Enhanced Application Presentation
As BMO Capital Markets opens new offices in Asia, Manta expects the company to reduce administrative and maintenance costs by centralizing applications on servers in Canada rather than maintaining installations on multiple servers and desktops in China and Hong Kong. BMO Capital Markets began this centralization process by publishing applications over the Web using Windows Server 2003 Enterprise x64 Edition and Citrix Presentation Server™ from Microsoft Terminal Services Partner Citrix Systems. Going forward, the company is excited about the enhanced Terminal Services features of Windows Server 2008, including Terminal Services RemoteApp.
BMO Capital Markets is investigating how the company can use the new Terminal Services features to increase the ease and speed of expanding into international markets by eliminating the need to deploy new infrastructure.
"Just by eliminating the need for infrastructure," Manta says, "we can save about $150,000 in capital costs for every office that we open in Asia, and we've opened four so far. That's more than half a million dollars already. When you include the costs of facilities and ongoing support, the savings will keep adding up."
Increased Performance and Cost Savings
BMO Capital Markets is using 64-bit architecture to achieve additional savings by reducing hardware requirements. "We can add memory and linearly scale out as much as we need to, up to 350 users per server, which is more than double the previous capacity," says Manta. "That's an immediate cost benefit because the average cost of a physical server platform is about $10,000. Windows Server 2008 should reduce the number of servers we need, as well as the associated support costs, by at least 30 percent—a savings of hundreds of thousands of dollars right off the bat."
BMO Capital Markets also anticipates that the stability of Windows Server 2008 will reduce systems failures and disaster recovery time, which will reduce downtime. "From what we have tested in production labs, Windows Server 2008 is stable," says Manta. "We expected to see this in the latest version of Microsoft's flagship operating system, and our tests of the prerelease versions have confirmed it."
Windows Server 2008
Windows Server 2008, with built-in web and virtualization technologies, enables you to increase the reliability and flexibility of your server infrastructure. New virtualization tools, web resources, and security enhancements help you save time, reduce costs, and provide a platform for a dynamic and optimized datacenter. Powerful new tools like IIS 7.0, Server Manager, and Windows PowerShell™, allow you to have more control over your servers and streamline web, configuration, and management tasks. Advanced security and reliability enhancements like Network Access Protection and the Read-Only Domain Controller option for Active Directory® Domain Services harden the operating system and protect your server environment to ensure you have a solid foundation on which to build your business.
http://www.microsoft.com/canada/casestudies/bmocapitalmarkets.mspx
Showing posts with label Cost management. Show all posts
Showing posts with label Cost management. Show all posts
Wednesday, August 27, 2008
Articles on Cost Reduction and Cutting by Consultants
Boston Consulting Group
June, 2008
A Principled Look at Cost Cutting
Many financial institutions have made progress in trimming overhead costs. But achieving truly meaningful reductions, with no “creep-back” over time, remains a challenge for most. BCG has developed an innovative cost-cutting method that involves establishing specific principles — rules that set limits and goals regarding organization and performance — through which head count reductions can be accomplished. Up to 20 percent of total FTE costs can be cut within six months using this method, which is known as Principles-Based Cost Reduction (PBCR).
Download detailed article from
http://www.bcg.com/impact_expertise/publications/files/A_Principled_Look_at_Cost_Cutting_Jun_2008.pdf
January, 2008
Banking on Lean Advantage
Years ago, pioneers in other industries—notably the automotive industry—began seeing operations as a strategic asset to be leveraged, rather than a source of costs to be managed. They looked at operations holistically, rather than through a one-dimensional, cost-oriented lens. BCG has been using a similar approach, lean advantage, to help banks complement efficiency improvements—cost reductions as high as 30 percent—with impressive gains in customer satisfaction and loyalty, all while building internal capabilities to ensure continuous improvement.
Download detailed article from
http://www.bcg.com/impact_expertise/publications/files/Banking_Lean_Advantage_Jan_2008.pdf
Views of Accenture Consultant
“The industry does carry a lot of cost,” says Bob Gach, global managing director capital markets at Accenture in New York.
