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Business Analysis in the New Normal IIBA at Credit Suisse October 18th, 2012 IIBA UK Chapter
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Business Analysis in the New Normal
IIBA at Credit Suisse
October 18th, 2012
IIBA UK Chapter
Welcome
Cathryn Graham
Business Engineering Job Family Lead, EMEA
October 18th, 2012 IIBA UK Chapter
Business Analysis in the New Normal
The Importance of Simplicity in Design
− Matt Searle
− Business Architect for the Strategic Risk Program spanning Trading, Chief Risk Office and Chief
Finance Office
How Business Architecture reduces complexity
− Gillian Christie
− Head of Business Architecture and Innovation, based in New York
Response to Regulatory Drivers
− Miles Barker
− Lead BA for Dodd Frank, former Director of UK Chapter of the IIBA
October 18th, 2012 IIBA UK Chapter
Defining the “New Normal”: low growth and increasing volatility
October 18th, 2012 IIBA UK Chapter
Simplicity in Design
Matt Searle – Credit Suisse
October 18th, 2012
IIBA UK Chapter
“There are two ways of constructing a software design. One
way is to make it so simple that there are obviously no
deficiencies. And the other way is to make it so complicated
that there are no obvious deficiencies.” -- C.A.R. Hoare
October 18th, 2012 IIBA UK Chapter
“Perfection in design is achieved not when there is nothing
more to add, but rather when there is nothing more to take
away.” -- Antoine de Saint-Exupéry
October 18th, 2012 IIBA UK Chapter
“The difference between a good and a poor architect is that
the poor architect succumbs to every temptation and the
good one resists it.” -- Ludwig Wittgenstein
October 18th, 2012 IIBA UK Chapter
“Any intelligent fool can make things bigger, more complex,
and more violent. It takes a touch of genius - and a lot of
courage - to move in the opposite direction.” -- Albert Einstein
October 18th, 2012 IIBA UK Chapter
“Simplicity does not precede complexity, but follows it.”
-- Alan J. Perlis
October 18th, 2012 IIBA UK Chapter
Addressing Business Complexity
Gillian Christie – Credit Suisse
October 18th, 2012
IIBA UK Chapter
The nature of the Investment Banking industry is changing, resulting in
three primary external drivers that impact strategy
October 18th, 2012 IIBA UK Chapter
1.
Market
2.
Regulatory
3.
Client
Challenge Implications for Investment Banks
The fundamental shape of the business is
changing, with an emphasis on increasing volume
at competitive (and compressed) margins
Regulators are demanding a cleaner, more straight
forward Operating Model. They want to see a
planned target state
Client requirements appear to diversifying. Some
want bespoke products and value personal
relationships and service. Others require fewer
advisory services, knowing what they want to buy
and from whom they will buy
Create a more efficient front to back cost model to protect profitability
As the shape of the industry changes, it’s critically
important that we listen and respond to customer
demands, accepting that those may be contrary and
diverse through the period of industry change
Demonstrate progression towards a clearly
defined roadmap and simplified target state across
the Front to Back Operating Model
Exte
rnal D
rive
rs
The complexity of the current infrastructure was driven by product aligned
revenue generating opportunistic investments to exploit high margins
without regard to cost to maintain
October 18th, 2012 IIBA UK Chapter
Ref
. Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref
. Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref
. Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Attributes
Rapid time-to-market for new products
and functionality
Capable of responding quickly to
dynamic business priorities
Product-aligned development (e.g.
multiple risk systems)
High complexity and TCO
Multiple “sources of the truth”
Line-of-business governance
Limited Business / IT accountability for
the platform TCO
The aspirational Target Operating Model (TOM) supports the strategies of
business and technology
October 18th, 2012 IIBA UK Chapter
Dramatically reduce complexity due to
reduced number of business rules
Lowest RtB and TCO without forcing one
solution for all
Allows for a more rapid response to regulatory
and market changes
Enables cross-product reuse
Allows for opportunistic revenue generating
investments without adversely impacting the
strategic core platform
Single golden source for client, product and
book data to reduce reconciliations
Attributes
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds Inst. Inves.
