisis changed the way you manage your staff?
Landert: No. The only change is managing expectations regarding the compensation you can give to people if you have a bad year. But overall I think it would be bad if we changed things because of the financial crisis. Our staff is our biggest asset. We need to manage it in a constant, sustainable way. You need to have a multiyear vision in how you develop your team, your capabilities. And you cannot change that because you have a bad cycle.
WS&T: Many firms have announced technology budget cuts. What about Credit Suisse?
Landert: We've always had a big focus on cost-efficiency and making sure our spend increase was moderate. We have had efficiency programs in place for a considerable number of years. From 2008 to 2009 we actually increased our budget rather than reduced it. I guess I am in a lucky position to be able to say that right now compared to some of my colleagues. Nevertheless we had to do some rebalancing, and we had some programs to increase efficiency based on some seasonal fluctuations. But overall the budget has increased 5 percent to 6 percent since last year. My colleagues who run the businesses have realized that IT is a big contributor that can lead to efficiency and to opportunities we are seeking to gain market share.
WS&T: Can you provide any specifics on the rebalancing you have done?
Landert: When you look at an organization of 12,000 people, even if you increase your budget, you have some areas where you have projects that roll off and some areas where you have businesses you are discontinuing. So the challenge is what to do with the people who have been assigned to those areas. Yes, we have mobility programs, and we use them to move people from one area to another. But nevertheless, given the full impact [of the crisis], we also had to resize some of our businesses. We had to make some cuts in some areas while in other areas we have been hiring quite a lot of people.
WS&T: In what areas have you made cuts? Where are you expanding?
Landert: We are no longer in some capital-intensive businesses. We have a strategy to really reduce our risk, so we went out of the businesses you would expect. We divested our global investors business in our asset management division with a sale to Aberdeen.
Areas where we have increased funding are our control-related initiatives around liquidity management and risk management, which again you would have expected -- the regulators are requiring new things from us. That's where more money is going in.