Transparency and Accountability: Management Operating Principles
Training for IT March 1, 2006 Cost Transparency Operating Model CLIENT.
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Transcript of Training for IT March 1, 2006 Cost Transparency Operating Model CLIENT.
Training for IT
March 1, 2006
Cost Transparency Operating Model
CLIENT
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CLIENT
Scope of the cost transparency operating model
Changes to the cost transparency reports
Overview of the operating model
Flow of chargeback information
Impact to IT
Calendar of Activities
Ground Rules
Expectations for the initial release
Product pricing process overview
Objectives
The objective of today’s discussion is to help you understand…
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CLIENT
Scope of the IT CT Operating Model
The cost transparency reports are currently being distributed to our customers. Initially we will focus on legacy Client Organization. Moving forward we will evaluate additional businesses.
Future Scope
As the impact of the bank integration initiative is determined, the following business units will be evaluated for future action:
Legacy Private Bank Legacy Asset Management
For the initial release the following legacy Client business units are in scope:
Fixed Income Equities Investment Banking Division A Division B Shared Services
Operations Product Control Credit Risk / Market Risk Financial Control Financial Control (BASEL II) Legal and Compliance division (LCD) Human Resources (HR)
Scope
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Background On IT Cost Transparency
IT Cost Transparency chargeback reports have been modified to give the business a better understanding of their consumption of IT products and services. Reports will enable constructive dialogue and rational choices to be made by both the business and IT.
Billing Methodology: Chargeback reports will provide more comprehensive application charges (e.g. infrastructure charges will be incorporated into application costs)
Report Presentation Process: The Application Development Group (ADG) RM will present chargeback reports with support from the Financial reporting RM
Inquiry Process: The report inquiry process has been streamlined to direct all inquiries through a central point of contact
Broader Audience: Chargeback reports will be presented to the Desk COOs and shared services
What Is Changing?
Greater Transparency: Business will have a greater understanding of technology consumption and cost
Improved Attribution and Accuracy of Consumption: IT charges are directly linked to Application-Infrastructure and End-User Technology consumption
Improved Planning: Business and IT will have the ability to better plan consumption of IT products and services
Competitiveness: Migrating IT from a support organization to a service model
Improved Customer Support: Inquiries will be tracked and the cost transparency operating model will be continually improved
Upstream Costs: Application Development Group (ADG) and Infrastructure Technology Group (ITG) will approach the business with a picture of total application costs that are inclusive of labor and infrastructure expenses
Improved Governance: IT will be accountable for all technology related costs pertaining to their business partners
What Are The Benefits?
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Overview of the Operating ModelO
bjec
tives
Key
Act
iviti
es
Develop an itemized report of IT products and services consumed by the business during the previous fiscal month
Consolidate end user and infrastructure consumption data
Apply appropriate unit cost /rate card to consumption
Allocate charges to cost centers
Generate itemized report
Report Production
Report Analysis
Report Presentation
Report Inquiry
ReportCorrection
Perform analysis of consumption trends, significant deviations on the chargeback reports
Analyze report and determine cost saving opportunities
Validate findings Append report with
analysis and status of previous inquiries
Generate predefined views of report
Present report and analysis to the business
Review report with ADG RM
Send monthly high level view to Business COOs
Present detailed report to the Desk COOs
Send detailed report to business accounting
Provide a mechanism for clients to raise questions about the report and to request correction
Forward inquiries to “Central Inquiry Tracker”
Capture inquiries Communicate status to
the business
Determine and implement appropriate action to reports that require adjustment
Forward inquiries to appropriate ADG RM or ITG RM
Investigate inquiries and determine action
Make corrections and update the Central Inquiry Tracker
Track issue and close the loop with business
The chart below outlines the operating model for the IT Cost Transparency process. This new process will minimize confusion and overlap of roles and ultimately result in a faster resolution of billing issues, improved customer satisfaction and ultimately improved control of costs.
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ITG RM
ITG Inventory Manager Person…
Financial Reporting RM GroupPerson…
IT Chargeback Information Flow in Equities
Equities Division
Equ
ities
Con
trol
lers
– P
erso
n…
Equities COOPerson…
Prime Services COO
Cash COO
Derivatives COO
Other Desk COOs
Cost Transparency GroupPerson…
End User Technology
Market Data
Other IT Towers (App driven)
2 4
Client Coverage Team
3Validate report
Recommend changes
Financial Reporting RM Group
1
Application-Infrastructure consumption
EUTconsumption
ADG RM
Chargeback information flow will be standardized across other divisions to ensure consistent chargeback report production and presentation.
