Application management services: Critical, cost-effective support for financial markets firms

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1 IBM Global Services Application management services: Critical, cost-effective support for financial markets firms Introduction Financial markets companies everywhere are struggling to maintain stability under increasingly complex circumstances. Deregulation, growing numbers of competitors, high demands for services and the complexities of managing risk on an international playing field are intensified by dipping revenues and the pressure to cut costs. The need to oversee growing numbers of cross-country investments a task that demands compliance with current regulatory and market structures is also a concern. In an effort to streamline, many firms alliance-based and specialty players alike are reducing staff and compensation packages. While these measures offer a tactical solution, they can fall short in terms of helping companies navigate the complexities of global trade and competition and arm themselves for growth. Today, remaining stable and profitable is a thorny proposition that is largely dependent on the application environment the collection of systems that enables companies to develop, launch and manage critical transactions and services. As firms extend their presence, they must also extend the capabilities of these assets to support best-in-class performance, communication, integration, continuity and security across ever-expanding, highly intricate networks. The goal is to create a self-funding, self-perpetuating infrastructure ready to respond dynamically to changes in customer and market demands and rebound quickly from business interruptions or disasters. This requires consolidating, upgrading and replacing applications on a regular basis a time-consuming and taxing task that must take into account both business and IT variables, as well as cost. Application management services offer an ideal model for achieving this objective.

2 Critical, cost-effective support for financial markets firms Aligning challenges with opportunities Today s financial markets companies are confronting challenges, as well as corresponding opportunities, in three areas: The marketplace: Regulatory changes, coupled with a growing demand for global trading, is enabling firms to extend their reach to international markets with limited capital outlays, but with stricter reporting and disclosure laws. A well-designed application architecture can automate and unify processes, safeguard connections among dispersed partners, reduce risk and support collaboration across networks and locations all within the context of current regulatory requirements. To achieve the greatest value, an enterprise s business and IT strategies must be tightly bound and highly interdependent. Otherwise, no matter how sound one or the other is, shareholder confidence and return on investment can quickly decline. 2

3 The customer: The unbundling of advice and execution is changing customer expectations compelling companies to decide which customers they want to serve, and how best to serve them. By building a strong customer database, firms can refine customer data, target the right customers and align them with the appropriate mix of products and services. That information can be repurposed across lines of business to develop innovative service models. A host of benefits for service providers Working with the IBM AMS team, financial markets firms can: Improve responsiveness and productivity by linking seamlessly with suppliers and partners in realtime. Integrate the enterprise by connecting applications and operating platforms across networks. The firm: Faced with a general market slump, many financial markets companies are looking to expand while reducing cost and risk. At the same time, regulatory changes are forcing firms to settle trades in one day to reduce exposure. Transforming legacy applications can enable companies to adapt more quickly to the changing business environment and promote faster development and delivery of new products. By aligning products and services with customer and geographic preferences, companies can refine their business structure and position the firm for long-term growth. IBM Application Management Services (AMS) can afford all of these opportunities rapidly, with less risk and with more economy. Achieve differentiation by developing customized applications for consumer and enterprise markets at less cost, and with a faster time to market. Retain customers and increase customer satisfaction by utilizing customer data to align expectations with products and services, better understand customer profitability and value, and automate services. Cut costs by outsourcing non-core, labor-intensive processes to a trusted partner with worldwide reach; reinvest savings in new initiatives. Save enough money from aging legacy applications to fund new on demand applications that will deliver critically needed business value. Optimize resources and conserve capital by utilizing global resources to provide services at the point of delivery across cultural, language and currency boundaries. 3

4 Critical, cost-effective support for financial markets firms Application management services: Tactical and strategic oversight for the application portfolio Today s forward-minded firms are focusing on the application portfolio as a primary way to reduce costs, manage change, strengthen relationships and accommodate growth. This strategy requires paying close attention to both the tactical and strategic aspects of developing, running and supporting complex applications legacy, package, custom and Web-based systems that can have any number of origins and functions. Coding, testing, integration and maintenance are ongoing, and skills must remain current and available across enterprise and geographical boundaries. On a higher level, firms must consider what their application mix can contribute in terms of heightening efficiencies, automating and integrating processes (i.e., Straight Through Processing), reducing risk, supporting competitiveness and bettering the overall cost structure. The decision to outsource part or all of application management to a provider like IBM can result in significant savings, which can help trim a company s overall expenses, reduce the cost of linking with alliance partners, and support future business and IT initiatives. By lowering administrative and support costs, application management services offer a feeling of confidence that a firm s existing applications will be utilized to their full potential without the need to hire and pay for full-time, highly trained specialists and support resources. Services can be performed rapidly (locally or globally) with the belief that the application portfolio will remain current equipped to speed transactions, integrate channels, streamline operations, support business continuity and enhance security features. This is key to becoming an on demand business, which in simple terms means having the ability to: Respond dynamically to customer, market and regulatory demands. Adjust cost structures to align with market fluctuations. Recover rapidly from unexpected events with little or no business disruption. Focus on core competencies, such as portfolio management, sales or operations. 4

