One of the main challenges facing organizations of a certain size, with regards to ICT and in the current economic context, is to simplify the management and operation of technology infrastructures. These items take up an important part of the bill that information systems departments have to pay to technology service providers every year, and is of particular importance in such sectors as the finance industry, which has recently engaged in large mergers with the resulting consolidation of their systems and technology infrastructures. This article briefly reviews the consolidation of the management and operation of intermediate business platforms carried out by Banc Sabadell with the help of HP.

1. July 2013
Consolidation of the management and operation of
intermediate systems by Banc Sabadell
One of the main challenges facing organizations of a certain size, with regards to ICT and in the
current economic context, is to simplify the management and operation of technology infrastructures.
These items take up an important part of the bill that information systems departments have to pay to
technology service providers every year, and is of particular importance in such sectors as the finance
industry, which has recently engaged in large mergers with the resulting consolidation of their systems
and technology infrastructures. This article briefly reviews the consolidation of the management and
operation of intermediate business platforms carried out by Banc Sabadell with the help of HP.
Initial situation
Banc Sabadell is the fourth largest private equity banking group in Spain. It is made up of several
banks, brands, subsidiaries and affiliates covering all the areas of finance. Dedicated to commercial
banking, it boasts a significant penetration in the market of middle and high income companies and
individuals. It has a network of over 1,800 offices 1 and a total staff of 10,699 employees. It is listed
on the Madrid Stock Exchange (SAB) and is part of the IBEX 35 index.
The group has experienced an important transformation in recent years, being affected, as many of
its competitors, by the wave of mergers that have resulted from the problems experienced by the
sector as a consequence of the financial crisis. Unlike others, the bank has adopted the stand of a
buyer, which has forced it to make important decisions regarding the resulting post-merger

2. technology. These decisions have normally gone along the lines of optimizing infrastructures and
business platforms in order to reduce the heterogeneity resulting from its historical evolution and
thus optimize management.
In 2009 and in such a context, Banc Sabadell needed to consolidate the management and operation
of its infrastructure and intermediate platforms which had been so far charged to different vendors
(HP, Accenture and T-Systems) and which, therefore, constituted a heterogeneous mix match in
terms of technology, operations and services. Excluded from this state of affairs were the systems
that house the core banking platform (IBM System Z architecture) and the treasury (operated by the
same service provider), which functioned according to a monolithic architecture following the usual
trends in the finance sector.
In addition to the unification of all the intermediate systems, Banc Sabadell needed to address the
strategic renovation of its workplace platform (office and back-office network) within a virtual
model, taking into account the need to expand and integrate the commercial networks of the merged
entities. It was crucial for the bank to carry out these initiatives under the aegis of a single global
supplier so as to guarantee a consistent and simplified management of the affected technology
platforms. The associated RFP (Request For Proposal) was issued in early 2010.
From a financial standpoint, Banc Sabadell needed to adopt a pay-for-use model of ICT assets and
services with the aim of reducing investment (CAPEX) in technology to a minimum and of
transforming all costs into operating expenses (OPEX). In other words, it needed to include such
expenses as hardware, platform, operation and maintenance software in a single utility bill. In this
regard, it was important to reduce the peaks in payments to providers and thus "flatten" the ICT
income statement and ease the estimation of the budget for technology services.
To this end, it was crucial for the company to reduce the management of technology obsolescence to
a minimum, virtually eliminating concerns over taking part in active renovation cycles. It is worth
remembering that, in order to provide the best services in the banking industry, it was very
important to benefit at all times from a state of the art technology architecture updated to meet the
topmost standards of the market.
Alternatives considered and reasons for the choice of the service provider
Banc Sabadell conducted an internal analysis of those technology vendors that would be able to
provide end to end management and operation services on all its intermediate systems. It sought a
global supplier that could provide converging infrastructures, technology and value-added services,
multilevel attention to end users, etc. These criteria already reduced the scope of the search for the
best options in the market. On the other hand, in order to choose the best provider for the services
related to the virtualization of the office and back office workplaces, an RFP was launched, with HP
and Accenture ranking as finalists. The technical evaluation resulted in the contract being awarded
to the bid submitted by HP.
At the junction between this project and the one concerning the consolidation of the management of
intermediate systems (named the Orion project), it was finally decided to award the latter also to HP
(which already had an important role in the management and operation of the departmental
platforms of the group).