Inventory Manager Consolidates end-user technology and application infrastructure consumption data.
Cost Transparency Group sends an interim chargeback report to the Financial Reporting RM Group.
Financial Reporting RM Group presents the bill to the IT Coverage Team for validation.
ADG RM and the Financial Reporting RM Group present the chargeback report to the business (ITG RM joins as needed).
PART C Allocate costs in PART B to the divisions.
PART D Allocate labor costs to the divisions.
PART E Perform trend and anomaly analysis
Generate report from PARTS A,C,D,E
PART A Calculate end-user product costs
PART B Calculate infrastructure costs
1 2
3 4
Support as needed
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IT Chargeback Inquiry Flow in Equities
Central Inquiry Tracker
IT 1,2,3,4,5
There will be a Central Inquiry Tracker function that would be responsible for tracking and forwarding the different inquiry types.
Business COOS and Desk COOs forward allocation related inquiries (IT 1, 2) to the Business Controller.
Inquiry Type Framework
IT 1 Incorrect application cost allocation at cluster level
IT 2 Incorrect application cost allocation at division level
IT 3 Incorrect End User Technology item (Desktops, Blackberry’s etc)
IT 4 Excessive application development charges (labor costs)
IT 5 Excessive application infrastructure costs
NOTE: A detailed view of this framework is available in the Appendix.
Business and Desk COOs forward all other inquiries (IT 3,4,5) to the Central Inquiry Tracker.
Equities Division
Equ
ities
Con
trol
lers
– P
erso
n…
1
Central Inquiry Tracker logs inquiries and forwards them to the correct contact
IT 3,4,5
2
3
Business Controllers forwards progress of allocation inquiries (IT 1, 2), and any additional inquiries to the Central Inquiry Tracker.
ITG RMPerson…
ADG RMPerson…
Financial Reporting RM Group
Person…
ADG Application Managers
4
2
1 3 4
IT 3
IT 4,5
IT 1,2
IT 4,5
IT 3,4,5
IT 4,5
ITG Inventory Manager Person…
Equities COOPerson…
Prime Services COO
Cash COO
Derivatives COO
Other Desk COOs
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The Impact on IT
Relationship Management Inquiry Response Financial AnalysisWhat Changes About My
Role?
ADG
Lead meeting with the business to present chargeback reports
Assume responsibility for chargeback items that correspond to applications and projects
Participate in the Coverage teams
Analyze inquiries and route them to the appropriate contact
Track status and follow up until resolution is achieved
Report progress to the business client and manage their expectations
Validate the periodic chargeback reports created by the Financial Reporting RM Group
Support the Financial Reporting RM group to identify cost drivers, trends, and key performance indicators
ADG will own the relationship with the business
ADG will own their application charges
Financial Reporting RM Group
Partner with the ADG RM to meet with the business
Participate in the Coverage teams
Support the ADG RM in inquiry resolution
Report progress on financial reporting inquiries to the business client and manage their expectations
Lead the development of chargeback reports and vet them with ADG
Lead analysis of cost drivers, trends, and key performance indicators
Financial Reporting RM Group will support ADG in their relationship with the business
Financial Reporting RM Group will no longer be the funnel of inquiries from the business
ITG
Assume responsibility for items on the chargeback report that correspond to infrastructure
Participate in the Coverage teams
Analyze infrastructure inquiries and route them to the appropriate contact
Report progress to the business client and manage their expectations
Support ADG and Financial Reporting RM Group with cost drivers, trends and key performance indicators for infrastructure
ITG will support ADG in their relationship with the business
ITG will attend meeting with the business to review the report as needed
Understanding and acting in your roles assures better coordination, improved interaction, and ultimately better service to the business.
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Calendar of Activities: Targeted BAU Process for March and onward
Business Days in the Average Month
1 2 3 4 5
6 7 8 9 10
11 12 13 14 15
16 17 18 19 20
21 22
Report Production
Report Production Report Analysis
Report Presentations, Report Inquiry, Report Correction
Cost Transparency Group and Financial Reporting RM Group develop an itemized report of IT products and services consumed by the business during the previous fiscal month
Financial Reporting RM Group and the ADG RM meet to vet analysis of business consumption trends, and of significant deviations on the chargeback reports
Client Coverage Team presents the report and analysis to the business. The business clients can then formally raise questions about the report. Finally, the Inquiry Coverage Team determines and implements appropriate action to items that require adjustment.
