Top Key Skills Needed For Today’s CIOs (Part 2)

Posted on April 3, 2012 by Ian

In my previous post “Top Skills Needed For Today’s CIO” I discussed Visionary & Strategic Leadership.

In this post I will be looking at the key CIO skills to Build High Performing Teams that are lean, agile and highly focused

Building High Performing Teams
To succeed in building a high performing team, there are a number of critical competencies that the CIO needs to develop across the technology organisation. These include

  1. Strong Customer Focus
  2. Commercial Orientation
  3. Team Motivation

1. Strong Customer Focus
In my experience, all high performing teams need to focus on treating the business as a true client and manage the technology organisation as a business.

This can only be achieved by generating energy and enthusiasm to understand the client’s business, their commercial drivers and pinch points through to the client’s products and supported services.

The technology organisation will need to be truly passionate about the organisation, its commercial drivers and cash flows. This includes demonstrating a deep understanding of how the financials for IT work, the costs / benefits of the IT investment and how this compares with other investment opportunities.

Only by building inspired client relationships with the business can the technology organisation become a true trusted advisor and exceed customer’s expectations in today’s fast moving, global market place.

2. Commercial Orientation
Strong commercial orientation is critical for all leading technology organisations and is often overlooked.

Only by understanding what the commercial hot buttons are, coupled with a detailed understanding of the technology landscape can you become a valued and respected trusted advisor to the business.

Direction should be focused on inspired conversations with the business and the commercial insight to recognise that you understand their business, the products they trade and the positive impact that technology investment will have on top line revenue growth and bottom line earnings.

Only by being on top of your game both commercially and technically, can the IT organisation build inspired relationships as a trusted advisor that are critical to the success of the business today, tomorrow and in the future.

3. Team Motivation
Creating a high performing team requires an environment where all members of the team feel valued and that their contribution is recognised.

Staff need to have the opportunity to discuss the bigger picture. Key to this is regular and timely briefings to discuss the commercial picture, the strategic drivers and the business value that the technology organisation will deliver. This can be achieved through town halls, leadership briefings and deep dives.

Deep dives gives the individual the opportunity to showcase their expertise and increase the overall knowledge of the team.

For the individual, there needs to be a clear value proposition – what are their personal drivers and how can the organisation meet those needs both in the short and longer term. This is underpinned from recruitment – from hiring for attitude and training for skills, through to an established talent & performance management programme that nutures and develops expertise across the technology organsaiton.

Summary
Building a high performing team requires a new value propostion from the technology organsaiton.

This need to be driven by strong customer focus, detailed commercial orientation and exceptional motivation to leverage the true value of technology and its people. This in turn drives business strategy, innovation and competitve advantage.

I look forward to your comments on Building High Performing Teams. In the next post I will discuss Operational & Technical Excellence.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Top Key Skills Needed For Today’s CIOs (Part 1)

Posted on March 26, 2012 by Ian

In today’s business landscape CEOs are increasingly focused on top line revenue growth and bottom line earnings along with increased pressure to execute at speed and scale. Business executives are now looking to their CIOs to drive growth and competitive advantage.

To succeed and outperform in this environment, today’s CIO need a number of unique skills:-

  1. Visionary & Strategic Leadership
  2. Building High Performing Teams that are lean, agile and highly focused
  3. Operational & Technical Excellence
  4. Detailed Product Leadership

In the first of a series of posts on key skills for today’s CIOs, we discuss Visionary & Strategic Leadership.

1. Visionary & Strategic Leadership
From talking with many CEOs, all organisations have the same challenges. Their capabilities overlap through growth and acquisition resulting in process / service duplication driving up costs.  In addition, after successive waves of cost rationalisation, companies are struggling to find the next big efficiency.

Companies are seeking CIOs that can deliver competitive advantage through increased business alignment, strategic innovation along with increased business skills.

Increase Business Alignment
For organisations to succeed in today’s market place, the focus needs to be on Intelligent Growth comprising of:

(i) Customer experience innovation

(ii) Permanent cost & capital management

(iii) Streamline operations and increase organisation’s effectiveness

Technology and business strategy needs to be aligned and woven together to meet both the short term and longer term objectives of the business.

