DVAG – Individual standards are paying off
Standardization and cost control are essential to reduce IT spending. This does not automatically lead to a “No-frills IT”. The financial service provider DVAG manages to be among the best – respective to expenses and functions.
The employees of Deutsche Vermögensberatung AG (DVAG) know about money – the company, established in 1975, is the largest independent financial services provider in Germany. It provides financial and insurance products from multiple vendors and achieves high earnings as well as a high equity ratio. So it was not really a need to cut the IT budget when IT Director Christian Glanz started the first IT benchmark for his organisation in 2011. "We just wanted to be certain that we are well underway qualitatively as well as financially.”
Main trigger for the systematic assessment were discussions within the company about the steadily growing cost of IT. Even if the increase is only natural – growing amounts of computing power and storage, rising prices for maintenance and development plus the increasing complexity of new applications and devices keep IT under constant pressure. About 650 employees in the Frankfurt headquarters provide services for the 37,000 professional financial advisors of DVAG in the field. The IT organisation has approximately 350 employees and a budget in the mid double-digit million range.
The results of two IT benchmarks with Maturity speak for themselves: "We spend less and work more productive than the average member of our relevant peer group," says CIO Glanz. To conclude from the results on a "No-frills IT" with the DVAG, however, is wrong. Standardised solutions without adjustments, commonly considered as a guarantee for low IT costs, are no strategic guideline of the Frankfurt-based company, according to Glanz. On the contrary: "As a pioneer of one-stop financial services we are in the situation that we have to set the standards for the sector."
Thus, from 2003 to 2007, the DVAG developed a completely new and comprehensive online system for its Financial Advisors: "In the insurance industry there was no such platform at this time – and it was considered an enormous challenge that we wanted to develop such a system by ourselves.” The software is continuously developed since then together with the users, and every month there is an upgrade released with additional features and technical changes. "The maintenance effort is high," argues Glanz, "but it finally goes directly to our core business."
Claiming to be the technology leader in the sector, the DVAG focused very soon on tablet computers as a sales tool – in 2010 an employee camped in the queue at New York's Times Square to buy two brand new "iPads" from Apple. He immediately got back to Frankfurt to as soon as possible with the concrete verification of compatibility. Meanwhile, the company engages more than ten employees who develop Apple apps to support the sales department. "If we don’t have an internal team for app development, we would certainly spend less money”, says CIO Glanz, "but then today we would follow the market." In this respect it is not useful to look solely at the absolute costs when evaluating the IT.
The IT controlling of DVAG had to do a lot of groundwork to prepare the first benchmark: "We had to identify the appropriate metrics, collect the figures and bring them in the right form for the comparison," says Stefan Boeff, head of IT controlling. The high efficiency of IT couldn’t be justified with cost awareness alone: "Of course we negotiate quite hard with our contracts and schedule discussions during the year-end sales of the suppliers," says Boeff. In addition the IT managed to establish individual applications as a standard within the company. Instead of using many simple solutions with supposedly low prices, the DVAG uses a few comprehensive, consolidated and customised applications that provide real business benefits, says IT Controller Boeff: "The online system based on smart client technology or the restriction to Apple iPads make the maintenance effort relatively acceptable."
However, one motto even applies for an efficient IT organisation: The journey is the destination. By a subsequent benchmark, CIO Glanz wants to verify that the good results of the first and second assessment were "no fluke", especially since volume and complexity of IT have continued to rise in the meantime. Again, Glanz recalls a motto of his company: Think earlier about later. And he is convinced: "This is not only for personal retirement savings and risk protection, but also for continuously optimising the efficiency of an IT organisation."