Chargeback Reports begin to be released to the business client
Reports are released to Financial Reporting RM Group
Accounting books are closed for prior month
Financial Reporting RM Group begin to meet with ADG RM
Presentations of reports to the business begin
NOTE: The units are business days.
The BAU process will take several cycles to reach target dates.
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Ground Rules
Supply application usage metrics to the business controller for making allocation decisions
End User Product (desktops, Blackberry) consumption
Application-related infrastructure charges
Application labor costs
IT Chargeback trend analysis
Areas Where We Can Help
Request to upgrade or downgrade application infrastructure (i.e. IT Standards and Architecture are the purview of IT)
Financial data without review in the Cost Transparency process
Request to change rate card; current rate card is consistent with the Global Allocation Committee (GAC) guidelines
Areas Out Of Scope
The IT COO has setup some ground rules to streamline the operating model across all divisions and ensure a consistent service level.
Triage issues within your own division before escalating to IT
All allocation inquiries will be forwarded to the business controller; business controller will address the inquiry and update the Central Inquiry Tracker
All other inquiries will be forwarded to the Central Inquiry Tracker
Initiating Inquiries
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What to expect from the initial release?
What to Expect? How to Manage It?
Increase in the volume of inquiries
Request business to direct request through business controller so that inquiries can be prioritized
Manage business expectations around resolution timeframe Use contact list to forward queries to the appropriate personnel Refer to the “Ground Rules” in the Appendix
Inquiries are received directly from the business
Clients will be encouraged to funnel inquiries through business controller and subsequently through the Central Inquiry Tracker
If you get direct queries, forward them to the Inquiry Tracker so that they can be captured in the tracking tool
The expectation has been set with the business that the initial roll out will have limited capacity to address inquiry requests. All inquiries will be captured, but not all inquires will be responded to.
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CLIENT
Expectations set with the business
Our goal is to continually improve the process and incorporate lessons learned from this initial release.
Cost Transparency Expectations
Because we anticipate a high volume of inquiries, we will prioritize responses; retroactive adjustments will be made
We expect the accuracy of allocation and infrastructure charges to improve as reports are reviewed in detail
- The business must focus on improving data integrity
- The business must demand higher accountability from IT
Responses to initial inquiries will be prioritized as follows:
- Frequency of reporting errors and inquiries
- Materiality of inquiries
IT and the business are learning together in this process; our ability to respond to your inquiries will improve as training is rolled out and enhanced
We are in the process of implementing the Central Inquiry Tracker position; this may not be fully operational by the time of this initial release
IT will get your feedback to improve this process
Activities during the rollout include:
- Communication about the operating model
- Chargeback reports will be released with limited analysis
- Meetings with the Financial Reporting RM Group will start to take place
- Inquiries to the report will start to be raised
Product Pricing Process Overview
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CLIENT
Overview of Current Product Pricing Process
ITG uses a rate card to charge the business for the consumption of infrastructure and technology services. The product prices in this rate card are reviewed on a periodic basis and updated to reflect changes to costs and inventory.
Cost Recovery: As a cost center, IT aims to minimize under (over) recovery for costs that are charged to the business
Drivers
Estimate the inventory of “billable” products
Determine direct, centrally planned and indirect expenses for each product
Calculate unit price per product
Key Activities
In 2006, product pricing will occur in Q1 and Q2, and can conceivably result in lower unit prices for the year
Beginning with 2007, product pricing will occur annually at the beginning of the year
Timing
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Steps in the Product Pricing Process
Product Pricing entails three high level activities.
Step Responsible
Inventory Collection
1. Provide inventory usage detail ITG Product Owners
2. Vet the inventory data and provide the cost transparency group an estimated global volume for all products that have a billing target
ITG Inventory Manager
3. Run the global inventory through the financial model to determine a more accurate estimate of volume for products that have a billing target
Cost Transparency Group
Inventory Spend Calculation
4. Verify the direct, centrally planned, and pass through expenses associated with each product
Cost Transparency Group
5. Verify the application, direct infrastructure, and indirect infrastructure expenses associated with each product
Cost Transparency Group
Unit Price Calculation6. Calculate unit price by dividing the total product cost by the
volume of billable productCost Transparency Group
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Product Pricing Process flow
ITG Product Owners
ITG Inventory Manager
Cost Transparency
Group
Calculate estimated volume of products with billing target
Provide product Inventory
Inventory volume
discrepancy?
