CIO Joe Eng set new performance standards for his IT department, negotiated technical requirements with demanding business partners, calmed nervous end users and built a $US500 million global network by following four simple principles.
- Why managing expectations for an IT project is critical
- The differing concerns of senior executives, company employees and customers
- Principles for defining and managing expectations
The worst day in Joe Eng's career was the day he told his CEO that his company's most important IT project - a $US500 million, state-of-the-art global network that is among this decade's most important IT initiatives in the financial services industry - would be three months late.
Eng is CIO of the Society for Worldwide Interbank Financial Telecommunication (Swift), a financial industry-owned cooperative that supplies messaging services and software that most of the world's banks use to send trillions of dollars in financial transactions daily. In February 2003, Eng and his team were testing the backbone of SwiftNet, the new network. With only a week before the two-year roll-out of SwiftNet was scheduled to begin, the network monitoring software was not working reliably. Fixing the problem would take a few months. Eng's boss, Swift CEO Leonard Schrank, had to know.
And so Eng called Schrank at headquarters in Brussels with the bad news. Schrank was incensed. The last time Swift replaced its network, in the 1980s, the project was years late, and Swift's banking customers hadn't forgotten. What would they think now?
"The problem had a very visible repercussion," Schrank says. "This was like delaying a space shuttle launch, with all the political pressures." Eng endured Schrank's grilling.
But the pain was short-lived. By the end of the 10-minute call, Eng had explained the problem, offered a solution and reset Schrank's expectations for when SwiftNet would be ready. He would do the same thing a few weeks later, when he was called on to repeat the story to Swift's board of directors. Three months later, with SwiftNet fixed, the roll-out began, just as Eng had promised.
Eng's encounter with Schrank may have been his most difficult moment, but there were many instances during the six-year project when Eng had to define - and then redefine - what he would deliver and when. For many CIOs, their toughest challenge is managing the expectations of senior executives, end users, IT staff and employees across the company, and the failure to address constituents' expectations undermines CIOs' credibility. In fact, expectations management can define whether or not your IT department is successful.
In Eng's case, Swift IT staff, business leaders and its 7800 shareholders (who are also Swift's customers) all had their own ideas about what SwiftNet should be. Eng couldn't possibly accommodate everyone's demands, or predict every problem that might crop up.
But he could be prepared to deal with them. Eng knew that managing expectations for SwiftNet would require frank communication, creative planning and deft diplomacy. He devised a strategy that included training internal IT staff and other employees about SwiftNet and its goals, providing choices to customers without compromising standards or efficiencies, and satisfying board members and executive staffs within defined parameters.
"I understood that the project had to do with understanding the stakeholders and what their needs were and being flexible enough to meet them without straying too far off course," Eng says. "It's a sensitive balancing act."
A High-Stakes Project SwiftNet was no minor upgrade. It represented a multigenerational advance in telecommunications technology that the global financial industry required in order to operate in the future. Global competition means banks need to close financial transactions in near real time (rather than waiting days sometimes) and to offer new network-based services. Swift provides the primary messaging and transaction network that makes international finance possible.
Swift's 7800 customers in 200 countries generate millions of messages daily in order to conduct trillions of dollars in transactions. These transactions range from the simple, such as exchanging foreign currencies, to the complex, such as clearing securities trades.
Swift's legacy network, built on 1980s X.25 technology, was an ageing, albeit dependable, workhorse. But manufacturers who supplied hardware for the network were closing out production of their old products. Furthermore, the cost of maintaining the network, at nearly $US60 million euros a year, was increasing - costs that were passed on to customers. Most importantly, financial institutions wanted new messaging services that would allow them to offer Web-based products to their customers, decrease financial risks and lower their operating costs. One service the banks wanted was instant messaging that would alert them when a transaction was completed. Other customers, including John Galante, CTO with JPMorgan Worldwide Securities Services, needed more bandwidth to deal with a growing volume of securities trades.
The project had numerous risks, not the least of which was that any malfunction of SwiftNet during the migration would disrupt transactions and cost customers money. "The biggest challenge was how do we do this conversion while we support the ongoing business," says Galante. Mistakes held the potential to bring international finance to a halt. "If SwiftNet were down a day, we would have a worldwide crisis," says Mike Fish, deputy CIO for Swift. Swift executives worried that any major failure would encourage customers to abandon SwiftNet for Internet services offered by telecommunications vendors.
Eng knew, however, that conflicts and problems were inevitable. "I knew [managing expectations] was going to be my number-one job, and I needed help," Eng says. He found it in a set of four principles for ensuring that everyone understood what they had to do, what IT would deliver and when.
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