The Bank of Bermuda Ltd. is undertaking a major reorganisation of its local operations in an attempt to cut costs and improve efficiency. Subsequent phases of the two-year restructuring programme will tackle the bank's widespread global operations.

Leading the charge, and probably ruffling a few feathers, is Raymonde Dill, who heads the newly created Group Services division. Group Services will focus on bringing all of the bank's services that are duplicated across the current divisions under one umbrella, and act as a conduit between various departments for cross-selling services.

The creation of Group Services is part of the changes being ushered in by bank chief executive officer and president Henry Smith, who was appointed to his position five months ago.

The idea for consolidating the bank's operations had been discussed by staff for a few years. Mr. Smith liked the idea and pulled Mr. Dill from the accounting and valuation section of the corporate trust division, charging him with the task of forming Group Services.

Historically, the bank's corporate banking, corporate trust, retail, treasury, personal trust and investment divisions tended to operate separately, creating their own units and products to service their operations.

"Over time there was a lack of standarisation, an inconsistency of prices in similar products and services, and inconsistency in delivery to our clients,'' he said. "We will look at all of those operating units inside the divisions and bring together those products and services which are the same and therefore demand standard delivery.'' The aim is to move away from insularity, and consolidate similar services and products under one management team. For example all divisons had their own reconciliation units to check records for errors. Group Services will take over those units and bring them under its management. The trust divisions and investments have their own pricing units. These will also be consolidated under Group Services.

In addition the division will create other products and services, and any other support functions enabling all divisions to access them. Group Services will eventually create new consultancy and marketing groups for all the bank's divisions.

"This will help the bank avoid the same types of people and the same types of skills being duplicated in the various divisions,'' Mr. Dill said.

"...Divisions were historically fighting to make the biggest bottom line internally inside the division at the expense of the bank. They were mandated to operate that way. In practice they were competing with each other. What we have begun to do is begin to peel away the bottom units, because Group Services will support all of the divisions, or business units as we now call them. Group Services is the support unit to all the business units.'' So far, in phase one of the restructuring, nine units have been stripped out of the corporate banking, corporate trust, retail, and treasury divisions.

Units in the personal trust and investment divisons will be left for phase two of the programme. So far about 170 staff have been put under Group Services.

Eventualy the division will grow to about 360 staff. "We have taken the largest units so we can see some benefits from economies of scale,'' Mr. Dill said.

Once the consolidation is complete, the various divisions will order their services and products though Group Services, which will deliver and then bill them accordingly. The strategy will allow the bank to track the true cost of its services for the first time, Mr. Dill said. It will also prevent confusion among its customers who were being charged a variety of prices for the same service by different divisions.

The ability to track the cost of various services will allow the bank to decide whether to outsource a particular function. Eventually Group Services will be able to sell its services outside the bank to other businesses.

"Outsourcing is a major part of our strategy in the long term,'' Mr. Dill said. "We want to make Group Services a true business.'' Group Services has also created three new units, one to manage communications between the various divisions, one to manage and assess the risk exposure and potential for loss of the various operations, and the other to manage the technical services for the bank. One aim is to eventually integrate all of the bank's computer systems.

Raymonde Dill