N
Y
Run volume through financial model
Verify volume discrepancy SS
Verify direct, centrally planned,
pass through expenses
Verify the application, direct infrastructure, and
indirect infrastructure expenses
Calculate unit price by dividing the Total Product Cost by the
product volume
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CLIENT
Total Product Cost Breakdown
Labor Cost: Costs for FTEs that book time to support a product
Telecommunication: Communication and WAN usage (provided by external vendor) required for a product
Depreciation: Software and hardware depreciation required for a product
Machinery / Expenses: Costs for software, hardware and service vendors that are required for a product
Application: Costs associated with applications that are used by the product
Infrastructure: Infrastructure costs consumed by the product
GTI Personal Consumption: Infrastructure costs consumed by direct labor
Indirect Expense
Centrally Planned
Direct Expense
TOTAL PRODUCT COST
Ope
ratin
g E
xpen
ses
Allo
catio
ns
Total product cost consists of three types of expenses that are each made up of different components. Direct and centrally planned expenses are accounted as operating expenses, while indirect expenses are allocations of internal costs.
NOTE: These are all of the possible components that can go into a product’s cost, but not all of them are necessarily included.
Appendix
Report Presentation Process Flow
Report Inquiry & Correction Process Flow
Inquiry Type Framework
Coverage Teams (Inquiry Response Coverage Teams, Client Coverage Teams)
Roles and Responsibilities for the Operating Model
Participants in the Cost Transparency Process
Example: Calculation of the unit price for “Email”
Roles and Responsibilities in the Product Pricing Process
For more information:
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CLIENT
Report Presentation Process flow
Business Controller
Central Inquiry Tracker (CIT)
Financial Reporting RM
Group
IT PL Community
ADG RM
ADG Application Manager
ITG RM
ITG Inventory Manager
Review and verify the report
Create Report
Recommend changes
N
Y
Present report to clients
Review and verify the report
Make changes to the report
S
S
Review and verify the report (as needed)
Business COO or
Desk COO
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CLIENT
Signs off on re-allocation requests
Allocations
Report Inquiry & Correction Process flow
Business COO or
Desk COO
Business Controller
Central Inquiry Tracker (CIT)
Financial Reporting RM
Group
IT PL Community
ADG RM
ADG Application Manager
ITG RM
ITG Inventory Manager
Report Inquiry
Logs InquiryInquiry Type
Forwards to the desk or business COOs for
signoffs
Forwards updated allocation to Financial reporting RM via CIT
Logs and closes inquiry
Reviews and forwards to ITG Inventory
Manager
Inquiry Valid ?
EUT
Updates database & ITG RM
Y
N
Updates business on inquiry status
Reviews and forwards to ADG Application
Manager
Application
Infrastructure related
Updates ADG RM
Updates business on inquiry status
N
Reviews and forwards to ITG Inventory
Manager
Y
Updates ADG RM
Updates business on inquiry status
Updates ITG RM
Logs and closes inquiry
Logs and closes inquiry
Logs and closes inquiry
Updates allocations table
Report Inquiry
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CLIENT
Inquiry Type Framework
Description Raised By Currently Directed To Proposed Directed To Requirements
IT 1Incorrect application cost allocation at cluster level
Desk COOs Division Controller
Step 1: Central Inquiry Tracker (logs it)
Step 2: Business Controller
Allocation details. Reasoning for re-allocation request. Effective dates Signoffs from necessary personnel
IT 2Incorrect application cost allocation at division level
Desk COOs Business Heads
Financial Reporting RM Group
Step 1: Central Inquiry Tracker (logs it)
Step 2: Business Controller
Allocation details. Reasoning for re-allocation request. Effective dates Signoffs from necessary personnel
IT 3
Incorrect End User Technology item (Desktops, Blackberry’s etc)
Desk COOs Division Controllers
Financial Reporting RM Group
ITG Inventory Manager Infrastructure Finance group
Step 1: Central Inquiry Tracker (logs it)
Step 2: ITG Relationship Manager Step 3: ITG RM will forward the
query to ITG Inventory Manager
Product type being inquired.
