Magic Orange was initially implemented at two of South Africa’s largest financial institutions (FIs) to help them operationalise their existing cost allocation models and enable their stakeholders to make decisions with fact based, granular data. The scope of the first FI included delivering cost transparency to their full stack of shared technology costs, corporate real estate as well as funding while in the case of the second FI it included bringing cost transparency to all its shared services (i.e. operational costs) including information technology, audit, credit, finance, marketing etc. Furthermore, the key principles of the Technology Business Management (TBM) framework were actively applied in the implementations of Magic Orange at both FIs, with Magic Orange being the enabling solution.
Positive outcomes were immediately realised; misallocations of costs were quickly spotted and corrected, assets and systems requiring decommissioning, optimising or rationalising were identified. Shared Service owners were made more aware of the cost drivers in their portfolio and found it easier to defend their costs and furthermore knew how to configure their services to drive down costs. Business owners finally understood the drivers and composition of their shared service charges and knew which levers to pull to reduce their Bill of Shared Services. In addition, senior management found it easy to see if the Shared Services and IT budgets were aligned to the business strategy in terms of having the correct composition of run versus change initiatives. Such is the success and trust in the Magic Orange, that Magic Orange is the single source for the Shared Service and IT cost recovery journals to the client business.
Our other insurance and banking clients in the Financial Institution sector that have implemented Magic Orange have also enjoyed similar successes.