Five tips for banks running the Ironman Triathlon

European banks and their IT leaders will spend the next several months trying to run a virtual triathlon (for those interested in the real one, please Google “Frankfurt Ironman”) comprising:

• Achieve prescribed capital adequacy ratio and survive the crisis- hoping the eurozone is still around
• Reduce IT (and other) costs
• Execute mandatory compliance projects and critical change-the-bank projects

Banks- including those with little or no prior sourcing experience- need to look at smart ways to "finish" this triathlon!

Here are five ways of getting "more from less" with sourcing approaches:

1. Use sourcing/offshoring in the run-the-bank/maintenance side to release funds and resources for critical change-the-bank projects or compliance projects.

2. Lower and limit the total cost of compliance and change-the-bank projects via sourcing/offshoring models and fixed price arrangements.

3. For key business or application areas which are expecting significant compliance-related spend, think of bundled sourcing deals which allow you to lower RTB costs and provide a resource pool for development/CTB projects (particularly helpful when detailed project plan is not available - e.g. Icase of compliance projects - giving you the flexbility to ramp-up / ramp-down resources as you go)

4. Use targeted sourcing approaches for particularly high-cost/high-risk areas like ageing/rare skills, software packages with expensive externals or contractors. For almost every package on the market, there are providers with competence centres in India, Eastern Europe etc. who can help achieve this.

5. Work with providers to construct co-investment or skin-in-the-game deals that can help reduce upfront capital expenditure or defer payments. Most package vendors are also providing SaaS models or are open to discussing financial arrangements in these times (wih several banks having stopped new project investments or put RFPs on hold).

And of course, make sure to go out running / cycling / swimming!