IT 4Excessive application development charges (labor costs)
Desk COOs Division Controllers
Financial Reporting RM Group
IT COO Project Managers Equity IT CIO ITG RM
Step 1: Central Inquiry Tracker (logs it)
Step 2: ADG RM Step 3: ADG RM will contact the
respective project manager.
Query definition (excessive work hours, vendor costs, infrastructure)
Signoffs from necessary personnel
IT 5Excessive application infrastructure costs
Desk COOs Division Controllers
Financial Reporting RM Group
IT COO Equity IT CIO ITG RM ADG RM
Step 1: Central Inquiry Tracker (logs it)
Step 2: ADG RM Step 3: ADG RM will contact the
respective application manager. Step 4: If infrastructure related
issue then ADG Application manager will forward app requirements to ITG RM
Step 5: If infrastructure related issue then ITG RM will get answer from ITG Inventory Manager.
Query definition (excessive work hours, vendor costs, infrastructure)
Signoffs from necessary personnel
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Coverage Teams: Inquiry Response Coverage Teams for Equities
Inquiry Type Originator Step 1 Step 2 Step 3 Step 4 Step 5
IT 1
Incorrect application cost allocation at cluster level »
Desk COO
Person X »
Business Controller
Person X»
Central Inquiry Tracker
»
Financial Reporting RM Group
Person X
IT 2
Incorrect application cost allocation at division level »
Desk COO
Person X »
Business Controller
Person X»
Central Inquiry Tracker
»
Financial Reporting RM Group
Person X
IT 3Incorrect End User Technology item (Desktops, Blackberry’s etc)
»Desk COO or Business Controller
Person X
»Central Inquiry Tracker »
ITG RM
Person X »ITG Inventory Manager
Person X
IT 4
Excessive application development charges (labor costs)
»
Desk COO or Business Controller
Person X»
Central Inquiry Tracker
»
ADG RM
»
ADG Application Managers
IT 5Excessive application infrastructure costs »
Desk COO or Business Controller
Person X
»Central Inquiry Tracker »
ADG RM
»ADG Application Managers »
ITG RM
Person X »ITG Inventory Manager
Person X
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CLIENT
Coverage Teams: Inquiry Response Coverage Teams for Fixed Income
Inquiry Type Originator Step 1 Step 2 Step 3 Step 4 Step 5
IT 1Incorrect application cost allocation at cluster level »
Desk COO
Person X »Business Controller
Person X
»Central Inquiry Tracker »
Financial Reporting RM Group
IT 2Incorrect application cost allocation at division level »
Desk COO
Person X »Business Controller
Person X
»Central Inquiry Tracker »
Financial Reporting RM Group
IT 3Incorrect End User Technology item (Desktops, Blackberry’s etc)
»Desk COO or Business Controller
Person X
»Central Inquiry Tracker »
ITG RM
»ITG Inventory Manager
IT 4
Excessive application development charges (labor costs)
»
Desk COO or Business Controller
Person X»
Central Inquiry Tracker
»
ADG RM
»
ADG Application Managers
IT 5Excessive application infrastructure costs »
Desk COO or Business Controller
Person X
»Central Inquiry Tracker »
ADG RM
»ADG Application Managers »
ITG RM
»ITG Inventory Manager
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CLIENT
Coverage Teams: Client Coverage Teams for Equities
MEETING 1 MEETING 2
Business Unit/Desk ADG RMFinancial Reporting RM Group
ADG RMFinancial
Reporting RM Group
Business COO
Business Controller
Desk COO
Equity Division (Global) U Person names U NA
Equity Division (Americas) U In all columns U
Equity Division (Europe) U cleansed U
Equity Division (Asia) U U
Prime Banking U U
Equity Proprietary Trading (Americas)
U U
Equity Proprietary Trading (Europe) U U
FID Proprietary Trading (Americas) U U
Cash Business (Americas) U U
Cash Business (Europe) U U
AEP US U U
AEP UK U U
Research U U
Equity Derivatives (Europe) U U
Equity Derivatives (Americas) U U
Convertibles (Europe) U U
Convertibles (Americas) U U
MEETING 1 - Monthly validation of application data in chargeback
MEETING 2 - Presentation of chargeback report to the business at various levels: Business COO, Business Controller, Desk COO
NA – Not applicable
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CLIENT
Coverage Teams: Client Coverage Teams for Fixed Income
MEETING 1 MEETING 2
Business Unit/Desk ADG RMFinancial Reporting RM Group
ADG RMFinancial Reporting RM Group
Business COO
Business Controller
Desk COO
Fixed Income Division (Global) U Person names U NA
Fixed Income Division (Americas) U In all columns U
Fixed Income Division (Europe) U cleansed U
Fixed Income Division (Asia)
