MICROSOFT TECHNOLOGY IN THE FINANCIAL SERVICES INDUSTRYSPRING 2009

FINANCEON WINDOWS

“Newer, proven software technologies make it possible to reliably andcost-effectively backup branch offices at the central data centre.”

Ian Masters, UK Sales and Marketing Director, Double-Take Software

FROM BRICKSTO CLICKS

How CIBER UK helped Endsleigh InsuranceServices embrace a digitally focused business

model with Dynamics CRM

BRANCH BANKING

GOVERNANCE,RISK MANAGEMENTAND COMPLIANCE

Find out the latest news on how Microsoft and itspartners are helping to address the unique

challenges faced by London Market insurers. Page 8

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Visit onwindows.com for news and views in financial services

FOREWORDSPRING 2009

In tough times, the tough survive – and these are certainly tough times forfinancial 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 placeat the right time, and today’s technologies play a key role in enabling banks todo just that. In our cover story on page 16, we find out how working withCIBER UK to upgrade to Dynamics CRM 4.0 helped Endsleigh Insurance adopta new, digitally focused business model and develop client relationships.

As many banks have found out, customers demand a branch presence. Butincreasingly, they will also use channels such as the Internet, making branchprofitability a challenge. Our feature on page 20 looks at how banks can maketheir branches attractive and relevant to the demands of today’s customers.

Particularly in the current economic environment, customers are attracted toreputation as well as service. By the same token, financial firms need to knowthey can build their business while minimising risk. On page 26, we look at howbanks can improve risk analysis and reporting, arguably the foundation onwhich business success and customer trust are built.

You’ll also find our usual selection of incisive commentary and news fromthe industry. Don’t forget to visit us at www.onwindows.com/finance for thelatest news updates across the region.

Enjoy the issue.

Anders AbrahamssonManaging Director, EMEA Financial ServicesMicrosoft

FINANCE ON WINDOWS

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EDITORIALEditorJacqui Griffithsjacqui.griffiths@tudor-rose.co.ukAssistant EditorsJames Doddjames.dodd@tudor-rose.co.ukLindsay Jameslindsay.james@tudor-rose.co.ukRebecca Lambertrebecca.lambert@tudor-rose.co.ukGroup EditorAdam Lawrence adam.lawrence@tudor-rose.co.ukEditorial ContributorsMike Amato, BarclaysAnthony Baron, Dimension DataMichael Bush, Business Control SolutionsDavid Edison, Moore Stephens ConsultingTony Emerson, MicrosoftClaude Goudreault, VM6Brian Henry, CIBER UKPeter Leahy, Endsleigh InsuranceNigel Lee, Financial ArchitectsAdrian Maconick, Finsbury SolutionsDermot McCauley, SingularityIan Masters, Double-Take SoftwareAlexander Millington, FormicaryChris Moxon, MethodwareJeff Napper, Bank of AmericaDawie Olivier, Sasfin BankSai Sireesh Pachava, MicrosoftJustin Parks, visionappBrian Scott, MicrosoftNick Sears, FaceTime CommunicationsRebecca Smith, Endsleigh InsuranceTodd Stone, ProcessUnityHoward Travers, FormicaryNigel Walder, Business Control SolutionsIan Warford, MicrosoftGreen IT AdvisorDr Bernd Kosch, Fujitsu Siemens Computers

MICROSOFT EDITORIALADVISORY BOARDAnders AbrahamssonManaging Director EMEA Financial ServicesAndreas DrescherEMEA Partner ManagerGordon Ejsmond-FreyEMEA Industry Director, InsuranceAndrew LongstaffIndustry Marketing ManagerTony EmersonEMEA Industry Director, BankingIan WarfordEMEA Industry Director, Capital Markets

PRODUCTIONCreative DirectorLeigh TrowbridgeDesignersBruce GrahamKelvin JonesPaul RobinsonWeb Site Manager – onwindows.comDan Dore

COVER PHOTOGRAPHYRohan Van Twestwww.rohanvantwest.com

COMMERCIALAdvertisingClaire Brownclaire.brown@tudor-rose.co.ukChristian Joneschristian.jones@tudor-rose.co.ukRyan Kenwardryan.kenward@tudor-rose.co.ukBen Mayerben.mayer@tudor-rose.co.ukMarcus Miolamarcus.miola@tudor-rose.co.ukRicky Popatricky.popat@tudor-rose.co.ukAmandip Singhamandip.singh@tudor-rose.co.ukPartner DirectorPaul Simpsonpaul.simpson@tudor-rose.co.ukSubscriptionsEwan Campbellewan.campbell@tudor-rose.co.ukReprintsStuart Fairbrotherstuart.fairbrother@tudor-rose.co.ukBusiness ManagerRichard PeppermanPublisherPaul Simpson

5

COVER STORY

FROM BRICKS TO CLICKS 16How CIBER UK helped Endsleigh Insurance Servicesembrace a new business model

FEATURES

BARKING UP THE RIGHT TREE 20In a challenging business environment,bank branches must adapt to survive

KNOW YOUR RISK 26Accurate analysis is key to managing risk

MARKETWATCH

NEWS DIGEST 8The latest news from technologyproviders across the region

GOVERNANCE, RISK MANAGEMENTAND COMPLIANCE

TAKING STOCK 32A year of challenges has seen governmentstaking a more prominent role in financial services

CONTENTS SPRING 2009

COMMENTARY

OUT ON A LIMB 34New technologies can cut the cost ofbranch data protection

MAKING THE BEST OF UNCERTAINTY 36How key technology trends can helpbanks rise to new economic challenges

BUILDING SUCCESS FOR SUPERBANKS 38Why transparency is vital for merged banks

SEE WHAT YOU SAY 40How companies can ensureregulatory compliance for Group Chat

IT STRATEGIES CONQUER THE CRUNCH 42IT suppliers can supportimproved service at reduced cost

CAN UC THE DANGERS? 44Unified communications can delivergreat benefits if the risks are mitigated

FAST ROUTE TO EFFICIENCY 46Rapid process reengineeringcan enable quick efficiencies

MODELLING YOUR MATURITY 48Assessing IT infrastructure maturity helps ensurebenefits when deploying Microsoft technologies

PROFILED

HBOS 50When HBOS moved from three IT servicespartners to one, it chose Fujitsu SiemensComputers

FORUM

DON’T LOOK BACK 52How forecasting can steerinsurance firms through challenging times

26 2016

08 46 50

PUBLISHING PARTNERS SPRING 2009

7

Finance on Windows isproduced as a partnership

between Microsoft and selectedkey organisations from the

financial services technologysector. These partners are

responsible for the editorialdirection of Finance on

Windows, and collaborate toprovide you with content that

covers the key issues facingfinancial services executives,

and technology solutions thatcan address these issues.

Published by Tudor RoseTudor House 6 Friar Lane, Leicester LE1 5RA, EnglandTel: +44 116 222 9900 Fax: +44 116 222 9901info@tudor-rose.co.uk www.tudor-rose.co.uk Managing Director: Jon Ingleton

ISSN 1473-2173Finance 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.

© 2009 Tudor Rose Holdings Ltd. All rightsreserved. No part of this publication may be storedor transmitted or reproduced in any form or byany means, including whether by photocopying,scanning, downloading onto computer orotherwise without the prior written permissionfrom Tudor Rose Holdings Ltd.

Active Directory, BizTalk, Microsoft, Outlook,SharePoint, Visual Studio and Windows are eitherregistered trademarks or trademarks of Microsoftin the US and/or other countries. The names ofactual companies and products mentioned hereinmay be the trademarks of their respective owners.

Views expressed in this magazine are notnecessarily those of Microsoft or the publishers.Acceptance of advertisements does not implyofficial endorsement of the products or servicesconcerned. While every care has been taken toensure accuracy of content, no responsibility canbe taken for any errors and/or omissions. Readersshould take appropriate professional advice beforeacting on any issue raised herein.

The publisher reserves the right to accept or rejectadvertising material and editorial contributions.The publisher assumes no liability for the return orsafety of unsolicited art, photography ormanuscripts.

FINANCE ON WINDOWS

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.

www.fujitsu-siemens.com

The Microsoft vision is to enable every businessenterprise to use the Internet to build richercustomer experiences. Microsoft sees e- business asmore than just transactions over the Web, it is ameans for establishing a closer relationship withcustomers and trading partners and Microsoft .NETis the evolutionary strategy behind this vision.

www.microsoft.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.facetime.com

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.ciber.co.uk

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.dimensiondata.com

www.onwindows.com

ondon Market Networkpartners Finsbury Solutionsand Sequel Business Solutions

have announced major new projects.Launched by Microsoft in February

2008, the London Market Network is agroup of software and service providersthat offer pre-integrated industrysoftware solutions based on a commonMicrosoft technology platform. It bringstogether a set of complementarysolutions to address the uniquebusiness and technology challengesfacing companies in the LondonMarket.

“We are delighted that the MicrosoftLondon Market Network is deliveringsignificant business value to ourclients,” said Bruce McKee, insuranceindustry manager at Microsoft. “Sequeland Finsbury Solutions are bothfounding members of the network, andplay important roles in our industrysolution. The Eclipse Underwriting

system from Sequel Business Solutionsis key to enabling data flow to othersystems – such as Dynamics CRM,SharePoint and K2 Workflow – to worktogether and access information, whilethe market leading capabilities of

Finsbury’s Spreadsheet Workbench,combined with its use of SharePoint,delivers the high levels operationalcontrol that insurance firms require.”

L

MARKETWATCH | NEWS

THE NETWORK DELIVERS PRE-INTEGRATED SOLUTIONS TO ADDRESS THE UNIQUE CHALLENGES OF LONDON MARKET INSURERS

SURE SUCCESS FOR LONDONMARKET NETWORK PARTNERSMICROSOFT PARTNER INITIATIVE DELIVERS BUSINESS VALUE

REPORT by Jacqui Griffiths

9

MICROSOFT

.NET 10, 12, 14

Dynamics CRM 8

Group Chat 13

HPC Server 2008 14

London Market Network 8

Office Communications Server 13

SharePoint 8

SQL Server 8, 10, 13

Surface 12

Visual Studio 10

Windows 10

TECHNOLOGY PARTNERS

Acette Technologies 14

Asysco 10

Business Control Solutions 10

Cadis 10

Compassoft 14

Crystal Software 14

Derdack 14

FinArch 10, 13

Finsbury Solutions 8, 14

Fiserv 14

Focus Solutions Group 12

Formicary 13

IE Group 12

Intel 14

K2 8

MBA Systems 14

Program Framework 12

Sequel Business Solutions 8

Sun Microsystems 14

SunGard 14

Total Information Management 10

Trillium Software 12

Xenomorph 13

FINANCIAL SERVICES PROVIDERS

Aberdeen Asset Management 10

Bank of Ireland Life 12

Banque Chaabi du Maroc 13

Barclays 12

Faraday 9

Fidelity National Information Services 10

HBOS 10

Heritage Managing Agency 8

Hoodless Brennan 14

HSBC 10

Oman Arab bank 14

Piraeus Bank 14

The Motley Fool 14

Willis Group Holdings 9

ANALYSTS AND ASSOCIATIONS

Datamonitor 10

Financial Services Authority 12

Javelin Strategy & Research 10

IN THIS ISSUE

MARKETWATCH | NEWS

Faraday and Sequel Business Solutions havecompleted the first phase of Faraday’sstrategic, end-to-end underwriting system,on time and on budget.

Lloyd’s and London Marketinsurer/reinsurer Faraday signed a contractfor the implementation of Sequel’s EclipseUnderwriting software solution in April2008, following an extensive selectionprocess and a three-month ‘model office’project which determined the size, shapeand cost of the full implementation.

“We chose Eclipse Underwriting as weneeded a modern, flexible system whichwould not only integrate seamlessly with allour other business systems, but would alsoplace us in the best possible position totrade and connect electronically with ourexternal counterparties,” said John Connors,head of operations at Faraday. “Sequel hasan excellent reputation for delivery and hasdemonstrated this quality in its recentcompletion of the first of two phases.

Together, we undertook an enormousamount of planning and preparation, whichgives me confidence that the programmewill continue to run to schedule. We nowfocus with confidence on the finaldeliverable – live rollout to all users acrossFaraday’s London Market operation insummer 2009.”

“Faraday is taking a forward-looking butlower risk approach to software replacementby partnering with Sequel,” said Sequeldirector Michael Graham, who believes morecompanies should follow Faraday’s strategyof replacing core processing systems. “Weare leading insurance software specialists,and our Microsoft-based systems are beingused by world-class carriers and brokers inthe London Market. We deliver proven andwell designed software solutions throughcollaboration with our clients.”

www.faraday.comwww.sequel.com

SEQUEL DELIVERS PHASE ONE FOR FARADAY

Insurance underwriting firm HeritageManaging Agency has implementedFinsbury Solutions’ SpreadsheetWorkbench to improve control andcompliance of its business criticalspreadsheets. Heritage was introduced toFinsbury Solutions via the MicrosoftLondon Market Network, which it co-founded a year ago.

“We welcome Heritage as our latestclient,” said Jeremy Wood, director andco-founder of Finsbury Solutions.

“Heritage is a recognised leader in theLondon insurance market and forSpreadsheet Workbench to be selected isa great endorsement of our productscapabilities and appeal.”

Spreadsheet Workbench is based onthe latest Microsoft technologiesincluding SQL Server 2005 andSharePoint 2007.

www.finsburysolutions.comwww.heritage-plc.com

FINSBURY WORKS MAGIC AT HERITAGE

Global insurance broker Willis GroupHoldings has speeded up its transactionalprocessing with the implementation ofSequel’s Eclipse broking software solution.

Willis chose Sequel to support its ‘Shapingour Future – London’ modernisationstrategy. Sequel worked in close cooperationwith Willis to deliver the new system in lessthan six months, and more than 1,000 Willisassociates worldwide now use theapplication for straight-through processingof placements, claims and accountingtransactions in the UK and other countries.Rollout to additional business units isplanned for 2009.