Strategist and Innovator
As a strategist and innovator, CIOs have carte blanche authority to develop processes, markets, departments and structures to generate competitive advantage. The CIOs that are visionaries and risk takers will benefit most from current opportunities.

CIOs will need to look outside of the normal technology domain and focus on products, markets and business models.

Several key areas include cost and complexity reduction, modernisation of non critical IT functions along with product and process simplification to drive improved real time decisions.

Business Skills
Businesses are increasingly looking to their CIO to drive growth and competitive advantage. Technology leaders are required to possess business skill sets in order to transform the technology organisation and change the technology / business industry value chain.

This can be achieved through inspired relationships by creating new and stronger connections with end customers and key stakeholders in the value chain.

CIOs will need to communicate IT performance in business relevant language using investment terminology to define the value contribution to deliver a concrete proposition for the organisation.

Summary
In today’s demanding landscape, CIOs need to be bolder, leaner and more focused.  Only by increasing business alignment and driving strategic innovation, coupled with new business skillsets, can they exploit leaner, more focused opportunities up and down the value chain.

In my next post I will look at high performing teams for a lean, agile and highly focused technology organisation. For now, take the time to review the visionary & strategic leadership aptitude for your own organisation and let me know your comments.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Big Data – The Next Frontier

Posted on February 8, 2012 by Ian

Big Data will be the next frontier for innovation, competition and productivity according to a recent report from McKinsey (http://bit.ly/tE7fiZ).

According to McKinsey :

30 billion pieces of data are shared on facebook every month

40% growth in global data, year on year

And by 2013 :

14% of business intelligence (BI) deployments will combine BI, collaboration and social media in to decision making environments.

33% of business intelligence functionality will be consumed via hand held devices

Big Data describes the data sets that simply cannot be tackled using traditional database and business intelligence tools.  In my opinion, Big Data is best described by a number of key attributes :–

Volume – from hundreds of terabytes to petabytes, where a petabyte is equivalent to 500 billion pages of standard printed text.

Velocity – up to near real time sub second delivery

Variety –  including both structured and unstructured data

Volatility – hundreds of new data sources coming online from new apps, web services and social networks

Data Strategy
To do Big Data well there needs to be a combination of machine intelligence and human insight. The vast amount of data involved is staggering – to sift, mine and identify the right information will require a fully integrated approach to managing both the product and data lifecycles for an organisation.

This will need to be built around a data management strategy that integrates Big Data into the front end of the innovation pipeline. This will involve a number of new alternative delivery models such as a new breed of analytical applications, using in memory capabilities to add scale and computation speed.

Benefits
The benefits for Big Data are immense, from identifying the profitability of  customers, products and channels, through to mining customer needs desires and sentiment.

The more intelligence you have on your customers from Big Data, the greater insight you can apply to new products and services, driving greater impact on revenues, margin and market share.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

Posted in Innovation, Big Data | Leave a comment

5 Key Initiatives for 2012

Posted on January 23, 2012 by Ian

Building on my previous post – Top 3 Technology Trends for January, IDC Financial Insights recently reported on the 5 Key Initiatives for EMEA in 2012.

1. New Business Growth.
In order to offset declining non interest income, revenue enhancement will be a key focus for institutions, supported by new product development, innovation, increased fees and margins.

2. Channel Proliferation
Mobility, social and crowd sourcing will become key service differentiator for banks to drive customer engagement and market penetration. This will be supported by real time analytics and charting, providing the user with a seamless cross channel experience.

3. Capital Optimisation
Banks will continue to drive cost compression to seek out aggressive operational efficiencies and complexity reduction across the enterprise. Continued use of outsourcing and robust infrastructure delivery methods such as Infrastructure As A Service will be key.

4. Infrastructure Resilience.
Organisations will need to focus on their legacy infrastructure, often the result of numerous mergers and acquisitions. This sprawling server real estate that can no longer be papered over and funded infinitum.

5. Expense Control
Banks will continue to embrace hybrid cloud initiatives along with infrastructure, desktop and connectivity virtualisation to drive down costs. Investment in private clouds will be a key focus of post trade activities.

Survive or Thrive
Underpinning all of the key initiatives will be a number of strategic enablers consisting of BigData, Social Media, Mobile and Cloud.