Corporate
s UHNW HNW Retail
Banking
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Flo
w
Hyb
rid
Risk
Besp
oke
Investment Portfolio choices
October 18th, 2012 IIBA UK Chapter
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will outpace our business growth
Using the Aspirational TOM as a tool to align
investment prioritization
reducing business and technology complexity will enable successful business delivery and a lower RtB
Only investing
strategically towards reducing technology complexity would be
very costly and could stifle business
growth opportunities
Globalizing from 1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
1
Investment Portfolio choices
October 18th, 2012 IIBA UK Chapter
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will outpace our business growth
Using the Aspirational TOM as a tool to align
investment prioritization
reducing business and technology complexity will enable successful business delivery and a lower RtB
Only investing
strategically towards reducing technology complexity would be
very costly and could stifle business
growth opportunities
Globalizing from 1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
2
Investment Portfolio choices
October 18th, 2012 IIBA UK Chapter
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will outpace our business growth
Using the Aspirational TOM as a tool to align
investment prioritization
reducing business and technology complexity will enable successful business delivery and a lower RtB
Only investing
strategically towards reducing technology complexity would be
very costly and could stifle business
growth opportunities
Globalizing from 1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
3
Investment Portfolio choices
October 18th, 2012 IIBA UK Chapter
Outcomes of Different Investment Priorities
If we continue to manage our cost base and investment budget without a long-
term vision, our maintenance costs will outpace our business growth
Using the Aspirational TOM as a tool to align
investment prioritization
reducing business and technology complexity will enable successful business delivery and a lower RtB
Only investing
strategically towards reducing technology complexity would be
very costly and could stifle business
growth opportunities
Globalizing from 1800 current
applications to 200 – 300 strategic
RT
B S
pe
nd
Benefit Realization
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref.
Dat
a
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Business Architecture Optim ized Model
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ataEntity Neutral
Finance
Client Facing
Trade Execution
Risk Management
Validation and Enrichment
Collateral Management and Margining
Clearing
Settlement
Re
fere
nce
Da
ta a
nd
Ma
rke
t D
ata
IB Securities
Finance
Client Facing
BAU Model
Aspirational Target Operating Model
Current State
App. Rationalization Optim ized Model
Client
Sol.
Trading
Post
Trade
Enterprise Content Portal
Banks Hedge
Funds
Inst.
Inves. Corpor
ates
UHN
W HNW Retail
Banking
Flow Hybrid Bespoke
Intelligent Order Routing
Finance Finance and Product Control
Ref.
Data Common Shared Reference Data
Risk Cross-product Risk and Collateral Management
Order Management
Investment Bank
Risk
4
The aspirational TOM enables a long term strategy for investment
prioritization, while transitional state operating models enable each
business line to pursue opportunistic innovation
October 18th, 2012 IIBA UK Chapter
Ref. D
ata
Legal Entities
LE
LE
LE
LE
LE
LE
LE
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LE
LE
LE
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LE
LE
LE
Ref. D
ata
Legal Entities
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
LE
Ref. D
ata
Legal Entities
LE
LE
LE
LE
LE
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LE
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LE
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Current Logical
Architecture Model
…
2012
?
Transitional
State
.
…
Aspirational Target
Operating Model
Client
Trading
Post Trade
Banking
Finance Ref. Data
Risk
Flow Hybrid Bespoke Risk
Transitional
State
.
…
.
…
Transitional
State As long as we build toward the aspirational TOM, we have still
invested intelligently with outcomes with interim business benefits
Our response: Enable Business Architects across the Bank to drive
transformation towards the target state
October 18th, 2012 IIBA UK Chapter
Value
Proposition Business
Architecture
And Innovation
Telling the Story
Transforming
the Bank Managing the
Innovation Cycle
Establishing a common
language
We run a jointly sponsored IT/Business design governance committee
October 18th, 2012 IIBA UK Chapter
IB Design Authority
Design Authority
Working Group
Risk (SRP) DA
CRO DA Finance
(CFO) DA Ops DA
Reference Data DA
Dodd Frank DA
Prime Financing
DA
Basel III DA
Ratify and escalate DAWG decisions on
IB FTB design
Decisions on design issues
Program level design coordination and
escalation to DAWG
DAs
open / closed/defer design
issues
Issues escalated in 2012:
DAs > DAWG
Issues escalated1:
DAWG > IB DA n
nn
nnn
Issues escalated to DAWG and
IB DA
IB DA Escalation
One of the recommendations - will be raised to
the Design Authority for action and resolution
Closed Design Issues:
Following four design issues were closed since
the last DA update: − […] − […]
− […]
Decisions
• Trade Capture Architecture
• Back Office Data Sourcing
• Structured Notes • Reference Data • Global Book Master • Collateral End to End
Issues
mandated
Transforming
the Bank
Functional DAs Program DAs
We provide standard frameworks – our Business Capability Model is used
to drive transformation
October 18th, 2012 IIBA UK Chapter
Provides a consistent framework and common
language across the bank
Provides a platform for
mapping resources to business capabilities
Understand functional redundancy in the application portfolio
Helps define the Target Operating Model (TOM) and
align IT architecture
Helps define the scope for
new initiatives and align initiatives
Helps clarifying responsibilities and
accountabilities on a functional level
Helps analyze how budgets
are aligned with underlying capabilities
Business Capability Model (BCM) Benefits of BCM Benefits of BCM
Establishing a common language via Models
& Tools
We train the firm’s Business Architects
October 18th, 2012 IIBA UK Chapter
Telling the Story
We aggregate innovation and encourage new ideas
October 18th, 2012 IIBA UK Chapter
Innovation Aggregators
Crowd Source
Champion Solutions Innovation Exchange
Connect the Dots
Managing the Innovation Cycle
Regulations and Business Architecture
October 18th, 2012
IIBA UK Chapter
Miles Barker– Credit Suisse
Talking Points
Who regulation impacts – far more than banking!