“This major implementation has been anoutstanding success,” said GrahameMillwater, group president of Willis. “Many

ambitious plans are announced in themarket place, but the great implementationsthat really work are rare and worthy ofcelebration. The Eclipse application is acornerstone of our London-based businessand positions us well for futuredevelopments in London Market Reform.”

“Our implementation was all aboutpeople,” said Sequel CEO David Smith. “Theteams from both companies have workedimpressively together and delivered againstan aggressive timescale. We are incrediblyproud of our achievements so far, and welook forward to a successful ongoingpartnership with Willis.”

www.sequel.comwww.willis.com

WILLIS SPEEDS UP STP WITH SEQUEL

EastWest Bank has gone live with itsFinArch Financial Studio ledger system,marking the first milestone in its financialtransformation programme in thePhilippines.

The bank worked with FinArch and itslocal partner Total InformationManagement (TIM) to implement thesolution in just seven months.

Financial Studio provides the bank withtimely, granular and more accurate internalreporting. EastWest Bank also runsFinancial Studio’s event-based accountingengine to generate the accounting entriesfrom transactions which existing systemsdo not provide, and to execute balancesheet transfers for the dynamic reportingrequirements of bank management andregulators.

The solution is expected to reducemanual entries and reconciliation effortwhile improving the workflow and

efficiency of the accounting division. “The Financial Studio ledger solution is

pivotal to the bank’s aim of consolidatingits financial management efforts,” saidAntonio Moncupa, president of EastWestBank. “Giving bank management readyaccess to financial information from asingle version perspective puts the bank ina more competitive position in realising itsstrategies. The bank is truly glad to havepartnered with FinArch and TIM, whoshared our objective of achieving financialtransformation.”

The next phase of the programme willentail the implementation of regulatoryreports (BSP and FRP), MIS, and internaland external risk reporting (Basel II andAnti-money Laundering).

www.finarch.comwww.timcorp.netwww.eastwestbanker.com

EastWest Bank goes livewith Financial Studio

Aberdeen implements Cadis EDM

74 per cent of 18-30-year-olds go online to view their bankaccount balances, with 70 per cent using Web channels to pay bills.

Source: Javelin Strategy & Research

CLUB 18-30

Knowledge bank

Fidelity National Information Services(FIS) and Microsoft have signed agroundbreaking agreement to make up-to-date financial news from MSN Moneyavailable on client Web sites. Theagreement is the first of its kind betweenMicrosoft and a financial servicestechnology provider. It enables clientfinancial institutions using FIS Web hostingservices to subscribe to four MSN Moneyauthors, providing their customers withcurrent financial news, commentary andadvice.www.fidelityinfoservices.com

A report by Datamonitor, Fromcompliance to improved businessperformance through operational riskmanagement, has found that financial firmsare recognising the operationalperformance benefits being unlocked byleveraging operational risk controls andreporting data, rather than seeingoperational risk purely as compliance andreporting function. It predicts that IT willplay a key role in facilitating operationalrisk management through processmonitoring and the automation ofreporting.www.datamonitor.com

Business Control Solutions (BCS) hassigned a contract with HSBC to supply BCSAgent Reconciliation Control (Arc), whichenables the centralisation of agent bankfee data. By acting as a single source ofdata, the application will enable HSBC tovalidate costs accurately each month andassess the most efficient fee models inorder to save money and accuratelyapportion fees against trading desks. www.bcsplc.comwww.hsbc.com

The Unified Communications Expotakes place on 11-12 March 2009 inLondon, UK. The event showcases next-generation business communicationssolutions and allows visitors to see forthemselves the benefits of real-timeintegration across communicationsplatforms. More than 500 unifiedcommunications will be showcased andaround 60 seminars will take place over thecourse of the two days. www.ucexpo.co.uk

UK bank HBOS has completed amainframe migration project, converting itsprevious Unisys environment to AsyscoMigration Technology Visual Studio (AMT-VS). The first phase of the project began in2004, with HBOS using Asysco’s AMT-Lionto migrate applications and data onto aWindows-based platform. Phase two thensaw the conversion of the environment intoC# code. www.hbosplc.comwww.asysco.com

IN BRIEF

MARKETWATCH | NEWS

www.onwindows.com

Aberdeen Asset Management hasimplemented the Cadis EDM Suite toenable greater control over data, improveefficiencies and lower operational costs.

Cadis specialises in enterprise datamanagement (EDM) solutions using amulti-tier, distributed architecture based onMicrosoft .NET and SQL Server.

Aberdeen selected Cadis after a rigorousselection process, due to the solution’sability to provide a data control layerbetween the company and its market datavendors and outsourced back officeproviders. The company will also be able toquickly integrate multiple data sources anduse the information in its front-officesystems.

“Cadis provides us with an enterprise-wide data management platform,” saidRichard Large, global head of front-officetechnology at Aberdeen. “It feeds our single

global trading platform and datawarehouse environments and allows us tomaintain control over our data, which issourced from a variety of vendors andthird-party administrators. After a rigorousbest-of-breed search and selection process,Cadis clearly emerged as a highly effectivesolution that would enable us to achieveour goal of a global data hub, allowing usto source, consolidate, validate anddistribute our investment managementdata worldwide.”

“Aberdeen’s decision is testament to thestrengths of our solution in helping firmsfully integrate their global operatingenvironments and ultimately get the mostout of their data and their technology,” saidDaniel Simpson, CEO of Cadis.

www.cadisedm.comwww.aberdeenasset.com

Barclays has become the first bank topilot Microsoft Surface technology in itsnew flagship branch at Piccadilly Circusin London.

Described as the first ‘brand concept’bank branch in the UK, the branch has8,000 square feet of retail space overthree floors, and makes extensive use ofnew technology and design.

The Surface technology will allowusers to grab digital content with theirhands and navigate information withsimple gestures and touches. A majorfeature of the branch is Being:London, aninteractive and evolving installationrepresenting the interests, conversationand activities of people in London.

Outside opening hours, the front ofthe branch will be transformed into the‘Night Life’ screen, which picks up theimage of passers using face recognitiontechnology and cameras and displaysmoving silhouettes with thought bubblescontaining random messages.

Piccadilly is the first Barclays branch tohave totally open cashier counters withno glass screens, while an innovativecurved queue rail softens the waitingarea. Handheld PCs will allow floor-walking staff to help customers withqueries without the need to wait, while alarge self-service area includes a foreignATM dispensing dollars and Euros, anddeposit machines for cash, cheques andcoins. “This is the first time that a bankhas opened a store such as this,” saidMike Amato, chief distribution andproduct officer for Barclays. “We havetaken inspiration from retailers anddeveloped a space that attracts andengages individuals while conveyingwhat the Barclays brand represents.”

Barclays is refurbishing its entire 1,733branch network in the UK after extensivestaff and customer consultation.

www.barclays.comwww.microsoft.com/surface

Focus Solutions Group is to implementits focus:360° solution at Bank of IrelandLife.

The company has signed the firstphase of a five-year contract, under whichit will configure the solution to meetBank of Irelands Life’s specific businessand technical requirements.

Based on Microsoft .NET technology,focus:360° has been designed to operateboth online and offline, and will supporta number of distribution channels goingforward.

“Focus continues to build upon itsextensive experience of delivering multi-channel point-of-sale systems within the

bancassurance sector with theacquisition of its first focus:360°customer,” said Richard Stevenson, chiefexecutive of Focus Solutions Group. “Wefirmly believe that we are in a uniqueposition to provide Bank of Ireland Lifewith a compelling, high quality solutionthat will enhance the customerexperience, improve adviser productivityand increase sales revenues for thebusiness. This contract furtherunderlines our expansion into the Irishmarket.”

www.focus-solutions.co.ukwww.bankofirelandlife.ie

Focus signs up Bank of Ireland Life

Barclays banks on Surface

Program Framework has achievedMicrosoft Gold Certified Partner status.The achievement puts the company inthe top one per cent of all Microsoftpartners worldwide, acknowledging itshigh level of competence and expertisewith Microsoft technologies. “Thisprovides a great boost for the companyand represents external recognition ofthe increasing breadth and depth of ourcapabilities,” said Paul Major, CEO ofProgram Framework.www.programframework.com

The Financial Services Authority hasissued a consultation paper urging UKbanks to spend almost £900 million onnew IT systems to speed up thepayment of compensation to savers ifthey collapse. The paper advises thatbanks must ensure they hold up-to-dateinformation to allow fast processing ofclaims. In order to achieve this, itproposes that banks set up new ITsystems for quick claims processing, atan estimated cost of £891.8 million overfive years.www.fsa.gov.uk

Trillium Software, a Harte-Hanksbusiness, has delivered its DataIntelligence and Governance (DIG)solution specifically for the financialservices, insurance and compliancemarkets. DIG is a combination of dataanalysis, data quality and reportingsoftware technology based on theTrillium Software System, with targeted,packaged financial and governanceconsulting services provided by thecompany. It includes built-in intelligencefor and about the financial servicesindustry to improve data validation,rules compliance, and businessprocesses germane to the financial andinsurance industries.www.trilliumsoftware.com

The High Tech Forecasting andPlanning Summit takes place on 22-23April 2009 at Le Meridien in SanFrancisco, USA. This IE Group-organisedsummit brings business leaders togetherto shape revolutionary ideas and sparkinnovation in forecasting and planningwithin the high-tech industry. Around200 high level executives are expectedto attend, with guest speakers includingthe chief technology strategist atMicrosoft; the vice president oftechnology and strategy at Nokia; thevice president of strategy and planningat Cisco; and the director of planningand innovation at Panasonic. www.09.ie-grp.com/high-tech/overview.html

IN BRIEF

MARKETWATCH | NEWS

www.onwindows.com

IN BRIEF

Banque Chaabi du Maroc, a keyinstitution of the Moroccan financialservices holding Groupe BanquesPopulaires, has selected FinArchFinancial Studio as the regulatoryreporting system across its Europeanbranches.

Following a rigorous competitive bid,FinArch was chosen to equip BanqueChaabi’s branches in Spain, theNetherlands, the UK and Belgium withFinancial Studio, its best-in-classintegrated platform for finance and risk.

FinArch will initially serve a largenumber of users to automate andmanage their daily activities aroundregulatory reporting requirements. Thesystem achieves significant increases inproductivity and allows a high degree ofautomation and compliance.

Banque Chaabi du Maroc has made no

secret of its ambitions in Europe, withover 40 branches scheduled to open. Itwanted to equip its European brancheswith a banking software suite that canhandle both the technologicaldevelopment of the initial architectureand the evolution of regulatoryrequirements across selectedgeographies.

“FinArch’s main strengths are its localpresence across Europe’s main financialhubs, highly qualified support, trainingand implementation teams, provenknowledge of banking business linesand activities, and a state-of-the-arttechnology base,” said MohamedAllouch, general manager of BanqueChaabi’s European network.

www.finarch.comwww.gbp.ma

Banque Chaabichooses FinArch

Xenomorph and Microsoft havecompleted a benchmark project to ensurethat IT directors, risk managers and tradingstaff have access to high-performance tickand time-series analysis within astandards-based architecture.Xenomorph’s specialist time-seriestechnology will be able to run withinMicrosoft SQL Server 2008 – resulting ineasier database management andadministration while allowing ITdevelopers to build on existing skills in SQLand Microsoft reporting tools.www.xenomorph.com

Formicary has released the FastTrackimplementation solution and the latestversion of its ChatSeer enterprise chatmonitoring and compliance tool. Bothreleases are built for the Group Chatfeature of Microsoft OfficeCommunications Server 2007 R2.“FastTrack is a cost and time-effectivesolution for both implementation for firsttime clients and migration of existingMindAlign (predecessor of Group Chat)clients,” said Philip Miller, intelligentmessaging director at Formicary. www.formicary.net

MARKETWATCH | NEWS

BARCLAYS IS PIONEERING SURFACE TECHNOLOGY IN ITS PICADILLY CIRCUS BRANCH

SunGard has added more than 500 coresto a grid computing cluster set up to hostits iWorks Prophet actuarial solution, theenterprise risk management application inthe iWorks solution suite.

The grid uses Sun Microsystems’ SunBlade X6250 server modules, Intel’s Quad-Core Xeon processors, and software fromMicrosoft to achieve high-performancecomputing (HPC) capacity that facilitatesthe development, execution and support ofactuarial models. The use of network-distributed parallel processing clusters,which can be integrated into any Microsoft-based platform, will help improveprocessing times for real-time riskmanagement. SunGard plans to expandthis environment to accommodate aservices offering, whereby users may leasecores when needed.

“Advanced technology is playing anincreasingly prominent role in theinsurance industry,” said Rick Echevarria,vice president of Intel’s sales and marketinggroup and general manager of its enterprisesolution sales. “That is why we are proudthat SunGard has chosen Intel Xeon quad-core processors, with their performance-per-watt strengths, to form the hardwareplatform for iWorks Prophet.”

“Microsoft is pleased to be working withSunGard in the development of its next-generation actuarial modelling solution,”said Gordon Ejsmond-Frey, insurance

industry director, Microsoft EMEA.“Windows HPC Server 2008 delivers theability to spread calculations across a largenumber of computers using industrystandard tools that are well understoodand easily integrated into the ITenvironments of SunGard and othermembers of the insurance industry. Asdemands increase for faster, more flexibleand robust risk modelling solutions,SunGard is investing in deliveringenterprise-class modelling with iWorksProphet, which will help insurers toimprove their modelling and reportingcapabilities.”

“Increasing the capacity of iWorksProphet will help reduce our customers’model runtime, so that actuaries can focuson the development of sound riskmanagement practices rather than worryabout their organisation’s IT infrastructure,”added Marc Fakkel, head of operations forSunGard’s iWorks Prophet business unit.“The team effort between Microsoft, Intel,Sun Microsystems and SunGard proves ourcommitment to improve the reliability,scalability and power of the iWorks Prophetenterprise framework.”

www.sungard.comwww.sun.comwww.intel.com

The Motley Fool has selected Crystal’sMomentum software system for the newfinancial services division of its UK Website Fool.co.uk.

