Outsourcing at Deutsche Bank gives IT staff a world of opportunities
Deutsche Bank's IT chief Daniel Marovitz tells Computing about the skills that technology professionals need to thrive in a multi-sourced global IT environment
Deutsche Bank is a multinational IT environment
Developing the skills of future IT leaders remains a priority for Deutsche Bank, despite this year reporting its first loss in 52 years, of £5bn.
The London operation of the German financial giant is one of the largest employers in the Square Mile, with more than 1,000 staff working in IT alone.
The downturn has hit every financial institution, but career enhancement is a long-term investment, said chief operating officer for technology Daniel Marovitz.
“There has been a slowdown in hiring. We are less aggressive about some things but are still looking to develop the team. We know we still have jobs to do for the future,” he said.
Over the past year, the bank has seen an intense IT transformation to meet future business requirements. This has involved increased efforts to enhance IT staff’s non-technical skills.
The bank focused on areas such as project and programme management training, and providing technology staff with non-IT knowledge. “There is a long history of taking someone who is a fantastic developer and making them a development supervisor or team leader, only for them to then fail when it comes to managing people,” said Marovitz.
“Making that transition is difficult and is something you have to train for. This is an area we put a lot of effort into if you don’t train and just assume that people can naturally transition from one role into the next, you can get into trouble.”
The bank uses competency modelling that involves a strict rating and ranking process that helps to assess how employees are performing in their roles against potential, and identify where training is needed for staff to progress to the next level.
Marovitz has staff reporting to him from 14 countries. Such a global footprint can pose challenges from a career development perspective. “It is a problem, opportunity and a point of complexity. That is why the performance management is so important,” he said.
“We need to know we have a high performer in Vietnam, for example, and if we want to keep him, we’ll have to move him to India or Singapore, where we have larger development environments and more opportunities.”
While outsourcing and offshoring currently make financial sense, labour cost arbitrage will come to an end as countries such as India and China advance and salaries increase, said Marovitz, so the bank is “playing the long game”.
“We are well placed to source great staff in Germany, but we had better be sourcing everywhere in the world if we want the best and brightest.
“It is important to stay competitive and manage cost in the short term, but for the long term we want to build relationships with universities. We want to have our name known in India and China, as they will produce fantastic people and you need to get some of them into your organisation to be best in class,” he said.
Deutsche Bank’s outsourcing includes large teams working at offshore captive centres in India and Russia, where they manage any local third-party relationships.
The hybrid approach and the bank’s tendency to outsource “predictable” IT and legacy systems increases the opportunity for IT career development, according to Marovitz.
“It means that employees have a chance to take on a supervisory role early in their careers it may not be managing employees but an outsourced group, which is an important skill,” he said.
Marovitz is adamant that outsourcing and the creation of new opportunities for junior staff can co-exist. “The staff in the retained organisation work on higher-level tasks, working on management and in the sexier technology because the un-sexy stuff is not in-house anymore,” said Marovitz.
“[At Deutsche Bank] you don’t have to slug your way through years of doing legacy management to earn your stripes you get a chance to work on new projects earlier in your career.”
According to Marovitz, multi-sourced IT environments - captive or run by a third party - are a fundamental component of how companies will deliver, and future managers need to recognise that.
“This means process and project management expertise become incredibly important, as co-ordinating all over the world isn’t easy and requires specific skills,” he said.
Tomorrow’s IT leaders will also become itinerant, said Marovitz, an American who relocated to London nearly a decade ago after working in Japan and Spain. “It is not for everybody, but you have to be up for that kind of diverse life. Because of this multi-sourced world, a more international life with people moving to different places will increasingly become a big part of how things operate,” he said.
“If you want to be an IT manager and use an offshore group from India, you have to go and see them every once in a while. The technology is there, but there is still no substitute for face-to-face contact. You can’t just throw things across the electronic wall and hope they will magically happen - this takes time and intention.”
Re-organising IT at Deutsche Bank
Last week, Deutsche Bank chief operating officer for technology Daniel Marovitz started talks with senior IT management at his investment banking unit on how to bring technology closer to the business.
Following the bank’s entry in the investment banking market in the 1990s, IT staff proliferated across the division, creating issues around risk and control, cost, and architecture standards.
IT was consolidated as a separate business unit about seven years ago, but views are changing and the bank is set to fundamentally change its structure.
“Maybe it does make sense for IT – which is a fundamental part of the way we do business – to exist in a variety of different areas,” said Marovitz.
“We have been looking at a pyramid of IT tasks, everything from high-level strategy to code writing to security and production management. The question is where IT should begin and end,” he said.
The approach should be “purposely inconsistent”, said Marovitz, depending on the business areas and their technology reliance and representation in the cost base.
“We in the process of adjusting that start and stop point, so parts of the IT can come much closer to the business,” he said.
“The intention is that the high-level business and technical architecture and the functional design of the applications will be glued with the product development function in the front office. We want IT to focus on delivery, coding, construction.”
Managing IT in a regulated environment
Technologies such as wireless, unified communications, videoconferencing and other tools have been invaluable in the management of offshoring relationships as well as skills development, according to Deutsche Bank’s chief operating officer for technology Daniel Marovitz.
But social networking platforms such as Twitter and Facebook pose challenges due to regulatory requirements for retaining employee communications.
“[Social networking] is part of the fabric of how our bankers and clients interact and there is no question about it, but we get caught up sometimes – regulation imposes structures that slow the pace of innovation,” said Marovitz.
The bank has been using other Web 2.0-based tools for less regulated areas, such as an internal wiki that is used to map pockets of expertise in the business and an internal customer relationship system aimed at enhancing staff relations.