“I saw a bank that said ’24 hour banking’,
but I didn’t have that Much time.”
– Steven Wright
Greetings from the land of the sun, where this week the mercury topped 100 degrees for the first time this year. This portends well for Gonzo readers – we’ve had some of our best ideas when we’ve been wandering in the desert heat for 3-4 hours – hey, do you think Haiku and parables get written around the coffee machine?
Today, however, our topic is not wisdom acquired via searing heat and dehydration – it’s technology planning. We’ve visited with enough CEOs and senior managers in enough banks to hear some common themes running through their ideas of what a technology plan should be:
Hard to refute those ideas, right? Well, it surprised me when a regulator told me recently that if this is the high-level definition of a strategic technology plan, about half of the banks he works with don’t have one.
Hmmm. I think that, given the importance banks place on technology in their plans going forward, this needs to change. Migrating your technology plan from being tactical to being strategic is crucial.
Many of you are starting the strategic planning process soon, and the technology planning/budgeting process will quickly follow. We write a lot of strategic technology plans with banks. Let me give you some suggestions on what we have seen that makes a technology plan strategic.
Like it or not, external technology trends drive strategy (see “Internet” in the dictionary). And we are at a point where functionality long promised by these external systems is starting to get real – payment systems and the whole P2P arena are two examples (a Gonzo discourse on this topic to follow). A strategic technology plan identifies key trends in the financial services industry, makes management clear about where it is in terms of deployment, discusses what key competitors are doing, and clearly articulates what steps the bank needs to take to address them.
Think about the hottest technologies at your bank — CRM, data warehouse, imaging, wireless, bill presentment. They are all topics that impact almost every group in the organization. They are not issues that can be addressed differently by retail, commercial, mortgage, trust, and administration – unless, of course, one of your goals is to spend a lot of money. A strategic technology plan thinks and plans across the bank, not by department. This is a more difficult, but far more beneficial, approach.
The truth is that you won’t have enough resources (financial or human) to successfully undertake all the technology initiatives desired by your bank. A strategic technology plan focuses the bank’s collective energy on those initiatives that are most crucial, and it stops the others completely. Remember that in the long run it’s better to wait a year and undertake a new project with 100% of the necessary focus and resources than it is to start it this year with 50%.
This is not always the most pleasant part to write. In fact, it makes faces red and voices loud, because the end result is that some business groups are told “no” to initiatives they think are important. But remember – the point of a strategic technology plan is to make everybody agree – not to make everybody happy.
Most of you have a way to rate the importance of an individual project. A strategic technology plan shows management the importance of projects compared to each other. It’s no picnic having to compare the strategic importance of a new commercial lending system, a CRM initiative, a data warehouse project, a new profitability package, and bill presentment. But that’s exactly what the management team has to do, recognizing that it’s not a perfect science.
Nobody argues that technology strategy must be aligned with other parts of the organization such as products/pricing, policies, process redesign, and people (training, incentives, etc.). A strategic technology plan specifically addresses the “who” as much as the “how”. An effective plan should include a responsibility matrix that makes clear who is responsible for results, and what skill sets they will need to accomplish those results. The focus is every bit as much on the lines of business as it is on the technology. In many plans, this business discussion is the longest section, the hardest to write, and the one that is most likely to cause, or impede, success.
It does so by clearly addressing and articulating how success will be measured – sales, growth, costs, revenue – and it weaves these measurements through every discussion.
I suppose the ultimate test of whether a technology plan is strategic is whether or not management actually uses it and integrates it into its thinking and planning. I know the phrase “living, working document” is a bit overused – but, as my late dad used to say, clichés must be true or else they wouldn’t have become clichés, right?