In April, 2007, information technology research and advisory company Gartner worked with Jerry Cristoforo, CTO of State Street Corp. (SSC) and a member of HengTian’s board of directors, on a case study of State Street Corp.’s technology center (TC) development in Hangzhou, China. The case study, entitled “State Street Corp Takes a Chinese Road to Supercharged Applications,” highlights the key success factors that account for the development of the technology center from a small unit exclusively focusing on R&D to a midsized center capable of delivering real savings while remaining technically advanced in its approach. Among the success factors, the innovative collaboration with Zhejiang University, a top ranked Chinese University, and Insigma Technology, a top-10 company in Chinese software industry, has been the cornerstone that provided the steady local talent resources to sustain the growth of the technology center.
The Gartner case study shows that TC has helped SSC to achieve great labor savings as well as significant corporate cost savings by re-engineering over 100 of its legacy applications to meet the productivity requirements of current business demands. The labor cost for TC is approximately 25% of that for US based staff, and, more significantly, the cost of re-engineering at TC is less than 2% of the cost of system replacement for SSC. In addition to legacy system re-engineering, TC has also grown into a center housing the core system development for SSC as it is now responsible for close to 20 such systems that have been 100% developed and maintained in China. The case study offers recommendations to corporations looking at offshore sites as strategic diversifications. For long-term successes, it first recommends that corporations should forge links with local pools of talent and expertise and plan for knowledge transfer on both sides; it also states that corporations should invest in cultural exchange and language development programs to promote a “questioning culture” that encourages interactions between business and IT.
In addition to support SSC internal business, the case study denotes the new development of the investment SSC made in China by creating a joint venture, named HengTian, between Insigma Technology and SSC to provide “supercharged” re-engineering IT outsourcing services to external clients of SSC. The commitment SSC made in China also helps to strengthen its corporate commercial position in the region. TC now has a role of acting as technical advisor to an important Chinese financial institution. Also SSC has acquired a part of the management of a portion of the Chinese National Pension fund outsourced to western firms.
The case study’s publication date is April 16, 2007, and its ID is G00147146. For more detailed information about the case study, please visit Gartner, Inc. website:http://www.gartner.com
