ABN Amro took a leap of faith to drastically change its IT strategy 2.5 years ago. The goal was to create a better and more stable enterprise IT stack and to be able to change and innovate faster. An important part of this was the shift from Kyndryl as a managed service provider. Instead, Kyndryl became an integrated partner, and a hybrid team was formed to collaborate seamlessly.
ABN Amro is in a dynamic world where IT plays a more significant role every year. Banks have gone through transitions in recent decades, but automation and innovation come back time and again. As a bank you can no longer do without a well-functioning IT division.
Reason for major strategy change
Several years ago, ABN Amro encountered various challenges. To build and maintain its IT stack, it worked with various IT vendors and managed service providers. However, these partners were all business partners who were at some distance from ABN Amro and simply delivered what was contractually agreed upon. Naturally, how it is delivered and maintained is often not visible to those not directly involved.
Daniel Bloem, head of private infrastructure platforms and technology at ABN Amro, explains that a solution or service is often delivered as a black box. You have no insight into how the underlying infrastructure can be optimized. The fact is that when problems arise, you are dealing with multiple partners, which leads to differing perspectives on accountability. Sometimes, those partners will even point to each other for who is responsible for a specific incident. Bloem recalls a particular case with a database that functioned perfectly, according to the database experts. However, the applications using the database were really slow, which made them almost unusable. Multiple partners were involved but none of them felt accountable. Ultimately, the solution took too long, and the need for a more integrated partner became more clear.
ABN Amro also has the necessary ambitions in terms of IT transformations. Think of a hybrid cloud strategy and a growing list of innovative projects. ABN Amro longed for a different structure in which it could cooperate more intensively with its partners.
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Role of Kyndryl changes from MSP to integrated partner
Looking ahead, ABN Amro wanted a better IT organization. The most obvious course of action is to bring more people in-house. That would mean that ABN Amro’s HR department would have to start recruiting hundreds of IT people, maybe even a thousand. It would take years to get that done and align all those people. That was not an option. Eventually, the solution came from the existing managed service provider. Kyndryl was willing to think outside the box with ABN Amro and see how they could work together more intensively and transform the engagement into one that aligns with the bank’s strategy.
One Kyndryl – ABN Amro team
Eventually, the existing engagement with Kyndryl was transformed into an intensive collaboration. In the process, hundreds of Kyndryl employees became more or less ABN Amro employees. Although they remained employed by Kyndryl, they became part of the IT teams within ABN Amro and are embedded into ABM Amro operations. They became full-fledged team members to remove the distance between the bank and the IT supplier.
From then on, IT projects were handled very differently, with Kyndryl employees continuously involved in all the bank’s IT projects. They can participate in all decision processes to discuss the options on the table, the technical set-up, or the possible challenges. The knowledge that Kyndryl’s people bring is essential in this process. ABN Amro can make better and faster choices for its IT stack based on the experience Kyndryl brings.
It doesn’t happen by itself
Sabrina Lounis, Culture Transformation Lead at Kyndryl, says that the goal was to build a cohesive and effective collaboration across a hybrid team, especially during the challenges of COVID-19 and to bridge amongst a hybrid team. She emphasized the importance of bridging gaps and fostering strong connections among teams, despite the remote work environment and the complexities of cultural differences and time zones.
Lounis was also involved in deploy the Inspire program, focusing on the people within the teams and investing in soft skills. The trust had to be built between the teams, and there were many virtual calls and even quizzes to get to know each other better.
Towards the end of COVID-19, when travel was possible again, several teams also went to India, and several teams from India went to the Netherlands. This was to learn from each other and better understand each other’s culture, with the goal of reducing the distance between employees and making them work better together.
Redouan Lahit, Business Lead Private Cloud Systems at ABN Amro, says you shouldn’t try to change cultures. You simply can’t. You have to learn to understand each other’s cultures. Sometimes, you shouldn’t respond immediately when something is asked, but first, listen carefully to the question. Furthermore, everyone benefits from openness and honesty, not finger-pointing. It is also essential to indicate that people can ask questions if they do not understand something.
Outsourcing is something else
When we talk about having IT work done in India, we often talk about outsourcing. According to Lahit, it is different in this case. Lahit states that with outsourcing, you have a client who wants something from an IT service provider from abroad, but on their terms, methods, and IT stack. In this case, it is different because Kyndryl cooperates on all fronts with ABN Amro’s IT stack and strategy. The way of working was created jointly.
One team, one task
The IT teams consist of individuals from ABN Amro and Kyndryl, who are located in different places around the world, but all have the same objective, targets, and project schedules. They also consult with each other on how to solve an issue or create reports, for example. There are also monthly evaluation moments with the entire team.
There is also a culture cultivated internally where everyone can develop ideas. If anyone has an idea, no matter how small, to improve a process, project, or product, they want to know about it. It is even encouraged. Such a small idea sometimes has a snowball effect that people start to catch on. Then a tiny idea can suddenly become a bigger and even better idea. To encourage this, almost all data is available to all members of the IT teams, both ABN Amro and Kyndryl employees. So they can also back up their ideas with data.
Expectations exceeded
Meanwhile, people report feeling like they are part of ABN Amro. In other words, there is no longer any difference between Kyndryl and ABN Amro. Overall, the work experience has been tremendously good.
The latter is evident in the IT projects that have been implemented. In the first 18 months, a completely new IT stack was built. All of ABN Amro’s critical applications were migrated. It was an massive operation at scale. All this while the bank was operating as usual. “Even other partners, they were amazed at how quickly we had done this,” says Bloem.
Teams work better and faster together because they are closer, and there is shared responsibility. Before, they managed environments, making sure they kept running. Now, they build the complete IT stack and application environments and are constantly looking at what else they can improve or optimize. This different way of thinking and working makes ABN Amro much more innovative.
Can this way of working be replicated at other organizations?
Kyndryl and ABN Amro are very satisfied with the open collaboration. So, the logical question is whether this model can be applied to more organizations. Kyndryl stated that they are continuously in discussions with customers to align with their evolving strategies, but this model requires a different way of thinking. Suppose an organization has a heavy top-down approach, where the entire IT strategy is determined at the top, and they want to have a substantial legal contract. In that case, this is not going to work.
According to Lahit, integrated teams can innovate quickly because a lot works bottom-up. The IT teams are given a challenge, and then they come up with innovative ideas and solutions. The shared responsibility makes the difference. Kyndryl and ABN Amro are very happy with how this partnership turned out.