5 An IBM AMS engagement can help financial markets companies redirect their focus to core business concerns...respond to customers, partners and the marketplace with new found agility...pay for only what they need when they need it...and have confidence that the resiliency of the IT infrastructure and the enterprise at large will remain dependable. Simply stated, an IBM-empowered on demand financial markets provider is equipped to: Deliver products and services dynamically, in realtime. Adjust cost structures and business processes to reduce risk and strengthen performance. Utilize the IT infrastructure and the application portfolio in a way that lowers costs, elevates productivity, supports resiliency, heightens service and drives higher returns. In the future, firms will share nondifferentiating processes outsourcing these tasks to a qualified service provider, and reinvesting savings in areas that can differentiate the business. Real-world results IBM assisted in defining the technical and operating architecture model for a diversified, global financial services company s newly merged asset management subsidiaries. IBM provided the operating and systems blueprint, facilitated the requirements definition and consensus-building for the new entity, and refined the blueprint into a viable architecture model that was agreed upon by the organization s key managers. The new systems and operations model spanned front- and middle-office functions from trade generation through settlement. IBM also defined the merger and integration program required to integrate six distinct investment management organizations, and specified an environment with new capabilities incorporating consolidated risk management, automated trading with T+1 compliance and robust performance measurement. The program detailed individual projects duration, sequencing, major dependencies and resources. 5

6 Critical, cost-effective support for financial markets firms IBM Application Management Services: Your industry partner IBM Application Management Services approaches a company s applications as strategic business tools that can fundamentally improve how a firm operates and communicates. Our services span the spectrum of application management encompassing project management and business analysis, requirements definition, architecture, design, development, coding, testing, deployment, support and transformation. Our expertise addresses virtually every type of application from legacy mainframe systems to Web-based and custom applications, plus offthe-shelf solutions from leading vendors like PeopleSoft, SAP and Siebel Systems. From multichannel integration to customer relationship management to Straight Through Processing, we can provide assistance with a single application, a subset of non-core applications, or the entire application portfolio. Application management services have the potential to not only reduce costs and enhance capabilities, but can also provide a financial markets company with significant funds to undertake key transformation initiatives. IBM Application Management Services brings demonstrated technologies, solutions, intellectual capital and a strong heritage of expertise in virtually every sector, including the financial markets industry. Our capabilities extend to helping firms manage change, reduce operational costs and achieve a measurable ROI from their application portfolio supported by proven methodologies, tools and skills, including those from IBM Business Consulting Services. The IBM AMS team, part of IBM Global Services, comprises IT and industry professionals highly skilled in their field. Today, these resources are being called into service to help financial markets firms transform their application portfolios into highly responsive, highly focused business environments. Prior to assuming any level of application management, IBM AMS professionals work closely with a company s staff to thoroughly assess the firm s technology and business challenges. Although we adhere to a structured methodology, we also know that every business has different (and evolving) requirements, and model our services accordingly. This helps assure an optimally integrated, security-rich and dynamic application ecosystem that is designed to align technology and business strategies in the best, most cost-effective way. Global sourcing As one of the world s largest providers of application development and maintenance services, IBM has developed a global optimization model a set of processes and facilities that help ensure economical, uninterrupted support and a single point of accountability for financial 6

