IT rises to global challenge

In an evolving financial services environment where speed of response is a critical factor, asset managers rely on service providers to cope with rapid peaks of investment activity.

In this context the challenge for a service provider’s IT is to match the needs of automated finance through internal and external resources at the best cost. To achieve this, a global pool of resources with adequate skill sets is required. This ensures superior project execution and 24/7 availability and support from Asia to Canada.

The CIO implications are substantial. For example, RBC Dexia’s center of expertise is located in Luxembourg or other onshore geographies for the key business applications. But we also rely on a captive structure and have implemented a hub in Malaysia for global transaction management.

This has enabled us to develop reporting which is based on specifications produced by an onshore location, as well as a help desk for the Asia-Pacific region. This supports both the local business and some global activities utilizing the Asian time zone.

We consider our capacity in Kuala Lumpur as complementary to our capacities in Luxembourg and the UK, and we are now examining the next wave of activities that could be performed by the Malaysian team.

This approach, however, requires a significant upfront investment. In the case of Kuala Lumpur, the initial set-up required middle managers to take six-month assignments to ensure local teams were properly hired and trained. Remote management is always a challenge and this needs to be considered upfront. Best practices are defined globally and the team is supervised by a local IT manager. We have also implemented an internal certification process that relies on Luxembourg expertise to provide the required business specifications.

This model is limited in terms of size and activities because of the training effort required to reach an expert level as well as the risk related to the launch of a new activity. In these cases, we consider that the home location or an external partner would align more successfully with our needs.

After several years we have now established mature relationships with our offshore partners. The managers are always very helpful and supportive but they have to face their own resources issues. Our business is not always well understood so the specifications have to be very precise.

Looking ahead, our sourcing strategy is currently being assessed. Application maintenance may be a possible next step. It creates different implications for people management but also the opportunity to organise a “knowledge transfer” or to reallocate people towards strategic initiatives. Another option is to create center of excellence directly through a partnership model.

The offshoring question is no longer a strategic decision but rather a necessary part of the modern financial world that manifests itself through many channels. Offshore players are now more and more present from a commercial perspective and deal with both business and IT, providing a full set of service including IT delivery and Business Process Outsourcing together. Having a clear vision on how our business and capabilities will evolve is critical if we want to be in control of our capabilities and our future.

Eric Mansuy
Chief Information Officer

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