Technology Cost Analysis and Value Study
Client Business Issues:
Our client, global money center bank, the Cash business of a preeminent global money center bank, was having difficulty interpreting the components and drivers of its $100 million annual technology budget. As a result, it was unclear to senior management how the technology products and services the business consumed (and the associated charges) related to business products, clients and revenues. This made it impossible to proactively manage expenses and make informed business decisions to control and reduce cost. Additionally, it was very difficult to validate the accuracy of charges and identify opportunities for cost savings.
Our Approach:
We performed several key steps to understand the charges for the technology services provided to the Bank’s Cash business. This included a demystification of high volume charges and how they were derived and allocated. Through understanding the charging methodology, we recommended actions to provide lower cost, better service, more focused value and control over technology. These included:
- Identifying options within current service offered by the Bank’s technology organization
- Mapping of charges to technology services in accordance with service level agreements (SLAs)
- Development of template for re-negotiation of service levels and charges (short and long term)
- Benchmarking and identification of alternative providers of technology services, internal or external to the Bank, at a lower cost
- Identification of opportunities and actions to reduce current charges and an estimate of those savings
- Development of new bundles and formats for reports to make them more understandable
Value Received By Client:
By working closely with this client, we were able to help them understand the complexities of their internal pricing and charge back system and identify opportunities to decrease their technology expenditures. This included recommendations for taking advantage of lower cost options and controlling business demand for technology.