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.
Critical, cost-effective support for financial markets firms
Aligning challenges with opportunities
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.
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.
�������������������������������������������������������������������������
��������������������������
����
���������������������
� ���������������������
� ������������������
� ���������������������
� ��������������������
� �����������������
� ���������������������
��������������
������
�������
�������
�����
�������
�����
���������������������
����
����
�������
����
����������������
� ��������������
������
����� � ������������������
����������� ����������������
������ � �������������
� ����������������
�������
������������
���
����
������
��������
��������
����
����
�������������������
� �����������������
� �������������������
� �����������
����
�
����
�
����
����
�
����
��
����������
����������
�
���
��
�����
������������������������
������������������������������������������������������������������������������������
2
�
���
�
���
���������������������
� ��������������������
� ��������������������
� �������������������
� ������������
The customer: The unbundling of advice and execu-
A host of benefits for service providers
tion is changing customer expectations — compelling
Working with the IBM AMS team, financial markets
companies to decide which customers they want to
firms can:
serve, and how best to serve them. By building a strong
customer database, firms can refine customer data,
• Improve responsiveness and productivity by linking
target the right customers and align them with the
seamlessly with suppliers and partners in realtime.
appropriate mix of products and services. That information can be repurposed across lines of business to
• Integrate the enterprise by connecting applications
develop innovative service models.
and operating platforms across networks.
The firm: Faced with a general market slump, many
• Achieve differentiation by developing customized
financial markets companies are looking to expand
applications for consumer and enterprise markets
while reducing cost and risk. At the same time, regulatory
at less cost, and with a faster time to market.
changes are forcing firms to settle trades in one day to
reduce exposure. Transforming legacy applications can
• Retain customers and increase customer satisfaction by
enable companies to adapt more quickly to the changing
utilizing customer data to align expectations with
business environment and promote faster development
products and services, better understand customer
and delivery of new products. By aligning products and
profitability and value, and automate services.
services with customer and geographic preferences,
companies can refine their business structure and posi-
• Cut costs by outsourcing non-core, labor-intensive
tion the firm for long-term growth.
processes to a trusted partner with worldwide reach;
reinvest savings in new initiatives.
IBM Application Management Services (AMS) can afford
all of these opportunities — rapidly, with less risk and with
• Save enough money from aging legacy applications to
more economy.
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
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
The decision to outsource part or all of application
application portfolio as a primary way to reduce costs,
management to a provider like IBM can result in signifi-
manage change, strengthen relationships and accommo-
cant savings, which can help trim a company’s overall
date growth. This strategy requires paying close attention
expenses, reduce the cost of linking with alliance part-
to both the tactical and strategic aspects of developing,
ners, and support future business and IT initiatives. By
running and supporting complex applications — legacy,
lowering administrative and support costs, application
package, custom and Web-based systems that can have
management services offer a feeling of confidence that
any number of origins and functions. Coding, testing,
a firm’s existing applications will be utilized to their full
integration and maintenance are ongoing, and skills must
potential — without the need to hire and pay for full-time,
remain current and available across enterprise and geo-
highly trained specialists and support resources. Services
graphical boundaries.
can be performed rapidly (locally or globally) with the
belief that the application portfolio will remain current —
On a higher level, firms must consider what their
equipped to speed transactions, integrate channels,
application mix can contribute in terms of heightening
streamline operations, support business continuity and
efficiencies, automating and integrating processes (i.e.,
enhance security features. This is key to becoming an on
Straight Through Processing), reducing risk, supporting
demand business, which in simple terms means having
competitiveness and bettering the overall cost structure.
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
An IBM AMS engagement can help financial markets
Real-world results
companies redirect their focus to core business
IBM assisted in defining the technical and operating
concerns . . . respond to customers, partners and the
architecture model for a diversified, global financial
marketplace with new found agility. . . pay for only what
services company’s newly merged asset management
they need when they need it. . . and have confidence
subsidiaries. IBM provided the operating and systems
that the resiliency of the IT infrastructure and the enter-
blueprint, facilitated the requirements definition and
prise at large will remain dependable. Simply stated,
consensus-building for the new entity, and refined the
an IBM-empowered on demand financial markets pro-
blueprint into a viable architecture model that was
vider is equipped to:
agreed upon by the organization’s key managers. The
• Deliver products and services dynamically, in realtime.
new systems and operations model spanned front- and
• Adjust cost structures and business processes to
middle-office functions — from trade generation through
reduce risk and strengthen performance.
settlement. IBM also defined the merger and integra-
• Utilize the IT infrastructure and the application
tion program required to integrate six distinct investment
portfolio in a way that lowers costs, elevates
management organizations, and specified an environ-
productivity, supports resiliency, heightens service
ment with new capabilities incorporating consolidated
and drives higher returns.
risk management, automated trading with T+1 compliance and robust performance measurement. The
program detailed individual projects’ duration, sequencing, major dependencies and resources.
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.
