HSBC increases IT productivity

The APM software has given the bank greater visibility into its offshored IT resources

Banking giant HSBC has cut the costs of developing and supporting in-house software by using an application portfolio management (APM) system.

Use of the tool is a core part of One HSBC, a company-wide programme that aims to increase the bank’s revenue and reduce spending by replacing legacy systems and standardising technology.

The APM software, provided by supplier Micro Focus, allowed the company to increase its capacity to develop new products and services as the platform helped prioritise application workloads, said Andy Givens, former head of IT for HSBC Mainland, who left the firm since this interview took place.

“We moved from a situation where we spent around 90 per cent of time fixing systems and only 10 per cent changing the bank, to one where resources are 40 per cent available to do new things,” he said.

“Having more visibility presented a big opportunity for the bank to invest in systems for the future to cater for customers’ demands.”

For example, around three-quarters of HSBC’s global credit card base is now running on the central platform and further migration is expected to take place in India and Indonesia this year.

The bank said the programme will reduce bespoke software costs. By using APM, HSBC’s central support team increased their support capacity from 50 applications to 120 within eight months and released developers for new projects.

“What HSBC is doing is taking the existing infrastructure and growing onto a scalable system and ‘evergreening’ the applications. But to do that, you need to know what is in them and how they work, so using APM is a very strong pillar of the entire scheme,” said Givens.

Apart from reducing time of development, APM tooling has also reduced HSBC’s reliance on specific skills to document software, as the system automatically collects application coding detail from the entire software portfolio, regardless of the programming language used.

“Use of the platform also meant that we have been able to undertake knowledge transfers much more efficiently across our development teams around the globe,” said Givens.

“APM also played an important role in building a mature offshoring model for HSBC’s global technology centre in India, as we have full visibility of the frequency and quality of the work delivered. And we have also managed to keep development costs per mandate flat in the past three years.”

APM will continue to underpin the One HSBC programme, which will be the bank’s main IT focus for the next couple of years.

“Implementing the strategy is the main objective for IT at HSBC and the bank is in a wonderful position to make things happen,” said Givens.

“Consolidation is the most logical route to be chosen by a bank. For example, if a business is running three credit card systems, one of them being the core card product and the other two non core, the others will get increasingly expensive to maintain and the bank will bear all the cost ­ – the threat of that happening alone is already enough to make the change.”

What is application portfolio management?

Application portfolio management (APM) systems are used to maintain inventories of software and supporting infrastructure. Such systems were originally introduced in the 1990s to handle the threat of application failure when the date changed to the year 2000. Use of APM then became increasingly popular as financial services firms needed tools to identify software duplications and redundancies during mergers.

Using APM tools, applications are categorised by criteria such as business unit alignment, application characteristics, lifecycle, usage, performance and technical and architectural compliance. Such evaluations help to support decisions to replace, retire or invest in new IT.

As banking institutions merge, APM is expected to be a key part of the IT agenda, said Jim Duggan, research vice president of application strategy and governance at analyst Gartner.

“Companies have started to realise that they have to be good at doing integration as they have to lower cost bases and replace platforms that are old and expensive to run,” he said. “For that reason, APM will play a central role in assessing which systems bring the most business value. Businesses ignoring the need to evaluate their application estate will see the consequences reflected in their financial results.”