3. In short, the main factors that led Banc Sabadell to hire the services of HP were the following:
•
•
Not only is HP a global technology provider, but it also proved to have extensive skills
in the provision of infrastructure services in a complex banking setting, as well as sufficient
ability to carry out the related operations and to organize layers of advanced management
services. In the eyes of the group, this meant being able to have all the possible movements
of the different intermediate platforms and its associated services managed by a single
technology partner.
The fact that HP was awarded the contract for the virtualization of the
workplaces allowed for a uniform approach in the management and operation
of both the intermediate systems and the end-user platform, thus ensuring the
technological and management consistency of all the service levels involved. In this regard,
the company needed a single supplier to act as a focal point in the provision of critical
infrastructure services, from the double standpoint of technology needs and coordination of
third party service providers.
The Solution
During the preliminary phase, Banc Sabadell carried out the consolidation of the management and
operation of the intermediate systems (of each department), as well as the process of virtualization
of the workplace (office and back office), with HP as an overall contractor, in what was known as the
Orion project 1, signed in September 2010. Under this scheme, the bank was using IBM as service
supplier of the core banking platform and treasury services, and HP as global supplier of the
operation of other systems (virtualized with VMWare), the virtualized user platform (by Citrix) and
the Internet service, thus improving the management of banking technology and lowering its costs.
When the company had to address the technological integration of CAM Bank, it carried out a
thorough revision of the project and began a second phase, called Orion 2, in order to properly
manage the great technological impact of the merger. This resulted in the need to revise each of the
intermediate platforms affected and resize all the service volumes in order to absorb the new needs
while ensuring flawless continuity. A joint project office was created, with HP as partner, and a very
practical approach was adopted, with the purpose of minimizing the diversity of issues that usually
arise from this kind of process.
The infrastructure service associated with intermediate systems provided by HP is very close to the
concept of private cloud, and in essence is a pay-for-use scheme. In this context, Banc Sabadell and
HP are carrying out a gradual transition towards a genuine cloud computing model, building on the
ongoing process of virtualization of all the intermediate platforms, including those that support
critical processes.
The aforementioned platforms will maintain the form of a cloud on premise, while – in parallel with
the completion of the said massive virtualization process – the transition of non-critical assets and
development systems to a hybrid cloud in bursting with the HP VPC (Virtual Private Cloud) is now
also being launched. Currently, Banc Sabadell has two CPD for the operation of the services
provided by HP, one in Sant Fruitós del Vallés and the other in Sant Cugat (CBS), in active-active
mode.

4. In addition to the above, the second phase of the Orion project has served to revise the
infrastructure operations and management model that was set up during Orion 1, in order to
overcome certain issues of coordination between the operations staff and the user management that
aroused at the beginning of the project and were partly caused by the service being designed in
"towers" according to technological field (process platforms, storage, middleware, etc). The revision
incorporated an additional layer of services to support the operations, thus ensuring a more effective
coordination between the technical teams and those in charge of compiling the needs of the users
and implementing support actions. This was achieved by incorporating professionals with a double
profile (infrastructure experts providing functional responses to users and, on the other hand,
systems experts focused solely on the operation of the affected platforms).
Thus, the management of everyday incidents was given a more significant role, the end user
benefited from homogeneous service levels and the operations of the mentioned technological
spheres was optimized (with the support of the service layer).
Management of the service provided by HP is based on a complex government model characterized
by a close coordination of the ICT staff of Banc Sabadell and HP, at different levels (management,
mid management and operations staff). Although the service, as has been mentioned, is distributed
in technology “towers”, it still ensures a homogeneous service model by incorporating dual
responsibilities for each (company -HP), a standardized Iaas cross-level group of infrastructure
service provision, and a cross team responsible for ensuring excellence of service to end-users and
for compiling end-user needs at all levels, regardless of the architecture involved.
Success features
Consolidation of the management and operation of intermediate systems around HP, implemented
by Orion projects 1 and 2 and still ongoing, is taking place as expected. Both the company and HP
are currently working very hard to optimize the operation of the platforms involved, taking
advantage of the service provider’s skills, particularly with regards to the management service layer
built around the operations model, and especially taking into account the complexity of the systems
included in the contract.
The key success features related to the Orion projects are:
•
•
•
Firstly, the importance of the virtualization and the consolidation of the
intermediate systems. This has been key to reducing technological heterogeneity (which
did not affect the core banking platform), as well as to ease the transition to a global
operating model at the hands of HP and to enable a new technology strategy with cloud
computing as its target setting.
Also crucial are the role played by and the importance given to the virtualization
of the office platform. Not only has it catalyzed the introduction of the said service layer
in the infrastructure operation, but it has also facilitated the technological integration of the
acquired companies (Banco CAM, Caixa Penedés) with HP technology and a financial model
without investment.
The addition of a strong service layer to the operation of the technology
platforms covered by the contract has also played a key role in easing the
management task, eliminating coordination problems and frictions, improving the
resolution of user’s problems and ensuring consistent compliance with the ANS.

5. •
Finally, in a setting such as Banc Sabadell’s, in which, despite the global nature of the
technology suppliers, at least two of them will end up taking part in the technology
management of the company, it is crucial to properly compartmentalize their
functions, assigning each of them powers over a particular technology field, and
reducing ambiguities as much as possible when it comes to integrating systems, support
services, etc.
Challenges overcome
With regard to the obstacles that have had to be overcome for the Orion project to be successful, the
following should be highlighted:
•
•
•
The consolidated outsourcing of the management and operation of
infrastructures has brought forward a paradigm shift that makes it difficult to
identify and recruit professional profiles capable of managing services provided by third
parties, since to date these profiles have been essentially technical. This problem, largely
associated to infrastructure outsourcing, results in the difficulty of articulating teams of
experts in which both skills converge.
The financial change marking the transition to a model that excludes
investment and is based on a pay-for-use OPEX for ICT services, has had to be
thoroughly explained, since it has introduced a significant change in the income statement
of the group. Indeed, charging the full amount for technological services to the operating
expenses account has somewhat risen the OPEX percentage levels compared to other banks
- in an industry so dependent on technology - and has been a delicate issue when reporting
the bank’s corporate results to markets and regulators.
From the point of view of technological change, a well-known obstacle has had to be
overcome, namely that of having to explain to the governing board of the bank the
decision of transferring certain technology assets to the cloud. And yet, the main
challenge in this regard stems from the limitations imposed by banking regulators to these
and other changes affecting technology, especially if these changes affect - even tangentially
- any assets related to financial transactions or to customers' personal data and their
financial positions.
Madrid
Velázquez 114
28006 Madrid
Barcelona
Córcega 282
08008 Barcelona
T.: +34 902 154 550
www.penteo.com