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Beyond Technology, Delivering Transformation

Beyond Technology, Delivering Transformation. Ken Harvey Group Managing Director and Chief Technology & Services Officer. International network. People strength. Offices worldwide. 86 Countries & territories. 8,500. 295,000. Customers. Total assets H1 2009. Pre-tax profit H1 2009.

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Beyond Technology, Delivering Transformation

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  1. Beyond Technology, Delivering Transformation Ken HarveyGroup Managing Director and Chief Technology & Services Officer

  2. International network People strength Offices worldwide 86 Countries & territories 8,500 295,000 Customers Total assets H1 2009 Pre-tax profit H1 2009 Over 100 Million US$2,422 Billion US$5.0 Billion HSBC Today CISCO CIO Day

  3. Evolution of Transformation (One HSBC) Q1 2009 Q1 2008 Propositions and customer experience added to scope with Target Operating Models added to One HSBC Q1 2007 Process and Operations added to scope of One HSBC Q4 2006 One HSBC for IT is launched Q1 2005 Joining Up Directive from CEO 120 Data Centres merged into 5, 10% of Apps retired Q1 2003 IT SSO Created 2003 2009 4 CISCO CIO Day

  4. What is a CTSO? The CTSO is responsible for – • The delivery of transformational change consistent with the strategic plans of the Group • The integration of existing technology and operations platforms • The reengineering of customer experience and driving down the unit cost of production • Leveraging Global Service Centres and standardising process Responsibility includes the total cost line of the business, to prevent leakage and ensure the impact of the cost efficiency initiatives are reflected in the bottom line CISCO CIO Day

  5. Jebson’s First Law of Computing • Hardware is Easy • Software is Difficult • People are Impossible CISCO CIO Day

  6. Why does the CIO get to drive? • Natural Strengths • Process Engineering • Programme Management • Change Control • Change Agent • Historic Weakness • Drive Bottom Line • Execution and Branding trump technical brilliance CISCO CIO Day

  7. Unit Rates are Crucial IT Operations Rates improving even when volumes are increasing at a lower rate CISCO CIO Day

  8. Implemented the same concept in OperationsFirst Year Results show 10% YOY Reduction is Possible Service Delivery Rates improving in the first year on year comparison CISCO CIO Day

  9. Benchmarking is Key Outliers excluded peer avg. 64.5% Peer avg. 92.94% IT Cost/ Operating Cost Outliers excluded peer avg. 12.0% Peer avg. 11.1% Operating Cost/Operating Income 25.0% Peers HSBC 20.0% 15.0% 10.0% 5.0% 0.0% 0.0% 50% 100% 150% 200% 250% 300% * originally released as “Achieve IT/Ops Collaboration”, the text of this goal was modified to represent the consolidated outlook CISCO CIO Day

  10. You can’t consult if you are apologizing CISCO CIO Day

  11. The Measures • Cost Efficiency Ratio and • The magic of arbitrary aspirational numbers • Centres Of Excellence (Offshore Penetration) • 30/20/50 and the “CIOs” become RMs • The concept of Manufacturing vs Distribution • Unit Rates (10% YOY reduction) • Run the Bank/Change the Bank (27% to 36% in 4 years) • Leverage and Standardization • Total FTE (down 6% in 2009) • Product Fragmentation CISCO CIO Day

  12. Manufacturing vs. distribution CISCO CIO Day

  13. Why IT Doesn’t Matter (as much) The Task USD 4 Bn 2011 2010 2009 One HSBC Business Transformation (Front Office) Service Delivery/CRE (Back Office) IT (Back Office) Comprised of: • Sales • IT • Front Office • Marketing • CRE, CD, Admin • Mid Office, Collections • Back Office Sustainable Savings Through Transformation are key. Where is the Money? 14 CISCO CIO Day

  14. Bottom Line Delivery • Each CTSO (14 in our world) owns a 5 year plan to improve the Customer Experience • Support income growth above industry average While: 16 16 Milestone Summit (July - Sept 2009)

  15. HSBCnet Volumes in 2009 • Direct Connect Customers • Total Customers up 47% • # Transactions up 106% • Value of Transactions up 192% • Internet Customers • Total Customers up 21% • # Transactions up 31% • Value of Transactions up 38%

  16. Role in driving effectiveness (innovation) • Create Bandwidth for change by harvesting • Hard measures are important • Unit Costing in business terms could take years • Teams will not drive to objective without the measures • Innovation that pays, gets paid • Measure and Pay • Channel Management • Customer Satisfaction • CER CISCO CIO Day

  17. Questions? CISCO CIO Day

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