HSBC bank building

Bank Ditches ‘Built Here’ Mentality for Flexible Services in the Cloud

FTSE 100 and Fortune 500 firms are cottoning on to the fact that competitive advantage derives not from ‘built here’ software but the ability to trade and buy software services cheaply and quickly. The abandonment of legacy software for a new future of horizontal value networks is highlighted by banking giant HSBC’s decision to swap a ‘universally hated’ HR system for cloud services.

“Why would we build HR technology? That’s just stupid,” Georgina Jarratt, global head of transformation, group HR, at HSBC, told BVEx sister title, Computerworld UK, at the SAP Financial Services Forum. “There is no difference running HR in a bank versus an insurance company, an engineering firm, Walmart or whatever.” (Read full story).

HSBC is looking to shift its entire global HR system to the cloud with SuccessFactors in under two years, a project Jarratt said is “really fast, on a level the organization has never seen before, impacting all 35,000 of our line managers and ultimately all 230,000 staff in 71 countries”.

The challenge of making the transition between ‘built here’ and participating in value ecosystems, for the manufacturing sector in particular, was referred to recently by DXC Industrie 4.0 expert, Michael Mey. Industrial players “are also handicapped by a manufacturing mindset of ‘built here’”, he told me in a recent interview.

“Whereas a consumer will happily buy a product, say a car, which comes with on-board, standard capabilities, a manufacturer, by contrast, will often seek to rebuild from scratch,” Mey further explained. In the scenario of acquiring Industrie 4.0 IT capability, this ‘built here’ approach would call for a huge outlay in software and infrastructure, including data centres, code and communications software.

“If manufacturers were to adopt the digital mindset of consuming appropriate services in a pick ‘n’ mix fashion, this would enable them to acquire capability in a scalable and agile way. They would also be able to access new plant, processes and people, fast, in order to innovate and meet changing customer demand,” Mey argued.

Over at HSBC, the financial services organization is doing just that with its HR capabilities, incentivized by the fact that millennials will not tolerate navigating multiple interfaces simply to book a holiday. The bank is also looking to outsource other non-core banking systems into the cloud on software-as-a-service (SaaS) contracts, including Oracle for financial back-office software.

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Helen Beckett

Author: Helen Beckett

Helen Beckett is the Community Manager of the Business Value Exchange. She has been a writer and editor for over 20 years and takes a particular interest in the challenges facing the CIO in today’s business climate.