Use of the software has helped the siteto start up its mortgage business morerapidly than previously anticipated. Thesystem has provided an integratedchannel solution for the advised sale ofmortgage and insurance productsthrough the Fool.co.uk sales team, withleads coming from its site.

“We wanted one integrated solutionthat would cover our CRM, point of sale,compliance and back-office needs,” saidPaul Warburton, senior product managerat Fool.co.uk. “After an extensiveevaluation of a number of providers, weselected Crystal because of its ability toadapt to our needs and to supply and

implement a custom solution within twomonths, which was crucial to ourbusiness.”

Built using the latest Microsoft .NETtechnology, Momentum has over 7,000users, including Halifax, Bank of Scotland,L&G, Paymentshield and Assurant.

“Fool.co.uk is a fantastic client for usto win and will help us strengthen ourfunctionality in Web site-led call centreenvironments, which is a growth area ofour marketplace,” said Patrick Shuker,director at Crystal. “It’s great to hear asuccess story in a difficult market placeand it has been a great pleasure to workwith such an innovative, entrepreneurialcompany.”

www.crystalss.co.ukwww.fool.co.uk

Crystal puts Momentum into Fool

SunGard adds HPCto hosted iWorks Prophet

IN BRIEF

Finsbury Solutions has strengthened itsproduct coverage with the acquisition ofUS governance, risk and compliancesoftware vendor Compassoft. The movewill see Finsbury further supporting anddeveloping Compassoft’s End UserComputing (EUC) products, which will beintegrated with its own SpreadsheetWorkbench solution to produce anadvanced product suite for themanagement of spreadsheets and enduser databases.www.finsburysolutions.comwww.compassoft.com

Oman Arab Bank has achieved significantefficiencies in customer service andopened up new revenue streams byadopting an SMS-based mobile bankingservice. The Tawasul service, which usesBanksmart implemented by AcetteTechnologies and is powered byDerdack’s message master XSP, allows thebank to offer its customers a range ofoptions that can be accessed using SMS,including account transfers, utilitypayments, smartcard top-ups and real-time payments to mobile operators.www.derdack.comwww.acette.comwww.omanab.com

Stockbroker Hoodless Brennan has wonseveral key awards followingenhancements to its Internet Brokersoftware, supplied by MBA Systems.During the same week, the company wonthe 2008 Daily Telegraph Award for BestOnline Service and six further accoladesfrom the 2008 Financial Times andInvestors Chronicle Investment Awards,including Best Execution Only Stockbroker,Best Online Stockbroker and Stockbrokerof the Year 2008.www.mbasys.co.ukwww.hoodlessbrennan.com

Piraeus Bank, one of Greece’s leadingfinancial institutions, has gone live on theFiserv Universal Banking solution at itsCyprus operations, following an eight-month implementation. The offering isFiserv CBS Worldwide’s integrated real-time solution for retail, trade and treasurymarkets. It incorporates the Microsoft-based Fiserv Aperio customer interactionmanagement solution, Fiserv CBS Teller,Communicator, ICBS core, CBS DataWarehouse, Fiserv Treasury,AquaGlobal/E2Gen for internationalpayments, and Fiserv Trade Finance.www.piraeusbank.grwww.fiservcbs.com

MARKETWATCH | NEWS

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IN BRIEF

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COVER STORY: ENDSLEIGH INSURANCE SERVICES

17

ndsleigh Insurance Services has rapidlygrown to become one of the UK insuranceindustry’s most respected householdnames. With around 800 employees and

30 relationship managers in the field, the company hasan excellent market reputation.

But reputation is not the sole guarantor ofcontinuing success. With 85 per cent of new salesoriginating from the Web, Endsleigh wanted to adopta new business model, making its business moredigitally focused using multimedia touch points with amajor target on students and recent graduates.

“As a result, we will no longer operate as a branch-based business with bricks and mortar and leases topay for 119 offices across the country,” says PeterLeahy, head of IT at Endsleigh. “We want to use theseefficiency savings to support our relationshipmanagers working from home or remote locations,with new tools and faster access to our core businesssystems.”

Endsleigh had used Voice over IP telephony tonetwork its branch offices, but with the company’splanned transition to two geographically based servicecentres, this was no longer cost effective as acommunications channel. The company’s data wasbeing stored in various fragmented systems with nouniform way of identifying lead conversion rates forthe marketing team. Endsleigh had to spend excessivetime and cost on setting up agents on various systems,the number of which also impacted security across theenterprise.

In addition, Endsleigh needed better features to help

develop client relationships in the face of changingregulations. In particular, it wanted to offer betterservice to trading partners including travel agents,which were regulated to sell travel insurance by theFinancial Services Authority for the first time fromJanuary 2009.

Although Endsleigh has a substantial in-house ITdepartment, its technicians were working on severalongoing projects and wanted to avoid tackling anylarge new development. They required a solution thatwas multi-company, and which would integrate withMicrosoft Dynamics GP for financial management andother business management systems, including itsexisting investment in Microsoft Dynamics CRM 3.0customer relationship management (CRM) software.

The company uses an in-house CRM system forbusiness-to-consumer clients that is integrated with itsin-house policy administration system. Dynamics CRMis used for business-to-business operations andintegrates with Dynamics GP.

In its search for a solution, Endsleigh worked withMicrosoft Gold Certified Partner CIBER UK to upgradeits existing Microsoft CRM software to Dynamics CRM4.0, integrating with Microsoft Exchange Server 2007communication technology. At the same time, thecompany opted for a Microsoft Enterprise Agreementfor low-cost volume licences to provide a low total costof ownership.

“We wanted to time the upgrade to correspond withthe changes in our business model, with theintroduction of a cost-effective infrastructure forunified communications by investing in Microsoft

E

FROM BRICKSTO CLICKSWHEN ENDSLEIGH INSURANCE SERVICES ADOPTED A NEW BUSINESS MODEL, ITCALLED ON CIBER UK TO HELP IT IMPROVE THE PRODUCTIVITY, PERFORMANCE,REPORTING AND PROFITABILITY OF ITS MARKETING ENVIRONMENT

“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

19

Office Communications Server 2007,” explains Leahy.“This was especially opportune in view of theintegration we could achieve between Exchange Server2007 and Microsoft Dynamics CRM. Previously, wehad relied on local area network connections withvariable reliability – in future, our people will always beconnected to our core business systems.”

Before Dynamics CRM 3.0, Endsleigh had error-prone manual processes for managing contractsbetween partners and making their commissionpayments. It lacked a central repository to managepartners and prospects. Having started with DynamicsCRM 3.0, these improvements have been consolidatedand further refined.

Now, Dynamics CRM 4.0 helps each sales team atEndsleigh to view information relevant to its divisionwithout having to search an entire database. Theupgrade provides a suite of powerful marketing, salesand service features, all with a familiar and consistentexperience based on Microsoft Office and MicrosoftOffice 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-onservice in which users receive messages to their clientdevice as if they were in an office environment.Furthermore, Dynamics CRM acts as a powerful andintuitive business intelligence system because itintegrates information from multiple sources. The

solution is also designed to operate with thecompany’s existing Microsoft Office SharePoint Server2007 collaboration technology as well as otherMicrosoft technologies and services.

The new implementation also enables each team tobenefit from the seamless integration of DynamicsCRM and SQL Server 2005 Reporting Services. Thisprovides 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-minutereporting, as well as multi-language and currencycapabilities. Dynamics CRM can be shaped to supportthe business and provide a robust environment forfuture growth. The product comes complete with sales,marketing and customer services modules.

When the credit crunch forced most insurancecompanies to re-evaluate their businesses, Endsleighwas strongly placed to change its model due to itsinvestment in Microsoft technologies. Its move intodigital marketing has been fully supported by theupgrade to Microsoft Dynamics CRM 4.0, which hashelped automate many more processes and integratedeasily with the company’s new unifiedcommunications strategy. “This investment will helpus to drive bigger, better, and more targeted marketingcampaigns using new skills to attract business fromour customer base,” comments Leahy.

The CRM software is helping sales executivesincrease digital marketing successes in line with thecompany’s new approach to customers. Yet, at thesame time, it adds no extra costs to the business orburdensome work for technicians. According to Leahy,this is all the more important now that Endsleigh plansto rely in future on more mobile sales employeesbacked up by two communications centres. “With theprevious systems, we had lost faith in the manualprocesses and did not feel confident in managing leadsand opportunities,” he says. “By automatingcommission payments through Microsoft DynamicsCRM, we have increased one segment of businesstenfold without needing extra accounts people tomanage the business processes.”

The integration features in Dynamics CRM 4.0 havehelped Endsleigh prepare itself to work through

COVER STORY: ENDSLEIGH INSURANCE SERVICES

www.onwindows.com

As a leading UK specialist in insurance andfinancial services products for careerpeople, Endsleigh prides itself on its statusas 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.

ENDSLEIGH AT A GLANCE

different communication channels to help its partnersadapt to new markets. Previously, the business teamresponsible for affiliated services did not have a reliablecommunication tool that let it engage with agents –Leahy says it had “hit a brick wall” in terms of takingon new prospects and simply could not manage anymore customers.

“We’ve improved the efficiency and accuracy of ourfrontline sales staff,” says Paul Nicholas, businessproject manager at Endsleigh. “When they’re dealingwith customers, we have a full record of the history. Wedeal with them in a more prompt and quality-drivenway and we have a single source of information for allour customer activities.”

“At a time of rapid business change, Endsleigh hascontinued to invest in Microsoft Dynamics CRMbecause it is based on an environment that isunderstood, not just by us, but universally,” says BrianHenry, head of sales for financial services at CIBER UK.“The seamless integration of Microsoft products is acritical factor in our future growth strategy. The similarlook and feel of Microsoft products means that notonly is integration simple, but fast adoption is alsoguaranteed. Together with SQL Server 2005, DynamicsGP and the Active Directory service for identitymanagement, Microsoft Dynamics CRM 4.0 willimprove group-wide efficiency and help Endsleighemployees convert prospects into valuable clients.”

“Upgrading to the latest version of Dynamics CRM,clearly shows that we have faith in both the Microsoftsolution and CIBER UK as our implementationpartner,” adds Leahy. “The scalability of the solution,supported by the fact that we’ve used previousversions, reinforces our decision to select this product.”

A further benefit of the implementation is that itenables Endsleigh to support flexible working for staff.“The killer benefit for me, as well as the organisation, isimproved business continuity with greater flexibility ofworking,” says Leahy. “With unified communications,Endsleigh employees can easily transpose theirworking environment for their home environment. If

an incident occurs, our employees now have the abilityto access their Office SharePoint Server 2007, e-mailand telephone, as well as our Dynamics CRM system.This has led to better offline working, making us moreresponsive and effective as a business.”

“Overall, the transition has been relatively seamless,”concludes Rebecca Smith, business project manager atEndsleigh. “As business project managers we’ve beeninvolved in implementing a number of third-partysolutions written by external software houses, such asa letting agency system and a tenant reference system.But Dynamics CRM has proved that with easy-to-understand technology and a committed businesspartner such as CIBER UK, implementation is ahassle-free process.” F

Endsleigh Insurance needed a newbusiness management system to helpadapt to changing market conditions.CIBER UK worked with Endsleigh to updateits Microsoft system, implementingMicrosoft Dynamics CRM 4.0 and a relatedsuite of Microsoft technologies.

The new technology was quicklyadopted across the company, enablingEndsleigh to work through differentcommunication channels and help itspartners adapt to new markets.

The company can now accessinteractive, personalised business reports,which improve productivity and help staffto take on a new wave of sales prospects.Endsleigh is also able to support mobileworking, enabling better offline workingand making the business more responsive.

DYNAMIC IMPLEMENTATION

PAUL NICHOLAS, REBECCA SMITH AND PETER LEAHY OF ENDSLEIGH INSURANCE SERVICES

ENDSLEIGH HAS 800 EMPLOYEES AND 30 RELATIONSHIP MANAGERS IN THE FIELD

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BANK BRANCHES HAVE BEEN ON THE HIGH STREET FOR SUCH A LONG TIME THATMANY OF US TAKE THEM FOR GRANTED. BUT WITH AN INCREASING NUMBER OFBUSY CUSTOMERS PREFERRING MORE MODERN CHANNELS, BRANCHES MUST ADAPTIN ORDER TO SURVIVE. JAMES DODD TAKES A LOOK

BARKINGUP THERIGHT TREE

BRANCH BANKING

21

he pressure that branches face in today’smarket comes from multiple directions.Protecting the bottom line is currently amassive priority, but at the same time a

competitive edge must be maintained so as not to loseground to competitors. While the obvious rival comesin the form of high-tech, multi-channel banking,pressure also comes, less directly, from the retailindustry.

“The expectations banking customers have for thekind of service that they get in the branch has beeninfluenced by the service that they have experiencedin retail establishments,” says Tony Emerson, bankingindustry director, EMEA for Microsoft. “To a certaindegree, banks are starting to compare themselvesmore with retailers than they are with other financialinstitutions.” The widespread implication is thatbranches need to make a major shift towards a morecustomer-centric attitude and mode of operation.

There is also much that branches can learn fromonline banking and its multi-channel, hi-techbrethren. The expectations of the online generationare explored in the survey Millennials in BankingSurvey 2008, which was conducted by Javelin Strategy& Research on behalf of Microsoft. The surveysuggests that to engage with customers of the‘Millennial’ generation – people between the ages of18 and 30 – banks must embrace a higher-tech, multi-channel approach.