7 markets firms around the world. We employ these assets to help companies reduce labor costs while mitigating the risks associated with utilizing global resources. Our reach, as well as our proven migration methodology, gives us the flexibility to effectively transfer work to different countries if political or economic conditions dictate at a moment s notice, and at little or no extra cost to our clients. In addition, we are able to leverage core industry and technology competencies available in various countries. Because we furnish the diverse, often hard-to-find skills required by our clients, we can perform effective and efficient capacity management from points across the globe. The IBM AMS team oversees the various aspects of global relationships, including cultural, language and currency differences. This offers more confidence, more economy and more flexibility, since our services can be delivered quickly, reliably and economically anywhere, virtually anytime, around the world. When selecting a global resource center, we consider a firm s unique needs skills, time zone, proximity to a delivery center and language proficiency and match those against the profiles of our global resource centers. This automated process, which runs a company s requirements through an optimization-modeling tool developed by IBM Research, enables us to select a location that meets a client s unique specifications. As part of our standard practices, we require that all of our delivery organizations comply with an established set of procedures for security and business continuity. Our integrated network infrastructure, equipped with built-in redundancy and backup features, allows global communication across our delivery centers. The IBM AMS difference An integrated team that leverages the global talent and intellectual capital of IBM, including our world renowned research capabilities that help enable financial services firms to understand, influence and take advantage of technological trends and developments. Commitment and experience in servicing clients with quality and high satisfaction for more than twenty years. Flexibility that offers firms the opportunity to take advantage of a range of skills and capabilities in multiple geographies, supported by AMS delivery centers around the world. Methodologies and processes that help companies make the most of their application environment through application maintenance and enhancement, application development, an AMS management system, transition and transformation methodology, and system documentation that helps enable IBM to perform. A one-stop solution that helps enable IBM to perform comprehensive, end-to-end process management worldwide, from multiple locations. Business and industry expertise that afford intellectual capital and long-term strategic value. 7

8 Critical, cost-effective support for financial markets firms Real-world results A leading asset management firm with over US $700 billion in assets under management and 12 distinct business units, engaged IBM to perform a trade operations review and STP assessment for its business units. IBM s responsibilities covered trading, portfolio management, settlement, investment accounting, compliance, middleware, industry protocols and virtual matching utilities. IBM was also engaged to assist with the development of a strategy for consolidating a number of business units. The project focused on identifying options for front office technology and outsourcing middle office and back office operations. An ROI framework IBM has developed a sophisticated ROI toolkit that can help firms gain a reliable estimate of concrete returns they can expect from any or all of their application transformation initiatives. Prior to starting those activities, IBM utilizes the toolkit to form various application scenarios. This provides information to assist in decision making, and can be utilized during the actual transformation process to track results and regularly evaluate cost to benefit. Global testing centers The IBM global test organization affords firms access to leading-edge testing centers to enhance application development. We offer a full range of software testing solutions, accessible worldwide. These services, which can be employed separately or together, encompass Test Process Evaluation, Requirements Validation, Systems Integration Testing, Performance/Stress Testing, Test Automation; National Language Support, e-business Testing, Test Project Management, and Full Test Outsourcing. A globally consistent set of processes, methodologies and tools The IBM AMS team relies on a proven management system and an integrated, highly disciplined approach to software and systems engineering. What s more, we continually test our processes and tools to confirm compliance with evolving standards and structures, verify rapid and cost-effective delivery of services, and help speed ROI. 8

9 IBM AMS Offerings IBM Application Management Services encompasses a set of complementary offerings that can be deployed separately or together. These offerings extend from management of a firm s entire application portfolio to toe in the water services relevant across a particular set of applications. IBM Application Portfolio Management Services (APM) involves a comprehensive evaluation of a company s application portfolio taking into account business, industry and technology priorities to help a firm thoroughly and continually understand the value of its applications. With these services, IBM provides ongoing assessment, transformation and management of a company s applications to help ensure that the business is focused on the right applications, and that those systems will receive the appropriate allocation of money and resources. ROI scenarios help forecast the probable benefits of transformation initiatives, and can be used to track and measure returns on an ongoing basis. IBM Application Portfolio Management is a flexible offering encompassing an end-to-end focus on portfolio assessment and portfolio transformation. IBM Application Portfolio Management Services-assessment helps financial services firms gauge and coordinate their current application environment and business strategies and identify transformation opportunities. The goal is to prioritize overall IT needs, including the IT infrastructure, systems architecture and high-level functional requirements. IBM Application Portfolio Management Services-transformation utilizes results of the portfolio assessment to implement an objective, prioritized blueprint for aligning and overseeing a company s applications, identifying key business drivers and monitoring their effect on the application portfolio, providing governance over transformation projects, and measuring the business value of those efforts against identified objectives. Portfolio transformation helps reduce redundancies and optimize productivity, and is especially relevant for organizations that have experienced or are experiencing mergers and acquisitions. IBM Legacy Transformation Services Most companies have allocated a significant portion of their IT budgets to supporting their legacy applications. When simultaneously faced with fewer dollars, growing competition, dwindling resources and larger expectations, businesses must carefully examine how to reap the most value from these critical assets. Legacy transformation thus becomes key to supporting new business initiatives, linking IT strategies to business goals, responding to market changes and optimizing ROI. IBM Legacy Transformation Services is a modular offering that can help companies incrementally transform legacy applications to adapt to the evolving needs of the business, its customers, its employees and its partners: IBM Legacy Transformation Services for consolidation and migration focuses on streamlining the legacy portfolio to reduce operating expenses. IBM Legacy Transformation Services for application integration assists firms in incorporating their legacy applications with other enterprise software package and home grown alike to achieve near-realtime access to critical business information. 9

