Wednesday, January 9, 2008

Knowledge Management System for Legal and Complaince Function of Investment Bank

IBM Consulting

for A major global investment banking and securities firm

A major international financial services institution works with IBM Global Business Services to leverage the information gleaned from IBM's social network analysis solution to devise a knowledge management "road map" for its Legal and Compliance group.

Business impact
IBM worked with a prominent global investment firm to devise and implement a Knowledge Management strategy aimed at assisting the bank's Legal & Compliance (L&C) department to streamline and improve its information gathering and sharing processes. As a result, it's anticipated that L&C staff will be able find pertinent, up-to-date information more quickly, which in turn helps reduce the turnaround time for providing advice to their internal clients, as well as helping reduce regulatory and compliance risk, and the operational costs associated with using outside counsel.

The investment bank's L&C department operates across multiple divisions and geographies on a global basis and comprises more than 1,700 staff members. This diverse landscape presents a challenge to keep up with the ever-changing regulatory and compliance environment, and the lack of a corporate knowledge-sharing process meant that there was no central repository of current information that could be tapped into to answer clients' queries. As a result, the bank failed to capitalize on its existing in-house legal resources, and instead incurred the cost of hiring outside counsel.

Executive summary
The investment bank engaged IBM Global Business Services (GBS) to devise a Knowledge Management strategy that would leverage the extensive in-house expertise of its L&C department by helping improve company-wide information management and better serving internal clients while reducing the time spent researching queries. GBS used social network analysis (SNA) tools developed by IBM Research to identify and analyze existing informal knowledge-sharing and professional collaborative networks. It was then able to map the informal communications patterns among L&C employees to devise a Knowledge Management strategy for the bank.

What IBM did
The GBS team worked with institutional staff across divisions and geographies, and across multiple roles within the L&C group, to elicit information that would help them better understand the investment bank's specific business processes and the associated regulatory challenges. A series of interviews and workshops were conducted that not only helped capture a snapshot of current practices, but also helped articulate executives' collective vision as to what the firm's Knowledge Management system should look like. The SNA solution helped identify the underlying connections and communications channels among widely dispersed L&C staff members, and the results served as a framework for recommendations on organizational and social behavior requirements, as well as requirements for change management within the organization. Content management technologies, in-house expertise, online communities and collaboration tools were identified and incorporated into IBM's recommendations. In addition, the SNA process illuminated the opportunity to break down some of the multi-dimensional organizational barriers between divisions and across geographies.

As a result of this process, GBS consultants were able to devise a three-year "road map" for the client that outlined the projects and dependencies that would benefit from an integrated Knowledge Management system. The road map provided guidance for sharing ideas and knowledge that can help the bank's L&C group meet customer needs, and also support future growth without having to increase staff commensurately. IBM's holistic approach addressed both the social/human components of a Knowledge Management system and leading-edge technologies necessary to implement it.

Capabilities applied
IBM's pioneering work in SNA offers clients a set of tools for "expertise mapping" among people or departments, giving managers a framework for improving organizational interactions to facilitate knowledge-sharing and maintenance. These tools could also be adapted to assist in human capital management initiatives, such as skill gap analysis and workforce integration during mergers and acquisitions.


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