Furthermore, findings suggest that Millennials goonline for most basic transactions with their banks,such as viewing an account balance (74 per cent) orpaying bills (70 per cent). But crucially, when itcomes to complex transactions – such as opening anew account (57 per cent) and applying for a loan(52 per cent) – they prefer to do it in person. So whilethe trend certainly leans towards high-tech channels,the humble branch clearly still has hope.

In addition, while branches can certainly learnfrom other channels of banking, it is also importantthat they maximise their own strengths by providinga more rounded and tangible customer experience.Staff need to be better prepared and trained, whileadvanced technology can be used in-branch to enticecustomers and smooth transactions.

So how are branches attempting to deal with thenumerous customer-centric directions that they arebeing drawn in? A current major trend is to tailorbranches to geographical area. “Banks are increasinglystratifying branches, setting them up according to thekind of market they are in,” says Emerson. “Branchesare specifically designed for the new urbanenvironment or the small rural environment, forexample – with each having a very different set offeatures and functions.” The banking industry hasrealised that different geographic communities wantand require different services. Providing a more focusedservice is also manifesting in less obvious ways.

T

Clearly the focus in this example is on achieving acustomer-centric branch through advancedtechnology such as Surface. However, it’s not just thebleeding edge that Microsoft is involved in, but alsomore vanilla enterprise implementations.

For example, American bank Wells Fargo usesSilverlight, a Web-based subset of WindowsPresentation Foundation, to stream full motion videoto its ATM screens. “Most ATMs have the dullestscreen interfaces you’ve ever seen,” says Emerson.“And yet if you go online you’ll find a much richer,interactive environment. Customers are saying: theWeb technology is so good, why am I not seeing thatin the branch?”

In another example of Microsoft’s presence, theBank of Montreal uses the Virtual Earth platform asits branch locator. Users can establish their nearestbranch and view it at street level, as well as access awealth of other information including the services itoffers, what advisors it has and whether they are free,and even what languages are spoken there. This is amajor customer tool for banks but, crucially, itcombines the branch with the online channel. Thisfusion is the crux for successful branch operation; asthe Millennials in Banking Survey 2008 indicates,multi-channel is the direction for the future.

While improving the customer experience at thefront end is undoubtedly important, changes to theback office can also have a positive effect on the

customer experience. Perhaps most notable in thisvein is virtualisation.

“With branch offices we have seen increasedautonomy in a decentralised environment withoverall cost containment a priority,” says ClaudeGoudreault, chief operating officer of VM6, aprofessional services and software developmentcompany dedicated to IT infrastructure virtualisation.“We used this as the groundwork for thedevelopment of our VMex 2008 software product. Itbrings virtualisation high availability to branch officesat an economical price point.” Virtualisation’s backoffice credentials are impeccable – it can makebranches more efficient and independent and thusmore cost-effective. But how does this permeatethrough to the customer experience?

Virtualisation can improve system availability andperformance, as well as data security and integrity,both of which are a high priority for the customer. Italso enables multi-channel access to banking services– which is a crucial part of the customer experience.“Customers expect the branch experience to beexactly the same as the head office one,” explainsGoudreault. “From a technology point of view, ittranslates into all data applications being available atthe branch level at all times. The branch should beable to access all relevant customer data to ensurethat the service level is seamless between the branchand the head office.”

BRANCH BANKING

Doing more with fewer staff at branches may atfirst seem like a cost-reduction measure, but actuallyit can produce a more impressive, efficient andspecified customer experience. Primarily, it istransactional operations that slow the branchexperience and automating these represents one waythat brick-and-mortar can catch up with onlinebanking in terms of speed and efficiency.

“Cashless branches are becoming popular,especially in northern Europe,” says Emerson. “Theyhave automated currency counting, recycling andreplenishment all built into advanced ATM machines– which means a quicker and more effective customerexperience. In addition, there’s no longer any needfor a till, or a vault. This reduces cost and improvesflexibility, allowing a branch to open in a muchshorter timeframe and focus more of its staff onselling and advice.” The trend of doing more with lesscan be furthered with the use of advanced technologyto engage and enable the customer.

“A major UK clearing bank is using Microsoft’sUnified Communications to speak remotely with videoto a mortgage specialist,” says Emerson. “Clearly, if youtell me that I can speak with a relevant expert I’mmuch more likely to come into the branch, sit downand talk to you than if you just offer me a genericbranch advisor. If you can improve the customerexperience you’re going to differentiate yourself overother banks, which grows your relative market share.The market itself is pretty much fixed – it’s your shareof it that makes the big difference.”

Improving the customer experience throughtechnology is where Microsoft’s

contribution comes into play. Itsexpertise in the user interface is

the area in which it can mosthelp branches deal with customers. A prominentexample is Barclays’ pilot implementation ofMicrosoft Surface technology in its new flagship

branch at Piccadilly Circus, London. Thetechnology allows users to grab digital content

with their hands and navigate informationabout Barclays’ Premier banking offeringwith simple gestures and touches.

Commenting on the opening of theflagship store Mike Amato, chief

distribution and product officer forBarclays, said: “This is the first time that a

bank has opened a store such as this.We have taken inspiration fromretailers and developed a space thatattracts and engages individuals whilst

conveying what the Barclays brandrepresents. “Our plan for Piccadilly has been to

build not only a branch of the future but abranch befitting the iconic setting. We have

embraced innovative technology and designwhich we expect to attract the interest of the

Piccadilly community in an innovative andgenerous way and of course enable ourcustomers to be able to interact with us in theway that suits them and in surroundings that arecomfortable and accessible for all.”

www.onwindows.com

Claude Goudreault, chief operating officer ofVM6 explains Microsoft’s contribution to theworld of branch virtualisation.

“Microsoft technologies, namely MicrosoftWindows server 2008, contribute in many waysto 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 technologycombined with VM6’s VMex 2008 software(which runs on Microsoft’s Windows platform) isthe ultimate game changer for ROBO. Thiscombination brings virtualisation to the branchlevel at a lower cost than other suchtechnologies. It also brings all the benefits ofvirtualisation to the branches such as decreaseddowntime, lower maintenance costs and easierupgrades.”

VIRTUAL REALITY

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BRANCH BANKING

Virtualisation seems to focus somewhat onthe technical and operationalenablement of the branch – butwhat of the humble advisor? Willthe future see this role slowly but

surely diminish? Theconsensus seems to be thatthe advisor will always have a

role alongside, and indeedcomplemented by, improvedtechnology and systems.

“Today’s branch advisor needsto 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 thechanging business environment and

customer.” Though fewer employees may bepart 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.

Emerson hints at this balance in his vision for thefuture: “The development of the branch is linkedintrinsically with the development of the technologyit adopts. I see them becoming more highlyautomated and less people intense, but at the sametime friendlier, coffee-house type environments,where you’re encouraged to come in and loiter.” Suchan environment is practically inconceivable withoutsome human presence to provide a welcomingatmosphere and guidance with regard to thetechnology available. The key here is a multi-channelapproach – not just in the sense of technology, but inthe sense of an entire ideology. Banks must considerevery avenue of approach to the branch and all of itsintrinsic traits. An all-embracing attitude is necessarybecause that is how today’s generation – today’spotential customers – operate.

“The reality is that the generation entering theworkforce at the moment has less differentiationbetween work-time and fun-time,” Emersoncontinues. “If we can’t make going into a branch evena little bit fun, online banking may well take overcompletely.” Thus a successful branch must combinemany ingredients from virtualisation and customerengagement to branch stratification. Ultimatelybranches have no need, or hope, of defeating theother channels available in banking. Rather, theymust find their niche in the rich ecosystem of theconnected customer experience.

“Banks have a choice to make – to either retrenchor drive growth by attracting new customers,”concludes Emerson. “How do banks do this? Webelieve it’s by providing what we call a ‘connectedexperience’. We all know that customers have manyways in which they choose to interact with theirbanks, whether it’s via the phone, Web or branch.Couple this with the emergence of new digital andconsumer technologies and you have the clearemergence of a consumer-centric, experience-basedmarket. This ultimately requires banks to engagethem in a consistent way across all touch points.

“Microsoft is unique in that we have technologyacross the consumer and enterprise space. We’reuniquely able to help banks connect these consumerand business technologies together to better buildrelationships and loyalty with customers.” F

Banking organisation UniCredit Group wantedto overhaul its Italian branch office servers, withan equal emphasis on increased efficiency andreduced environmental impact.

The company sought to streamline itssoftware and hardware management, as well asscale performance to meet growing needs. Atthe same time UniCredit wanted animplementation that met its corporate socialresponsibility guidelines, which included keepingpower consumption to a minimum andimproving working conditions for branch officeemployees.

At UniCredit space is at a premium, with itbeing necessary for servers to be housed in thesame office space as employees. This is one ofthe reasons the organisation ultimately selecteda Primergy TX120 server offering from FujitsuSiemens Computers (FSC) as the mostappropriate for its needs. This range of servershas a compact design, low operational noise andso is barely noticeable in an office space – toemployees or customers. They also have whatFSC calls a ‘green design’, which focuses onenergy efficiency to reduce both cost and effecton the environment.

The new servers are expected to producesavings of 230,000 kW/h, or more than 300,000over their estimated useful life. In addition,UniCredit will be able to improve the availabilityof its business applications and improve capacityto accommodate future business growth.Branches will be quieter and cooler foremployees and customers alike, improving theoverall surrounds and hopefully business as well.

GREEN BRANCHES

“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

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RISK ANALYTICS AND REPORTING

27

inancial organisations face a paradoxicalsituation when it comes to risk – they needto minimise it, but they can’t grow withoutit. In today’s economic climate, it is more

important than ever to identify, measure and minimiserisk in order to reap its attendant rewards. AlexanderMillington, head of risk management software atFormicary, explains: “Financial organisations thrive ontaking risk, but understanding and giving clarity tothat risk is more important than ever in a complextrading environment.”

However, banks face many challenges in accuratelyassessing the risks they face, and there is consensusamong the experts that risk analysis methods havepreviously fallen short. “How you value the risk isobviously key to determining the size of the reward,”says Michael Bush, head of product management atBusiness Control Solutions. “But how do you value riskthat only has a ‘potential’ to take place?”

“Margin pressure in core business has driven manyorganisations to seek greater return in the capitalmarkets, fundamentally carrying a greater risk to theirbusiness,” says Nigel Lee, chief commercial officer atFinancial Architects (FinArch). “A failure to correctlyassess risk and risk-adjust business performance hasexposed these organisations, their customers and theirshareholders.”

“Financial organisations are still searching for theappropriate balance,” adds Chris Moxon, chiefexecutive officer of Methodware. “The herd mentalityprevalent in many large financial organisations, drivenby pressure to maximise profits, has produced a bias to

‘reward’ in spite of the associated risks. Controlsapplied in recent years have not been effective, andsome banks have focused more on controlling smallfraud exposures than managing advanced creditinstruments or systemic institutional issues. Clearly,this needs to change.”

That change is on the horizon, according to AdrianMaconick, director of Finsbury Solutions: “We are inthe middle of the biggest banking crisis in my lifetime,”he says. “This will trigger a complete re-evaluation ofrisk management which will cover the regulators, therole of government, the role and status of riskmanagement in the organisation, the measurement ofrisk and the systems used to provide risk managementinformation.”

“For many firms the number one issue right now isbasic survival and recovery from their directparticipation in or exposure to the credit crisis in all itsforms, especially as it relates to the underlyingsecurities risk,” comments Todd Stone, chief executiveofficer of ProcessUnity. “After that, managing andcontrolling both existing and new financial productsand services is critical to all financial firms.”

Moxon agrees: “The two most significant issuesfacing banks in this context are institutionalising a riskmanagement culture and obtaining a true enterpriseview of risk,” he says. “Most financial managers andexecutives have never faced a business environmentthis challenging in their professional lifetimes. Theyneed to increase awareness of proactive riskmanagement practices and the discipline across theorganisation. In conjunction with this, financial firms

F

KNOWYOUR RISKRISK ANALYSIS IS FUNDAMENTAL TO EFFECTIVE RISK MANAGEMENT.JACQUI GRIFFITHS ASKS HOW FINANCIAL FIRMS CAN ENSURE THEYGET IT RIGHT FROM THE START

“Most importantly, people need to be at the centreof risk management,” says Warford. “They need tohave the tools to manage risk themselves. Forexample, instead of having a business intelligencegroup somewhere embedded in the IT department,everybody should be able to use businessintelligence tools.”

“There’s no need to re-invent the wheel here,” addsStone. “Most of the information is readily available. Thetrick is to establish the right relationships between thisinformation and make it easily and widely accessible.There is more detail of course, but there is often morevalue in improving basic management visibility andtransparency than in abstract risk engines.”

“Where formal transaction processing systems

exist, it is relatively easy to extract data from theseand use them to feed risk management systems,”adds Maconick. “The hardest problem is to find andextract data from the myriad of informal systems onspreadsheets and PC databases. Some people havesuggested that all spreadsheets should be migratedto formal systems, but this is just wishful thinking –our work shows end user computing applicationsgrowing at around ten per cent per annum in mostorganisations. When a new product area emergesthey have to act fast and rely on spreadsheets toprocess. The best way to deal with the problem is toembrace spreadsheets and other end-userapplications, but make them acceptable by providingthe right tools to manage and control them.”

“Risk analysis has a significant dependency on theunderlying data and the analyst’s ability to access andaggregate it,” says Moxon. “The use of robust databasetechnology and browser-based delivery channelsallows easier access, and the flexibility of the riskanalysis tool allows the best possible solution fit.Methodware’s flagship risk management solution,ERA, leverages Microsoft technology to provide acentral, integrated repository that clients can configureaccording to their specific needs.”

Lee expands the point: “For a tool to be effective ithas to be easy to use and familiar,” he says. “Microsoftprovides the most prolific tool in the risk and financefunction – Excel – and some of its partners have built

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RISK ANALYTICS AND REPORTING

need the ability to take risks out of their individualbusiness unit silos and understand the collectiveimpact on the entire organisation.”