The concept of “sustainable cost reduction” takes a more holistic or systemic approach to cost reduction, according to Accenture’s spokesman. Instead of one department looking to reduce costs and another department working independently, all the departments work together as an enterprise to reduce costs. This makes the cost reduction more sustainable in the long run, says Accenture’s spokesman.
With this kind of approach, any large investment bank can take out $1 to $2 billion in costs, says Gach. “For the next tier down, the opportunity is $300 to $500 million,” says Gach.
What’s also inevitable is IT vendor consolidation, says Gach. With all the procurement deals on Wall Street, many firms are using dozens of vendors. Consolidating the number of relationships is part of the cost-reduction process, Gach suggests.
For more on the topic
http://www.advancedtrading.com/blog/archives/2008/04/time_to_end_wal.html
June, 2008
A Principled Look at Cost Cutting
Many financial institutions have made progress in trimming overhead costs. But achieving truly meaningful reductions, with no “creep-back” over time, remains a challenge for most. BCG has developed an innovative cost-cutting method that involves establishing specific principles — rules that set limits and goals regarding organization and performance — through which head count reductions can be accomplished. Up to 20 percent of total FTE costs can be cut within six months using this method, which is known as Principles-Based Cost Reduction (PBCR).
Download detailed article from
http://www.bcg.com/impact_expertise/publications/files/A_Principled_Look_at_Cost_Cutting_Jun_2008.pdf
January, 2008
Banking on Lean Advantage
Years ago, pioneers in other industries—notably the automotive industry—began seeing operations as a strategic asset to be leveraged, rather than a source of costs to be managed. They looked at operations holistically, rather than through a one-dimensional, cost-oriented lens. BCG has been using a similar approach, lean advantage, to help banks complement efficiency improvements—cost reductions as high as 30 percent—with impressive gains in customer satisfaction and loyalty, all while building internal capabilities to ensure continuous improvement.
Download detailed article from
http://www.bcg.com/impact_expertise/publications/files/Banking_Lean_Advantage_Jan_2008.pdf
Views of Accenture Consultant
“The industry does carry a lot of cost,” says Bob Gach, global managing director capital markets at Accenture in New York.
The concept of “sustainable cost reduction” takes a more holistic or systemic approach to cost reduction, according to Accenture’s spokesman. Instead of one department looking to reduce costs and another department working independently, all the departments work together as an enterprise to reduce costs. This makes the cost reduction more sustainable in the long run, says Accenture’s spokesman.
With this kind of approach, any large investment bank can take out $1 to $2 billion in costs, says Gach. “For the next tier down, the opportunity is $300 to $500 million,” says Gach.
What’s also inevitable is IT vendor consolidation, says Gach. With all the procurement deals on Wall Street, many firms are using dozens of vendors. Consolidating the number of relationships is part of the cost-reduction process, Gach suggests.
For more on the topic
http://www.advancedtrading.com/blog/archives/2008/04/time_to_end_wal.html
Zero Marginal Transaction Cost: Securities Trading
Zero Marginal Competitive Cost: Securities Trading
Z/Yen, a consultancy firm, regularly benchmarks investment bank costs, headcounts and volumes to produce costs per trade covering:
FX & Money Market - Global FX, Currency Options, Money Market;
Equity & Debt - European Equities, SBL, Bonds, Repo, Listed & OTC Derivatives;
US Securities - Equities, Stock Borrow Loan, Bonds, Repo, Options & Futures.