Europe Interest Rate Products U U
US Interest Rate Products U U
Exotics U U
Europe Repo U U
US Repo U U
CDO U U
CMBS U U
Research U U
Listed Derivatives U U
Leverage Finance U U
RMBS U U
Coverage (Europe) U U
Coverage (Americas) U U
Fund Linked Products U U
MEETING 1 - Monthly validation of application data in chargeback
MEETING 2 - Presentation of chargeback report to the business at various levels: Business COO, Business Controller, Desk COO
NA – Not applicable
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Coverage Teams: Client Coverage Teams for IB, Division B and Division A
MEETING 1 MEETING 2
Business Unit/Desk ADG RMFinancial Reporting RM Group
ADG RMFinancial Reporting RM Group
Business COO
Business Controller
Desk COO
IBD (Global) U Person names U
IBD (Europe) U In all columns U
IBD (Americas) U cleansed U
Division B U U
U
Division A U U
Legal and Compliance U U
MEETING 1 - Monthly validation of application data in chargeback
MEETING 2 - Presentation of chargeback report to the business at various levels: Business COO, Business Controller, Desk COO
NA – Not applicable
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Coverage Teams: Client Coverage Teams for IB Support and CFO
MEETING 1 MEETING 2
Business Unit/Desk ADG RMFinancial Reporting RM Group
ADG RMFinancial Reporting RM Group
Business COO
Business Controller
Desk COO
IB Support Person names
Corporate U In all columns U NA
Complex Product Support U cleansed U NA
Executive U U NA
Human resources U U NA
CFO U U NA
Operations U U NA
CFO
Financial Accounting U U NA
Global Treasury U U NA
Group Controlling U U NA
Investor relations U U NA
New Business U U NA
Product Control U U NA
Shared Services Controlling U U NA
MEETING 1 - Monthly validation of application data in chargeback
MEETING 2 - Presentation of chargeback report to the business at various levels: Business COO, Business Controller, Desk COO
NA – Not applicable
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Coverage Teams: Client Coverage Teams for COO and CRO
MEETING 1 MEETING 2
Business Unit/Desk ADG RMFinancial Reporting RM Group
ADG RMFinancial Reporting RM Group
Business COO
Business Controller
Desk COO
COO Person names
Audit U In all columns U NA
Business School U cleansed U NA
Corp Development U U NA
Corporate Real Estate U U NA
Human Resources U U NA
Market Info Business Mgmt U U NA
Public Policy U U NA
CRO
Credit Risk U U NA
Risk Measurement & Mgt U U NA
Operational Risk Management U U NA
Strategic Risk Management U U NA
MEETING 1 - Monthly validation of application data in chargeback
MEETING 2 - Presentation of chargeback report to the business at various levels: Business COO, Business Controller, Desk COO
NA – Not applicable
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CLIENT
Roles and Responsibilities in the IT Cost Transparency Process
Report Production
Consolidate end-user technology and application infrastructure consumption data
RA
Apply rate card against end-user product consumption RA
Apply rate card against application infrastructure consumption RA
Allocate application charges (infrastructure) to divisional cost centers RA
Allocate application development charges (labor) to the divisional cost centers
RA
Report Analysis
Perform trend analysis for the past 12 months of IT chargeback C RA C
Perform chargeback anomaly analysis C RA C
Determine cost saving opportunities C R AC C I C I
Coordinate with IT to validate the anomaly analysis and cost saving suggestions
R RAC C C C
Incorporate suggested changes (requested by IT PL Community) into the summary of observations
RA I I I I I
Append report with the status of previous report inquiries RA C C C C C
Generate predefined views for different audiences (e.g.. Newsletter for Business COO etc,)
RA
Bus
ines
s H
ead
Bus
ines
s/D
esk
CO
O
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G A
pplic
atio
n M
anag
er
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
erA = Accountable (makes decision) R = Responsible (does the work) C = Consulted (provides input) I = Informed (told of decision)
Note: Activities and roles in bold italics are proposed
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CLIENT
Roles and Responsibilities in the IT Cost Transparency Process - 2
Report Presentation
Send high level monthly chargeback view and summary of observations (e.g. Newsletter) to the Business COO, Controller and Desk COO
I I I RA I I I I I
