1. Beyond Technology, Delivering Transformation
Ken Harvey Group Managing Director and Chief Technology & Services Officer

2. Insert HSBC video
HSBC Fishing Video
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3. HSBC Today 295,000 8,500 Over 100 Million US$2,422 Billion
International network
Offices worldwide
Customers
People strength
Pre-tax profit H1 2009
Total assets H1 2009
295,000
8,500
Over 100 Million
US$2,422 Billion
US$5.0 Billion
86 Countries
& territories
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4. Evolution of Transformation (One HSBC)
Q1 2009
Q1 2008
Propositions and customer experience added to scope with Target Operating Models added to One HSBC
Q1 2007
Process and Operations added to scope of One HSBC
Q4 2006
One HSBC for IT is launched
Q1 2005
Joining Up Directive from CEO
120 Data Centres merged into 5, 10% of Apps retired
Q1 2003
IT SSO
Created
2003
2009 4
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5. What is a CTSO? The CTSO is responsible for –
The delivery of transformational change consistent with the strategic plans of the Group
The integration of existing technology and operations platforms
The reengineering of customer experience and driving down the unit cost of production
Leveraging Global Service Centres and standardising process
Responsibility includes the total cost line of the business, to prevent leakage and
ensure the impact of the cost efficiency initiatives are reflected in the bottom line
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6. Jebson’s First Law of Computing
Hardware is Easy
Software is Difficult
People are Impossible
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7. Why does the CIO get to drive?
Natural Strengths
Process Engineering
Programme Management
Change Control
Change Agent
Historic Weakness
Drive Bottom Line
Execution and Branding trump technical brilliance
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8. Unit Rates are Crucial
IT Operations Rates improving even when volumes are increasing at a lower rate
Site
2005
2006
2007
2008
2009
2010 %
$(M)
HTSE
-10.40%
-$59
-10.80%
-$78
-6.20%
-$44
-20.70%
-$211
-13.70%
-$125
-4.90%
-$29
HTSU
-4.00%
-$14
-10.60%
-$68
-18.20%
-$114
-1.90%
-$11
-14.70%
-$97
-10.70%
HTSA
-12.00%
-$25
-16.60%
-$45
-17.60%
-$50
-17.80%
-$56
-11.30%
-$36
-29.80%
-$117
HBMX
-8.90%
-$10
-19.70%
-$24
-17.40%
-22.10%
-$40
-1.60%
-$2
HBBR $0
-19.30%
-44.10%
-$154
-14.80%
-$41
-4.20%
-$8
HBFR
-17.50%
-$21
0.20%
-$27
-5.10%
-$5
Total
-8.80%
-$98
-11.00%
-$201
-14.40%
-$297
-$456
-$366
-$220
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9. Service Delivery Rates improving in the first year on year comparison
Implemented the same concept in Operations First Year Results show 10% YOY Reduction is Possible
Site %
$(M)
HTSE
-15.30%
-$55
HTSU
3.00%
-$11
HTSA
-11.10%
-$14
HTSC
0.80%
0.4
HTME
-21.70%
-$8
HBEG
1.10%
0.1
Total
-7.80%
-$88
Service Delivery Rates improving in the first year on year comparison
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10. Benchmarking is Key Peers HSBC 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 50%
100%
150%
200%
250%
300%
HSBC
Peers
Outliers excluded peer avg. 64.5%
Peer avg %
Operating Cost/Operating Income
IT Cost/ Operating Cost
Outliers excluded peer avg. 12.0%
Peer avg. 11.1%
* originally released as “Achieve IT/Ops Collaboration”, the text of this goal was modified to represent the consolidated outlook
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11. You can’t consult if you are apologizing
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12. The Measures Cost Efficiency Ratio and
The magic of arbitrary aspirational numbers
Centres Of Excellence (Offshore Penetration)
30/20/50 and the “CIOs” become RMs
The concept of Manufacturing vs Distribution
Unit Rates (10% YOY reduction)
Run the Bank/Change the Bank (27% to 36% in 4 years)
Leverage and Standardization
Total FTE (down 6% in 2009)
Product Fragmentation
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13. Manufacturing vs. distribution
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14. One HSBC Business Transformation
Why IT Doesn’t Matter (as much)
USD 4 Bn
Comprised of:
Sales IT
Front Office
Marketing
CRE, CD, Admin
Mid Office, Collections
Back Office
One HSBC Business Transformation
(Front Office)
Service Delivery/CRE
(Back Office)
The Task
2011
2010
2009
We have addressed the IT area, focusing on Service Delivery and OPI are big opportunities, but the biggest deal in business is to move towards business transformation
Sustainable Savings
Through Transformation
are key. Where is the Money? 14
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15. Call Centre Video
One HSBC / me2me Video 15
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16. Bottom Line Delivery
Each CTSO (14 in our world) owns a 5 year plan to improve the Customer Experience
Support income growth above industry average
While: 16 16
Milestone Summit (July - Sept 2009)

17. HSBCnet Volumes in 2009 Direct Connect Customers
Total Customers up 47%
# Transactions up 106%
Value of Transactions up 192%
Internet Customers
Total Customers up 21%
# Transactions up 31%
Value of Transactions up 38%

18. Role in driving effectiveness (innovation)
Create Bandwidth for change by harvesting
Hard measures are important
Unit Costing in business terms could take years
Teams will not drive to objective without the measures
Innovation that pays, gets paid
Measure and Pay
Channel Management
Customer Satisfaction
CER
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19. Questions?
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