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One Bank Saves $23.5m by Better Managing Remote IT Facilities

News from Global Services Conference on best practices in offshoring.

A top 10 bank saved $23.5 million by rationalizing its sixty-plus technology facilities worldwide to five and insisting on higher employee performance, attendees at the Global Services Conference heard this week in New York. The change, in which the number of staff was more than halved, to 723 from 2,000, was made in 20 months.

Rhonda Vetere, now a managing director with Barclays Capital, said she was legally prohibited from naming her former employer, where she oversaw the changes above.

"We made everyone re-interview for their positions," said Vetere, now MD of IT Operations for the investment banking division of Barclays Bank (London; $2.027 trillion in assets). Only 20 percent were retained of those who had been working for the bank through IBM, "because they were inflexible, "Vetere said in her presentation at the offshoring event. About half of the bank's technology/support staff was provided through IBM, she later told BS&T. In some cases, the bank recruited its own replacements, she said.

The centers Vetere consolidated were a combination of the bank's own footprint, plus outsourced centers—both bank owned (so-called 'captives') and third-party sites.

The $23.5 million saved came from many things, Vetere said, including reduced real estate and headcount, fewer software licenses and fewer computers as a result of virtualization.

The biggest cultural challenge was in Western Europe, where employees were least inclined to share information, Vetere, an American told the audience. "Intellectual property was big, the people that didn't want to give it up, they didn't last," she said in the session entitled, 'Infrastructure Management: New Paradigms in Managing IT Assets to Create Value.'

The handful of bank centers she chose to keep — Columbus; Somerset, NJ; Chicago (since closed); Hong Kong; Bournemouth, England — were selected with the talent pool, not just cheap labor or real estate in mind, Vetere said. "India, I'm not keen on," she remarked, adding, "You need to hire high performers, not just look at salaries."

Gartner [Group] did a research note on the project as a "best practice," Vetere remarked.

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