Meet with, and present detailed reports to the Controller and Desk COOs according to client needs
I I I R RA R C
Gather feedback during meeting C C C R RA
Create action items based of feedback C RA C C C
Issue responses to the business I I I I I RA I I I
Report Inquiry
Client identifies a problem or is not satisfied with explanation and formally questions an chargeback item
R R RA I I I
Record the question in the tracking tool RA
Determine the inquiry type and forward to the appropriate contact for investigation. Use contact list
RA I I I I
If it’s an allocation related inquiry, resolve it on the business side RA I I
Investigate the inquiry and determine an explanation R RA R R R
If item can be explained, communicate the response to customer. Close the issue
I I I R RA R
If item requires correction, provide update to customer, update status
I I I R RA R
Bus
ines
s H
ead
Bus
ines
s/D
esk
CO
O
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G A
pplic
atio
n M
anag
er
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
erA = Accountable (makes decision) R = Responsible (does the work) C = Consulted (provides input) I = Informed (told of decision)
Note: Activities and roles in bold italics are proposed
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CLIENT
Roles and Responsibilities in the IT Cost Transparency Process - 3
Report Correction
Get business sign offs for all application re-allocation related inquiries and forwards it to the Financial Reporting RM Group, and notifies the Central Inquiry Tracker.
I I RA I I
Central Inquiry Tracker forwards Application issues to the appropriate ADG RM and Inventory issues to the ITG RM
RA I I
ADG RM reviews the issue and forwards it to appropriate ADG Application Manager
RA C
ADG Application Manager forwards Application Infrastructure related issue to the ITG RM
A R CI
ITG RM reviews the issue and forwards it to the ITG Inventory Manager
RA CI
Inventory Manager investigates the issue and determines appropriate action
RA
Inventory Manager makes correction and communicates the change via ITG RM to the single point of contact
I I RA
Central Inquiry Tracker tracks issue and closes the loop on the inquiry
RA I I I I
Communicate the resolution to the client I I I I RA
Bus
ines
s H
ead
Bus
ines
s/D
esk
CO
O
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
IT P
L C
omm
unity
AD
G R
M
AD
G A
pplic
atio
n M
anag
er
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
erA = Accountable (makes decision) R = Responsible (does the work) C = Consulted (provides input) I = Informed (told of decision)
Note: Activities and roles in bold italics are proposed
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CLIENT
Key Contacts Involved in the Cost Transparency Process for Equity
EQUITY - Global Person names
Equity Division (Americas) In all columns
Equity Division (Europe) cleansed
Equity Division (Asia)
Prime Banking
Equity Proprietary Trading (Americas)
Equity Proprietary Trading (Europe)
FID Proprietary Trading (Americas)
Cash Business (Americas)
Cash Business (Europe)
AEP US
AEP UK
Research
Equity Derivatives (Europe)
Equity Derivatives (Americas)
Convertibles (Europe)
Convertibles (Americas)
Bus
ines
s C
ontr
olle
r
Cos
t T
rans
pare
ncy
Gro
up
Fin
anci
al
Rep
ortin
g R
M
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G
App
licat
ion
Man
ager
*
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry
Tra
cker
Bus
ines
s/D
esk
CO
O
* The ADG Application Manager will depend on the application that is in question. The ADG RM will be able to route the issue to the appropriate ADG Application Manager.
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CLIENT
Key Contacts Involved in the Cost Transparency Process for Fixed Income
FIXED INCOME - Global Person names
Fixed Income Division (Americas) In all columns
Fixed Income Division (Europe) cleansed
Fixed Income Division (Asia)
Europe Interest Rate Products
US Interest Rate Products
Exotics
Europe Repo
US Repo
CDO
CMBS
Research
Listed Derivatives
Leverage Finance
RMBS
Coverage (Europe)
Coverage (Americas)
Fund Linked Products
Bus
ines
s C
ontr
olle
r
Cos
t T
rans
pare
ncy
Gro
up
Fin
anci
al
Rep
ortin
g R
M
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G
App
licat
ion
Man
ager
*
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry
Tra
cker
Bus
ines
s/D
esk
CO
O
* The ADG Application Manager will depend on the application that is in question. The ADG RM will be able to route the issue to the appropriate ADG Application Manager.
