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The client, a leading global bank with significant presence and growth aspirations in Asia, was performing a comprehensive review of its regional operating model. Expand worked with the regional Capital Markets CIO, who was looking to leverage the bank's Asia technology presence to support the regional and global business.
Problems/Questions
In order to articulate such a strategy the client wanted to understand the bank’s Asia IT footprint in terms of IT budget allocation, offshoring intensity and cost per IT head. Additionally, the CIO wanted to learn about the best practices in managing satellite locations, and to explore opportunities to nearshore and offshore certain IT functions.
How Expand helped
Quantitative analysis
Expand's analysis of the firm’s Asian technology cost and headcount data identified that the IT budget allocation to the region was low relative to its business size - this was in contrast to the bank’s growth strategy and risked negatively impacting competitive advantage in the region.
The analysis illustrated that the advantages gained from the bank's relatively low Asia IT cost per head (CpH) were offset by a very high CpH at the bank's headquarter location.
Qualitative analysis
Over 20 regional CIOs and senior managers in peer banks were interviewed to gather qualitative insights into industry best practices, allowing for a showcase of effective operating models to manage satellite locations. Additionally, Expand illustrated important location trends in Asia and communicated success stories from peers, highlighting specific teams and functions in significant locations.
Outcome
Expand presented its findings to the Asia CIO and to the firm’s global management committee. The study helped the Asia CIO make a case for a higher IT budget allocation to Asia for strategic investment. Based on Expand’s cost analysis the management committee is now exploring options to move IT staff from the global headquarter to Asia to reduce personnel costs. The bank is also in the process of rolling out a new regional operating model to optimally manage its satellite locations in Asia.