Reducing Enterprise Costs

As organisations continue to struggle with a series of major shocks from a global pandemic, remote working and Brexit uncertainty, the ability to reduce enterprise costs is now firmly entrenched as the number one priority to re-position and invigorate today’s organisations for success in a new economic landscape.

In the current environment, I.T. is a critical catalyst for reducing enterprise costs. With this comes new challenges and tensions. The technology platform has to be flexible and agile, supporting reduced business costs while at the same time enabling the enterprise to emerge stronger, fitter and leaner for the challenges ahead.

Market trends indicate that the number of companies now cutting costs has climbed to over 50% of organisations, where the magnitude of cuts is often in excess of 20%.

With this comes the critical constraint of how to meet the demand for improved business performance, flexibility and agility while at the same time reducing costs?

In my experience this can only be achieved by seeking out significant and sustainable cost reductions through a process of:

  • Cost Compression
  • Optimisation
  • Re-architect and Re-platform

1. Cost Compression, aka Cost Take Out

The first step of the process focuses on the quick wins for dramatic cost compression. From renegotiating vendor contracts through to optimised processes to reduce enterprise technology expenses.

This is often achieved by focusing on reducing sales and servicing costs by introducing customer segmentation based on profitability and value, through to industrialising high touch processes through the introduction of self-service digital channels.

New levels of industrialisation can be achieved through the use of new technology, from standardising enterprise applications, such as CRM, through to redesigning IT processes to make use of commodity based SAAS (Software as a Service) and cloud based technology.

In one of the biggest examples of standardisation and virtualisation to date, BBVA, the Spanish bank, migrated all of its 110,000 employees across 26 counties onto Google Apps to drive increased efficiency and innovation for its global workforce.

These opportunities need to be prioritised according to their potential returns and risks and will typically enable organisation to realise savings in the range of 10% – 20%.

2 Optimise

The second step is to Optimise – to make current process better, faster and cheaper. By making effective use of technology assets, through rationalisation, simplification and automation, organisations can be migrated to a lower cost base to dramatically improve their operating margins and overall profitability.

By reducing operating complexity, such as consolidating and rationalising infrastructure through to standardising and industrialising operating systems, organisations are better able to respond to new challenges and growth opportunities.

New tools such as a cloud first strategy enable organisation to drive greater levels of optimisation through a process of standardisation. By eliminating processes that add little value and outsourcing non-core services, organisation can reduce overall fragmentation, complexity and waste throughout the enterprise.

During the optimise stage, organisations can often achieve cost reductions in the range of 15- 30%, enabling the organisation to be successfully position itself for the third and final phase.

3. Re -Architect and Re-Platform

The third and final stage is to Re-architect and Re-platform the technology proposition. Only by addressing the legacy of aging technology can organisations truly drive strategic and structural cost reduction.

Ageing technology consumes a disproportionate amount of energy, effort and cost thereby depriving the organisation of the very ingredients it needs to flourish. Legacy technology should be reengineered for the future. End of life platforms should be retired and ageing core banking platforms should be replaced. In addition, enterprise wide processes such as CRM and document generation need to be restructured to drive new levels of integration, automation and efficiency.

Only by rewriting legacy platforms and restructuring enterprise wide technology can organisations be in a position to drive sustained strategic and structural cost reduction.


This new wave of IT enabled cost reduction will create organisations that are lean and adaptable. These organisations will be built on a platform of sustained strategic and structural costs reduction, driving new levels of competitiveness and benefits to the wider enterprise.

In today’s new world it will be the leaner, low cost organisations that will survive.

What are your thoughts ?

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This article was first published in Ian Alderton’s Technology Trends and Innovation in May 2013.

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Time to Go Digital or Go Dark

Faced with the storm of a global pandemic, remote working and Brexit, business leaders are struggling to identify the risks and opportunities as existing business models become stressed and over extended.