It will be these very initiatives and enablers that will that will be critical for organisations to decide if they are going to survive or thrive in 2012.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Top 3 Technology Trends for January

Posted on January 13, 2012 by Ian

Looking in to the crystal ball for 2012, a number of new technologies and trends will become evident this year. In my opinion, there are 3 significant and interlinked trends that will become critical for financial institutions.

1. Big Data
Big data is the next frontier for innovation, competition and productivity. Banks have to realise that they are in the data business and that data is their biggest asset.

This is all about how structured and unstructured data is processed, analysed, optimised, automated and protected. Unstructured data accounts for 85% of everything we interact with including emails, text, video and web.

The next generation for big data  is about getting the machine to fit to humans. This will require the structured and unstructured data worlds to combine to provide a single layer across the enterprise, providing a consolidated and comprehensive picture of the customer. Only then will banks be able to tap into data as an asset, mining information to drive intelligence and customer insight.

2. Social CRM
A natural extension of big data is Social CRM. An evolution of customer relationship processes, to manage customer relationships and data in an efficient and process centric way.  Social CRM is about developing a social or collaborative business, both internally and externally, to identify and solve the business challenges your customers are facing.

At its most basic form, this will involve monitoring blogs, Facebook, Twitter and LinkedIn for references to your company.  Proactively, this will enable an organisation to create and manage its own online community, enabling your customers to interact, inform and conduct business. Dashboards can be enabled to define the most active social markets, drive customer engagement and insight as well as increasing customer service and satisfaction. Further benefits include client segmentation, rankings and behavioural targeting to further increase customer engagement and penetration.

3. Gamification
Fortune Magazine has identified a number of companies that are utilising gamification as a competitive advantage, using the same mechanics that hook gamers, as an effective way to generate business (www.bit.ly/9oS97L).

This has caught the attention of venture capitalists that have noticed large number of companies seeking funding for consumer software applications utilising game design theory.

Gamification will become a key tool to drive customer engagement and desirable web site behaviour. Using game design techniques to solve problems and engage audiences will become key for organisations with a Social CRM agenda.

This can be achieved through the introduction of gamification elements, such as badges, rewards, leader boards and ribbons to solve problems and increase engagement with customer audiences. As an example, Seattle-based Evo Media increased the number of users who completed their online tasks from 10% to 80% by adding gamification elements.  Users can receive points or badges for performing a variety of actions including spreading links to questions and answers via Facebook and Twitter. When a users reputational points exceeds various thresholds, they benefit from higher privileges with the option of moderating the site.

The convergence of Big Data, Social CRM and Gamification will drive significant opportunity for financial organisations to realise the benefit of their biggest asset – data. This will drive competitive advantage from improved customer information, intelligence and insight.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Banking Technology 2011 Awards

Posted on November 11, 2011 by Ian

The biggest names in the banking and financial services world gathered at the Grand Connaught Rooms in London last night, for the annual Banking Technology Awards ceremony ( www.bit.ly/rWS33r ).

The awards were judged by a number of industry heavyweights including Professor Michael Mainelli (Executive Chairman, Z/Yen Group), Ray O’Brien (Global Head of Risk IT, HSBC) , Stephen Norman (CIO Global Banking & Markets, RBS) and Paul Willmott (Director, McKinsey & Co).

As part of the final and ultimate accolade of the evening, Ian was awarded the highly prestigious and acclaimed Banking Technology “CIO Of The Year” award.

 

 

 

 

Pictured left to right are David Bannister (Editor, Banking Technology) , Ian Alderton, (CIO Corporate Banking, RBS) and legendary comedian and compere Fred MacAulay.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Reinforce Control & Command (Part 3)

Posted on July 20, 2010 by Ian

As the third post in the series on Targeting a New Operating Model, in this article I will discuss Principle 3 – To Reinforce Control and Command.

Many corporations are inhibited in their ability to fully grasp their risk exposure due to outdated or poorly integrated IT systems. As a result of multiple mergers and acquisitions, many banks have disjointed IT structures in which business systems are duplicated or not included in the overall data aggregation.

These disconnected and disparate systems make it more difficult to identify the information necessary to fully grasp an institution’s broad spectrum of risk exposure.

