The cultural and organisational integration of people, core business processes and technology is essential to maximise business performance. But have communications channels been developed enough to support these challenges asks Jim Callan, CEO of Eontec.
It’s widely recognised today that IT has a fundamental and valuable role to play in the achievement of strategic objectives within financial services. But there was a time when technology issues were left to the IT managers and deemed as ‘unimportant’ or of ‘little relevance’ to senior management. As the status of IT has grown within financial services, technology has become increasingly aligned with high level business strategies. With the migration to e-business, senior management want and need to play a much larger part in the IT decision making process. However, years of isolation has left a significant gap between the technology available and the knowledge necessary to succeed in amongst the senior banking echelons.
Customer demands are continuing to drive change. IT is transforming client bases and globalising the market and business managers are keen to own and control IT strategy. This fundamentally alters the traditional roles of business and IT managers within financial institutions. Technology and business expertise can no longer remain autonomous.
Financial services firms must offer their customers more than their core business offerings to ensure long-term survival. Customers are demanding new products, enhanced services, the realisation of new channels and higher levels of satisfaction. With wireless and digital TV adding to the burgeoning number of channels available, banks need to be clear about the strategic importance of IT implementation, migration issues and timescales in which they need to respond, in order to remain competitive. To create value from new technology investments, IT and business decision makers must work in harmony in the battle to attract and retain customers.
This is essential as IT often remains somewhat of a mystery to business executives frustrated by the difficulty of realising the business benefits of IT. Increasing fragmentation in both financial institutions and external vendor and supplier networks, due to the increase of channels, will lead to inefficiencies unless communication channels are managed effectively.
More competition and increasing pressures mean that technologists have been deemed as ‘futurologists’ with Boards looking to IT departments and suppliers for advice and strategic guidance on levels of investment and return. Technology has become more complex as the market has become saturated with product, vendors and suppliers and due to this complexity is little understood by banking management. However, executives are under pressure to create a strategic vision and estimate and verify the business value of IT decisions. When this match doesn’t occur, technology is poorly understood or communicated. There is a significant knock-on effect on the total economic impact of IT which affects speed of delivery, value, flexibility and most importantly, cost.
According to a recent survey, 50 per cent of senior executives feel threatened by the growing power of IT directors. This is not helped by the fact that techies don’t speak the language of banking business and vice versa. To ensure survival in the global market, both parties must strive to understand each other.
Historically, the reputation of the software industry has suffered from the overselling that occurred in the past. As a result, this has led to dissatisfaction and mixed vendor reputations. A perception which is slowly changing.
Today there is a willingness by all parties to change, but how? Frustration has to be overcome to create a cohesive relationship that is conducive to success. Communication must be recognised as the sole factor in the move forward. All parties must be tri-lingual, speaking the language of technology, business and e-business.
The technologists’ roles have also changed and must continue to do so. There is an increasing need for IT staff to apply their technical expertise to business problems. Senior management must act as technology translators, spotting the latest developments and educating colleagues about business potential. Intelligent analytical applications will help strategic and operational decision-makers to increase revenue, manage corporate risk and control costs.
Technologists need to think in business terms and become business enablers. They need to communicate effectively and achieve business buy-in by those with purchasing power. Conversely, strategic directors must be clear about the possibilities and limitations offered by the plethora of technology available. If a two-way education process is set in motion, we will slowly unravel the complexities of technology in financial services and ensure that successful and timely implementations are commonplace.
With a commitment to the sharing of intellectual capital, acceptance of the changing roles within financial institutions and a willingness to accept change, strategic goals will become more realistic, software and systems will offer even greater real benefit and banks will make a smooth transition to technology globalisation.