The need for companies to accelerate their digital strategy, to maintain commercial longevity during a mandated lockdown with restricted activity, has become critical.

Remote Working

For many organisations, their pandemic response, in March 2020, focused on an intense period of frantic activity sourcing remote working technology, to ensure their staff and critical business functions operated safely and securely from a home location.

In April 2020, demand for PCs soar, driven by remote working and e-learning requirements, coupled with severe supply chain delays due to the global lockdown.

As acknowledged by Satya Nadella (Chief Executive Officer, Microsoft) social distancing rules have led to “a world of remote everything”.  A similar trend can be seen with remote learning earlier this year, with the number of teachers and students using Google Classroom doubling to 100m users within a 2 month period.

Many organisations have quickly pivoted to conduct operational processes and workflows in new, repeatable, secure and scalable ways. Call centres, which were often considered a legacy, quickly rose in importance in maintaining the human connection with customers. Call centre agents were equipped with new operational processes, even updating the recorded welcome message, to assure customers that the sound of small children playing or a family dog barking was due to staff relocating to a home location.

Consumer Behaviour

With the majority of customer interactions taking place virtually, the demand for digital services has surpassed all previous expectations.

Digital adoption now includes the baby boomers, a generation that previously shunned the digital experience for key day-to-day services such as online banking and ordering groceries. The accelerated growth in digital adoption, which was achieved in just a few months, would have previously taken 10 years to reach the same level of acceptance.

Business Processes

Digital adoption is now penetrating the business to business (B2B) sector, which had traditionally trailed the business to consumer market for digital adoption. For B2B, with its entrenched business processes, adopting new revolutionary technology would typically takes years of heartache and heartburn, but is now happening overnight.

“With the massive shift to digital resulting from COVID-19, video and live chat have emerged as the predominant channels for interacting and closing sales with B2B customers, while in-person meetings and related sales activities have dropped (Source McKinsey).

This new level of digital adoption is going to stick. Consumers now have higher standards for their digital services, and the expectation is for this to rise further. People will no longer accept clunky manual processes. Instead, they require fast speeds, instant transactions and guaranteed uptime.


Government mandates and regulatory requirements have been quickly amended during the pandemic. One of the most notable changes has been the adoption of telemedicine, or virtual consultations, as an alternative of a face to face interaction with a healthcare specialist.

While the technology has been available for several years, the need for social distancing has accelerated this change, with many patients, who have experienced the digital service, being reluctant to go back to a traditional face to face consultation.


As part of the pandemic response, companies are being forced to move swiftly to assess the risk, key mitigants and potential opportunities, just to keep their businesses running.

Companies are having to pivot their operational processes and redesign their workflows for new ways of working, whilst at the same time, cutting costs to ensure their survival during what is potentially a sustained economic downturn.

While going digital is not a silver bullet in itself, it does offer a number of tools and levers to safely weather the storm and return stronger:

  • Enhanced Operational Efficiency: is a task which digital solution are ideally suited for, compared to traditional cost cutting, in sustaining businesses through financial turbulence and uncertainty.
  • Accelerated Automation: by far the biggest efficiency play is automation, preforming the same work faster and with fewer mistakes, enabling scarce team members to focus on high value-added activities.
  • Productivity Advantage: empowering employees to work remotely effectively and safely, leveraging collaboration tools to maximise employee productivity, engagement and mental wellness.
  • Customer Convenience: changing the customer experience to provide enhanced focus and engagement, with faster service times, instant transactions, guaranteed uptime and reliability.

For some businesses, the forces of disruption may be so great that the long-term strategic vision will need to be overhauled in addition to redefining their digital enablement.

Resources, both in terms of talent and money will likely be constrained, and digital initiatives may need to be reprioritised based on relevance to the current environment.


For many organisations, the digital future is rushing closer, creating significant and lasting impact, with the adoption of a wide range of new digital services and products.