“At Formicary, we’ve found that making consistentinformation, particularly market information, availableacross the institution is a top priority now for firms,”says Millington. “The ability to provide coherentpricing and risk analysis rapidly, across systems, fromaudited information sources, is critical in providing alevel of confidence that the information on whichbusiness decisions are made is accurate, across theboard. But accurate information is nothing without theability to report and analyse it. Providingstraightforward, easy access to a flexible reportingframework enables business decisions to be based ontimely data in a way that is relevant to the business.”

Perhaps it should come as no surprise, then, thateven in these straitened times, analysts are predictingthat risk management and compliance will be the areawhere most money is spent. “As we talk to ourcustomers, the area where we consistently seespending is risk management and controls,” says IanWarford, EMEA industry director for capital markets atMicrosoft.

“Firms will now begin to increase investment ineffective internal control and risk management on onehand, and meeting regulatory requirements on theother,” says Stone. “But they should take care not to

overreact. Large, complicated, enterprise-wide riskmanagement approaches will cause more harm thangood. They delay the benefits of effective internalcontrol, end up increasing risk, and cost a fortune at atime when financial services firms need to spendwisely.”

Warford concurs: “Customers know that additionalregulation will be coming towards them – it alwaysdoes after a period of financial turmoil. But they’re notlooking to replace their systems – they’re trying to usewhat they have to address the processing problemaround risk.”

PERFECT MATCHThe good news is that the key to solving the riskanalysis conundrum may lie in a simple, if well-thought-out, shift of focus that tallies exactly with theethos of using existing technologies – the technologiesthat end users are already familiar with.

A major obstacle for banks has been their historicalreliance on algorithmic techniques for risk analysis. AsLee explains: “The calculation of risk is difficult, andunfortunately not a science. Reliance on statisticalmodels and the algorithmic exploitation of historicdata has detached many organisations from soundjudgement.” People across the enterprise can givevaluable context to that data. Indeed, by returningtheir focus to their people, banks can efficientlynurture a context-rich, enterprise-wide risk culture.

Microsoft’s future-state vision of risk analyticsand 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, easy-

to-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 theheart of our risk processes and workflow controlsolution,” says Ian Warford. “It allowsorganisations to embed workflows arounddocuments. For Excel spreadsheets, SharePointenables full control of versioning, so firms canidentify who did what, when.

“Microsoft’s high-performance computing(HPC) offering – Windows HPC Server 2008 –enables faster computing and modelling so thatbanks can make faster decisions about risk. Inaddition, Microsoft PerformancePoint Server canenable visualisation of complex risk data and asingle view of structured and unstructured data. Itcan sit on top of SQL Server, which pulls togethervarious data sources from around theorganisation which can then be served up forPerformancePoint to do business analytics.”

A SOUND VISION

Bank of America needed a robust and scalableway to meet the compliance challenge of theBasel II Accord, which mandates an entirely newapproach to measuring, monitoring, reviewingand reporting operational risk.

After considering off-the-shelf solutions, thebank decided to build its own system using toolsand an environment that would be familiar todevelopers and users. Within four months itdesigned, developed and deployed a portalsolution based on Microsoft Office SharePointServer 2007 with a data-input mechanism basedon the Office InfoPath information-gatheringprogram, part of Microsoft Office Enterprise2007. To help ensure that only fully authorisedusers could access sensitive data, developerscreated highly customised views and controlsbased on the native security features inSharePoint Server 2007.

“Because we based the solution on adevelopment and deployment environment asefficient as Microsoft Office Enterprise 2007 andSharePoint Server 2007, the bank is wellpositioned to effectively manage operationaland compliance risk, now and well into thefuture,” says Jeff Napper, senior vice president ofenterprise operational risk management at Bankof America.

BANK OF AMERICA

“Most financial managers and

executives have never faced a

business environment this

challenging in their

professional lifetimes”

Chris Moxon,CEO, Methodware

www.onwindows.com

RISK ANALYTICS AND REPORTING

risk and finance solutions that rely heavily on Microsoft.The Financial Studio product from Financial Architectsis exactly this kind of platform. It is based on the financeresource planning concept, and has been developed bybankers for bankers. Financial Studio exploits Excel viaMicrosoft Reporting Services to provide information forboth internal and external use in an environment whichis both familiar and easy to use.”

“Two main capabilities are particularly relevanthere,” adds Maconick. “Cataloguing, controlling andincorporating all types of data into the riskmanagement systems is relatively easy in formalsystems, as most are based on modern databasesystems such as Microsoft SQL Server. For end-usersystems, an end-user computing control system suchas Finsbury’s Spreadsheet Workbench is required.Once identified as providing business-criticalinformation, the spreadsheets can be analysed and keycell data extracted for input into risk managementsystems. The second key capability is computingpower – most risk management calculations requirelarge numbers of scenarios to be calculated. This is aninherently parallel process, so technology such as high-performance computing (HPC) is of significant value.”

Howard Travers, director of sales at Formicary,stresses the importance of including all methods ofcommunication in risk analysis. “With theintroduction of Microsoft Office CommunicationsServer (OCS) R2 2007, firms are recognising the hugebenefits derived from VoIP, presence and unifiedcommunications,” he says. “Firms continue to look formethods to streamline communication and retainknowledge, and recent additions to OCS such asGroup Chat are going to make a huge difference. The

biggest issue they face is making sure there aremechanisms available to accurately search and identifyunauthorised conversations and information. This iswhy Formicary introduced ChatSeer, which is used byseveral tier-one investment banks to natively searchinstant messaging and Group Chat communicationsand help them ensure they are analysing the rightinformation.”

It seems that in order to achieve a more accurateview of the risk/reward balance, banks must also strikea balance between people and technology; between thesubjective context and insight that staff can offer, andthe objective data that runs through their systems.Using familiar technologies not only helps put peopleat the centre of the risk culture, but can also createefficiencies in terms of resources, organisation andcost. “When it comes to cost, many people alreadyhave licences for SQL Server, PerformancePoint, andeven HPC Server,” concludes Warford. “If financialfirms deploy these technologies they can save atremendous amount of money as opposed to buyingnew licences. Many firms are realising that they cansave money by deploying the licences they alreadyhave. They’re trying to use what they have to addressthe processing problem around risk, and because thetoolset is familiar to everybody who uses MicrosoftOffice, it’s a very compelling opportunity for them.” F

South Africa’s Sasfin Bank serves commercialcustomers, with a focus on entrepreneurs. Siloedinformation gathering and management made itdifficult for employees to access a unified viewof the customer, and Sasfin also faced challengesin addressing the reporting requirements ofBasel II regulations.

Sasfin executives joined the Microsoft Office2007 Rapid Deployment Technology AdoptionProgram to deploy a single, consolidatedcontent management solution and Web portal.Structured information-gathering capabilitiesnow enable employees to capture data in arepeatable and easily validated manner, whileXML capabilities mean forms data can beuploaded automatically to customer datasystems.

The solution delivers greater process efficiencyand more comprehensive information for Sasfinstaff, enabling stronger decision-makingcapabilities. New data analysis capabilitiesoffered through the Microsoft Office Excel 2007spreadsheet software, as well as the enhancedreporting capabilities of Office SharePoint Server2007, give users greater insight into customerinteractions and sales opportunities.

“We expect help-desk calls relating to theOffice products to be considerably lower thanafter prior deployments,” says Dawie Olivier, ITproject manager at Sasfin Bank.

SASFIN BANK

disparate in others, does show signs of anorchestrated effort.

But as governments around the world continuetheir efforts to bolster financial firms’ defences againstrisk, there are also lessons to be learned from thecurrent situation, in order to guard against the need toresort to such measures again. Because of the sheermagnitude and ubiquity of government interventionsand bailout funding, many people see the situation astantamount to nationalisation. However, the freemarket economies are fully aware of the economicdistortions and allocation inefficiencies involved, andtheir objective is not to widen the sphere of the state infinancial markets (as in nationalisation), but simply toprovide temporary support to sustain the marketmechanism by throwing a lifeline. The function of thissovereign funding is to act as a safeguard againstmarket failure – what must be taken into account,though, is that it has serious implications andconsequences for risk management.

There are several potential effects to consider. First,the regulatory burden may increase because, havingchannelled tax revenues to address the problem,governments will want banks to show tax payers, andto justify to the wider world, how that money is beingused. In addition to this, the natural tendency ofregulatory regimes to expand their footprint will beboosted. Further, risk-taking by banks may be moreguided by the perceptions and preferences ofgovernment policies than by portfolio considerations.There is also an attendant risk of over-regulation, asgovernments seek to compensate for a diminishedtrust in bank management by implementing detailedtransaction-oriented examinations.

The current situation raises an additionaldimension for chief risk officers to deal with, if theirinstitution is subject to government risk managementactivities. The lessons learned from government riskmanagement will also feed into a heavier touch fromregulators in industry risk management. In addition,the knowledge that governments around the worldgain from their experience of rescuing ‘too big to fail’firms will have an impact on the future viability andambitions of ‘financial supermarts’ around the world.Finally, this government risk management effort willhave far-reaching impacts on the risk management roleof governments in the future and, implicitly, the role ofrisk management in society.

For years, financial institutions have faced theongoing challenge of meeting new levels of riskmanagement and greater demands for compliance. Asin previous times of crisis, that challenge is nowintensifying alongside the global economic situation.As the role of governments continues to intensify andtransform these challenges, it is perhaps moreimportant than ever for financial firms to take aholistic approach to risk and compliance, based on astrong and flexible IT infrastructure.

RISING TO THE CHALLENGEMicrosoft works with leading partners that deliversolutions to address the spectrum of riskmanagement and compliance needs. Thesesolutions take advantage of Microsoft’s focus onstrong infrastructure and reusable businesscomponents, while using enterprise-ready productsand technologies and taking advantage of the tightconnection of the back end to Microsoft’s leadershipin client devices.

A key strength of this approach lies in the familiarityof end users across the organisation with Microsofttools and capabilities, which are ubiquitous in manyorganisations as well as in users’ homes. In enablingusers to embrace and use information technology thataligns with a company’s business process, thisminimises training needs and helps to build anintegrated risk management and compliance cultureacross the organisation.

In these difficult times, our efforts at Microsoft arefocused first and foremost on helping our customersmaximise the existing investments they have madewith us. The latest guidance around IT compliancemanagement is a good example of these efforts. Weare also starting work on a Future State of RiskManagement global study and will be releasing this inthe middle of this year. F

Sai Sireesh Pachava is the worldwide director for riskmanagement and compliance industry solutions atMicrosoft. He also serves as the co-regional director forthe Professional Risk Managers’ InternationalAssociation (PRMIA) Seattle chapter

33www.onwindows.com

GOVERNANCE, RISK MANAGEMENT AND COMPLIANCE SERIES

he financial services industry iscontinuously evolving at a rapid pace.Besides the challenges posed by emerging

technologies, expanded business strategies,redefined business processes, new financialinstruments and regulatory frameworks, 2008 hasthrown up the additional trials of the global creditcrisis and government interventions that haveincreased the scale, scope and interconnectivity offinancial institutions. Correspondingly, enterpriserisk management across multiple business unitswithin increasingly complex organisations is underincreasing scrutiny, and rightfully so given what is atstake to investors, creditors and clients, and morebroadly, to the global economies and financialmarkets.

The past year has been humbling and disruptive forthe financial sector – perhaps especially for the largeinvestment banks, but also for the risk managementprofession as a whole. Many epitaphs will be written

for legendary institutions that disappeared overnight,and the demise of these organisations will be spokenabout for decades to come in terms of the crunchingglobal impact and associated lessons.

In the US, about US$650 billion of sub-primebonds were outstanding in March 2008, about 75 percent of which were rated ‘triple A’ at issuance, andacross the world, banks raised around US$600 billionin 2008 worldwide in order to survive. This globaldevelopment has broad, long-term implications for therisk management role and the function ofgovernments and sovereign wealth funds.

With government bailouts for banks across Europeand the US Federal Deposit Insurance Corporation’srecent suggestion of using an aggregator bank, there isa fascinating convergence of free markets and the roleof governments as risk managers of last resort. Thiscomplements an ongoing global risk managementeffort that, although coordinated in some parts of theworld (for example G7 and the European Union) and

T

TAKING STOCKSAI SIREESH PACHAVA TAKES STOCK OF THE RISK AND COMPLIANCE SITUATION AFTER A YEAR OF CHALLENGESTHAT HAVE SEEN GOVERNMENTS TAKING A MORE PROMINENT ROLE IN THE FINANCIAL SERVICES INDUSTRY

Microsoft has released the IT ComplianceManagement Guide, a free, authoritative MicrosoftOperations Framework (MOF) 4.0 companion guidebased on the Regulatory Compliance PlanningGuide.

The guide aims to help financial firms addresstheir governance, risk management and compliance(GRC) needs using existing technologies. It offers arange of resources to help organisations shift theirGRC efforts from people to technology, includingconfiguration guidance to help efficiently addressGRC objectives. This acts as an accelerator to helpbusinesses better understand how an IT processframework can help them implement GRC controlswithin their Microsoft infrastructure.

A workbook, IT Compliance ManagementResources, accompanies the guide, providing anextensive inventory of GRC-related configurationand management guidance organised by Microsoftproduct.

By viewing compliance obligations through a‘lens’ of eight authority documents, includingSarbanes-Oxley and ISO 27002, the guide helps toreduce the complexity often associated with GRC. Itprovides guidance to consolidate and address GRCrequirements from multiple authority documentssuch as regulations, publications and agreements.

The guide has been well received by reviewers,with auditing firm Grant Thornton commenting:“The Microsoft Operations Framework referenced inthe guide is both a reasonable and extensibleframework by which an organisation may manageGRC requirements and solutions.”

The IT Compliance Management Guide is free todownload at www.microsoft.com/solutionaccelerators

MICROSOFT RELEASESIT COMPLIANCE GUIDE

35

probably have to allow about one hour per branchfor weekly technical maintenance and verificationand with 34 branches, the support would equate toroughly the cost of a full-time employee.

