Top 3 Current Projects

Derivatives Infrastructure Reengineering

Objective:

A reengineering from front-office margining and trading through middle-office and back-office operations, across multiple businesses. The goal is to evolve from a siloed product infrastructure into a cross-product derivatives environment, providing a unified front-to-back infrastructure across half a dozen different businesses from which we can produce integrated risk and P&L, consistent middle-office support, and consistent support for finance. The whole backbone is distributed computing, using DataSynapse as the key product.

Expected Completion:

The middle to end of 2007.

Reference Data

Objective:

This is a multiyear effort focusing on instrument and client reference data as a foundation for evolving across silos. As a result, we now can understand our institutional customers across all our products and measure the clients with which we are working well versus those with which we are not, as well as the ones with which we are generating the most revenue, enabling us to make intelligent decisions on how to evolve those relationships. The next evolution will be to see the clients across the whole enterprise, irrespective of whether they are an investor or an issuer client on the corporate or commercial banking side.

Expected Completion:

The investor client side will be largely done by year-end.

Common Securities Infrastructure

Objective:

To increase the percentage of cash transactions -- whether sales-originated or electronically originated directly from a client -- that can go all the way through to settlement and payments without human touch. We are in the first year of a three-year cross-business, straight-through processing effort for our cash products across treasuries, mortgages, corporate bonds, etc. The benefits are a combination of cost efficiency and control, reducing the number of exceptions so the middle office and product control groups have fewer things to analyze.

2007 Initiatives

Data Aggregation

It's not formulated as a project at this stage, but where I see technology being able to help the businesses is by evolving from a product-centric toward an information-based world. Information is going to become a very important currency for the business, and the larger the institution, the more difficult it is to aggregate all the relevant information for the business to make decisions. So we will have more projects focusing on data aggregation across all the different businesses and channels to learn more about our clients through that data.

Vitals

Percent of IT Projects Outsourced:

15 percent to 20 percent. We outsource relatively traditional areas, such as quality assurance testing and some back-office technology support.

Key Technology Partners:

We both buy and build. We typically buy in more-commoditized areas where the vendor market is mature. So we use Bloomberg, ADP and Murex, and we run pilots with the Microsofts and IBMs of the world. In areas that are constantly evolving and the vendor market is thin, such as our derivatives businesses, we build.

Success Metrics:

The main variables are revenues, operating risk and cost. Typically, a project drives one or more of those variables. The ultimate success metric, though, is an annual internal client satisfaction survey to see how we're doing as a team across all of our projects -- the head of the business pushes the survey to all of his or her reports and further down in the organization. We can say we've achieved any metrics we want, but if the internal clients are not satisfied with the service, then we could have a problem.