Citigroup will have to unravel integrated ITwhen it splits the
company up to separate strong and weak parts of its business.
The breaking up of the
financial services giant will require integrated IT to be
separated and IT skills to be redeployed.
Higher risk consumer finance and securities businesses are being
separated from its global commercial banking operations in an
attempt to ensure its survival, according to the Financial
Times.
Parts of the business will be sold off when the economic
conditions improve. When these businesses are acquired the IT that
underpins them, such as huge customer databases, will be important
to the acquirers.
Citigroup has had a
business model known as "universal banking" for about a decade,
where customers can get all their financial services from one
place. This has involved the rationalisation and sharing of IT
resources.Citigroup was created in 1998 when Citicorp merged with
Travelers. The firm has since been building an organisation capable
of serving ordinary savers as well as large businesses.
As a result, splitting the business up will be a huge challenge,
said Bob McDowall, analyst at Towergroup.McDowall said Citigroup
will have to "unscramble and segment integrated IT."
"If it wants to sell off parts of the business and realize value
it will have to sell the technology assets and people with skills
with it. They are going to have to extricate these parts of
technology and the people that support it."