Case Study of CITI Group

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Case Study

Citigroup
How IT Value Management is Leading CTI into the Next Millennium

Citigroup’s corporate center provides administrative support and information technology services to its global business units. Within the corporate
center, Citigroup Technology Infrastructure (CTI)
www.citigroup.com

manages all global mainframe data centers, and
most of the distributed computing for the six
sectors and the Corporate Center.

Industry
Financial Services

Problem
Internal customers were concerned
about the lack of transparency in
cost-recovery charges.

Solution
Run IT as a value-add business.
Implement a performance measurement system based on Acorn
Profit Analyzer™ and Acorn Performance Analyzer™ to accurately assign and track costs.

The Citigroup Technology Infrastructure Division (CTI) had reached the size of a government. With 75 to 80 percent of the company’s technology infrastructure, had responsibility for providing highly reliable, secure, and cost effective services to about 60 units in the global sectors and the Corporate Center. With a budget of over $3 billion and a dedicated workforce that spans the globe, it required a tremendous level of effort to track performance. CTI’s hundreds of different information systems did not help.

Having a better understanding of the value of IT processes can drive smarter demand for IT services, better management of work, and better utilization of resources. Learn

Results

how CTI helped create a new IT framework that aligns their technology assets with

• Replaced spreadsheets with an

operational goals.

automated, easy-to-use system
• Creates monthly usage volumes
and quantities/prices of products
and services billable to clients
• Created ability to transfer best
practice margins by comparing
productivity and cost efficiencies between regions

Case Study: Citigroup

CTI, the Information Technology (IT) arm of Citigroup, used the IT Value Triangle to maximize the value of their IT organization. The three core steps are:
1) document / map in detail the current processes performed by IT to serve its clients 2) measure performance of these processes in terms of true cost and capacity 3) leverage this information to define the future strategy of the IT organization

New Model: IT as a Value-Add Business

In 2004, CTI embarked on a major shift in strategic focus to redirect its business model from a utility to a service model. Jeff Nachowitz, the CFO for CTI, summarized the change as follows: The rationale for managing IT as a business within a business, as opposed to as an internal corporate utility, was to demonstrate how we create value to the businesses that we support. If we can not add value to our customers, they will look elsewhere for their technology services. We introduced product managers, client relationship managers, service-level agreements, benchmarking and service catalogs.

As part of this change the CTI Finance organization made a parallel transformation from being the scorekeeper and cost overseer to becoming an active business advisor for CTI’s operations managers. Exhibit 1 shows the four components in the CTI Financial Management Cycle – operational productivity, product profit and loss (P&L) statements, benchmarking, and customer recovery/chargeback – that are at the heart of managing technology infrastructure as a business within a business.

Exhibit 1: CTI Financial Management Cycle1

Target State

Target State

• Transparency
• Cost Management
• Customer P&L’s

Customer
Recovery/
Chargeback

Operational
Productivity

• Develop Business Drivers
• Labor Capacity Planning
• Productivity Metrics
• Capital Planning

Financial
Management
Target State

• Comparison to internal
IT and external vendors

• Opportunities for service


and pricing improvements
Service Catalog

Benchmarking

Product P&L’s

Target State
• Standard Product Definitions
• Cost Pools

•...
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