Taking cost out of mission-critical IT - Bain & Company

Bain uses cookies to improve functionality and performance of this site. More information can be found in our Privacy Policy. By continuing to browse this site, you consent to the use of cookies.

Case Study

Taking cost out of mission-critical IT

A leading electronic securities exchange had recently acquired its leading competitor and needed a plan for integrating the two companies' technologies. We redesigned the client's technology platform and IT architecture, which contributed to 50% cost savings.

  • min read

At a Glance

  • 50% cost savings
  • 100% market value increase

The Full Story

The Situation

The client is a leading electronic exchange for securities. A wave of new electronic exchanges emerged in the mid-90s and created vicious price competition. SecuritiesCo* had recently acquired its primary competitor and needed to integrate the two technology infrastructures. Also, SecuritiesCo was under significant pressure to reduce costs where customer interfaces accounted for ~30% of technology costs. Bain was asked to advise on the following issues:

  • How should we integrate the technology infrastructures of SecuritiesCo and its recent acquisition?
  • How should we restructure the organization to best compete in a consolidating industry environment?

Our Approach

Bain team set up two primary work streams: strategy and technology.

Our Recommendations

Bain recommended the following solutions in a complex realignment of the IT architecture:

  • Front-end customer interfaces to be fully replaced with a new architecture that is in line with business needs and capabilities.
  • Back-end systems to be consolidated utilizing the best components of SecuritiesCo and its acquisition.
  • Matching engines to be integrated into a single system to support a single quote and to optimize speed and functionality.

Bain recommended an aggressive transformation plan to support organizational alignment along businesses, while maintaining trading synergies: Two businesses, Agency Brokerage and Exchange, to maintain separate business organizations while sharing certain technology platforms.

The Results

  • Redesigned technology platform allowed SecuritiesCo to realize 50% cost savings
  • Organization restructured around value added broker, exchange and technology
  • 100% increase in market value
    • Stock price doubled over case period

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

Want to continue the conversation?

We help global leaders with their organization's most critical issues and opportunities. Together, we create enduring change and results.