IT programme back on track

 

Services Billing Validation for a national commercial bank

Peru's commitment

Our client, one of the ‘big four’ commercial banks in Ireland and Northern Ireland, has a long-term relationship with one of Ireland’s largest voice and data network providers in Ireland. This provider’s services stretched across the bank’s head offices, business banking sites, trading centres, customer contact centres, local branches and its ATM network, through two ‘state of the art’ data centres.

The bank was aware that it did not have enough resources dedicated to completely oversee the consumption of services and the associated monthly and quarterly invoices from its provider, thereby determining their accuracy. Knowing of our experience, it appointed Peru Consulting to undertake a validation exercise of recent invoices to determine whether or not the billing was correct and if there were any opportunities to improve the cost base of the services received.

In effect the bank sought an independent view to determine if it was:

  • Receiving the right network services for its users
  • Paying the right amount for them,
  • Getting the level of support from its provider to achieve its strategic objectives

As a result of this initial work, Peru recognised that a saving of 25% off current IT communications charges could be found.

The substance

In seeking to understand the complex services provision and the millions of Euros spent on delivery, hardware, software, line rental, maintenance and other fees, our Service Billing Validation work with the bank was based on a thorough understanding of the contractual obligations that the supplier was under and on analysing all the available data.

The timeframe for the work was two months during which:

  • The contract and dozens of data files were reviewed to build an end to end picture of how the invoices were created
  • Clarification interviews were conducted with both bank and supplier representatives to assist in our understanding of the business context and technical details of the service delivery
  • We built a data model to capture disparate information sources in one place, thus allowing trends and outliers in the data to be identified and questioned
  • Our network services market knowledge was engaged to give estimates of potential savings, comparing the supplier’s consumption rates for certain services with those available in the wider market.

The outcomes

In summary, our work reached the following conclusions:

  • It was not possible for the bank to validate its invoices with the backing data it was receiving from the provider; the necessary detail wasn’t being made available. We were therefore able to advise the bank to demand the right level of detail in the supporting data it received. Peru then provided the bank with the reconciliation and analysis tools so that it could have confidence that it could challenge invoice amounts if they were incorrect
  • It became clear that there were several swift and simple things the bank could do to reduce monthly costs, ranging from blocking its users from using certain high rate numbers to reviewing the number of pstn lines required at branches
  • There were at least three benchmarking opportunities that the bank could instigate that Peru judged would certainly reduce costs, compared to the rates it was paying currently.
  • Longer term, the bank needed to challenge its supplier to be more innovative and proactive in bringing productivity, technology and process improvement to the table, and working with it to achieve benefits. There were initiatives tackling some of these issues underway but progress was relatively slow and the bank needed to enhance its profile in these developments
  • In total, the savings possible on its annual operational bill was found to be at least 6% in the short term with additional savings achievable in the longer term, equating to hundreds of thousands of Euros per annum.

 

THE PERU REPORT ON RETAIL BANKING IT

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