5
Critical, cost-effective support for financial markets firms
IBM Application Management Services: Your industry partner
IBM Application Management Services approaches a
IBM Application Management Services brings demon-
company’s applications as strategic business tools that
strated technologies, solutions, intellectual capital and
can fundamentally improve how a firm operates and com-
a strong heritage of expertise in virtually every sector,
municates. Our services span the spectrum of application
including the financial markets industry. Our capabilities
management — encompassing project management and
extend to helping firms manage change, reduce opera-
business analysis, requirements definition, architecture,
tional costs and achieve a measurable ROI from their
design, development, coding, testing, deployment, sup-
application portfolio — supported by proven methodolo-
port and transformation. Our expertise addresses virtually
gies, tools and skills, including those from IBM Business
every type of application — from legacy mainframe
Consulting Services. The IBM AMS team, part of IBM
systems to Web-based and custom applications, plus off-
Global Services, comprises IT and industry profession-
the-shelf solutions from leading vendors like PeopleSoft,
als highly skilled in their field. Today, these resources are
SAP and Siebel Systems. From multichannel integration
being called into service to help financial markets firms
to customer relationship management to Straight Through
transform their application portfolios into highly respon-
Processing, we can provide assistance with a single
sive, highly focused business environments.
application, a subset of non-core applications, or the
entire application portfolio.
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
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.
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
markets firms around the world. We employ these assets
The IBM AMS difference
to help companies reduce labor costs while mitigating the
An integrated team that leverages the global talent and
risks associated with utilizing global resources. Our reach,
intellectual capital of IBM, including our world renowned
as well as our proven migration methodology, gives us the
research capabilities that help enable financial services
flexibility to effectively transfer work to different countries
firms to understand, influence and take advantage of
if political or economic conditions dictate — at a moment’s
technological trends and developments.
notice, and at little or no extra cost to our clients. In addition, we are able to leverage core industry and technology
Commitment and experience in servicing clients with
competencies available in various countries. Because we
quality and high satisfaction for more than twenty years.
furnish the diverse, often hard-to-find skills required by
our clients, we can perform effective and efficient capac-
Flexibility that offers firms the opportunity to take
ity management from points across the globe.
advantage of a range of skills and capabilities in
multiple geographies, supported by AMS delivery
centers around the world.
The IBM AMS team oversees the various aspects of
global relationships, including cultural, language and
currency differences. This offers more confidence, more
Methodologies and processes that help companies
economy and more flexibility, since our services can be
make the most of their application environment
delivered quickly, reliably and economically anywhere,
through application maintenance and enhancement,
virtually anytime, around the world. When selecting a
application development, an AMS management
global resource center, we consider a firm’s unique
system, transition and transformation methodology,
needs — skills, time zone, proximity to a delivery center
and system documentation that helps enable IBM
and language proficiency — and match those against
to perform.
the profiles of our global resource centers. This automated process, which runs a company’s requirements
A one-stop solution that helps enable IBM to perform
through an optimization-modeling tool developed by
comprehensive, end-to-end process management
IBM Research, enables us to select a location that meets
worldwide, from multiple locations.
a client’s unique specifications. As part of our standard
practices, we require that all of our delivery organiza-
Business and industry expertise that afford intellectual
tions comply with an established set of procedures for
capital and long-term strategic value.
security and business continuity. Our integrated network
infrastructure, equipped with built-in redundancy and
backup features, allows global communication across
our delivery centers.
7
Critical, cost-effective support for financial markets firms
Real-world results
An ROI framework
A leading asset management firm with over US $700
IBM has developed a sophisticated ROI toolkit that
billion in assets under management and 12 distinct
can help firms gain a reliable estimate of concrete
business units, engaged IBM to perform a trade opera-
returns they can expect from any or all of their applica-
tions review and STP assessment for its business
tion transformation initiatives. Prior to starting those
units. IBM’s responsibilities covered trading, portfo-
activities, IBM utilizes the toolkit to form various appli-
lio management, settlement, investment accounting,
cation scenarios. This provides information to assist in
compliance, middleware, industry protocols and virtual
decision making, and can be utilized during the actual
matching utilities. IBM was also engaged to assist
transformation process to track results and regularly
with the development of a strategy for consolidating
evaluate cost to benefit.
a number of business units. The project focused on
identifying options for front office technology and out-
Global testing centers
sourcing middle office and back office operations.
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
IBM AMS Offerings
IBM Application Management Services encompasses
• IBM Application Portfolio Management Services-transformation
a set of complementary offerings that can be deployed
utilizes results of the portfolio assessment to implement
separately or together. These offerings extend from
an objective, prioritized blueprint for aligning and
management of a firm’s entire application portfolio to
overseeing a company’s applications, identifying key
“toe in the water” services relevant across a particular
business drivers and monitoring their effect on the
set of applications.
application portfolio, providing governance over
transformation projects, and measuring the business
IBM Application Portfolio Management Services (APM) —
value of those efforts against identified objectives.
involves a comprehensive evaluation of a company’s
Portfolio transformation helps reduce redundancies
application portfolio — taking into account business,
and optimize productivity, and is especially relevant
industry and technology priorities to help a firm thoroughly
for organizations that have experienced — or are
and continually understand the value of its applications.
experiencing — mergers and acquisitions.