According to the cost versus volume curves for Global Foreign Exchange, Global Money Markets, European Processed Equities and European Processed Bonds for the period from 2000 to 2002 developed by the firm, volumes increased markedly while operations costs per transaction fell:
Some of this per trade cost reduction is due to increased volumes being handled at decreasing marginal cost, largely through automation. For instance, the largest equity traders handled around 10M trades per annum in 1999, in 2002 they were handling nearer 25M; for bonds 250,000 trades per annum was large in 1999, now (2002) larger operations process over seven times as much at 1.8M; for FX in 2000, 3M trades was large, now an investment bank would need around 5M to be in the top league. With the “per trade” figure as the denominator, volume matters in getting cost/trade down. The pressure increases for those unable to get to efficient levels of capacity or unable to scale the costs of processes in line with demand. However, larger volumes, poorly processed could well increase costs and investment banking operations are increasingly more professional, increasingly focused on reducing exception, improving controls and risk management.
Cost reduction affects all areas, i.e. operations, operations IT, middle office/product control and middle office IT. In case of FX, cost per trade was just over $11 in 2000, now under $8. The cost squeeze has been felt in all cost components,
Pundits have long forecast the need for investment banking operations & IT to improve their performance markedly. As cost per trade falls precipitously, one obvious question arises, “how far can this go”? Some operations seem to be able to handle increasing volumes with little additional headcount, hitting 55,000 trades per head. Other operations can have as few as 12,500 trades per head. Investments in IT seem to pay off in numbers of trades per operations head, concentrated in the 2001 to 2002 period. More returns on IT seem likely to arrive.
Z/Yen Limited is a risk/reward management firm helping organisations make better choices. Z/Yen undertakes strategy, finance, systems, marketing and intelligence projects in a wide variety of fields (www.zyen.com), such as developing an award-winning risk/reward prediction engine, helping a global charity win a good governance award or benchmarking transaction costs across global investment banks.
http://www.zyen.com/Knowledge/Articles/zero_marginal_competitive_cost.htm
Z/Yen, a consultancy firm, regularly benchmarks investment bank costs, headcounts and volumes to produce costs per trade covering:
FX & Money Market - Global FX, Currency Options, Money Market;
Equity & Debt - European Equities, SBL, Bonds, Repo, Listed & OTC Derivatives;
US Securities - Equities, Stock Borrow Loan, Bonds, Repo, Options & Futures.
According to the cost versus volume curves for Global Foreign Exchange, Global Money Markets, European Processed Equities and European Processed Bonds for the period from 2000 to 2002 developed by the firm, volumes increased markedly while operations costs per transaction fell:
Some of this per trade cost reduction is due to increased volumes being handled at decreasing marginal cost, largely through automation. For instance, the largest equity traders handled around 10M trades per annum in 1999, in 2002 they were handling nearer 25M; for bonds 250,000 trades per annum was large in 1999, now (2002) larger operations process over seven times as much at 1.8M; for FX in 2000, 3M trades was large, now an investment bank would need around 5M to be in the top league. With the “per trade” figure as the denominator, volume matters in getting cost/trade down. The pressure increases for those unable to get to efficient levels of capacity or unable to scale the costs of processes in line with demand. However, larger volumes, poorly processed could well increase costs and investment banking operations are increasingly more professional, increasingly focused on reducing exception, improving controls and risk management.
Cost reduction affects all areas, i.e. operations, operations IT, middle office/product control and middle office IT. In case of FX, cost per trade was just over $11 in 2000, now under $8. The cost squeeze has been felt in all cost components,
Pundits have long forecast the need for investment banking operations & IT to improve their performance markedly. As cost per trade falls precipitously, one obvious question arises, “how far can this go”? Some operations seem to be able to handle increasing volumes with little additional headcount, hitting 55,000 trades per head. Other operations can have as few as 12,500 trades per head. Investments in IT seem to pay off in numbers of trades per operations head, concentrated in the 2001 to 2002 period. More returns on IT seem likely to arrive.
Z/Yen Limited is a risk/reward management firm helping organisations make better choices. Z/Yen undertakes strategy, finance, systems, marketing and intelligence projects in a wide variety of fields (www.zyen.com), such as developing an award-winning risk/reward prediction engine, helping a global charity win a good governance award or benchmarking transaction costs across global investment banks.
http://www.zyen.com/Knowledge/Articles/zero_marginal_competitive_cost.htm
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