The pandemic is pulling on all the main levers that affect the pace of digital adoption: remote working, consumer behaviour, business processes and government regulation.

The new digital processes, to support business longevity, are delivering significant and broad societal change that will become the new rails on which businesses operate. Customers will be unwilling to tear up the new digital rails once the crisis stabilises.

It’s now time to “Go Digital or Go Dark”.


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The Future of SME Banking

Check out my latest industry insights on the “Future of SME Banking” and the dynamic changes in the industry, driven by evolving SME needs and digital technology #SMEBanking.

Read the full article here …


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Blockchain: Chain Reaction

More than 500 years ago a new accounting technique was discovered, transforming how merchants, entrepreneurs and their investors keep track of every penny they receive or spend.

This technique was viewed as an intellectual breakthrough and became known as double-entry book-keeping, which led to the birth of modern day accounting processes.

Fast forward to 2018, and blockchain has made similar promises to disrupt commerce. Over the last 2 years, blockchain experimentation and proof of concepts prevail, but progress to date has not yet delivered on the pledges made.

The blockchain is a digital, decentralized public ledger tthat was initially developed as the accounting method for the bitcoin crypto currency. New information types, such as birth records to business transactions, can be baked into the highly secure and encrypted blockchain, creating permanent and secure records which cannot be tampered with.

Blockchain Phenomenon
In December 2017, an intriguing new phenomenon began to emerge. Companies that were previously undervalued by the stock market were finding that the simple addition of the word ‘blockchain’ to their corporate identities could multiply their worth many times over.

 Soft drink companies, trade finance specialists and a photography company were, according to their share price, transformed into potential technology giants.

  • Long Island Iced Tea Corp, a maker of soft drinks, saw its shares increase in value by 500 per cent when it announced it was changing its name to Long Blockchain Corp. 
  • LongFin, a trade finance specialist, announced it had bought a blockchain-related venture, sending its shares jump by more than 1,000%. 
  • Eastman Kodak, doubled its market value after announcing a pivot to blockchain to manage ownership rights for photographers coupled with a new crypto currency called ‘Kodak Coin’.

While most genuine blockchain companies dropped the ‘blockchain’ moniker, it is hard to understand why the mere mention of blockchain should be capable of sending stock prices soaring.

Blockchain Tourists
Brad Garlinghouse, CEO of cryptocurrency and payments company Ripple, described these companies as  “tourists”, shoehorning non-fintech ideas into the blockchain in the belief that they would strike gold.

The frenzy surrounding anything vaguely tied to blockchain is the kind of buzz that attracts short-term traders, who are hungry for increased trading volatility and the opportunity to make a quick profit. Ultimately this leaves major industry players feeling somewhat queasy, as rogue actors try to game the system, in a market that feels a little like the Wild West.

While similarities can be drawn with the tech bubble of the late 1990s, when organisations saw their share price soar when they added “dot-com” to the company’s name, blockchain is more than this.

Blockchain is a technology with significant potential.  Serious industry initiatives to watch in 2018 include a new blockchain venture from the Australian Stock Exchange (ASX) which is planning the first major infrastructure switch, replacing its legacy CHESS clearing platform with a new blockchain platform planned for later this year.

Just as the modern tech giants now dominate the post “dot-com” era, serious industry initiatives can be confident that the disruptive technology will become mainstream, leaving behind the gold rush euphoria, as organisations go live with real world blockchain applications later this year.


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Disruptive Change

Excited to be working with a leading global investment organisation to accelerate  #disruptive change and next generation #digital engagement models.

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Fears Mount About Meltdown and Spectre

Fears continue to mount regarding the Meltdown and Spectre vulnerabilities that were highlighted earlier this month.

Both vulnerabilities, which are separate but similar, can be traced back to a design flaw that was introduced 20 years ago. Three different sets of researchers uncovered the Spectre vulnerability in June 2017 prior to uncovering the Meltdown flaw in July 2017.

