It's time for IT to step up and play a strategic role in the financial services sector. That was the main message of a recent report from professional services firm Deloitte, entitled Running IT as a Business.
The report, based on discussions with 21 senior IT leaders in the financial sector, maintained that IT departments in financial services companies need a stronger, more strategic voice at the decision-making table to be considered true partners to the business. Alignment between IT and the business enables constructive discussions on ways to reduce costs, improve internal operations and provide clear performance metrics.
"In order to become strategic and valued contributors to the business, IT must adopt a business mindset, learn to communicate in business language and offer proactive solutions to problems, rather than simply taking orders to fix them," said Terry Stuart, Deloitte partner and national Consulting financial services leader. "In order to shed its image as a commodity service provider, IT must in effect act like a strategic partner in order to be accepted as one," he added.
The report recommended the following strategies to help IT become true partners to the business:
Improve alignment between IT and the business. An overwhelming majority of respondents - 18 of 21 - favour including IT in the planning process as a way to create alignment. Most respondents also indicated that a shared understanding of IT issues and performance metrics would improve the quality of discussions on ways to lower costs without sacrificing critical services.
Focus on business value. Adopting business terminology breaks down language barriers and increases the odds of IT and the business arriving at consensus on ways to tackle business issues. Survey results show that IT functions recognize the need to define their service offerings and performance measures in terms that are meaningful and understood by the business. That means using business, not technical terms.
Choose the right IT projects and activities. Investing in IT initiatives that do not align with business value is a waste of precious time, money and resources, said 16 of the respondents. Clear and detailed business requirements and an accurate calculation of benefits and value must exist in order to properly select IT investments with the strongest returns.
Execute projects effectively. Nearly half of the respondents point to successful delivery of critical projects as the priority issue for IT in the coming year. In order to avoid project overruns, respondents highlight the importance of communicating and managing expectations where business and IT functions intersect.
Manage workforce and talent needs. An aging workforce and shifting demographics continue to place ongoing strains on recruitment and retention efforts in the financial services industry. IT functions must therefore develop and implement strategies designed to attract and keep the types of IT professionals that are most critical to their success.
Centralize without losing alignment. The results show a continuing shift towards centralization of IT functions and services as a way to reduce costs. Merging the right activities without losing efficiency requires maintaining close collaboration between IT and the business in priority areas such as analysis and performance metrics.
Innovate for strategic advantage. Although innovation is considered a relatively low priority for many IT functions, nine of the respondents identify it as a strategic differentiator. Innovation leads to better competitive positioning in the marketplace, and is also a way for IT to deliver more value for less money.