WHAT'S NewS Issue 1 January 1998
Business plan administration
5
'The goal of these GMA meetings is the
J^xchange of information and experience for
the benefit of the entire bank.'
MOBILIZING TEAMWORK
To illustrate how regional teamwork can be
mobilized to benefit the network as a
whole, Wolthuis offers a recent, real-life
example. 'Private banking, of course, has
great independence within our
organization. But we are convinced that,
administratively, we can learn quite a lot
from each other. Recently, there was a
discussion in the quarterly European
regional administration committee meeting
about methods for mitigating operational
risk. Frankfurt tabled some solutions - and
it seemed they might be potentially
applicable worldwide. When the GMA
met, Adrian Whiteman of IPB suggested
•that we could further improve on these
Ideas by incorporating solutions evolved by
private banking in Luxembourg. Frankfurt
and Luxembourg put their heads together,
perfected a plan, and it is now being
considered for use by general managers
throughout the global network.'
CONSISTENT STANDARDS
This is a good example of one of the key
objectives of the Administration 2000 plan;
narnely, to bring consistent, reliable and
secure global standards and solutions to
bear on problems and processes of shared
global concern. For example, while local
business development remains the task of
local offices, other issues, such as market
risk policies, credit risk policies,
capital/solvency ratios, accounting
principles and many other areas ranks
Kamong those that must be addressed in a
:onsistent way throughout the network.
Similarly, the GMA is being used to control
the evolution of the OPEX information
technology program in the interests of the
network as a whole. 'It is our task, for
example, to examine the budget proposals
for IT implementation at the branch level in
order to insure that our spending decisions
and the inevitable tradeoffs are taken with a
global perspective in mind,' continues
Whiteman.
SIGHTING OBJECTIVES
The Administration strategy has two other
important objectives. First, to make sure
systems implemented in today's operating
environment can keep pace with the
development of new products and new
markets. Next, since knowledge has been
^dentified as a key to our future growth, it
"needs to manage the flows of information
about our customers, about products, about
financial positions and about the status of
transactions in the most enlightened
possible way. Further information about the
A business driven planning proces Administration is the basis
Customer Focus
strategy
Offices
Businessplans
Integrated
Administration
plan per office
Food Agri Health
care Businessplan
Investment Banking
Businessplan
Private Banking
Businessplan
IB Global
Productmanagement
Businessplan
Corporate Banking
Administration plan
Investment Banking
Administration plan
International Private Banking
Administration plan Administration strategy paper
External regulators Competitors
Technology
new division of administrative
responsibilities, and about the allocation of
global versus local tasks can be found in the
GMA Public Folder on MS Exchange.
These public folders are in fact a good
example of how we can support our
business with shared information over the
IT network. They can be used to distribute
all kinds of information about clients,
products and markets.
SOLVING DIFFICULTIES
Another strategy plan initiative is the
establishment of a Global Operations
Support unit (GOS) within head office. In
addition to supporting the GMA, it will be
responsible for the planning and control
cycle, including the budget, and for
overcoming one-off administrative
difficulties as they arise anywhere in the
world. Moreover, it can support the effort
to directly address concerns raised by the
Dutch central bank about operational
bottlenecks, about the need to improve back
office performance, and the need for more
uniform information systems. Among other
things, for example, Global Operations will
have a dedicated professional controller
working on the OPEX IT project. It will
maintain 'Flying Squads' that can be
dispatched to address any regional problems
or needs that require expert assistance. The
GOS will use a 'balanced score card' system
to measure its efficiency and success in
planning, control and process management.
OPERATIONAL BLUEPRINT
Clearly, bringing our commercial
aspirations into line with our operational
capabilities is a task that will require that
each of our approved strategie business
plans be 'mirrored' by a detailed blueprint
for its actual, operational implementation.
This process is already well advanced. The
Private Banking and Corporate Banking
Administration plans have been finished
and the Investment Banking Administration
plan is now being finalized. This will be
followed by the production of integrated
plans for business implementation at each
of the local offices. This is illustrated in the
diagram.
FACTORY PROCESSING
'When considering the new strategy paper,
it is useful to remember that certain
functions of a bank resemble those of an
ordinary factory,' suggests Wolthuis.
'What do we really do? We use
information to produce contracts, for
example. They have to be processed and
accounted for in a highly efficiënt way. We
need to apply well known marketing
concepts to achieve an effective straight-
through processing of our output.' This is
easier said than done, needless to say. Our
Investment Banking activities produce
similar products in London, Utrecht and
Frankfurt, for instance, and there might be
desirable economies of scale to be
achieved by processing all of them at a
central regional site. However 'this
involves much more than merely
connecting a couple of computers into a
network,' Wolthuis says. 'Often, the most
profound issues aren't really technological
at all: they might be legal and fiscal, for
example. Such implications shouldn't be
underestimated: sometimes, they can take
many months to be efficiently addressed.'
ACHIEVING GOALS
But time is at a premium and the market
never stands still. Fortunately, we now have
the facilities of an integrated world
Communications network at our disposal.
We have also unveiled consistent standards,
guidelines and procedures to help us achieve
our strategie aims. Now, it is time to stop
talking and make it all work. 'We have been
digging for copper when we are actually
sitting on a mountain of gold,' remarks Van
der Stelt. 'This will change. In two years'
time, I predict that we will have
transformed ourselves into a new
organization, just as we evolved in response
to the original customer focus strategy when
it was unveiled two years ago.'
