Business impact IBM conducted a social network analysis involving over 150 senior information technology (IT) and banking personnel to help determine how effectively the institution's existing IT support group was aligned to meet the needs of the various banking divisions. Based on the results, a case was made for a reorganization and realignment of IT operations support.
Issue In the highly competitive financial services industry, streamlining and fine-tuning IT operations to help improve transaction processing speed, quickly launch new services, and boost organizational efficiencies can be a valuable differentiator for attracting and retaining customer loyalty.
Executive summary The financial services institution's operational structure comprised three separate divisions – investment bank, wealth management and asset management – plus a corporate level organization, each of which had different requirements in terms of IT hardware, software and support. Using a central IT infrastructure to meet such a diverse set of needs meant that design and engineering were performed at the lowest common denominator, creating a situation where the investment bank division, which required speedier response times and a higher level of service, was supplementing the central IT support group with its own auxiliary IT support. The institution turned to IBM ODIS – a partnership between IBM Research and IBM Global Business Services – to devise a solution that would help improve mission clarity, quality of service and timeliness of response on a cost-neutral basis.
What IBM did Because the nature of the financial products and transactions handled by each division was so diverse, and the IT support processes were so widely disseminated across the enterprise, there was some confusion among banking personnel about where to seek IT support. The confusion and resulting inefficiency were exacerbated by fact that the acquisition of IT infrastructure had evolved on an ad hoc basis rather than as part of an overall IT strategy aligned to the financial institution's business goals. The result was an inefficient allocation of IT infrastructure resources and personnel, and an investment banking operation that lacked a reliable mechanism for delivery of IT services and support.
To discern the characteristics and operational patterns of the institution's existing IT support infrastructure, IBM Global Business Services (GBS) consultants conducted interviews with senior business and IT executives. Contemporaneously, the social network analysis (SNA) solution developed by IBM Research was used to identify the underlying connections and communications channels among the institution’s employees and the various IT support groups. As a follow-on, GBS led a service alignment workshop for the institution's senior personnel and also requested feedback from the firm's process teams to identify the ambiguities in organization, role responsibility and governance that were contributing to service delivery issues. The results of the investigation were presented to the chief technology officer for the global bank and the chief information officer of the investment bank.
The SNA indicated that while there was a high degree of collaboration between the business and the auxiliary IT support group around infrastructure decisions, there was no connection at all between the auxiliary IT support group and the central infrastructure group tasked with maintaining IT operations. This disconnect was a significant point of friction between the players. In addition, the SNA revealed that most of the communication between groups was occurring on the periphery of the organizational chart, with little or no communication directed toward the central infrastructure group that controlled the IT budget. Finally, the SNA results indicated a lack of clearly defined roles and responsibilities within the IT support operation, reflected in the confusion surrounding where to go for IT support, with 94 percent of respondents reporting receiving a misdirected request for IT in the past year, and 30 percent receiving misdirected requests weekly.
Based on these results, GBS recommended creating a new organizational structure and changing existing reporting relationships to more accurately reflect operational realities. In addition, GBS recommended a realignment of roles and responsibilities as they related to the enterprise versus the division in the investment bank. The goal of the reorganization was to transform the entire IT operation from a utility model that focused on implementing services in a standard fashion to a differentiated model geared toward driving competitive advantage.
Capabilities applied IBM's pioneering work in SNA offers clients a set of tools for mapping important relationships and communications patterns between people or departments, giving managers a guide to understanding the intricacies of organizational interactions that can either facilitate or impede departmental functionality. Businesses seeking new ways to help boost efficiency and enhance employee and customer satisfaction can benefit from IBM's expertise in using SNA to uncover the hidden connections that drive organizational processes.
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