BCG - The Boston Consulting Group

Situation

A Chinese joint-stock bank with around 350 branches nationwide was in discussions with strategic investors and wanted to transform its operations. However, IT became the constraint for transformation. Sound IT management discipline was urgently needed to put in place to address key challenges IT was facing, e.g, IT development plan was determined by discussions between BUs without an objective approach, there were few measurements in place to measure and track return on IT investment, lack of effective decision-making process in place for IT governance, etc. To institutionalize modern and sound IT management practice and to support business transformation the bank was going through, the client asked BCG to assist in a transformation project to design the overall IT strategy with future IT architecture, IT governance model and core management capabilities, and IT investment management approach. Also, a number of specific topics were addressed: organization model for e-banking, enterprise data standardization, information security, business continuity planning, and outsourcing.

Approach

BCG took a four-step approach. First, we identified gaps in the IT environment in terms of governance, organization, processes, architecture, applications, and technical infrastructure. Second, we designed a five-year IT blueprint that included: application architecture with a migration road map, target IT governance, an organizational model, IT portfolio prioritization, and an IT investment plan. Third, in accordance with the client’s needs, we developed models for business continuity planning, information security, and enterprise data standardization. Fourth, we identified and quantified opportunities for outsourcing.

Impact and value created

The five-year IT blueprint and investment plan was fully endorsed by the bank’s Board of Directors. Meanwhile, the client had begun implementation of BCG’s recommendations before our engagement was even completed; as a result, this client became the first Chinese bank to use value-based IT planning and portfolio management. Ultimately, the project helped the bank improve the net present value of its IT project portfolio by 82 percent.

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