Abstract
M.Com. (Business Management)
The Global Transactions Services (GTS) business unit was established alongside the Rand Merchant Bank (RMB) brand reporting into a Corporate and Investment Banking Board. GTS has been mandated to deliver global cash management, trade and custody services and account services to large corporates in the jurisdictions where FirstRand operates. Technology advances in centralising operating structures, have made it possible for GTS to centralise back office operations to a few locations within the country as witnessed by Global banks like Citigroup.
The research problem therefore was to evaluate and identify the strengths as well as shortfalls of the current decentralised operating model versus a proposed approach towards a centralised operating model within the GTS business unit; focusing on investigating whether outsourcing IT operations and technology would create efficiencies, attract skilled employees and technological advancement to the division.
Primary objective of the research was to evaluate the current decentralised operating model.
Secondary objective was to evaluate the gains associated with implementing a central operating model against the gains currently derived from the decentralised operating model.
The findings derived from the study suggest that:
(i) There is a misalignment between the business strategy and IT strategy within the current operating model resulting in IT playing a supporting role and not an enabling role in the business strategy formulation and implementation.
(ii) The bank does not engage in an on-going activity to evaluate processes, procedures and technology making it difficult to streamline and automate processes resulting in a lot of manual processing.
(iii) The bank lacks the internal capabilities required to introduce automated processes which will reduce manual interventions;
(iv) Existence of Silos in the business prevent the business from taking advantage of benefits brought about by economies of scale, cross skilling, knowledge sharing, straight through processing and ultimately economies of scope benefits