Management Strategies

01:38 PM
<strong>Dormain Drewitz, manager of solutions & vertical marketing, Riverbed.</strong>
Dormain Drewitz, manager of solutions & vertical marketing, Riverbed.

Intelligent Growth: Branching Out and Rolling Up

A cost-efficient and scalable IT strategy is key as banks continue to expand their operations.

Industry Consolidation

Banking consolidation has been underway in the U.S. and other countries for some time. Acquisitions can deliver accretion by layering on new services, expanding the market, or by stripping costs and streamlining operations. Meanwhile, all acquisitions carry the risk of disrupting service to customers, who take their assets elsewhere. So how do banks expand through accretive acquisitions, finding ways to drive cost reductions while minimizing risk?

Building a repeatable framework for absorbing bank after bank allows the acquirer to drive cost savings and reduce risk. Part of that framework is simply organizational strategy – creating a team of integration specialists who develop, test and continually improve a strategy for integrating acquisitions. But another element is having a core infrastructure that has the agility to absorb changes quickly. Virtualizing and consolidating the servers can provide banks a rapid return on investment in the form of power and cooling, which typically represents 15-20 percent of ongoing costs, but closing data centers and migrating assets into a centralized location can yield further real estate and operational savings. To minimize the risk of a data center migration, dependency mapping can discover which IT assets are connected.

As with centralizing branch servers, WAN optimization is essential to ensure performance of applications after a data center migration or consolidation project. Whether the acquired data center assets need to be moved to the next state or the next continent, users can experience degraded response times, which erodes productivity. Similarly, streamlined operations are only a strategic asset if they can deliver equal or greater productivity to users. After investing in an acquisition, the last thing any organization wants is their recent purchase to perform worse.

Over the next decade, foreign and domestic banks will be expanding their banking operations. Those with a cost-efficient, scalable and resilient IT strategy will have an advantage. Server virtualization and WAN optimization are key technologies to enable growth through efficient branch expansion and streamlining acquisition integration, while delivering high-quality service to inspire trust and confidence.

Dormain Drewitz is the manager of solutions & vertical marketing at Riverbed.

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