Case: Strategic Optimization
The US business of a global financial services firm was exploring options to optimize its back office and associated vendor relationships with an eye towards reducing its cost profile and improving efficiencies. The client was a full service, global firm providing investment banking, wealth management, and prime brokerage services but suffered from a high cost basis that was derived from a disparate operating platform. The client did not fully understand how they were 'really' leveraging external vendors vs. their internal systems. There was a lack of formal vendor management processes, the vendor’s contracts were outdated, and the client had no reference point for where their costs compared to the market.
A high-level strategic assessment was conducted by IM2 to identify opportunities to optimize the client's operating model and to benchmark costs. The project team leveraged subject matter experts, market knowledge, a strategic peer comparison, and conducted over 50 interviews and work sessions.
Activities Performed:
Developed a detailed view of the client's operating and technology platform, architecture, workflow, processes, and vendor relationships
Delineated operational functions performed internally vs. those performed externally by vendors or service providers
Conducted vendor assessment including contract, SLA, and market pricing benchmarking
Evaluated vendor services and functions leveraged by the client vs. internal capabilities and invoiced amounts
Provided strategic direction to support business decisions, identifying pain-points, and recommendations on best practices
Offered solution on how to optimize transaction submission processes to reduce billable vendor transaction counts
Results:
Delivered an operational and functional schematic illustrating and describing how the client was leveraging its vendors, internal systems, and how those processes connected to operational activities required to support the business
Identified processes requiring manual intervention and high staff counts and provided recommendations to optimize workflow and cost footprint
Provided framework to reset the client's vendor relationships and establish a unified management strategy. Tools were created to reconcile actual transaction counts vs. invoiced counts
Vendor management best practices were identified to highlight governance, contract, pricing, performance, and measurement improvements
A market benchmark was performed to identify opportunities for savings and contract renegotiations
An opportunity menu was provided of optimization and save opportunities