Transcript Slide 1

New Technologies in
Banking: hype or reality?
Oldřich Příklenk
Country Director
27.5.2008
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner
audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected,
and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved.
Hype Cycle for Banking and Investment
Services Front-Office Technologies, 2007
2
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Technologies moved off-hype cycle
•
Linux in Banking Delivery Channels (not taken off as a technology trend with specific
applicability to banking beyond the trend for enterprises replacing or upgrading
desktop computers and servers)
•
Deposit ATMs (was incorporated in the Advanced ATMs and Kiosks element)
•
Bank Document Imaging/Archive/Retrieval at Front Office (no specific applicability to
banking and is tracked in other Gartner Hype Cycles)
•
Customer Natural Language Speech Recognition in Bank Telephone and Call Centers
(and replaced by Speech Recognition in Contact Centers)
•
Real-Time Analytics, Profiles and Detection (broken into two technologies: real time
analytics and centralized customer profiles)
•
Alert Technologies (it has reached the Plateau of Productivity)
3
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Priority Matrix
4
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Implications
The Hype Cycle Explained
Visibility
Peak of
Inflated
Gartner’s Hype Cycle helps
Expectations
enterprises decide when to
implement emerging
technologies. As with all
Plateau of
Technology
Slope of
technology investments, there is
Trigger
Trough of
Enlightenment Productivity
no simple answer. Business
needs and philosophies should
Disillusionment
determine when it makes sense
to invest in a particular new
“Type A” Adoption
“Type B” Adoption
“Type C” Adoption
technology.
Maturity
Type A, Type B and Type C Enterprises
Enterprises are identified as Type A, Type B and Type C, based on the aggressiveness with which they adopt and
use technology, which typically varies based on industry:

Type A enterprises are technology-driven, often using immature, cutting-edge technologies to gain an edge.

Type B enterprises are moderate technology adopters, implementing new technologies that
have entered the mainstream.

Type C enterprises are technologically risk-averse and are usually among the last to adopt new technologies.
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Hype Cycle for Banking and Investment
Services Front-Office Technologies, 2007
6
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Recommendations
• You own your technology-related strategy, not
your vendors
• Innovators: Compete at the cutting edge of
innovation and use IT as a weapon only if you
have people/culture/strategy for that
• Mainstream: Use IT to improve productivity,
product quality and customer service, wait for
technology to be tested
• Laggards: Wait for a technology to become
absolutely stable before deployment
7
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Taming IT Costs in
Banking
Felix Enescu
EXP Executive Partner
27.5.2008
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Key Findings
• IT spending has to continue for run-the-bank operations
and "must have" projects.
• Must also continue for those discretionary projects that
can differentiate a bank in an increasingly commoditized
industry with fickle customers.
• Avoid "me too" spending that copies peers — but note
that targeted IT investments have a direct impact on
profitability at banks.
• Whatever routes CIOs take to reduce costs aspects such
as governance and cultural fit will be more important in
the long term than short-term savings on price.
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Use cost containment techniques that not only
save money but also provide business benefits
• Some techniques just save money or delay
expenditures
• Others also provide business benefits because they
reduce complexity and/or provide flexibility
- Improve service levels
SERVICE
- Increase agility
AGILITY
- Reduce risk
RISK
REDUCTION
Spend Less, Get More | EXP Special Report | Oct. 2006
Page
10
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Understand your costs at the macro and
micro levels
• Use activity-based costing
(ABC) to understand major
cost drivers
ABC traces the cost of each
activity to the reason why
organizational resources were
consumed in support of the
necessary activities.
TCO for Desktop User
Annual Downtime
Cost per User
Hardware and Software
End-User
Operations
• Use total cost of ownership
(TCO) to understand life
cycle costs of major assets
Spend Less, Get More | EXP Special Report | Oct. 2006
Page
11
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
• Peer support
• Casual learning
and self-support
• Formal learning
• File and data
management
• Application
development
• Finance and
Administration
• Disposal cost
• IS training
• End-user training
• Hardware
• Purchased
software
• IS software
• Technical services
• Planning and
process
management
• Data support
Operations
Administration
Compare your costs to peers carefully
• Use common ratios and indexes carefully to identify areas for analysis
IT Cost Metrics
Pros
Cons
IT spend as percent of
gross revenues
Widely used, easy to
calculate
Can be very misleading: heavily influenced
by revenue size, does not consider
effectiveness
IT operating budget per
employee/user
Widely used, easy to
calculate
Outsourcing can distort ratio
IT professionals to total
employees
One measure of efficiency
Outsourcing can distort ratio
Industry standard
metrics, e.g., cost per
mortgage, ton
Puts IT in a business
context
Does not consider effectiveness
Unit cost, e.g., cost per
MIPS, cost per gigabyte
One measure of efficiency
Many IS organizations do not have the
necessary data available
• Use benchmarking for more accurate comparisons and insights and compare
your costs to peers carefully
• Benchmarks can also show where further cuts are unwarranted or increased
investment is required
Spend Less, Get More | EXP Special Report | Oct. 2006
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Use the 25 common IT cost containment
techniques framework to identify opportunities
Manage
Demand
1. Chargeback
2. IT PMO
3. IT Governance
4. Contingent
Workers
5. Software as a
Service
6. Capacity-onDemand
7. Staff
Reconfiguration
8. Selective
Outsourcing
9. Offshore
Outsourcing
10. Automated
Software
Distribution
11. Server/Storage
Virtualization
12. Voice/Data
Network
Reengineering
13. Voice over
Internet Protocol
14. Open-Source
Software
15. Data Center
Consolidation/
Automation
16. Standard
Operating
Environment
17. Teleworking
18. Refresh/
Upgrade Delay
19. Asset/License
Management
20. Print Fleet
Rationalization
21. Telephone
Expense
Management
22. Telephone
Bill Audit
23. Contract
Renegotiation
24. IT Operations
Process
Improvement
25. Apps Dev
Process
Improvement
Link costs to
demand
IT cost containment
Shift to
Variable Cost
Reduce
Labor Cost
Reduce
Resource
Costs
Reduce
Technology
Cost
Change IS
Operating
Model
Change
Operating
Practices
Improve IS
Business
Practices
Spend Less, Get More | EXP Special Report | Oct. 2006
Page
13
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Recommendations
• Resist calls to slash the IT budget, but do examine how
IT can be run more efficiently.
• Benchmark operations to assess how technology
investments can support the business strategy.
• Fight to preserve the IT budget for new projects that will
make the bank unique and able to stand out from the
herd.
• Make provisions for IT spending on customer onboarding
systems.
• Bargain aggressively with IT providers and seek out
emerging vendors
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Contacts
Oldrich Priklenk
Country Director
KPC-Group, s.r.o.
Independent Gartner Representative in Romania
10 Montreal Square
Bucharest , Romania
M: +420 603461866
E: [email protected]
T: + 420 257322524, F: + 420 257325085
gartner.com
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Gartner delivers the technology-related
insight necessary for our clients to make
the right decisions, every day.
Go to Slide Master to add client’s name, project # and date.
16
© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.