We are all asking why it has taken 20 years to discover the vulnerabilities and what is the true risk to the technology industry and its customers?

Back In Time
Since the 1990’s memory access times have improved ten-fold, while the speed of the central processor (CPU) has increased by a factor of 1000. To allow the CPU to talk to the slow memory, most modern chipsets are designed with a technique called “speculative execution”, where a processor will read ahead and take snipets of code before it is needed in order to save valuable nonosecods in performance.

While the technology risk with a cyber security vulnerability can not be overstated, it is important to understand both flaws in more detail:

Meltdown breaks the most fundamental principle for isolating user applications and ‘melts’ the virtual walls separating digital memory from diffident programs.

The vulnerability, which primarily affects Intel chips manufactured since 1995, could allow an adversary to access the memory and secrets of other programs, such as passwords, encryption keys and payment details. This applies both to personal computers as well as cloud infrastructure.

While Meltdown is easy to exploit, the good news is that the flaw can be fixed and Technology vendors are rushing to release software patches.

Spectre enables a rogue program running on an affected chip to trick a legitimate application to divulge sensitive information.

The Spectre flaw affects most modern processors, including Intel, AMD and ARM which are used in Apple, Dell, HP, Microsoft, Google, Amazon computers and smartphones.

While Spectre is harder to exploit than Meltdown, it is significantly more difficult to fix. Widely known exploits can be partially mitigated through new software patches. A lasting fix is expected to require new hardware which has not yet been designed or manufactured.

Performance Hit
The software fix for Meltdown, moves the core operating system program, or kernel, into its own dedicated virtual memory space, protecting it from potential exploits. A significant downside is that the fix introduces an additional processing overhead, potentially slowing down the system.

It is anticipated that high performance activities, such as heavy disk storage, network activity and system calls, will be impacted with a 30% degradation in performance. Light workloads, such as simple web servers, will be mildly affected.

Partial mitigations for Spectre, which involve recompiling software with specific countermeasures, are expected to have a further negative impact on processing performance.

Industry advice is to install new software patches as soon as they become available.

Commercial Risk
Providers of cloud-computing services, such as Amazon Web Services and Google, which have data centres will millions of computers, are thought to be are most at risk. Their business model is critically dependent on the appearance of strong security and moats around the cloud computing client.

Rogue actors could rent capacity as a cloud tenant and steal sensitive information, such as passwords and account numbers, from their virtual neighbours.

Economic Impact
While it is recognised that the technology industry is responding to the threat, any degradation in performance could be the equivalent to tens of thousands of computers for the cloud providers.

A drop in CPU performance will be equally worrying for cloud subscribers, who are typically billed by the hour or second. They could face skyrocketing bills if cloud usage rises substantially to apply the fixes, or support existing cloud processing payloads.

Both Spectre and Meltdown has shaken the heart of the technology industry which has historically prioritised processor speed over security. While this is the first major security vulnerability that has impacted a new generation of cloud providers, security has to be designed in as a critical perquisite for our new highly connected and networked world. Meltdown will soon be forgotten, but Spectre will challenge cloud organisations and its customers for years.

Call me to discuss how to strengthen the cyber security resilience of your organisation.

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CIO 2018 Technology Trends: Powering AI

In my last blog I discussed Digital Reality as a key CIO trend for 2018. In this post I will be discussing Powering AI.

In 2018, Artificial Intelligence will become established and widely recognised within Banks.  A recent EY report identified that:

40% of banks are using Robotic Process Automation (RPA) and machine learning, in areas such as anti-money laundering (AML) and know-your-customer (KYC)

AI can develop and apply complex business rules in real time at a fraction of the cost of a full-time employee. With approximately 1 in 6 members of staff at a bank working directly in a control and governance function, AI will become pervasive in managing repetitive, routine control tasks such as KYC (Know Your Client) and AML (Anti Money Laundering) processes.