By implementing a solution that replicates andtransports byte-level changes only, the bank couldmove data to a central location. By eliminating theneed for backup, technical maintenance andassistance, you could save around £33,000annually. Plus there is no recurring hardwaremaintenance cost and no loss of employee time insupervising the backup process.

With no user intervention and no additionalbandwidth required between the branch officesand the central data centre, real-time datareplication gives a backup and recovery solutionwithout bottlenecks, allowing operations tocontinue unimpeded. The result: cost-effectivequality service, up-to-the-minute data protectionand economical use of existing bandwidth.

Summing up, therefore, it would appear thatcontinuous access to key business information is acritical requirement for both corporateheadquarters and branch locations. But manycompanies have not adjusted to this reality, and

continue to rely on tape backup to protect theirbranch offices. The tape backup and recoveryprocesses are complex, labour intensive and proneto errors – especially when untrained branchemployees are asked to execute them. In short, tapebackup for branches is a costly and risky dataprotection strategy. New solutions that use real-time data replication software to automaticallybackup branch office data to a central serverprovide a simpler, more reliable and cost-effectiveway to protect your branch offices. F

Ian Masters is UK sales and marketing director atDouble-Take Software: www.doubletake.com

OUT ON A LIMB

NEW TECHNOLOGIES CAN REDUCE THE COST OF BRANCH OFFICE DATA PROTECTIONWITH REAL-TIME DATA REPLICATION AND CENTRALISED STORAGE, SAYS IAN MASTERS

www.onwindows.com

COMMENTARY

ost organisations understand the importance ofdeploying the right resources, processes andtechnology to protect key information and

minimise downtime at their main headquarters. But toomany companies don’t have the adequate resources ortechnology in place for protecting invaluable data inbranch or remote offices. Their data protection strategiesdo not encompass the fact that branch offices now containcustomer databases, e-mail servers or financial informationthat are critical to the company’s day-to-day operations.

The traditional approach – relying on tape backup forbranch office data protection – is both costly and risky. Inaddition to the initial tape backup hardware, software andinstallation costs for each branch, there are the continualcosts of tape media, maintenance and off-site transport andstorage. Most companies can’t afford to have IT staff inbranch offices, so they incur traditional IT support costsfor the weekly maintenance and verification of branchbackups. Even with weekly support, central IT ends upfinding out about gaps in the branch data backup afterimportant information has already been lost.

Often, untrained non-technical staff in the branches haveto be responsible for consistent, reliable backup – but giventhe wide variety of things that could go wrong, this is anunrealistic responsibility. Backup fails without the branchstaff even noticing. Shortcuts taken to save timeunwittingly sabotage the process. Improperly labelling,rotating and removing tapes, results in lost data and slowrecovery. Since the branch employees have never tested therecovery process, they aren’t familiar with how to executethe recovery when a disruption occurs. So the branch isdown for hours, or even days, and often requires theassistance of the central IT staff.

ANOTHER WAYWhat is surprising is that few companies realise that thereare alternatives to this costly and risky approach to branchoffice data protection. Newer, proven software technologiesmake it possible to reliably and cost-effectively backupbranch offices at the central data centre. In the past,centrally backing up remote locations was not feasible formost businesses because the solutions available were hardto manage and required costly WAN bandwidth.

New remote backup solutions that use data replicationsoftware are dramatically easier to manage and workeffectively over low bandwidth connections and long

distances. With real-time data replication, file changes onbranch office servers are automatically copied andtransferred to a target server at a central location – usingyour existing network bandwidth. The replication occursautomatically, relieving branch office staff from their dutiesas backup administrators and giving IT staff confidencethat reliable backups are occurring in the branches –without a lot of branch support calls and headaches. Andbecause the replication is occurring constantly, the windowof data loss is dramatically smaller compared to once-a-daytape backup.

Imagine a bank with 34 offices, with each branch havingto spend £4,500-£6,500 for backup hardware and software,in addition to set-up time. In addition to this, there wouldbe the ongoing costs of media, maintenance,communications, transport and storage. Even with all thiscapital outlay the system would fail to guarantee theprotection of all records because tape backup is notconstant, since it occurs just once daily. If a failure shouldoccur, the gap between the last backup and the failurewould result in the irretrievable loss of transactions andrecords.

Without trained IT staff at each branch the bank wouldbe dependent on non-technical staff for tape management.People trained to serve customers would be inexpertlychanging tapes. As the IT manager you should be askingyourself: did they make the tape change? Did they do itcorrectly? Did they install new tape or erase data?

Whilst relying on tape backup alone, you would

M

“Newer, proven software

technologies make it possible

to reliably and cost-effectively

backup branch offices at the

central data centre”

“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”

www.onwindows.com

MAKING THE BESTOF UNCERTAINTY

AS BANKS FACE A NEW SET OF ECONOMIC CHALLENGES,KEY TECHNOLOGY TRENDS CAN HELP THEM THROUGH, SAYS BRIAN SCOTT

COMMENTARY

s instability continues to ripple through the globaleconomy, it’s clear that no one is immune to theeffects of tighter credit and slower consumer and

business spending. But while it’s impossible to predict theduration of this uncertainty or its final impact on jobs andgrowth, I am optimistic about long-term economic prospectsaround the world.

The trends that have made the last decade so dynamic forbusinesses haven’t changed – technology continues toimprove, productivity continues to rise, and new businessopportunities continue to emerge. At the same time, there’s nodoubt that thoughtful business leaders must carefully assesshow best to use their resources in these uncertain times.

IT can play an important role in helping financial firms ofevery size to respond to this difficult and rapidly changingeconomic environment. In the near term, manyorganisations will focus on cutting costs and reducing risk,and a number of technologies are helping companies tolower expenses and improve effectiveness and efficiency.

One example is virtualisation. By making it possible torun more than one operating system on a single computer,virtualisation reduces costs and lowers energy consumption,enabling organisations to use more of the computing powerthey already own. Another example is unifiedcommunications technologies that bring together voice, e-mail and instant messaging, allowing organisations toreplace traditional phone systems with integrated softwaresolutions that reduce hardware and maintenance costs.Today’s video conferencing and collaboration tools aremaking virtual meetings much more like face-to-faceinteraction, enabling people to share and collaborate moreeffectively while reducing travel costs, and companies arefinding that reducing computer energy usage is one of themost effective ways to lower costs without hamperingorganisational capabilities.

At Microsoft, our internal IT department saved more thanUS$10 million by moving 25 per cent of its servers into avirtualised environment during 2007. Now, it takes just fourpeople to manage the group’s 3,500 servers, and afterimplementing a unified messaging system we are savingUS$5 million each year in hardware and maintenance costs.

Large companies are not the only ones benefiting fromsoftware that can help reduce expense. For example,deploying Windows Server 2008 Hyper-V has helpedEgypt’s first credit bureau I-Score, which has 50 employees,to consolidate hardware and reduce the cost of

implementing a new disaster recovery site. I-Score alsoexpects to reduce energy consumption and cooling costs.

While cutting costs is important in responding to currenteconomic challenges, it’s also possible to see some of thesechallenges as opportunities. Many new technologies areenabling forward-looking financial firms to build systemsthat are more cost-effective while enabling people tounderstand and respond to changing business conditionswith greater insight and speed than ever before.

This focus on people is critical. In any economy,innovation is the foundation for creating opportunity andsuccess – and innovation is built on the ability of people totransform new ideas into products that deliver value tocustomers. The danger is that as the global economy slows,companies will shift focus to controlling expenses ratherthan investment in innovation. But companies that continueto pursue innovation will position themselves better toweather difficult economic times and create the conditionsfor more rapid growth when the economic climate improves.

There is no doubt that companies and individuals nowface a new set of economic challenges. But at the same time,key technology trends are converging in ways that willrevolutionise the role computing plays in our lives. Financialinstitutions that take advantage of these trends to transformtheir businesses and deliver new innovations to customerswill have an important competitive advantage, today and inthe future. F

Brian Scott is vice president, worldwide industry at Microsoft

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”

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BUILDING SUCCESSFOR SUPERBANKS

TRANSPARENCY IS VITAL IF MERGED BANKS ARE TOACHIEVE TRUE SUPERBANK STATUS, SAYS NIGEL WALDER

COMMENTARY

hile many firms and individuals have suffered hugefinancial pain over recent months, some haveprospered and bought fire-sale assets that lift them

overnight into the new ‘superbank’ category. However, wherethere is reward there is risk, and these superbanks facesignificant integration challenges. There are several key aspectssuperbanks need to consider in order to build success.

For example, in a merger between two large banks, whatshould the new entity be called? Should both brands be keptbecause each has brand value? If so, how can the bank createa unified institution-wide culture?

In addition, the movement of many firms towards a ‘onebank’ mentality by leveraging shared infrastructure oftenresults in hybrid operating models whereby the businessline with most power ends up with the better service,creating pressure for poorer performing businesses. It iscrucial that all factors are taken into account and thatintegration is swift.

Since most banks align themselves by product, difficultiescan arise when trying to service customers with multi-product needs when the products are spread out across thetwo entities. Superbanks face an internal battle over whoowns the client relationship, which can take precedence overthe best interests of the client.

Superbanks also need to reaffirm the confidence ofregulators and shareholders by taking a holistic view of riskthat is easy to understand and to act upon. While easy toaccept 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 thebucket in which other risks are put. Many banks have alsofocused their efforts on minimising thecost of regulations, rather thanembracing the spirit of what’sintended.

I’m not suggesting that thecurrent crisis was caused byoperational risk. However,as operational riskdepartments tend to bepretty isolated from units such asfinance and operations, there isoften a lack of understanding asto where problems occur, whoshould follow them up andhow they should be reported,

especially in large firms.So, what is needed to monitor the risk within these

operational units? The answer is transparency, which canonly come about via effective communication betweensenior management and people in the line functions. Giventhe size and reach of superbanks this can’t be done verbally.It has to be systemised. Operational risk needs to beembedded in the fabric of an organisation – its people, whocan provide the context that numbers might lack.

Tightly coupled to operational risk is governance over thebalance sheet. Superbanks have millions of accounts that aresubject to millions of transactions daily. During integrationthis is amplified when aggregated financial management andreporting is required across multiple platforms, with financedepartments having to temporally bridge the gap. In orderfor firms to sign off comfortably on their balance sheet, totaltransparency is needed. This should be capable of showingproblematic accounts and identifying patterns, so whenaggregated up, the warning bells proactively go off to seniormanagement. It should also provide an opportunity formanagement to attribute a relative risk weighting over theaccounts.

Operational risk is an art not a science, and it needs to betreated as such. The next two to three years will see intensiveactivity within the newly-created superbanks as they battleto extract costs while keeping key employees and clients.Speed of execution and total transparency of risk will be vitalif they are to succeed. F

Nigel Walder is CEO of Business Control Solutions: www.bcsplc.com

W

USE THIS JPEG RATHER THAN PDF

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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

COMMENTARY

he use of instant messaging (IM) is growing at anexponential rate and with the recent release ofMicrosoft’s Unified Communications (UC) suite,

Office Communications Server (OCS) R2 2007, this is set tocontinue. While IM technologies have simplified andreplaced e-mail for one-to-one conversations, chat is thenatural 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 thebreakthrough came when innovative organisations like UBSextended that protocol to develop a persistent group chatproduct, resulting in a separate company called Parlano andthe MindAlign product. Microsoft acquired MindAlign in2007, and its adoption by many of the world’s largestfinancial institutions has shaped the functionality ofMicrosoft’s Group Chat, as many of those companies nowplan to move to the UC platform.

When I was sales manager of Parlano in Europe, CXOsoften questioned why they would need persistent groupchat when they had e-mail, phones and portals. But oncethe penny dropped (often after a successful pilot) thosesame CXOs rapidly championed the concept and adoptedit across the enterprise. Traders were attracted because theycould create different ‘rooms’ for each market and conductvirtual meetings without leaving their desks. Group Chatoffers a means of managing far-flung project teams andenabling faster, more informed investment decision-making.

There are, however, important issues to consider aroundIM and Group Chat, especially concerning regulatory andcompliance risk. IM, including persistent group chat, issubject to the same stringent compliance regulations as e-mail. Many organisations are required to record and archiveall communication data for differing retention periods insecure, tamper-proof storage facilities. They must also beable to readily retrieve the data when required for audit,compliance or e-discovery purposes, or face hefty fines fornon-compliance.

Existing compliance solutions archive IM communicationsin e-mail format, which is not 100 per cent compatible withthe persistent group chat feature. Group Chat data does nottranslate easily into e-mail format, so there is a possibility ofdata being lost, manipulated or corrupted before it reachesthe secure data storage unit. Compliance officers need toknow who spoke to whom and when, and the retrieval ofdata for e-discovery and audit purpose breaks down and

becomes complex when you have a chat room withhundreds or thousands of users. Converting Group Chatinto e-mail can only be achieved by putting the recipientsinto the body of the text. That makes reconstruction andinterpretation of Group Chat conversations almostimpossible and highly time consuming.

In line with the recent launch of Microsoft OCS 2007 R2Group Chat, Formicary released the latest version ofChatSeer. Unlike other compliance solutions, ChatSeeridentifies and indexes all IM communication, includingattachments in their native format, enabling simple, quickand precise response to discovery and litigation requests. Itwas built based on two top-tier global investment banks’demand for a powerful compliance solution that wouldenable secure archiving and deliver fast, accurate response toall discovery requests while allowing users to communicateboth internally and externally through all available channelsimproving collaboration, business relationships andinformation flow.

Some organisations may already have an archivingsolution and require only a solution to store IM and GroupChat data in the same place. Others just don’t need e-discovery tools beyond the basic ones that they have. Forthese companies, ChatSeer Lite logs all message traffic on IMand persistent group chat, and supports the nativeintegration of EIM message traffic, access and permissioncontrols.

