Don’t prepare for the world as it is – it’s the future that matters

Don’t prepare for the world as it is – it’s the future that matters
By Richard Brown of Ernst & Young

Published: June 9 2008 09:42 | Last updated: June 9 2008 09:42

We can all make predictions: the financial services world will continue to change, and there will continue to be rapid technological advances, both of which stimulate further demands and increasing expectations from all stakeholders.

Virtualisation, green IT, privacy and identity management are some of the new(ish) ones on the block while cost management, sourcing and standards have never gone away. Securing mobile devices continues to be a subject of conversation at any event where CIOs gather.

Regulatory demands are unlikely to decrease. Technologies will continue to evolve – seeking the right adoption point where they move into business-as-usual. And customers will continue to demand convenience, flexibility and privacy at the same time. Business leaders will expect more for less from IT, a demand fuelled by the desire to free up funds for further growth or simply to reduce costs. And there will undoubtedly be another financial crisis to deal with – the question being not whether but simply what and when?

In reality, CIOs in the financial services sector continue to face a multitude of competing demands from changing business models to moves to offshore business and delivering major change programmes while keeping the lights on – cost effectively, of course. On top of this, the financial services sector has had other specific challenges – increasing regulatory demands and expectations, and consumer demands for flexibility, convenience plus security, to name but a few.

Continued high profile instances of loss or compromise of personal data have caused increased interest not only from the regulators but also from business partners and consumers. The credit crunch and sub-prime are taking their toll on the sector, resulting in some rapid business decisions being made on products and services offered, and a variety of cost cutting measures. More than that, there is great uncertainty about the duration and nature of the current economic situation.

How can this mountain of individual predictions be used to create a plan for the future?

A couple of things are clear. If financial businesses continue to look at individual activities, processes and incidents in isolation, then they will face the future unprepared. Organisations also need to start learning from their experiences – even if it’s just on post-project reviews, it’s a start. And finally it is also necessary to take a hard look at people and their capabilities to help you into the future.

Why are these factors so important, when there are so many others?

Each business and IT priority justifies a major programme of activity in its own right. More important, they all bring with them a host of further considerations from risks to skills, governance, timeframe, and globalisation, which need to be looked at more broadly than the main activity itself.

So can you really see the big picture? And if you can, can you see it any time you like or just once a year at planning time? And how big does the wall have to be to hold the picture? The volume of available data and the speed of consolidation make many things possible. This could mean putting a precise value on system downtime at a precise time, on a particular day, or the opportunity to become a very fast follower.

But is IT really helping to join the dots to spot the gaps and the anomalies? Has IT grown up sufficiently that we can move seamlessly from projects to business as usual, and that asking “what if?” and “so what?” becomes a natural part of doing business?

Many organisations purport to carry out post-project reviews, but in reality some brush problems under the carpet, and sometimes even the best rarely take the lessons further than the project team. In order to get better, financial services companies need to adopt a culture that continuously learns from mistakes. If there is a struggle to learn lessons and apply them, what chance is there to learn from broader business and economic situations?

Strategies, plans, processes and governance will only get you so far. People and their capabilities is the key thing. For example does the IT management team include those who are constantly scanning the horizon? Does it include those with the vision to see potential, and have the courage to seize new opportunities without losing sight of commercial reaity? Regardless of functions and roles do your teams have the right balance of cynics and visionaries?

These may be simple questions, but the financial services industry has faced an unprecedented volume of incidents and change resulting in some knee jerk reactions and shaken confidence, leaving a great deal of uncertainty. And IT is now in a unique position where it really can make or break a business. So these questions deserve well considered responses. Will you stand up to the scrutiny?

Richard Brown is the head of technology security and risk services, Northern Europe, Middle East, India and Africa, at Ernst & Young
Copyright The Financial Times Limited 2008