Executive Summary

A leading international financial institution, partnered with Strategy Go to address spiralling IT costs and inefficiencies. Facing rising expenses without clear visibility into spending patterns, the bank implemented a capability-based framework that mapped its business functions to IT applications. This initiative delivered $102 million in cost savings over two years, achieving a 34x return on investment, while fostering innovation and collaboration across previously siloed departments.

Key Results:

Application Rationalization: Eliminating redundant systems and consolidating global services.
Increased Reuse: International adoption of shared solutions jumped from 20% to 46%.
Cultural Transformation: Teams shifted from isolated development to building reusable, scalable solutions.
Strategic Alignment: IT spending was realigned with business priorities, driving both cost efficiency and growth.

Success Drivers:

The Business Capability Model (BCM): A standardized framework that identified redundancies and prioritized investments.
Governance Changes: New project approval processes ensured reuse and consolidation before funding new systems.
Financial Innovation: Funding models addressed the "first mover disadvantage," incentivizing teams to build globally reusable solutions.
Data-Driven Accountability: A dashboard tracked progress, creating transparency and accountability at all levels.

This transformation not only reduced costs but also positioned IT as a strategic asset capable of driving innovation and competitive advantage. The lessons learned offer valuable insights for organizations seeking to optimize IT spending while aligning technology investments with business strategy.

Ready to transform your organization’s financial management and achieve measurable results? Contact Strategy Go today at (437) 523-8585 or visit our website at www.strategy-go.com to schedule a consultation and learn how our expertise can drive efficiency, accountability, and cost savings for your business.

Background

Despite annual IT budgets in the billions, the bank struggled with limited visibility into where money was being spent, whether investments were generating adequate returns, and how technology assets were being utilized across the organization.

The bank’s Chief Technology Officer (CTO) had articulated a compelling vision: develop “champion solutions”—global platforms that could be deployed across regions rather than building isolated systems for individual teams or regions. However, the organization faced a “first mover disadvantage”: teams that built reusable solutions bore the full cost, while others reaped the benefits without contributing. This created perverse incentives that discouraged collaboration and innovation.

As IT costs continued to rise without clear justification, the bank’s leadership recognized the need for fundamental change in how technology investments were managed. They engaged Strategy Go, a specialized consulting firm, to diagnose the problem and implement sustainable solutions.

The Challenge: Fragmentation and Lack of Transparency

The Global Bank operated as a collection of siloed units rather than a cohesive organization. Finance teams managed budgets, IT teams built and maintained systems, and business units pursued their priorities—often with minimal coordination. This fragmentation resulted in:

Redundant Systems: The bank had accumulated over 3,000 applications, many performing similar functions.
Inefficient Budgeting: IT budgets were set using traditional financial approaches (previous year’s spend plus a small percentage), which failed to account for the dynamic nature of technology costs like multi-year software contracts and milestone-based spending.
Limited Visibility: There was no comprehensive view of technology assets, making it impossible to identify redundancies or opportunities for consolidation.
Misaligned Incentives: Teams were not rewarded for building reusable solutions that could benefit the entire organization.

A finance executive at the bank captured the problem succinctly: “Teams should naturally reuse assets to save money.” The reality, however, was that without structural changes, teams continued to build redundant systems rather than leveraging existing assets.

Why Did Costs Keep Rising?

IT costs were increasing year-over-year without a valid rationale. Teams lacked transparency into:

Whether licenses were being underutilized.
If enterprise agreements were being optimized.
How much any application truly cost (total cost of ownership).

Traditional budgeting methods (e.g., last year’s spend + 2%) worked for predictable expenses like salaries but failed for IT, where costs fluctuate based on software-as-a-service contracts, infrastructure needs, and project milestones.

The CTO’s Vision: Champion Solutions

The CTO envisioned “champion solutions”—global platforms that could serve multiple markets. For example:

A treasury management system like Kondor could support multiple regions instead of running fragmented versions in different markets.
Applications could be built once and scaled globally, reducing duplication and inefficiency.

However, this vision faced significant barriers:

First Mover Disadvantage: Teams that invested in reusable solutions bore the full cost while others benefited without contributing.
Narrow Scope: Systems were often built for one-time use or specific business lines (e.g., Canadian banking) without considering broader applicability.

The Diagnosis: Beyond Cost Cutting

When Strategy Go began its assessment, it quickly became apparent that the problem extended beyond simple cost management. The bank lacked a shared understanding of how its complex technology portfolio supported its business and its customers.

The existing Enterprise Portfolio Management (EPM) system contained basic information about applications (owners, launch dates) but lacked critical data on server usage, licensing costs, or team allocations. Without this visibility, it was impossible to make informed decisions about technology investments.

More fundamentally, there was no standardized way to map applications to business needs. Strategy Go recognized that before addressing specific cost issues, the bank needed a comprehensive framework to understand the relationship between its IT systems and business capabilities.

The Solution: The Business Capability Model (BCM)

Strategy Go’s first major initiative was developing the Business Capability Model (BCM), a comprehensive framework that mapped the bank’s 3,000 applications to 525 distinct business capabilities. This wasn’t merely a technical exercise—it represented a fundamental shift in how the bank understood and managed its technology portfolio.