With these services, IBM provides ongoing assessment,
transformation and management of a company’s applica-
IBM Legacy Transformation Services — Most companies have
tions to help ensure that the business is focused on the
allocated a significant portion of their IT budgets to sup-
right applications, and that those systems will receive
porting their legacy applications. When simultaneously
the appropriate allocation of money and resources. ROI
faced with fewer dollars, growing competition, dwindling
scenarios help forecast the probable benefits of transfor-
resources and larger expectations, businesses must
mation initiatives, and can be used to track and measure
carefully examine how to reap the most value from these
returns on an ongoing basis. IBM Application Portfolio
critical assets. Legacy transformation thus becomes key
Management is a flexible offering encompassing an
to supporting new business initiatives, linking IT strategies
end-to-end focus on portfolio assessment and portfolio
to business goals, responding to market changes and
transformation.
optimizing ROI. IBM Legacy Transformation Services is a
modular offering that can help companies incrementally
transform legacy applications to adapt to the evolving
• IBM Application Portfolio Management Services-assessment
helps financial services firms gauge and coordinate
needs of the business, its customers, its employees and
their current application environment and business
its partners:
strategies and identify transformation opportunities.
The goal is to prioritize overall IT needs, including the
• IBM Legacy Transformation Services for consolidation and migration
IT infrastructure, systems architecture and high-level
focuses on streamlining the legacy portfolio to reduce
functional requirements.
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
Critical, cost-effective support for financial markets firms
• IBM Legacy Transformation Services for Web enablement takes
Real-world results
A large investment management services company
legacy applications to the next level, bringing them
serving the investment needs of individuals and institu-
online to optimize communication and information
tions with a variety of product offerings overseen by
access among employees, customers and partners.
money managers in four primary locations, including the
• IBM Legacy Transformation Services for application renovation
United States, Tokyo, Singapore and London, engaged
documents, extracts and centrally manages the busi-
IBM to assist in assessing the operating environments
ness rules held in legacy applications — turning these
of their applications. These included investment man-
resources into reusable, network-based processes that
agement, treasury, custody and accounting. The objec-
can be leveraged over time, via a standardized archi-
tive was to determine the level of effort required to
tecture, to provide more dynamic response to changing
achieve a Straight Through Processing environment.
business and market demands.
IBM analyzed the firm’s major processes within the
investment life cycle, compared those to STP Best
IBM Accelerated Solution Delivery Services — IBM has in
Practices, and recommended actions to improve their
place Accelerated Solution Delivery Centers — locations
readiness for an STP environment. Each recommenda-
that apply a set of best-of-breed techniques to speed
tion outlined the required steps, effort, high-level cost
product development and reduce time to market. This
and resources needed to execute the action and move
methodology has been proven to trim development
closer to STP readiness.
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
continuous support — crucial to realizing the expected
IBM Application Management Advisory Services — assists
return on a company’s applications investment. Ongoing
firms in identifying and evaluating options for increasing
application support and maintenance, as well as optional
the value of application development and maintenance.
implementation and user help desk assistance, are
delivered by IBM professionals highly skilled and experi-
IBM Application Management Resource Services — supplies
enced in package applications. This helps enable a firm
and manages a company’s application development
to concentrate more on the core business and less on
and maintenance resources, including the provision
the daily aspects of application management — including
of supplemental staff to help develop, enhance and
technical, industry, regulatory and process requirements.
maintain the application portfolio. We offer access to a
vast reserve of experienced IBM professionals to help
IBM Custom Application Services — focuses on delivering
organizations acquire additional staff and specialized
continuous innovation, improvements and ongoing
skills on an as-needed basis. These resources can be
maintenance for one or more of a company’s e-business
drawn from a local pool of IBM talent, or from a variety
applications. These services are designed to increase
of IBM locations worldwide. IBM AMS consultants are
the overall business value of custom-built applications,
also available to help businesses optimize the value of
while helping to reduce the cost of maintaining them.
subcontractors and predict the need for those resources
With IBM Custom Application Services, firms can lever-
over time.
age IBM’s e-business expertise to help accelerate
time to market, improve application quality, reduce risk
Find out more
and lower ongoing costs in a significant, predictable
IBM Application Management Services is an acknowl-
way. IBM assumes responsibility for evolving, enhancing
edged leader in helping financial market firms glean the
and maintaining selected applications according to
most value from their critical applications. Our highly
specified service-level agreements and can, if neces-
trained AMS team of business, industry and IT experts
sary, manage the end-user help desk. IBM Custom
is prepared to deliver IBM AMS capabilities to financial
Application Services can also encompass the develop-
services companies around the world — supported by
ment of an application — from requirements definition,
IBM data centers and IBM Business Partners strategically
through implementation.
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
© Copyright IBM Corporation 2004
IBM Global Services
Route 100
Somers, NY 10589
U.S.A.
Produced in the United States of America
01-04
All Rights Reserved
IBM, the IBM logo and the e-business logo
are trademarks or registered trademarks of
International Business Machines Corporation
in the United States, other countries, or both.
Other company, product and service names
may be trademarks or service marks of others.
References in the publication to IBM products
or services do not imply that IBM intends to
make them available in all countries in which
IBM operates.
G510-3694-00