The elephant in the room for 2018 has to be the notion of the so called GAFA banks (Google, Amazon, Facebook, Apple).

While the tech giants have already established digital beachheads to disrupt finance (Google Wallet, Apple Pay etc), we are only now starting to see new AI powered assistants offering voice payments, such as Amazon Pay being added to the Alexa skill set and Facebook’s ‘M’ assistant.

Although the GAFA banks might not want to become fully fledged banks, technology disruptors are successfully leveraging AI to target a number of high margin banking activities, such as asset management and transaction payments.

The significant risk for banks is that new tech disruptors ‘cherry pick’ the customer relationship and high margin activities, leaving the bank to provide the balance sheet for core banking services such as lending.

Established incumbents are responding to the changing landscape. Banks have significant expertise with an untapped wealth of financial data that can be used with AI to make smarter, real time investment decisions. Separately, Banks have been busy buying fintech firms, setting up their own fintech accelerators or establishing their own Venture Capital funds to invest in new disruptive technologies.

2018 could be the year that the incumbents take on the big tech firms ….






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CIO 2018 Technology Trends: Digital Reality

2017 was an eventful year for technology. Who would have guessed that bitcoin would surpass all expectations and increase in value by 1,600% within a year?

While I am more than happy to leave others to speculate on the merits of bitcoin as an investment currency, I wanted to share my insight on two significant technology trends that will be shaping the CIO agenda for 2018 – Digital Reality and Powering AI.

In this post I will be covering Digital Reality.

2018 will become a significant year for profound digital transformation. Building on the initial success to transform the end user experience (UX), banks will start to digitise their middle and back office by incorporating new technology, such as AI and cognitive learning, to become faster, smarter and highly cost effective.

According to IDC, 20 percent of US bank technology budgets is spent on digital transformation. This is expected to grow to nearer 40 per cent in 2020, implying a significant increase in digital transformation expenditure over the coming four years.

Faced with declining revenues and increasing compliance costs, banks will be looking to adopt new utility based service models to drive down costs and increase efficiency. The new industry utilities will allow banks to migrate labour intensive control functions to a trusted third party. Key areas of focus include middle and back office control functions such as customer onboarding, anti-money laundering and trade surveillance.

The new financial utilities will be a key growth area for new RegTech firms who will look to disrupt the market with new innovative solutions, potentially partnering with legacy incumbents to gain market share.

In parallel, the open sourcing of banking will become a reality in 2018.  As part of the EU Payments Service Directive 2 (PSD2) and the UK Open Banking legislation, banks will be required to provide third-party providers with access to their customers’ accounts through open APIs (application program interface). These new APIs will enable third-parties to build financial services, such as account aggregators, on top of banks’ data and infrastructure, potentially disintermediating the bank from the end customer.

Key to the success for Digital Reality is Powering AI which I will discuss in my next post.


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Improve Operational Efficiency with Robotic Process Automation

Software robotics has received significant attention in the last 12 months with the popular press speculating that we are now entering a 2nd Machine Age.

While Robotic Process Automation #RPA can trace its heritage back to data centre automation, the use of new techniques such as #CognitiveComputing and #AI offer new and exciting opportunities for automated processes to self-adjust, learn and improve.

Industry case studies indicate that early adopters are seeing operational efficiency improvements in excess of 40% whilst at the same time delivering a ROI (return of investment) well within 12 months.

RPA offers organisations a unique opportunity to address the long tail of manual processes that have yet to be automated, whilst at the same time delivering significant operational efficiency improvements and return on investment.

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Cost Benefits of RPA

  • RPA offers significant cost benefits ($5,400) when compared to a standard back office resource in the US, UK and Australia (averaging $43,880).
  • A fully loaded RPA software robot is equivalent to 11-14% of a full time equivalent person.
  • This compares to 75% of the cost of an offshore resource working in India, and 50% in the Philippines.

If you would like to discuss this or find out more, just get in touch.

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