The BCM provided a common language for business and IT teams, enabling them to:

Identify Redundancies: On average, each business capability was supported by six different systems—clear evidence of duplication.
Prioritize Investments: By understanding which capabilities were most critical to the bank’s strategy, teams could allocate resources more effectively.
Foster Collaboration: With a shared understanding of the bank’s technology landscape, teams could identify opportunities for reuse and consolidation.

One Strategy Go team member explained: “Before the BCM, teams had no way to know if someone else had already built a solution to their problem. After the BCM, they could simply look up a capability and see all the existing systems that supported it.”

Data Challenges

The EPM system lacked critical information such as server usage, licensing costs, and team allocations.
Teams often didn’t have access to data like the number of licenses or infrastructure costs, requiring Strategy Go to manually gather and validate this information.

Implementing Governance: Transforming Project Approval

With the capability model in place, Strategy Go turned to transforming how the bank evaluated and approved technology projects. The existing process lacked mechanisms to prevent duplication or encourage reuse. Projects were approved without considering whether existing systems could meet the need.

Strategy Go introduced new requirements for project approval:

Justification: Teams had to explain why a new system was needed and why existing systems couldn’t meet their requirements.
Migration Plan: If a new system was truly superior, teams had to detail how they would migrate users from legacy systems and ultimately decommission them.

This approach forced teams to consider reuse before building new systems. It also provided a mechanism for retiring redundant applications, generating both immediate and long-term cost savings.

Anecdote: Kondor Example

Multiple versions of Kondor (a treasury management system) were running in different markets, supported by separate teams.
Strategy Go identified $3 million in operational expenses (OpEx) tied to these duplications.
By consolidating Kondor into a single global platform, the bank eliminated redundancy and freed up funding for innovation.

Measurement and Accountability: The Monthly Rhythm

To sustain momentum and demonstrate results, Strategy Go implemented a monthly cost capture process. Teams submitted intake templates detailing reuse opportunities and potential savings, which were then validated by finance. A dashboard tracked progress against key performance indicators, creating transparency and accountability at all levels of the organization.

Initially, the team set modest savings targets. However, as they demonstrated early wins, leadership raised the bar to a $50 million annual “stretch goal.” This ambitious target helped gain attention from stakeholders across the organization and elevated the importance of the initiative.

The dashboard became a powerful tool for driving behavior change. It enabled executives to compare performance across business units, creating healthy competition and spreading best practices. As one team member noted, “CIOs didn’t want to be the only one without a green marker on the dashboard.”

Financial Innovation: Addressing the First Mover Disadvantage

One of the most significant barriers to reuse was the “first mover disadvantage.” Teams that built reusable solutions bore the full cost, while others benefited without contributing.

Strategy Go tackled this challenge by developing innovative funding models that:

Distributed Costs: Development expenses for “champion solutions” were spread across multiple years and business units.
Rewarded Innovation: Teams that built reusable solutions received recognition and additional resources for future projects.
Aligned Incentives: Funding decisions were based on capabilities rather than individual projects, encouraging teams to think globally rather than locally.

These changes transformed the bank’s approach to technology investment. Instead of each team building its own solutions, the organization began to leverage Centers of Excellence that developed global platforms for common capabilities.

Results: Beyond Cost Savings

Over two years, The Global Bank achieved remarkable results:

$102 Million in Cost Savings: Through application rationalization, reuse of existing solutions, and consolidation of global services.
Increased Global Adoption: International user adoption of shared solutions jumped from 20% to 46%.
Cultural Transformation: Teams that had once operated in silos began collaborating to build solutions that could be used across the organization.
34x Return on Investment: Against Strategy Go’s consulting cost of $3 million, the bank realized $102 million in savings.

More fundamentally, the bank transformed how it thought about technology investment. IT was no longer seen as a cost center but as a strategic asset that could drive innovation and competitive advantage.

Broader Benefits

Beyond cost savings, the transformation fostered alignment between IT and business strategy. For example:

Smaller markets gained access to technologies they couldn’t afford on their own, leveling the playing field.
Teams learned from each other, sharing best practices and improving products and services.

As one participant noted, “It wasn’t just about enhancing something so it could be used elsewhere. We were learning how to improve our own offerings by speaking to other markets.”

Lessons for Leaders

The bank’s transformation offers valuable lessons for organizations facing similar challenges:

Start with Visibility: Before attempting to optimize costs, ensure you have a comprehensive view of your technology portfolio and how it supports business capabilities.
Align Incentives: Address structural barriers to collaboration by developing funding models that reward reuse and innovation.
Implement Robust Governance: Create processes that encourage good behavior (reuse, consolidation) and discourage bad behavior (duplication, siloed development).
Measure and Celebrate Success: Use dashboards and regular reporting to create accountability and recognize teams that embrace new ways of working.
Bridge Organizational Silos: Foster collaboration between finance, IT, and business teams to create a shared understanding of priorities and constraints.

Conclusion

The bank’s journey from fragmentation to cohesion demonstrates that significant cost optimization is possible without sacrificing innovation or quality. By creating transparency, aligning incentives, and fostering collaboration, the bank not only reduced costs but also built a foundation for sustainable growth.

As organizations across industries grapple with rising technology costs and increasing complexity, the bank’s experience offers a valuable roadmap. The keys to success lie not in indiscriminate cost-cutting but in thoughtful governance, financial innovation, and cultural transformation.

“This isn’t just about saving money,” reflected a Strategy Go team member. “It’s about spending smarter, building better, and creating value for the entire organization.”

Technology Cost Optimization at a Large Global Bank