IT executives in financial services organizations find themselves at a critical juncture. They have evolved from being yesterday's technology suppliers to today's information services brokers. To succeed and exert their true potential, they need a fresh approach that combines financial and organizational savvy with an innovative approach to technology.
So says a recent report from Deloitte Consulting, "AFICIONADOS—Chief Information Officers: Shaping the Future of Financial Services." A convergence of passion, power, and purpose are the ingredients for successful CIOs in today's financial services organizations.
But passion alone is not enough, according to the report. There's enormous pressure on CIOs to prove their worth. Against a backdrop that includes merger integration, straight-through processing (STP), strategic cost reduction, technology optimization, and consolidation of customer touch points, CIOs must build organizations that are flexible enough to respond to change and deliver real value.
How to accomplish this is the mantra of these IT decision makers and bearers of responsibility. For if they used to bear the brunt of IT failure, they are now responsible for wider success throughout the organization; IT is often the pathway to that success. CIOs face four key questions:
- How do we become client-focused and value-based?
- How do we create breakthroughs in operational excellence?
- How do we efficiently handle the basics—keeping the lights on?
- How do we reposition for cost-effective and cost-competitive performance?
Of course, none of these questions can stand alone. For example, if outsourcing is necessary to reduce costs, business continuity is also required to ensure commercial resilience. In other words, CIOs are juggling an increasingly complex set of variables, and nothing less than the enterprise itself is at stake.
What has happened is that the convergence of the business of IT and the business of financial services is almost complete. In as much as there is still a difference, CIOs now straddle the divide and have to hold it together.
So if CIOs are in the center of the powerful meeting of business and IT, what are the pain points that they must address? The key issue is to avoid the misalignment of technology portfolios and overall business strategy. And businesses cannot achieve alignment without transparency—that is, knowing who is doing what, what it's costing, and what the investment reaps for the business. The areas of concern include:
- Looking at how to create an IT organization model that can shrink and grow in response to business demands.
- Analyzing the true potential of outsourcing.
- Facing the fact that the biggest barrier to creating and measuring the value of IT investment is misalignment and a lack of transparency throughout the organization.
- Understanding the importance of getting better value from CRM initiatives.
- Creating effective management of an increasingly complex infrastructure despite limited staff and tighter budgets.
- Developing and implementing comprehensive business continuity programs to ensure that the IT organization is fully prepared from top to bottom.
But if this sounds daunting, all is not lost. "CIOs today in the financial services sector have the power to lead the way as the line between the business of financial services and information technology blurs," said John Fotheringham, head of Deloitte Consulting's U.K. financial services division.
"Indeed, the decisions taken by CIOs today have a major impact on the future of their organization. Armed with practical knowledge about what works—and supported by a host of new technologies and practices—CIOs bring new energy and purpose to an industry in transition."