Partnership beyond outsourcing

Source: Technology Digital

Date :20/06/2007 14:52:00

How Luxoft brings Russian technology to western financial markets

“There is little doubt that global outsourcing has gone off the scale in terms of prevalence and IT is the biggest market. In the UK, the financial market is the biggest where it comes to embracing outsourcing.” So says Dmitry Loschinin, President and CEO of Luxoft, but how would you feel about placing your CRM in Russian hands?

By John O’Hanlon

Luxoft is a global software development company headquartered in Russia, with clients including world leaders in the IT, manufacturing, energy, financial services and aerospace industries. Deutsche Bank approached Luxoft to build a business critical customer relationship management system with the objective of replacing the application previously developed in-house.

Customer relationships are obviously critical to Deutsche Bank - investment banking is based on trust and client knowledge and the way in which you manage the relationship how is at the heart of the business. It is advantageous, and indeed vital, to implement client management software connecting the various qualitative and quantitative client systems across all parts of the bank to provide a single, integrated view of each client relationship.

The new system needed to provide the sales division with a flexible work space that linked CRM information with other business critical content to ensure an accurate, up-to-date and comprehensive overview of each client relationship. The main goal was that the new application should improve customer relationship quality, increase service efficiency and make the client more attuned to customer needs.

As Daniel Marovitz, COO for technology at Deutsche Bank’s global banking division, comments, “The new system was originally built to replace a variety of legacy CRM applications that were costly to maintain and each covered only silo views of the business. It was designed to radically reduce the running cost and provide us an overarching view of a client relationship across all geographies, products and industry verticals.

A custom solution

Marovitz continues, “This is particularly critical for managing relationships with large multinational corporates. The main goal was that the new application should improve customer relationship quality - letting us be more strategic and deliberate in managing accounts. Deutsche Bank is a large and complex organisation - the key was to make sure our scope and breadth were strategic advantages for us rather than hindrances.”

Deutsche Bank needed a custom solution because packaged solutions did not provide enough flexibility and functionality to meet their objectives. By leveraging outsourcing, it could build something less expensively than buying licenses from an established CRM vendor. Banks have very specific, tailored business processes and fine-grained entitlement rules which could not be supported by off-the-shelf products without lots of expensive customisation, which just further dilutes the case for buying something off the shelf.

As a result, Deutsche Bank brought in Luxoft as an outsourced partner to implement the solution. Having considered Canada, Ireland and low-cost locations in the United Kingdom, it was decided that the choice came down to India or Russia. Russia won the day, as Marovitz explains: “Every time we went over to India and we tried to get things going and do a little pilot, we found it difficult to get traction. We spent time knocking around India, looking at all the big companies. It was hard to get them to focus on something that would be pretty cutting edge. In Russia, you can get people who can think on their feet’, which is useful for innovative projects. People aren't afraid to tell you that you have a silly idea that makes no sense whatsoever. But that's what you need for complex ITO.”

Nearshore advantages

Marovitz continues, “Another reason why we selected Russia was for its nearshore location. For a fast project ramp up geographical proximity is critical. The three and a half hour flight from the UK means that we are in Luxoft’s offices when needed, which improves operational effectiveness and knowledge transfer. Nearshore locations are also a plus when you need to ensure airtight communications, critical for high end ITO. The costs of maintaining a relationship with a nearshore supplier are lower, which is a big plus when you need to start small. Complex IT projects in the financial industry require close collaboration and that’s where nearshore capability has advantages, which result in higher productivity and ultimately superior ROI.

The main features of the CRM platform include: Centralisation - data from a myriad of external sources is corralled into one convenient location; Searchability – the application has advanced search functions; Accessibility - critical client data accessible from anywhere a bank’s sales staff has internet access and security – a sophisticated entitlements model filters data according to specific criteria such as user location, industry, client location, etc. The new system effectively connects the various qualitative and quantitative client systems across all parts of the bank providing a single view of each client relationship.

The results of the relationship were impressive. Working with Luxoft helped Deutsche Bank to understand the issues of the current system and to improve the business process flow within the bank. As a result of the implementation of the new CRM system, the time taken for data entry within the bank was significantly reduced. For example, the time required to log a call report decreased from eight to three minutes, which resulted in 750 hours saved per month.

The new CRM system provides a single point of access to corporate clients’ data to all the parties and brought together sales, global relationship managers and senior investment bankers across Deutsche Bank. The system is three times faster than its predecessor and the new functionality allows bankers to manage customer relationships in a more interactive and intelligent way. It also integrates with the majority of customer applications in the bank’s database schemas, loading mechanisms and infrastructure, allowing Deutsche Bank to deliver updated business information to bankers as soon as it is available.

A marketing partnership model

The Deutsche Bank CRM project achieved a high degree of ROI, estimated at a saving of 30 – 40 percent compared to conducting the project onshore. The huge success of the project has generated a further development of the relationship - Luxoft and Deutsche Bank are now undergoing a joint initiative to market the Client First technology to other investment banks. As Daniel Marovitz says,” Our Luxoft team has continually shown that they are as committed to our success as we are, and that they are prepared to lead rather than simply follow. I believe we can now build on this partnership by jointly marketing Client First to other businesses.”

Dmitry Loschinin emphasized that working with Deutsche Bank has been a truly collaborative partnership and that the commercialization of Client First is an exciting move: “We are taking an almost unprecedented step by working with Deutsche to sell a product that was specifically developed for just one client. We are confident that we can maintain the winning formula that has made the Deutsche-Luxoft team so successful.”