To refocus and sharpen Control and Command across the enterprise, there are 2 key directives that need to be addressed :

Principle 3 : To Reinforce Control and Command

Principle 3 Directive
Reinforce Control and Command · Focus on improving detection and reducing excess management
· Focus on quality, not quantity of controls

Focus on Improving Detection and Reducing Excess Management
Historically, risk frameworks have been designed for economic, regulatory and liquidity aspects and by definition were more reactive than proactive. The key design principle of these systems was of measurement as opposed to detection.

These frameworks were architected around fragmented controls and a silo based approach to risk. This was all about creating volume of data where detection mattered less. Risk systems would groan under the amount of data they had to consume swamping the organisation with wave after wave of metrics, generating white noise and static that the organisation was unable to hear let alone act on.

In addition, recent systematic failures across the industry have highlighted that many organisations do not poses a single holistic perspective on the detection of key market threats and risks with the result that key systematic failures resulting in massive losses were not detected in good time.

What is required is a new approach to risk management that requires less data and simpler output. This is key is to produce improved detection on key threat and market risks with the expertise and domain knowledge provided in the analysis of the data.

Weak signals will need to be converted into strong indicators through improved connectivity of information and triangulation of outcomes form independent sources. Only then can an organisation be confident that it is in a position to reduce excess risk management signals and focus on improving risk detection.

Focus on Quality, not quantity of controls
The risk management approach to date for many banks has relied on excessive controls being developed to imply comprehensive coverage.

This provides a false sense of security, and only papers over the gaps in the risk management framework obscuring systematic failures and key market losses until it is too late. Furthermore, the abundance of controls realises copious amounts of sizeable risk reports which are generated but rarely viewed.

To refocus and sharpen the risk management approach, a “control of controls” function is required. This function would measure the quality of exiting controls by conducting stress tests with a view to optimising over controlled and immature control areas with a view to optimise both the number and cost of controls across a specific business area.

The risk architecture needs to avoid garbage in garbage out scenarios. The underlying data needs to be mapped, managed and utilised across a central set of reference data, master data, positions and accounting data. Common and specific classification need to exist throughout.

Only be striving for cross product architecture across silos, geographical regions and asset classes can a scalable risk architecture and methodology be defined. The focus on quality, not quantity of controls will need to be designed from the bottom up in order to design a true control of controls risk function.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

Posted in Transformation, Risk / Regulation | Leave a comment

Industrialise & Strengthen Processing (Part 2)

Posted on June 25, 2010 by Ian

In my previous post “Target a New Operating Model (Part 1) “, I discussed the first principle of Aligning Operations with the Business.

In this post, I will explain Principle 2, to Industrialise and Strengthen Processing across the enterprise.

Principle 2 : to Industrialise and Strengthen Processing

Principle 2 Directive
Industrialise and Strengthen Processing · Differentiate between fast lane and high touch processing
· Strive for Cross Asset processing architecture
· Develop enterprise wide shared service model
· Install culture of continuous improvement

 As the operating model for banks becomes more simple and specialised, focusing on higher transactional volume, the need for technology to understand the business dimensions becomes ever more critical.

Only by understanding the value proposition, including and how to drive value across the enterprise, can a world class next generation operating model be clearly defined.

The correct shared service model approach needs to be in place to differentiate between standard, utility transactions which can be STPd in the fast lane, from complex, bespoke processes that require a high degree of manual intervention and high touch processing. True economies of scale and automation can only be achieved by having a shared service model that is truly cross asset across all product silos, legal entities and geographical regions.

The fast lane utility processes will form the bedrock foundation to support business agility and process innovation by providing a flexible and agile framework to define customised business processes. By their very nature, these processes are often both complex and bespoke, requiring a high degree of manual intervention and entrepreneurial spirit to support aggressive business velocity into new market and geographies.

The drive to Industrialise and Strengthen Processing is all about working smarter, to create sustainable competitive advantage. It’s all about leveraging existing processes and domain expertise to build a culture of continuous process improvement and innovation, where change is viewed as an opportunity that will differentiate between a market leader and a market follower.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Targeting A New Operating Model (Part 1)

Posted on June 7, 2010 by Ian

In the current financial landscape, banks are no longer focusing on survival. The financial crisis has been a powerful catalyst for change with banks now focusing on how to thrive in a new environment of tighter oversight, lower leverage and higher capital costs.