The launch of OCS R2 2007 and Group Chat spells a newand exciting phase in the development of UC. The rightapproach can help financial firms to rise to the challengespresented by these new technologies, and make the most ofthe opportunities they offer. F

Howard Travers is business development manager of Formicary:www.formicary.net/microsoft

T“Traders were attracted because

they could create different ‘rooms’

for each market and conduct

virtual meetings without leaving

their desks”

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IT STRATEGIESCONQUER 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

COMMENTARY

ince late 2007, the credit markets have been in adownward spiral, which is having a domino effect onbusinesses. The state of the credit markets has had a

detrimental effect on the financial services sector, which hasthen impacted all other sectors due to the reluctance and,sometimes, the inability of banks to open the credit doors. Andif companies are not able to extend their loans or take out newloans from the banks, then this position prevents the banksfrom executing one of their key objectives – to make moneyfrom lending money.

As a result, many banks have less money available tospend on growing and improving their businesses. Capitalinvestment has to be channelled into those areas of thebusiness which keep the bank operating, often inhibitingspend on other areas such as IT. Although the banks relyheavily on IT and usually set the benchmark for IT strategy,this is often the area where capital investment is frozen. ITprojects, outsourcing contracts and service improvements

are directly impacted, with IT suppliers being squeezed toenable more performance at a lower cost. As a result, ITsuppliers are being forced to rethink their approach tofunding initiatives for improved service and IT projects, andto consider changes to products used in the architecture.

At visionapp we promote shared ‘risk and reward’ servicecontracts with an emphasis on fewer, more skilled IT staff.When IT suppliers diversify into all areas of managedservice, there is a tendency to dilute the quality and skills ofthe resource supporting the service by taking on TUPE’dstaff, with no active training strategy or programme todisplace redundant staff. Raising the standard of all aspectsof the service will allow the IT supplier, in a close workingrelationship with the bank, to actually realise the servicebenefits. The improved service should then lead tomeasurable cost savings or cost avoidance, andsubsequently to an improved profit for the bank – and it isthis more profitable position that is shared. With a greatlyreduced budget, the internal IT organisation will no longerbe able to fund all IT projects, so the onus falls on thesuppliers to build the business case and develop the fundingmodel for the project. In this respect, the supplier plays atrusted advisor role and shares with the bank its experiencesfrom previous commitments.

Service and operational improvements can also beachieved by strategic thinking around the desktop andinfrastructure components. Business applications and dataaccessible to users from any location with an Internetconnection brokers more flexible working while significantlyreducing costs. A thin client desktop model is less costly tosupport providing it is the rule and not the exception.Forward thinking IT suppliers are building on theseprincipals while mapping the infrastructure solutions tocloud computing models. This brings shared services ontothe horizon of some CIOs where it was previouslydiscounted as a business strategy. During 2009, we will seean increase in the acceptance and deployment of thesemodels as a way to shed high IT operating costs and toensure alignment with future proofed technologies.

Until the credit markets recover and the financial servicessector can again support the other sectors, IT spend willcontinue to fall. Suppliers need to rally on new technologiesthat support improved service at greatly reduced costs if theyare to survive the coming year. F

Justin Parks is director at visionapp: www.visionapp.co.uk

S

45www.onwindows.com

COMMENTARY

technology to scan, security-check and confirm thatthe content being sent in and out over e-mail is assafe as they can make it.

Unified communications is no different to e-mail.It is more immediate, more instant than e-mail, but itshould be treated in exactly the same way. If acompany bans Web mail access, then it should dothe same with all variants of publicly available IMclients – and it shouldn’t rely on its firewall or URLfilter to achieve this. Public IM applications areastoundingly good at circumventing companydefences. Talk to any network administrator whohas tried to stop them using only traditional securitytools, and the conversation begins with a long sigh.

The IM networks can’t be blamed; after all it istheir business model to allow customers tocommunicate from anywhere. Therefore they’vedesigned their products to be able to jump from portto port and even tunnel through the firewall ifrequired. As soon as one port is blocked, it just looksfor another. If not properly controlled, this can opena backdoor into the network, bringing spyware,Trojans and other malware or an exit for corporateinformation.

Social engineering tactics are just ascommonplace in real-time communications as theyare in e-mail. However, users are still far more likelyto click on a link in a chat message without a secondthought, than they are in an email. This is becausethey truly believe that if the message comes from“Nick Sears” then it is Nick Sears that has sent thelink, it rarely occurs to anyone to ask Nick if he sentit. Consequently malware is often rife inorganisations that have no visibility or control of thereal-time communications on their network.

One of the more recent trends that the FaceTimeSecurity Labs have seen is malware coming into thenetwork over one IM network, identifying other IM –and even UC – clients installed, and then hoppingover. It is very similar to the early days of e-mailviruses – a quick scan of the victim’s contacts, and

hey presto, they receive a copy of the infectionwithin seconds.

If UC-related communications are runningwithout monitoring in place, confidentialinformation can easily leave the company. In asurvey conducted in August 2008 sponsored byFaceTime, over a third of people admitted tosending an instant message to the wrong person.Although only five per cent of respondents had senthighly confidential information to the wrongperson, one such error resulted in the company’stelephony and Internet access being used bysomeone else at the organisation’s expense. Nearly16 per cent of respondents said they had clicked onan attachment or a link within an IM that hadturned out to be malware, and 42 per cent of thosesaid their current anti-virus protection did not catchit.

Obviously, now is a great time for organisations tostart implementing UC. But just as no one wouldconsider rolling out e-mail without properlyconsidering security, management and compliance,so must these three vital areas be addressed withUC. A rush to save costs and neglecting to mitigatethe dangers will only result in businesses spendingmore money clearing up the resulting issues. F

Nick Sears is vice president, EMEA at FaceTimeCommunications: www.facetime.com

CAN UC THE DANGERS?

UNIFIED COMMUNICATIONS PROMISES GREAT BENEFITS,BUT ONLY IF THE RISKS ARE MITIGATED, SAYS NICK SEARS

he reasons for implementing unified commun-ications (UC) are now so strong and the costsavings so wide-reaching that in the present, tough,

economic climate it would be difficult not to look atimplementing a system. Until recently, concerns oversecurity and compliance have been blamed for the slowuptake to date. However, as financial pressures forceorganisations to move towards maximising every penny ofbudget and IT infrastructure, there may now be a temptationfor 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 lessobvious benefits start to materialise and it is these, not justthe 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 tocrack a smile on the financial director’s face.

No longer constrained by technology and costs, UCenables collaboration to become far more widespread withinorganisations. Presence – the ability to see at a glance who isavailable – has also helped to strengthen this trend. Nowvirtual meetings can be created on the fly, without the leadtimes associated with checking who’s available, booking aconference call and notifying everyone for the dial-in. Theend result is faster turnaround of projects or problemsolving, and not just within the company, but with suppliers,partners and customers too.

UC platforms are changing the way people, groups andorganisations work in many different ways. At the click of abutton they can turn ‘chat’ into voice and share theirdesktop or application in order to explain a situation moreclearly. Previously this was achieved through a mixture ofchat programs, such as Messenger, the telephone, and Webconferencing programs, three disparate mediums that oftenmade life more confusing for the uninitiated.

The increase in virtual meetings often results in fewer face-to-face meetings, which in turn means lower travelling costs.One CEO remarked at a recent conference that sinceinstalling UC his travelling has dropped by 20,000 mileseach year! But the benefits don’t just stop at savings on fuel,transportation tickets, hotel, subsistence and car hire. Lesstravel means that an employee’s availability increases, whichin turn boosts productivity levels.

It has been reported that since one company installedMicrosoft Office Communications Server it achieveddramatic headcount reduction, while its sales volumes

increased by 70 per cent. While not every company willnecessarily achieve these kinds of returns, at a time wheneveryone is looking to do more with less, implementing UCmakes sense.

Even though many organisations are looking to reduceheadcount and costs, there is still a need to provideincentives to encourage productive employees to stay, adifficult task when budgets are being cut and a pay increaseis not always available. Working from home is seen as amajor perk – not only does it improve the work-life balance,it also adds a few much-needed pounds in the pocket savedfrom the reduced commute. With UC, employees can stilloperate as if they were in the office, and often moreproductively.

Interestingly, ill employees, who perhaps when office-based might call in sick, nine times out of ten will dragthemselves to a home office and work through bouts ofsickness that would have seen them unavailable if they’dhad to travel to the office. It could also be said that thisimproves productivity massively during this season ofcoughs, colds and the inevitable ‘man-flu’, since it eliminatesthe spreading of germs in an office.

Such great benefits do come with inherent risks. But theyare no different to those risks that have been managedeffectively in the e-mail world for years. Since the days of the‘I love you’ virus, every enterprise has had some form of e-mail security – from anti-virus to malware checking and evencontent filtering. As Exchange and other e-mail servicesprovide a degree of control, organisations still use additional

T

“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”

1. Monitor and analyse usage of real-time tools2. Formulate a strategy and usage policies – to

incorporate publicly available tools3. Standardise on a single messaging client

where possible4. Ensure that all unsanctioned traffic is

specifically denied5. Treat all IM and UC traffic in the same way

that you do e-mail.

BEST PRACTICE TIPSFOR UC IMPLEMENTATION

47www.onwindows.com

what is often called the ‘waterfall’ sequence of visionsetting, analysis, design, testing, and finally, aftermonths have elapsed, implementation – is simplyunacceptable today. Continual, fast iteration lies atthe heart of the new rapid reengineering approach.Ironically, some aspects of this fast-iteratingapproach were being developed in the 1990s, in theIT world under the auspices of a group called theAgile Coalition, while the Hammer-bornreengineering wave was at its height. Now, the bestelements of these ‘agile methods’ are being adaptedto the task of rehabilitating process reengineeringfor today’s quick-moving world.

Drive innovation through internal competition –Consensus and collaboration have been cornerstoneprinciples of almost every change initiative in thepast 20 years. Now it’s time to add a dose ofcompetition – not to undermine the virtues ofconsensus building and collaborative working, butto spark more innovative thinking, to undermine‘lowest common denominator’ thinking, and topush the pace of change.

ASAP – A PROVEN APPROACHSingularity is in business to populate the world withagile companies. Our clients use our rapidreengineering approach, branded ASAP and based

on the principles above, to become more agile,quickly. ASAP packages the best practices ofreengineering and agile methodologies and equipsour clients to fuel innovation by unleashing thepositive forces of internal competition. It also usesbusiness process management technology as adelivery platform, to enable early visualisation ofthe result, support rapid implementation and addagility to processes. This approach is not just a newtheory of how to make beneficial change achievablequickly for businesses – it’s practical and is provento work today. F

Dermot McCauley is director for banking and capitalmarkets at Singularity: www.singularity.co.uk

FAST ROUTE TO EFFICIENCY

RAPID PROCESS REENGINEERING CAN PROVIDE A WAY FOR FINANCIALFIRMS TO QUICKLY ACHIEVE EFFICIENCIES, SAYS DERMOT MCCAULEY

COMMENTARY

he downturn in the global economy has gatheredpace and businesses everywhere must achieveefficiencies quickly while still serving clients and

otherwise ‘getting the job done’. Companies are looking tocreate efficiencies, and rapid process reengineering couldprovide a practical way to achieve this. But can you justify arapid process reengineering project when headcountreduction may seem the only available fast-paybackapproach? A look at the principles and practicalities of rapidprocess reengineering will answer this question.

DIDN’T WE TRY THAT ALREADY?Reengineering is not a new topic. In the 1990s the westernworld was swept by a wave of reengineering projects thatpromised to remake major corporations from the ground up.In July 1990, the Harvard Business Review published a nowfamous (some say infamous) article by reengineering guruMichael Hammer, entitled Reengineering work: don’tautomate, obliterate.

Hammer’s thesis, widely accepted in corporate boardrooms at the time, was that small improvements in workingpractices were simply not enough to meet the businesschallenges of the early 1990s. A wave of economic troubleswas bearing down on the corporate world and the onlyoption was major change. Tinkering at the edges of businessprocesses would fall short of achieving the change needed –incremental business process improvement was out, andmajor business process reengineering was in.

But the promise of reengineering, though delivered insome cases, was frequently unrealised. While a growingchurch of reengineering evangelists ministered to the needsand ambitions of executives, the disappointing truthemerged – reengineering often fell short. Reengineeringprogrammes were frequently too big; their ambitions toogrand; their results too meagre; their expense too great. Bythe end of the 1990s the reengineering wave had itselfcrashed. In its wake lay a trail of failed initiatives and, amongthe wreckage, a wealth of lessons to be learned.

A WAY THAT WORKS TODAYFast-forward to 2009 and business processes are again centrestage. The scale of today’s challenges is greater and, critically,the challenges are even more urgent. Executives recognise thecriticality of efficient and effective business processes tocompany success and know also that processes must quicklychange to meet new realities. Yet the shortcomings of the

1990s reengineering approach mean that it cannot be takenunchanged off the shelf for reuse. A new approach is neededthat takes advantage of the best practice of 1990sreengineering, adds some new best practice learned sincethen, and provides a way that works today.

Let’s review the principles that underlie a new, rapidreengineering approach that is already proven to work in 2009:

Business value quickly – Whatever phrase you use to describethe cost/benefit comparison – return on investment (ROI),business value capture, investment payback – thecost/benefit of reengineering must be understood before theinitiative begins. But this is nothing new – it was also true ofold-style reengineering. What is new in rapid reengineeringis that the ROI timeframe must be short. A period of monthsis too long to wait for value to emerge. Weeks, and preferablydays, is the payback period that matters today. Toparaphrase an executive to whom I spoke recently: “I’m notsure what I need, but I need it now!” This executive is notstupid – he’s just under pressure to show results quickly anddoesn’t have the luxury of months to analyse his issues.

