Creating Value in IT
Background
Our client - 11,000 employees, T/O £1bn - is an International Insurance broker. Their operations cover commercial brokering in Europe, Asia and USA . Insurance services cover a broad range of corporate assets, including buildings, airlines and shipping plus corporate liability for employees, products and customer services. The business is organised around service lines to its customers with core support activities being centralised in the UK and USA .
The industry has been the subject of consolidation, with competitive pressures on margin and a search for competitive advantage.
Our client was concerned with the size of the central support costs and more specifically about the escalating cost of IT and the inability to control legacy system costs.
Consulting Assignment
Our client asked us to help them to reduce the cost of IT, gain control of the IT division and to help them improve their service.
Key Project Activities
Managerial Control/Operational Control
Implemented performance management principles. Linked departmental and individual objectives to group objectives. Established regular plan-do-review cycle at various operating levels. Introduced performance monitoring and measurement. Created all important linkages between operational decisions/control and financial outcomes/control
Financial Control
Cost Analysis - Detailed activity based cost analysis completed, linking cost to service delivered.
Financial Awareness - Established financial accountability at operating management level
Zero Based Budget - Established the principles of ZBB and facilitated the preparation of the budget on the new basis
Billing System - Introduced new intra company charging system for IT services clearly delineating cost of service
Benchmarking - Introduced Cost of service benchmarking with external alternative IT providers
Value for Money
Eliminated non value add activities.
Reengineered operational processes to improve efficiency and reduce cost
Compared internal and external costs of service. Prepared detailed plans for insourcing 20% of the key service activities (associated savings = 25% of budgeted cost)
Organisational Control
Re-organsied the division around the newly established operational processes
Client Benefits
The key benefits were:-
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