The new landscape provides an opportunity for banks to target a new operating model, to match their core strengths with the business along with focusing on high volume, low risk activities based on facilitating client transactions.

In my experience there are 4 guiding transformation principles that that need to be followed to put in place a Next Generation Operating Model.

Transformation Principles

 1. Align Operations with the Business
2. Industrialise and Strengthen Processing
3. Reinforce Control & Command
4. Differentiate Client Service

Principle 1 : Align Operations with the Business

Principle Directive
Align Operations with the Business ·Create efficiencies to underwrite investment in high growth business
·Expand the scope to include upstream activities
·Track and report metrics linked to strategic goals
·Guide the transformation of the business

 With the move to high volume, high frequency activities, models are becoming simple and more specialised. Coupled with lower profitability and increased competition, it is essential that operational process and effective and efficient.

Banks need to strive for a truly agile and cross product processing framework both across business silos and geographical regions. This can only be achieved by streamlining both upstream and downstream processes to facilitate automation. The weakest links in the chain have to be addressed, removing complexity to deliver economies of scale in an effective, efficient and scalable manner.

For the banks operations to be a source of competitive advantage, it is essential that the operating model continues to deliver tangible outcomes through the tracking and reporting of key metrics. These metrics need to be aligned to the business model and strategy, tracking to a number of defined objectives for the transformation, such as efficiency, innovation, risk management and client service.

The success of the transformation rests on the change enablers such as IT, Operations and Business Heads guiding the transformation of the business. Technology along with Operations should view themselves not as order takes but as a true business partners, shaping and driving the future direction of the business. Only then can operations and technology act as a catalyst to transform the business operating model.

In my next post I will look at Industrialised Processes and how to differentiate between fast lane and high touch processing.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

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Flash Crash : Equity Plunge

Posted on May 13, 2010 by Ian

The recent plunge in equity markets has placed high frequency trading platforms under fire from both regulators and political administrations on both sides of the Atlantic.

At one point last week, the Dow Jones industrial average dropped nearly 1000 points before rallying to a 348 point loss.

Initially, viewed as a fat finger error attributable to a single trade, the regulators along with the relevant exchanges and market participants have found no evidence of human error causing the plunge which wiped $1,000bn off the markets.

History
Looking back, fat finger errors have created significant issues for banks over time. In 1992, Salomon Brothers sold a flawed customer order and knocked 15 punts of the Dow Jones. In 2001 another leading tier 1 bank sold 610k Japanese securities at 16 yen instead of 16 shares at 610k yen.

Systematic Checks
Ten years ago where were fewer than 10 US equity exchanges. Today, there are more that 50 platforms providing greater competition along with tighter bid / ask spreads. A similar picture is painted across Europe where Mifid paved the way for a myriad of new exchanges to appear on the market.

In my experience, as an expert on trading technology across multiple asset types, the chance of a human error causing such a significant swing is highly unlikely given the systematic safeguards now in place to prevent large orders being submitted in error.

It’s my view that 2 key areas need to be addressed –

1. Holistic Regulation
The new innovative trading practices that are in use today including high frequency trading, dark pools and direct market access has exposed the regulators with a significant gap.

At a time when they are still reeling from the political fallout of the credit crisis, the technological and product innovation across the equity markets continues at warp speed.

The regulators need to look long and hard at how to close the gap and ensure that there is a single set of eyes across a fragmented market. Only by providing a truly holist approach to regulation, can the regulators guarantee greater market stability, transparency and efficiency.

2. Circuit Breaker
In addition, market participants along with the trading venues need to ensure that they don’t continuously feed in orders once markets go into terminal decline and liquidity dries up.

This has been seen before in 2008 and we can’t afford to continue to re-examine events once the horse has bolted when we know that there is an issue.

What I strongly believe is needed is for the market to adopt a circuit breaker approach. These circuit breakers would trip when liquidity disappears off the cliff as we saw in the markets last week

The major exchanges along the regulators and all market participants need to work hand in hand to re-establish market credibility.

First, the root cause of last week’s plunge needs to be accurately determined. Only then can all market participants and regulators work together to develop an effective circuit breaker to promote greater market stability, efficiency and transparency.

IAN ALDERTON
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770

Posted in Equity Markets, Risk / Regulation | Leave a comment