ZIFFPAGE TITLEMeasuring UpBy Larry Dignan | Posted 2005-10-19 Email Print
How Real-World Numbers Make the Case for SSDs in the Data Center
Keep it simple; don't overanalyze; focus on results and stick with your plan; manage business first, technology second; keep teams small and focused, according to Cathy Tompkins, David Johns, Mitchell Gregory, Werner Vogels and Mike Chandler
Wilmington Trust's Mike Chandler makes decisions by looking at staffing levels, spending metrics and what's best for the bank.
By Larry Dignan
CIO, Wilmington Trust Corp.
Lesson: Keep staffing levels in line with your industry.
Wilmington Trust Corp. chief information officer Mike Chandler likes to manage by a set of metrics when it comes to technology spending and staffing.
Instead of hiring based on incoming projects, Chandler picks his ideal head count based on the technology staffing levels of Wilmington Trust's competitors. According to Chandler, the company regularly measures itself against other financial services businesses.
Chandler's target: keep technology staff levels at about 9% of the company's 2,428 employees. That percentage is 2% less than investment banks and money management firms, but more than the 0.5% of technology staff per head count at commercial banks. He arrives at that number by blending an average of technology worker levels among rivals in Wilmington Trust's three main unitsa traditional bank that collects deposits, an international asset management unit and a wealth management group.
"We're a hybrid, so staffing is at a higher level than commercial banks, but less than investment advisory firms," Chandler says.
Likewise, the midsize Wilmington, Del., bank, which reported 2004 earnings of $141.9 million on net sales of $673 million, also looks at technology spending relative to the company's sales, currently at around 5%. The company has a technology budget of $30 million to $35 million.
These I.T. labor and spending metrics helped put Wilmington Trust on the list of the 500 companies that manage information best. At No. 419, the company delivered Information Productivity of 32.6% and topped larger banks such as Bank of America (No. 453), MBNA Corp. (No. 460) and Key Corp. (No. 485). In fact, banks with sales below $1 billionW Holding (No. 36), Corus Bankshares (No. 50) and Hudson City Bancorp (No. 51), to name a fewpeppered the commercial-bank listings in the Baseline 500 this year.
Chandler acknowledges his favorite metrics aren't perfectit's hard to compare Wilmington Trust with Wells Fargo (No. 299), a bank that can spread out its technology costs across 145,500 employeesbut they do provide a good start to prioritizing projects.
And the metrics are also weighed against what's good for the bank. For instance, in late 2004 and mid-2005, two executives in charge of business units came to Chandlerone was looking to enhance a wealth management system to provide customized monthly statements, and the other to update the online banking application.
Wilmington Trust picks its technology priorities annually based on the answer to a simple question: Will this make us any different? Chandler must then decide if he has the staff to take on the work, and set priorities. In this case, the priorities were clear: Spend most of your labor resources on the wealth management system, which will launch in early 2006, not online banking. Why? Wealth management is a competitive differentiator and accounted for $155.6 million in 2004, or 27.5% of Wilmington Trust's revenue.
Since online banking wasn't going to boost the bank's bottom line, Chandler implemented packaged software for the online application in December 2004. As Chandler puts it: "We have to measure ourselves against other financial institutions while doing what we can to build competitive advantage."