Taking cost out of mission-critical IT

Client Results Story

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.

Opportunity
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? 

View Approach

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

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View Recommendations

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.

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View Results

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

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