Early visualisation of result – Start prototyping immediatelyand move rapidly toward implementing the most beneficialsolution your prototyping identifies. Develop an earlyvisualisation of the result (within three days) and then buildit ‘for real’ in a few short weeks (preferably days). Don’tspend weeks analysing your current processes or definingnew ones. Adopt the ‘show me, don’t tell me’ rule – insist onseeing now how your future business will work and don’trely solely on requirements documents, process analysisreports or graphical models to understand how your futurebusiness will work.

Agility of result – Implement business processes in a way thatequips you to quickly change them when you need to. Theprocesses you implement now must be open to rapidchange; after all, your business faces market-driven changeevery day and if your processes are not agile you cannotrespond effectively.

Agility of approach – Rapid reengineering does not assumethat processes must be designed first and thenimplemented. Rather, it accepts that processes should beredesigned while they are being implemented. Thetraditional reengineering approach to change – typified by

T

“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”

49www.onwindows.com

into the Basic, Standardised, Advanced or Dynamiccategory, businesses should start by taking theonline assessment test. The assessment has 32questions, eight for each level.

“Depending on your answers, you’ll be placed inone of the four categories, and you’ll get a betterpicture of your infrastructure and your practices,”says David Beauparlant, senior product manager forapplication platform and development marketing atMicrosoft. The test rates not only the technology orbest practices you have employed, but also the wayyou use them. “You might be at Basic level in onearea, but Advanced level in another,” explainsBeauparlant.

When it comes to progressing between levels,there are two steps to follow. First, organisationsmust understand where they currently are in the IOmodel, and then they need to determine how toarrive at their desired state. Let’s take datamanagement as an example: during yourassessment, you will discern all the pertinent

aspects of data – where is it, what applications itrelates to, and who is authorised to use it. Onceyou’ve assessed your data management capabilities,you may see that your data is strewn all over theorganisation rather than being consolidated inMicrosoft SharePoint or on other servers.

You might think the process will get harder asyou move through the stages, but the truth is justthe opposite – the hard part comes first. As youmove up the levels of maturity in the model, yourcapabilities are increasing. You can do more, and doit for less money. F

Anthony Baron is global vice president for solutionarchitecture and strategy at Dimension Data:www.dimensiondata.com

This commentary is based on an article published at: www.microsoft.com/midsizebusiness/businessvalue/measure_platform.mspx

MODELLING YOUR MATURITY

BY ASSESSING THE MATURITY OF THEIR IT INFRASTRUCTURE, BANKS CAN BE CONFIDENT OF REWARDWHEN DEPLOYING TECHNOLOGIES ON THE MICROSOFT PLATFORM. ANTHONY BARON EXPLAINS

COMMENTARY

n challenging times, business confidence can takea battering – something that banks know all toowell in today’s economic conditions. But a strong

technology base can deliver the support that financial firmsneed.

Increasingly, financial organisations are realising that theMicrosoft technology platform offers a cost-effective, flexibleand efficient way to support operations across theorganisation. Any executive who wants to grow his businessconstantly asks: ‘How can we complete any given processmore efficiently?’ The question applies to every part of thefinancial business: sales, marketing, product development –and especially IT. In many cases, it can be tempting to reflecton your successes, but in today’s business environment nocompany can afford to rest on its laurels, and it’s now moreimportant than ever for banks to determine what they canimprove.

To help organisations tackle this challenge, Microsoft hasworked with Gartner to devise an infrastructure modelcomprised of four levels of maturity. Here we talk about thecharacteristics of each level and what financial institutionscan expect as they move forward.

The purpose of the Infrastructure optimisation (IO)model is two-pronged: first, it enables institutions todetermine whether their IT infrastructure can deliver thecapabilities their business requires. Second, it helps them tosystematically improve their infrastructure in order toachieve their goals.

As you become more mature in anything, you get better atit, and the model that Microsoft is offering is common sense– a maturity path that says: ‘If you’re at this level, these areyour best practices.’

The IO model encompasses Basic, Standardised,Advanced and Dynamic levels of maturity. The Basic stage ischaracterised by disconnected applications and platforms.A business at this level might find that its processes arepoorly defined. It frequently lacks the ability to exchangeinformation among departments and teams, or tocollaborate efficiently. A new employee, for instance, willneed a computer and a desk. Ideally, a new entry in thehuman resources system would automatically generate arequest to facilities and a computer request based on thenew employee’s responsibilities. The IT department,however, lacks insight into the overall health of applicationsand services due to insufficient tools and resources. Becausethe IT environment is hard to manage, IT remains a cost

centre, with application backlogs and low productivity.At the Standardised stage, an organisation has standards-

based, flexible business applications. Companies begin toadopt XML and other industry standards more broadlyacross departments and with trusted trading partners. IThas deployed data warehouses so that it can deliverbusiness intelligence reports and business analytics,automatically combining information from multipleinternal departments for broader insight. At this level, the ITdepartment is still a cost centre, but is moving towardbecoming a business enabler that can build and deployapplications faster.

The Advanced level is where the IT department hasoptimised infrastructure and applications and, as a result,can manage the technology environment well. A company’score business processes are mature, which helps provideclear insight into performance. For instance, if you have acontract that requires delivering supplies within a certainperiod of time, the scanning of those supplies at theirdestination automatically updates your customer’s databaseand yours, so that there is a record of the completedtransaction. At this stage, IT is a true business partner, and itcan quickly build applications that take advantage of newbusiness opportunities or cope with competitive threats.

The optimum level is the Dynamic stage. By deploying aflexible, adaptive architecture based on Web services,companies at this stage can seamlessly integrate data foremployees, customers and partners. Highly automatedprocesses help align IT with business needs and controlcosts. In this scenario, an executive could follow a product’sprogress from its beginning as a collection of components ata factory in one location through its shipment overseas to adifferent location, its distribution to wholesale and retaillocations, and even its sales figures. IT understands howadditional incremental investments in technology can yieldspecific, measurable business benefits.

In order to determine whether their infrastructure falls

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”

51

remote services team works closely withthe HBOS ComputerCall operation, andtogether they have improved everydayprocedures, with a resulting improvementin ComputerCall’s first time fix rate. HBOShas also seen a reduction in the volume ofdisruptive incidents, with improvedavailability and end-user productivity.

Fujitsu Siemens Computers operates awarehousing and commissioning centrewith a purpose-built, state-of-the-art buildcentre dedicated to HBOS. This enablesdedicated production of desktop andlaptop products to be built to the HBOSspecification.

A dedicated team manages the projectsservices, delivering to HBOS requirementsand using a flexible resource model thatcan adapt to the changing workload.Projects are quoted against an agreed ratecard that has been actively managed toprovide HBOS with the most competitiveoptions on a range of skill sets.

In just 12 months, HBOS has been ableto reduce costs and introduce innovative,

practical approaches to drive up servicequality. Fujitsu Siemens Computers hasdelivered transparent cost accounting,improved the services to HBOS desktopand server users across all divisions, andsignificantly reduced server costs.

This includes an improved first-time fixrate and better management of servicedelivery across all operations. The Office ofContinuous Improvement and Innovationdelivers continuous progression in all areasand drives the improvement culture thatunderpins the Fujitsu Siemens deliverymodel.

This high performance has beenconsistently delivered by campus andmobile engineers delivering services thatare specific, measurable and improving ona monthly basis.

“Fujitsu Siemens Computers deliverswhat it promises, while at the same timereducing costs on an annual basis,”concludes Bob Smith, head of colleague ITservices at HBOS. “The combination of highlevels of service and transparent accounting

makes a compelling business case thatjustifies the selection of the company as ourstrategic support provider for desktop anddistributed server support services.” F

www.onwindows.com

PROFILED

ith 65,000 seats across its UKoperations, Halifax Bank ofScotland (HBOS) decided in

2007 to move from three suppliers to asingle partner for distributedprovisioning of its IT services. It wantedto reduce support costs through atransparent pricing model, and thesuccessful partner would also have tomaintain existing service levelagreements (SLAs) while providing avehicle to drive a continuous serviceimprovement culture.

In January 2007, HBOS chose FujitsuSiemens Computers as its preferredpartner. The choice was based on thecompany’s multi-skilled engineers andproven ability to manage large-scaletransitions of staff and equipment acrossmultiple locations in very short timescaleswithin the Managed Office service offering.

“We needed to drive down IT servicecosts across our operations,” says JonathanWard, head of relationship management at

HBOS. “But we knew that if we moved toone partner from three, the partner wechose must have impeccable credentials.We found that in Fujitsu SiemensComputers.”

The contract, which is based on thesupport of desktop PCs and servers inoffice locations, campus sites, headquartersand branch offices throughout the UK,offered a saving of £6 million in the firstyear, with increased savings oversubsequent years. It took just four monthsto transfer 180 employees to FujitsuSiemens Computers under existing TUPEregulations. Industry standard SLAs wereimplemented, and the bank’s day-to-dayoperation was unaffected by the change.

The Fujitsu Siemens Computers UserAccess Management desk was up andrunning at the start of the contract, and hassince increased the amount of requests ithandles by 50 per cent, while thecompany’s Software Certification andPackaging team has delivered service levelsconsistently above target.

Workshops with HBOS employeesdemonstrated how Fujitsu SiemensComputers’ cost base is made up, as wellas the drivers that affect the outcome ofany charges. This gave staff clarity overcosts and demonstrated the effectivenessof the model.

A business continuity test timetable wasalso set up to ensure readiness to respondto any business outages. This has twicebeen used in earnest, and on bothoccasions it worked smoothly to preventany loss of business to the bank. Inaddition, the Fujitsu Siemens Computers

HBOS

W

www.hbosplc.com

OVERVIEW

Solution: Distributed provisioning of ITservices

Benefits: Reduced costs; improved fixrate; increased user productivity

Technologies: Management of serversand desktops

Partner: Fujitsu Siemens Computers.

www.fujitsu-siemens.com

“Fujitsu Siemens Computers

delivers what it promises,

while at the same time

reducing costs on an

annual basis”

“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”

DON’T LOOK BACK

www.onwindows.com

FORUM - INSURANCE

he global economy has enteredsome truly stormy waters, and itmay be some time before things

finally settle down. It is not easy to seeexactly where things will end, nor when,and nor indeed what further jolts there maybe along the way. But there are certainlyways to help ride the storm and reap therewards during calmer weather to come.

“As individual enterprises, there is littlewe can do to influence either the economyor the overall global environment in whichwe operate, and predicting the likely stateof the economy, even in the very shortterm, is far from an easy exercise,” saysDavid Edison, head of actuarial services atMoore Stephens Consulting. “However, byimplementing and using provenforecasting techniques and integratingthem with appropriate technologies, wewill be able to better steer our way through

the rough patch, and to position ourselvesto maximise performance when the tidesturn.”

While the Internet and new technologiesaren’t crystal balls, the amount ofinformation available is phenomenal. Wehave achieved almost limitless levels of datacapture and storage, and our ability tointerrogate and analyse this data usingbusiness intelligence (BI) tools such asProClarity has enabled us to understandour business and what drives it, leading usto faster, smarter decisions. Data miningtools go a step further than conventional BItools, enabling businesses to useunimaginably clever programs andalgorithms to hunt out patterns andrelationships in the data, sometimes hiddenso deep within such masses of data that youcouldn’t hope to discover it manually otherthan by chance. The results of such analysiscan change the way in which a businessthinks or markets itself. Microsoft’scustomer relationship management (CRM)software allows us, having developed amarketing campaign strategy, to implementand monitor that campaign, and to ensureits efficient running.

While BI enables companies to monitorbusiness performance, it is essentially arecord of the past. Forecasting enablesbusinesses to look forward and makeeducated decisions. Forecasting requires aplethora of mathematical, statistical,actuarial and scientific techniques andtechnologies. Take all this data, analyse it,and then use such objective analysis, inconjunction with expert and experiencedsubjectivity, to project patterns and trends.These projections can be used to learnwhich way individual business lines areheaded, and how we can better controlthem and maximise their performance.

In recent years, the Financial ServicesAuthority (FSA), along with other nationaland international regulators, hasimplemented a number of requirements forregulated firms, from ensuring thatcustomers are being treated fairly through toensuring solvency and capital adequacy. Butits motives for requiring firms to performsuch analyses are not only so that the FSAwill have peace of mind. Encouraging firmsto analyse, investigate and forecast their own

data and business on an ongoing basis willlead them to better understand and managetheir business and opportunities.

“As individual items BI, CRM andforecasting tools each perform their ownfunctions in helping organisations provetheir solvency and other requirements tothe regulators,” says Edison. “Regular,structured use of these tools will alsoenable firms to be increasingly conversantwith their business data, and addingMicrosoft’s data mining tool will add anentirely new dimension to theirunderstanding and interpretation of keybusiness drivers. However, it is only whenthese different tools are brought togetherinto a unified environment, where data isautomatically sourced on a regular basisfrom them, that the system starts tobecome truly integrated.”

The results of projections from theforecasting system (be they actuarialchain ladder claims projections at anylevel of granularity, or any constituentoutput of a holistic stochastic capitaladequacy/solvency model) are broughtback into the warehouse and, therefore,back into the BI and dashboards. Thiscreates a circular management system viathe monitoring, comparison andinterrogation of actual, expected andpreviously forecast results. Such a systembecomes far more embedded in thebusiness psyche and strategy than anyseries of disparate tools – an approachthat will allow both you and the FSA tosleep better at night. F

T

DAVID EDISONHead of Actuarial Services, MooreStephens Consulting

After graduating in Actuarial Sciencein 1993, David began his insurancecareer at a Lloyd's Syndicate beforejoining the non-life actuarial servicesdivision of Moore Stephens' insurancegroup. Moore Stephens Consultingwas established in 2002, and David isresponsible for the company'sactuarial and statistical solutionsglobally, as well as for datawarehousing and designing contentand functionality of forecast cubes.

www.moorestephens.com

DAVID EDISON SAYS THAT FORECASTING IS KEY TO HELPING INSURANCE FIRMS SURVIVE TOUGH TIMES

“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”

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