What Regulation impacts – across organisational boundaries
Understanding Regulation 1 – it’s always business process
Diversion Understanding Regulation 2 – BA skills and PESTLE
Regulation – understanding themes and change
Regulation – opportunity from pain (process and service)
A case for doing what you really know you should, anyway!
Challenging your understanding of business
Wrap-up
October 18th, 2012 IIBA UK Chapter
Who regulation impacts – far more than banking!
October 18th, 2012 IIBA UK Chapter
Who regulation impacts – far more than banking!
October 18th, 2012 IIBA UK Chapter
The Locomotive Act 1865 - Removed by Locomotives on Highways Act 1896
Regulatory impacts – across organisational boundaries
October 18th, 2012 IIBA UK Chapter
Understanding Regulation 1 – it’s always the business process
October 18th, 2012 IIBA UK Chapter
Understanding Regulation 2 – BA Skills and PESTLE
October 18th, 2012 IIBA UK Chapter
Understanding Regulation 2 – BA Skills and PESTLE
October 18th, 2012 IIBA UK Chapter
……………..
Understanding Regulation 2 – BA Skills and PESTLE
October 18th, 2012 IIBA UK Chapter
Credit where credit’s due!
October 18th, 2012 IIBA UK Chapter ©Crown Copyright . Source
http://www.oft.gov.uk/shared_oft/business_leaflets/cpregs/oft1008.pdf
Standardisation curve
October 18th, 2012 IIBA UK Chapter
Regulatory Background and Relationships (Reporting)
October 18th, 2012 IIBA UK Chapter
Regulation – An Opportunity
October 18th, 2012 IIBA UK Chapter
Leverage FID TOM to build a
strategic FI architecture
Fulfi l l regulatory
m inimums
Deploy common cross-product
securities processing engine
Key Goals: * Cross-product
collateral management
and margining
CVA
Joint cash / OTC
processing engine
(CCSS)
Key Goals: * LASAR
Same-day /
intraday
collateral
Our initial focus is bounded by regulatory timelines, but the architecture should be built with a view towards immediate operational changes
to the Fixed Income business and the long term aspirational enterprise architecture for common cross-product securities processing
REWARDS OF TAKING A
STRATEGIC, LONG-TERM
APPROACH:
1. Credit Suisse can save significant
money through synergies
2. We can make significant advances
toward a target architecture
RISKS OF TAKING A TACTICAL,
SHORT-TERM APPROACH:
1. Duplication of efforts
2. Failure to advance toward a target
architecture Key Goals:
Connectivity to SEFs
Central clearing for OTC derivatives
Event-driven transaction and position
reporting
Event-driven risk management
eCommerce
System Architecture
October 18th, 2012 IIBA UK Chapter
Talking Points
Challenging your understanding of business
Abstraction
Commonality
New regulation means there may not be an SME
October 18th, 2012 IIBA UK Chapter
Q&A
October 18th, 2012 IIBA UK Chapter
IIBA Update
Mailing list, please sign up if you have not done so already
− Details are on the IIBA UK Chapter website
Events coming up:
− 25th October: Bristol
− 6th November: Manchester
IIBA LinkedIn Group
− Feel free to join the group!
October 18th, 2012 IIBA UK Chapter
