Taking back IT reins pays off

Oakeley: The world is not a certain place, but we are well positioned

The successful completion of an IT overhaul at financial asset management giant Schroders means the firm is ready for an acquisition spree as its new scalable infrastructure reduces costs associated with integration.

The restructuring began in 2005 after the company ended a rocky outsourcing relationship with JPMorgan, bringing investment operations back in-house, said Matthew Oakeley, global head of IT at Schroders.

“We realised that the five-year outsourcing period with JPMorgan had meant no investment in this platform and that it needed ripping out and replacing,” he told Computing.

The project – which recently won user group The Corporate IT Forum’s Real IT Awards 2008 – involved the introduction of new systems linked to performance, client reporting, pricing and reconciliation, as well as the replacement of core applications such as the firm’s portfolio accounting system, developed 27 years ago.
At its peak, the project had 200 people working on it, including 45 contractors paid rates of about £500 per day.

People management was one of the testing parts of the scheme, as well as controlling the project scope and choosing the right manager to lead the project, said Oakeley. He brought in an external consultant, Wendy Steel, former head of information systems at investment firm Gartmore, but that too presented challenges.

“How does a head of IT bring in someone who has been around for a long time, is very strong minded, and who used to run her own IT department in her way, for a project that will consume everyone in IT and still ensure the survival and functioning of the department and be able to continue afterwards when the project is completed?” said Oakeley.

“I had to trust that she would do the right thing with the team and not keep referring to me. Luckily, we agreed on pretty much everything, as we had similar ideas in terms of IT architecture because of our similar industry backgrounds.”

Oakeley joined Schroders in 2005 after spending 12 years working in the global asset management division of UBS Investment Bank. The operating model at his former employer provided inspiration for the overhaul.

“There were lots of ideas that, frankly, I have copied, but why wouldn’t I? What we have today is a cross between UBS, Gartmore and every other company where the senior team used to work and we have ended up with something really strong as a result,” he said.

Oakeley said one of his main achievements was to avoid any major disruption to the business. “Oddly, that has worked against us. There were no hysterics or heroes addressing crises, so the business assumed it was easy; we became victims of our own success,” he said.

Future projects at Schroders will see the rollout of the new platform in Asia, as well as an increased focus on virtualisation and a storage upgrade, albeit with a reduced budget.

“The world is not a certain place at the moment, but we are quite well positioned for the current climate,” said Oakeley.

“Our budget is not as aggressive as it used to be and we have cut back on some costs, but nowhere near what some of our peers have had to go through.” <

Boosting the profile of IT

An important aspect of the overhaul at Schroders was repairing the damage to IT’s reputation caused by the experience with JPMorgan and addressing issues caused by a siloed structure.

“The IT department I found was composed of a lot of little teams with different standards and approaches. We have been driving standardisation to improve efficiency, with multi-skilled teams,” said Schroders’ head of global IT Matthew Oakeley.

“We have encouraged the IT team to interact with the business more and not see itself as a silo. IT will only work if you have the relationships and a good communication flow.”

Oakeley said his team is still motivated despite the insecurity surrounding financial services, but the firm’s ability to reward staff is limited.

“Big bonuses, for example, are a thing of the past. These days, everybody’s bonus is to have a job,” he said.

“This is a rough time, but things will change. A lot of the structural transformation that will take place in investment banks will demand IT teams to do the behind-the-scenes work. You may get rid of traders, but you will still need people to integrate platforms.”