JPMorgan’s Massive Collaboration Experiment

Sitting in on the Symphony Innovate 2017 conference last week in New York, the figure that stood out for me was not that Symphony had already achieved 250,000 users so far in 2017 – more than doubling over 2016 – but that J. P. Morgan (JPMC) represents about 60,000 of those users. (Did I hear that right?!) This is roughly 25% of JPMC’s current total headcount of over 240,000 – and, upon further analysis, is likely concentrated within their corporate and investment banking division (48,748 employees for Q2-2017), asset management division (21,082 employees for Q2-20170), and to some extent the operations and infrastructure group known as corporate center (32,358 employees for Q2-2017).

And while numerous other bulge banks (like Goldman Sachs and Bank of America) and large asset managers (like Blackrock and T Rowe Price, who claimed 6,800 users) are significant partners, backers and/or users of Symphony’s communications platform, it occurred to me that with 60,000 seats, JPMC’s footprint here just might represent that largest experiment in collaboration along the entire global financial landscape.  As such, it will be a significant development to watch…

The trick, however, for both JPMC and Symphony will be whether this communications and collaboration platform moves the needle: Does it impact JPMC’s performance? And/or, does it influence JPMC’s technology spending. Because, if so, this will become the case study that could propel Symphony far far beyond where it already is. Here’s some benchmarking to consider and keep an eye on:

To anchor where we are today, we share a normalized version of JPMC’s quarterly technology spending – in the form of tech spend per employee (TCO/e) – for the 43 quarters ending June 2017, below:

Now, based on this picture, there is no needle moving yet – no noticeable downward pressure on tech spending. If anything, growth in tech spending – even in the face of rising headcount for the past 2 years (not shown) – may have been a key catalyst to influence  a drive towards greater process efficiency through improved collaboration.

But this is only the cost side. What about the performance side? In the exhibit below, we compare an index of quarterly technology spending with a similar index of revenue growth to see if there is any evidence there yet.

Again, no observable needle moving here yet. That said, it really is a little early to expect a noticeable improvement in performance or the technology costs behind that performance via cutting-edged collaboration tools.  Combating human latency is notoriously difficult and, at least historically, notoriously slow. Given such a backdrop – and all the heavyweights involved – this is going to be a fascinating case study to watch.

Stay tuned…

By | 2017-10-09T22:31:56+00:00 October 10th, 2017|Alphacution Feed|

About the Author:

Paul Rowady is the Director of Research for Alphacution Research Conservatory, the first digitally-oriented research and strategic advisory business model focused on providing data, analytics and technical infrastructure intelligence within the financial services industry. He has 28 years of senior-level research, risk, technology, capital markets and proprietary trading experience. Contact: paul@alphacution.com; Follow: @alphacution.

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