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CLIENT
Key Contacts Involved in the Cost Transparency Process for IBD, Division B and Division A
IBD (Global) Person names
IBD (Europe) In all columns
IBD (Americas) cleansed
Division B
Division A
Legal and Compliance
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G A
pplic
atio
n M
anag
er*
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
er
Bus
ines
s/D
esk
CO
O
* The ADG Application Manager will depend on the application that is in question. The ADG RM will be able to route the issue to the appropriate ADG Application Manager.
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CLIENT
Key Contacts Involved in the Cost Transparency Process for IB Support and CFO
IB Support Person names
Corporate In all columns
Complex Product Support cleansed
Executive
Human resources
CFO
Operations
CFO
Financial Accounting
Global Treasury
Group Controlling
Investor relations
New Business
Product Control
Shared Services Controlling
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G A
pplic
atio
n M
anag
er*
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
er
Bus
ines
s/D
esk
CO
O
* The ADG Application Manager will depend on the application that is in question. The ADG RM will be able to route the issue to the appropriate ADG Application Manager.
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CLIENT
Key Contacts Involved in the Cost Transparency Process for COO and CRO
COO Person names
Audit In all columns
Business School cleansed
Corp Development
Corporate Real Estate
Human Resources
Market Info Business Mgmt
Public Policy
CRO
Credit Risk
Risk Measurement & Mgt
Operational Risk Management
Strategic Risk Management
Bus
ines
s C
ontr
olle
r
Cos
t Tra
nspa
renc
y G
roup
Fin
anci
al R
epor
ting
RM
Gro
up
Glo
bal D
ivis
ion
RM
AD
G R
M
AD
G A
pplic
atio
n M
anag
er*
ITG
RM
ITG
Inve
ntor
y M
anag
er
Cen
tral
Inqu
iry T
rack
er
Bus
ines
s/D
esk
CO
O
* The ADG Application Manager will depend on the application that is in question. The ADG RM will be able to route the issue to the appropriate ADG Application Manager.
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CLIENT
Example: Calculation of the unit price for “Email”
The total product cost is composed of direct expenses, centrally planned expenses, and indirect expenses.
Description Example Annual Expense Cost per unit
Direct Expenses
Labor Cost: Costs for FTEs that book time to support a product
People book their time in Project Web for “Email” support
$6,500,000
Centrally Planned Expenses
Telecommunication: Communication and WAN usage (provided by external vendor) required for a product
Telecommunication and WAN consumption costs for “Email”
$1,244,431
Depreciation: Software and hardware depreciation required for a product
Depreciation of software and hardware used by “Email”
$1855,024
Machinery / Expenses: Costs for software, hardware and service vendors that are required for a product
Cost of vendors supporting “Email,” e.g. IBM, Microsoft etc.
$3,788,123
Indirect Expenses
Application: Costs associated with applications that are used by the product
A percentage of the fully loaded costs of applications used by “Email,” e.g. FTP, Tumbleweed etc.
$2,077,981
Infrastructure: Infrastructure costs consumed by the product
A percentage of the infrastructure consumed by “Email,” e.g. servers, databases etc.
$6,000,000
GTI Personal Consumption: Infrastructure costs consumed by direct labor
Costs associated with desktops, Blackberry's, etc. used by direct labor associated with “Email”
$1,894,062
Total Product Cost $23,359,621
Volume of Email Accounts 35,244
Cost per account $663 /year
Email unit price $55 / month
NOTE: The figures in this chart are for illustrative purposes only.
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CLIENT
Roles and Responsibilities in the Product Pricing process
ITG Product Owners
ITG Inventory Manager
Cost Transparency
Group
INVENTORY COLLECTION
Provide inventory usage detail RA I
Vet the inventory data and provide the cost transparency group an estimated global volume for all products that have a billing target
CI RA CI
Run the global inventory through the financial model to determine a more accurate estimate of volume for products that have a billing target
I CI RA
INVENTORY SPEND CALCULATION
Verify the direct, centrally planned, and pass through expenses associated with each product
I RA
Verify the application, direct infrastructure, and indirect infrastructure expenses associated with each product
I RA
UNIT PRICE CALCULATION
Calculate unit price by dividing the total product cost by the volume of billable product
I I RA
A = Accountable (makes decision) R = Responsible (does the work) C = Consulted (provides input) I = Informed (told of decision)