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TheBlueCat

Deutsche Bank Cognitive Dissonance

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http://www.theregister.co.uk/2015/10/30/deutsche_bank_overhauls_45_operating_systems/

On the one hand, having seen the internals of a few banks IT systems in my time, the idea that Deutsche needs to massively simplify things makes complete sense. On the other, the idea that they're going to start that process by firing all the IT people that might be able to carry out the simplification work is bonkers.

In which parallel universe do you think they're operating?

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Worked out well for good old RBS!

To be fair though, speaking as someone who used to work on one of the more obscure Unix's, it makes sense to just use one or two (actually 4 is a bit much), OS's - things often get expensive when each different group has their own special requirements. I'm also seeing the cloud being used more and more (even places where you would n't expect it), again positve from a cost point of view.

Edited by reddog

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Worked out well for good old RBS!

To be fair though, speaking as someone who used to work on one of the more obscure Unix's, it makes sense to just use one or two (actually 4 is a bit much), OS's - things often get expensive when each different group has their own special requirements. I'm also seeing the cloud being used more and more (even places where you would n't expect it), again positve from a cost point of view.

It makes 100% sense, I just don't see how they can possibly do it without spending more on IT at least in the short term. My general experience of this is that when the IT budget is cut, it has to be new systems development and enhancements spend that goes first since the operational budget is not optional.

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http://www.theregister.co.uk/2015/10/30/deutsche_bank_overhauls_45_operating_systems/

On the one hand, having seen the internals of a few banks IT systems in my time, the idea that Deutsche needs to massively simplify things makes complete sense. On the other, the idea that they're going to start that process by firing all the IT people that might be able to carry out the simplification work is bonkers.

In which parallel universe do you think they're operating?

IIRC these guys have ALREADY shipped out work to both India and China. So this won't be their first attempt at outsourcing. Plus they've just signed a billion dollar contract with HP. Which begs the questions just who are the outsourcers going to use as staff, and is the whole of IT to be TUPE'd or sold off ?

I can well understand a bank's desire to simplify and rationalise their IT estate. But I keep getting the feeling that this is being touted as some cost cutting exercise. Get rid of 10,000 here and 5,000 there - then what?

It just seems bizarre to me. That and the precedent of certain other banks' failures.

I'm struggling to find the ulterior motive. Or even what the strategy is supposed to be.

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IIRC these guys have ALREADY shipped out work to both India and China. So this won't be their first attempt at outsourcing. Plus they've just signed a billion dollar contract with HP. Which begs the questions just who are the outsourcers going to use as staff, and is the whole of IT to be TUPE'd or sold off ?

I can well understand a bank's desire to simplify and rationalise their IT estate. But I keep getting the feeling that this is being touted as some cost cutting exercise. Get rid of 10,000 here and 5,000 there - then what?

It just seems bizarre to me. That and the precedent of certain other banks' failures.

I'm struggling to find the ulterior motive. Or even what the strategy is supposed to be.

Quite often when banks say they are going to save a load of money, they are talking about the "run the bank" costs, i.e. the poor schmucks who have to do the day to day work.

They do not say that in order to do this they will have to incure a load of "change the bank" costs, which usually means these days money straight into the pockets of Wipro, Accenture etc. etc.

Incidentally I recently found out a major credit card co I used to contract for is now moving many things to Amazon Web services. This was a bit of a surprise, as I thought it would take a while for the cloud to get into major financial companies in this way. But in all honesty this is the sort of outsourcing that makes sense (as opposed to the usual offshoring by the usual suspects BS). You can use automation to cut costs, while still retaining quality.

Edited by reddog

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Quite often when banks say they are going to save a load of money, they are talking about the "run the bank" costs, i.e. the poor schmucks who have to do the day to day work.

They do not say that in order to do this they will have to incure a load of "change the bank" costs, which usually means these days money straight into the pockets of Wipro, Accenture etc. etc.

Incidentally I recently found out a major credit card co I used to contract for is now moving many things to Amazon Web services. This was a bit of a surprise, as I thought it would take a while for the cloud to get into major financial companies in this way. But in all honesty this is the sort of outsourcing that makes sense (as opposed to the usual offshoring by the usual suspects BS). You can use automation to cut costs, while still retaining quality.

Not that long ago I did a cost comparison of using AWS as a replacement for internal infrastructure at a well known large bank. Comparing the internal chargeback rates for a representative set of things and including all incidental costs such as back retention and so on, AWS was about 25% of the price and falling...

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The banks are always the ones with the money to spend as special bailout and subsidy cases etc. Soon after the economic collapse they were offering free luxury biro pens and refurbishing their branches luxury style etc whilst cutting savers' deposit rates to the minimum. That's what you could see at the counter, goodness knows what excesses there were behind the scenes and at head offices etc etc (apart from all the bonuses for failure).

Massively updating their IT serves many purposes including it employs lots of IT people whilst at the same time they can claim that it's (eventually) going to cut the overall numbers of IT people. When it's finished (if it ever is) then they'll say that it all needs maintaining or even updating again so expect lots of announcements then that they're employing more staff and even more IT people maybe because of some manipulated boom paid for by more debt to them - probably as the next general election starts to come into view.

The banks are just very good at spending other people's money - and that latest announcement is a prime example of it.

Edited by billybong

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