Up to the Challenge

Up to the Challenge

On first arriving at Challenger there was not much time for stargazing. Challenger was home to legacy systems from 13 business units that had been cobbled together as a result of the merger of Challenger International and CPH

Spy? Yes, but in a constructive way.

Goh believes that there are benefits for all Australian businesses if more IT know-how is shared. Not strategic competitive know-how, but technical insight that might raise the general standard of computing in the country. "I don't think that all competition is direct; you can have co-competition," he says.

"Every time you push an Australian company to do well then you are pushing the whole Australian financial services market. IT people tend to be quite professional and know what is confidential and what they can share. In infrastructure there is no disadvantage in sharing information because there is no competitive advantage. If you didn't share then it would be a bit like trying to win a tennis game by hoping that your competitor gets injured.

"The key competitive advantage that every organization should protect is the best practice of their application sets. The key recipe for higher revenues or productivity is in the know-how and that should remain confidential. It's like KFC - everyone can buy the tools to make fried chicken but the KFC recipe is confidential," he says.

For that reason he's also chary of outsourcing. "I always feel that financial services is very special and it is a highly regulated and compliant industry. While I'm keen to reduce non-discretional spending you must have solid business knowledge and if I can retain people for more than 10 years the costs will be significantly lower."

A Single Source of Truth

He sees himself in for the long haul, and believes that with the infrastructure in place he is in a position to add real value to the organization. In fact, he is prepared to bet on it. "What I would like to do in two years is to be measured by how much value I can add. I'd like to be measured against the bottom line," he says, adding wryly that to be measured "against the share market, however, is beyond me".

He is likely alluding to Challenger's remuneration philosophy as outlined in its most recent annual report, which says that as well as offering competitive remuneration the company would link executive rewards to shareholder value, make some component of remuneration dependent on achieving specific benchmarks and establish "appropriate demanding performance hurdles in relation to variable executive remuneration" in order to attract and retain key executives.

While that portion of the annual report sings from the same hymn sheet as Goh, it waxes less lyrical about the contribution of information systems to the firm. In fact the online annual report, which was released in late August, does not mention the IT group at all, or the fact that it has won an international award for its efforts.

Despite what many might consider a slight, Goh maintains that his relations with the senior management and board are strong. "You need a track record and a vision and the ability to show how it is aligned to the business model. It's a catch-22 thing because when you get the track record and demonstrate you can deliver, well, that's when the board has more confidence in you."

He has also had to ensure that the business managers of the three independent units understand and accept his intention to provide a whole-of-business information system that integrates at the very top levels in order to provide improved management information to Challenger's senior team. Although he has already delivered IT savings, now he wants to generate IT-led revenue improvements and productivity hikes. To do that he needs to work with all three groups and get their buy-in.

"Infrastructure and compliance, yes you need that. But the value comes from business processes to drive revenues and increase productivity," Goh says. "You need strength in your distribution systems to drive revenues and then you need to drive that distribution at a lower cost to ramp up your productivity and profit. You also need to have a strong capability in administration, which can be a core competence if it makes you more accurate, more compliant. Then you need to manage the assets and the risks by providing information to hopefully help managers make better decisions.

"It will take the next two years to achieve accurate management information systems. If we can link all the information systems into the network, which is the aim of the application portfolio, then there will be a cross-selling capability."

Goh knows this will not be easy. "We have different business sponsors of each project. It's not always easy to get different business CEOs to talk around the table. But you have to, because it's like trying to build a ring-road - how can you build it if you don't finish the M2 or the M3?

"I did have the discussion that we will be the group IT if you, [the business units] CEOs, function as a group. Without that thinking then you may as well decentralize to the individual businesses." So far CEO Tilley seems to be listening and giving Goh the opportunity to create that whole-of-business management information system.

How long will it take this master builder to complete his ring-road? "Two years to achieve the full synergy," Goh says. Ultimately he believes that what he and his team will deliver is "a single source of truth of our customer and a single source of truth of our management and business information.

"It should deliver real shareholder return in a very direct sense," Goh says.

And as any CIO knows, when it comes to delivering IT value there is no better measure.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about AGSMBillionBright StarCHALLENGER INTERNATIONALColonial First StateFirst StateHISHSBCIT PeopleMicrosoftPLUSRoseVIA

Show Comments