Financial Shared Services – How Much Do You Know About Your People?

Using Data to Maximize Performance and Productivity
Driving Performance and Productivity Using Greater Workforce Insight

Can you really make informed IT decisions to drive your business without a better understanding of your people, their costs and their productivity?


The banking sector, similar to all sectors, continues to face greatly reduced budgets and an ongoing requirement to do more with less. According to a recent Accenture survey, banks have carried out more waves of cost cutting than any other industry surveyed, yet cost / income ratios are still too high and there’s a long way to go before reaching optimum operational efficiency. Over the years, most banks have turned to a shared service model to work towards operational cost reductions, and improvements in process efficiencies and customer service. We all know the expected benefits of a shared services model.  But how confident are we that we’re getting the very best out of the people in shared service team? How rigorous is our analysis of our staff, their skills, their utilisation and performance?

People – a cost worth managing

According to the Journal of Bank Cost & Management Accounting, the largest operating expense for banks is personnel, which generally accounts for 55% to 75% of all non-interest operating expenses. And a Business Week survey suggests that workforce inefficiencies waste up to 40% of operating cost. So, consider a bank’s global IT team. With a £4bn annual IT budget, the staff costs are a minimum of £2bn. Which means that workforce-related inefficiencies could cost a staggering £800 Million? It’s a cost worth closer scrutiny, for banks of all sizes

Real-time visibility into your workforce

It’s not all about cost savings however. It’s about visibility and insight and building a complete picture of your workforce in order to guide decision making and strategic planning and budgeting. For example, could you answer simple questions such as:

  • Do you have any idea how productive your IT team is?
  • Are you confident that you always have the most suitable resource, and the right level of resource, on every project?
  • Do you measure and monitor your sub-contractors in the same way that you manage your own employees?
  • Can you compare productivity levels across teams?
  • Are you able to calculate exactly, all people-related costs on every project?

Without the answers, it’s impossible to understand what resource you have, resource availability and suitability, where staff are over-committed, where staff are under-committed and how to build the most effective, cost efficient IT team for each project. Tools such as workforce management solutions are available to pull this information together from multiple source system, including HR and payroll. And with systems working in real-time, you have the information at your fingertips to guide decision making at all times.

Running the bank and changing the bank – both require better people processes

To support the business, IT must constantly strive to evolve and innovate, keeping one eye on running the bank and another on changing the bank. And with the majority of resources dedicated to ‘keeping the lights on’, it’s difficult to see where you can find resource to manage the innovation required by the business and to manage it with any degree of speed or agility. Greater insight into your employees can guide decisions around resource management.

Short term staff-cost savings will affect long term growth

Every year senior executives are goaled on reducing cost. This is typically approached by a combination of squeezing vendors for better pricing, cutting staff costs, applying a spending freeze and renegotiating existing contracts. Its is arguable that this type of approach delivers any sustainable benefit, even in the short term, The approach to cost cutting needs to evolve if banks are to be in a strong position to manage growth and performance in the future. Staffing cost reductions can also hinder short-term performance goals, as a result of job security uncertainly and lower staff morale. The making of these decisions is far too often arbitrary in nature, rather than based on the relative value of each person to the organisation. Visibility of such measures as productivity, % utilisation of skill set across projects, attendance history etc. will help avoid making the wrong decisions and the expense of having to rectify the situation in the future

Beware over reliance on Project and Portfolio (PPM) tools

There are a lot of PPM tools out there to help map time against projects, but the bottom line is that that they never seem to work exactly as you want them to work, with common problems around integration with other key systems and challenges with customisation. PPM tools also tend to work at a high level and certainly don’t offer the granular real-time information vital to optimise and manage a diverse and global workforce. Operations and IT senior executives across all industry sectors are starting to realise that Workforce management tools offer a much more detailed and comprehensive view of the performance and potential of their people by providing detailed analysis of:

  • The Organisation – what is the degree of duplication and overlap of capabilities across the workforce?
  • Performance – which employee attributes correlate with high performance?
  • Cost – how are costs distributed across the workforce? Where are the cost spikes and do they represent value?
  • Financial – which segments of the workforce generate the most/least profit and revenue?
  • Operations – where are the operational risks and bottlenecks?

What are you waiting for?

Gaining greater visibility to staff costs, activities and productivity is nothing new. Organisations in pretty much every industry sector are benefiting from real time employee information, all day, every day, to inform better business decisions. The banking sector stands alone in not pursuing the use of the latest workforce management technologies to inform decision-making. But it’s only a matter of time before the COO, CFO or CIO opens their eyes to the significant business improvements that will be achieved as a result. IT in particular must determine how to remove inefficiencies to transform infrastructure and resources to be able to deliver business-critical, innovative projects with speed and agility.


The quality and speed of decision making can determine an organisation’s ability to compete, deliver its strategy and manage cost and transformation challenges. By combining workforce data with financial, customer and operational data, you gain a powerful insight into the cost and efficiency of your people. The potential to positively impact business performance is greatly increased – and you will sustain the right investments to manage the demands on your business.  Can you really afford not to take a closer look at the benefits to be gained from real-time workforce management?

Alex Kwiatkowski, Research Manager of IDC Financial Insights


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