10 Critical, cost-effective support for financial markets firms Real-world results A large investment management services company serving the investment needs of individuals and institutions with a variety of product offerings overseen by money managers in four primary locations, including the United States, Tokyo, Singapore and London, engaged IBM to assist in assessing the operating environments of their applications. These included investment management, treasury, custody and accounting. The objective was to determine the level of effort required to achieve a Straight Through Processing environment. IBM analyzed the firm s major processes within the investment life cycle, compared those to STP Best Practices, and recommended actions to improve their readiness for an STP environment. Each recommendation outlined the required steps, effort, high-level cost and resources needed to execute the action and move closer to STP readiness. IBM Legacy Transformation Services for Web enablement takes legacy applications to the next level, bringing them online to optimize communication and information access among employees, customers and partners. IBM Legacy Transformation Services for application renovation documents, extracts and centrally manages the business rules held in legacy applications turning these resources into reusable, network-based processes that can be leveraged over time, via a standardized architecture, to provide more dynamic response to changing business and market demands. IBM Accelerated Solution Delivery Services IBM has in place Accelerated Solution Delivery Centers locations that apply a set of best-of-breed techniques to speed product development and reduce time to market. This methodology has been proven to trim development cycles by as much as 67 percent, and development costs by as much as 30 percent. IBM Package Application Services offers a way for companies to accurately predict and manage the costs, risks and resources related to the ongoing maintenance and support of package applications. IBM Package Application Services provides comprehensive and costeffective management of leading software packages like SAP and PeopleSoft along with the skills, expertise, processes, tools and methodologies needed to optimize the quality, performance and economy of these applications. These services are designed to furnish flexible and 10

11 continuous support crucial to realizing the expected return on a company s applications investment. Ongoing application support and maintenance, as well as optional implementation and user help desk assistance, are delivered by IBM professionals highly skilled and experienced in package applications. This helps enable a firm to concentrate more on the core business and less on the daily aspects of application management including technical, industry, regulatory and process requirements. IBM Custom Application Services focuses on delivering continuous innovation, improvements and ongoing maintenance for one or more of a company s e-business applications. These services are designed to increase the overall business value of custom-built applications, while helping to reduce the cost of maintaining them. With IBM Custom Application Services, firms can leverage IBM s e-business expertise to help accelerate time to market, improve application quality, reduce risk and lower ongoing costs in a significant, predictable way. IBM assumes responsibility for evolving, enhancing and maintaining selected applications according to specified service-level agreements and can, if necessary, manage the end-user help desk. IBM Custom Application Services can also encompass the development of an application from requirements definition, through implementation. IBM Application Management Advisory Services assists firms in identifying and evaluating options for increasing the value of application development and maintenance. IBM Application Management Resource Services supplies and manages a company s application development and maintenance resources, including the provision of supplemental staff to help develop, enhance and maintain the application portfolio. We offer access to a vast reserve of experienced IBM professionals to help organizations acquire additional staff and specialized skills on an as-needed basis. These resources can be drawn from a local pool of IBM talent, or from a variety of IBM locations worldwide. IBM AMS consultants are also available to help businesses optimize the value of subcontractors and predict the need for those resources over time. Find out more IBM Application Management Services is an acknowledged leader in helping financial market firms glean the most value from their critical applications. Our highly trained AMS team of business, industry and IT experts is prepared to deliver IBM AMS capabilities to financial services companies around the world supported by IBM data centers and IBM Business Partners strategically located in points across the globe. To learn more about IBM Global Services and IBM Application Management Services, contact your IBM sales representative or visit: Ibm.com/services 11

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