By Brad Powell
"Those dweebs in IT don't understand our business area."
- Executive handling a major line of business at a mid-sized bank
"Yeah, but those starched shirts don't understand technology."
- Response from the information technology manager
Those aren't actual quotes -- but they are representative of comments Scott Sommer, the president and CEO of Cornerstone Advisors, says he hears from many financial institutions these days.
Sommer blogged about these attitudes yesterday on Cornerstone's Gonzo Banker blog. In the post, he pointed out a fundamental divide between executives running various lines of business and the IT group that ostensibly supports their efforts to modernize.
This division prevents banks and credit unions from adding new technology that could "make the business area more efficient, improve turnaround times, and handle more volume with less headcount" – all vital upgrades for financial institutions these days.
Three of Sommer's observations were especially resonant to me:
1. Every manager should understand and use technology
Sommer writes:
"Many bank executive teams are asking Cornerstone about the 'proper role of IT' because they are wed to a completely outdated notion that the 'skill set' of understanding technology needs to reside in some separate group on the org chart. This is like asking, 'What roles do critical thinking and communication have in our organization?' "
As technology transforms banks' and credit unions' businesses at a rapid pace, it makes little sense to treat tech as an add-on or supplement to an organization. Used properly, technology underlies nearly everything a financial institution does.
That's why it's vital for executives and managers across the organization to use and understand the technology customers will use as well as the basics of the back-end technology that powers such products. An important first step is knowing what you don't know, and starting the learning process there.
2. The consequences of 'punting' on technology are dire
Sommer writes that "it is still far too common for the CEO or the executive team to let the head of Commercial or Retail or Operations 'punt' on a key product, delivery or process issue by saying something like, 'Well I'm not really sure what the answer is because that's a technology issue.' "
Such "punts" usually result in executives who run complex lines of businesses with spreadsheets and Word documents, don't understand the uses and benefits of image scanning systems and spend much more time worrying about branches instead of online transaction channels, he says.
When many executives began in banking, "technology meant knowing how to insert the pass book into the machine." Obviously, much has changed. There's no way to catch up or keep up if you "punt."
3. IT groups can't do it all
For most financial institutions, expecting the current IT team to efficiently tackle development projects across multiple lines of business is folly, Sommer writes. He does see an important role for IT:
"It is best focused on ... infrastructure, security, data and architecture standards, helpdesk, telecom, and keeping the lights on. It is naïve to think that in this age of complexity an IT group that has to hire the skill sets to accomplish all of those infrastructure related tasks can also simultaneously develop deep knowledge of Commercial, Cash Management, Retail, Private Banking, Small Business, Wealth Management, etc., etc."
So how does a financial institution add the technology expertise needed to innovate in areas such as cash management, retail and private banking? They can do it themselves -- a tall task, certainly, involving more hiring and training than many organizations can tackle right now.
Another option is partnering with a technology company with proven expertise in the field, one that can help both plan and execute complex development projects. The best ones will keep an eye on value, do much more than simply code to requirements and will not develop a product that quickly will become obsolete.
Yes, Axiaware is one good option for a consultative partnership with financial institutions and other data-driven organizations. But even if you don't address your "starched shirt vs. IT dweeb" divide by working with us, it's crucial you address it -- quickly.
Read the entire Gonzo Banker post here: The IT Group Is Not Your Business Partner
"Those dweebs in IT don't understand our business area."
- Executive handling a major line of business at a mid-sized bank
"Yeah, but those starched shirts don't understand technology."
- Response from the information technology manager
Those aren't actual quotes -- but they are representative of comments Scott Sommer, the president and CEO of Cornerstone Advisors, says he hears from many financial institutions these days.
Sommer blogged about these attitudes yesterday on Cornerstone's Gonzo Banker blog. In the post, he pointed out a fundamental divide between executives running various lines of business and the IT group that ostensibly supports their efforts to modernize.
This division prevents banks and credit unions from adding new technology that could "make the business area more efficient, improve turnaround times, and handle more volume with less headcount" – all vital upgrades for financial institutions these days.
Three of Sommer's observations were especially resonant to me:
1. Every manager should understand and use technology
Sommer writes:
"Many bank executive teams are asking Cornerstone about the 'proper role of IT' because they are wed to a completely outdated notion that the 'skill set' of understanding technology needs to reside in some separate group on the org chart. This is like asking, 'What roles do critical thinking and communication have in our organization?' "
As technology transforms banks' and credit unions' businesses at a rapid pace, it makes little sense to treat tech as an add-on or supplement to an organization. Used properly, technology underlies nearly everything a financial institution does.
That's why it's vital for executives and managers across the organization to use and understand the technology customers will use as well as the basics of the back-end technology that powers such products. An important first step is knowing what you don't know, and starting the learning process there.
2. The consequences of 'punting' on technology are dire
Sommer writes that "it is still far too common for the CEO or the executive team to let the head of Commercial or Retail or Operations 'punt' on a key product, delivery or process issue by saying something like, 'Well I'm not really sure what the answer is because that's a technology issue.' "
Such "punts" usually result in executives who run complex lines of businesses with spreadsheets and Word documents, don't understand the uses and benefits of image scanning systems and spend much more time worrying about branches instead of online transaction channels, he says.
When many executives began in banking, "technology meant knowing how to insert the pass book into the machine." Obviously, much has changed. There's no way to catch up or keep up if you "punt."
3. IT groups can't do it all
For most financial institutions, expecting the current IT team to efficiently tackle development projects across multiple lines of business is folly, Sommer writes. He does see an important role for IT:
"It is best focused on ... infrastructure, security, data and architecture standards, helpdesk, telecom, and keeping the lights on. It is naïve to think that in this age of complexity an IT group that has to hire the skill sets to accomplish all of those infrastructure related tasks can also simultaneously develop deep knowledge of Commercial, Cash Management, Retail, Private Banking, Small Business, Wealth Management, etc., etc."
So how does a financial institution add the technology expertise needed to innovate in areas such as cash management, retail and private banking? They can do it themselves -- a tall task, certainly, involving more hiring and training than many organizations can tackle right now.
Another option is partnering with a technology company with proven expertise in the field, one that can help both plan and execute complex development projects. The best ones will keep an eye on value, do much more than simply code to requirements and will not develop a product that quickly will become obsolete.
Yes, Axiaware is one good option for a consultative partnership with financial institutions and other data-driven organizations. But even if you don't address your "starched shirt vs. IT dweeb" divide by working with us, it's crucial you address it -- quickly.
Read the entire Gonzo Banker post here: The IT Group Is Not Your Business Partner