The Larger Purpose

By Thomas P. Johnson Jr.

Information technology is essential for efficiency, but its ultimate application is enhancing the customer experience.

Efficiency is an overarching goal for many information technologists, who must meet the ever-escalating requirements of their companies and customers even as they are being asked to reduce costs. So it is certainly appropriate to celebrate breakthroughs in economy and functionality. Yet it is important to keep sight of an even greater priority: enhancing the customer experience.

That critical distinction remains elusive, given that a growing number of progressive retailers, such as Amazon.com and Nordstrom, are responding to customers better than many financial services providers. Enough examples of service excellence have surfaced across American industry to lift overall customer expectations to a new level, leaving banks to play catch-up.

Customer-perceived deficiencies in responsiveness and individualized service compound the challenge for major financial institutions, which remain obligated to achieve the economies of scale promised with their mega-mergers. Unquestionably, the basics must be put in order, as shown by the actions of Austin A. Adams since he became chief technology officer at Bank One Corp. Facing a hodge-podge of systems built up over a decade of acquisitions, Adams swiftly purged redundancies by consolidating deposit systems, Internet platforms and back-office processing centers.

Integrating technology across the business silos and across the geographic territories is one thing; marrying systems to the larger purpose of profitable revenue growth is quite another. At Bank One, Adams has worked to convert technology people into business partners by creating a management structure that embeds IT people in the business lines, couples their incentives with business line objectives and provides hands-on training in business applications. "This kind of structure creates huge amounts of dialogue between the technology and business line people," Adams says.

Still, it is risky to equate internal cohesion with customer satisfaction, as illustrated by the travails of CRM, or customer relationship management. After expenditures estimated in the hundreds of millions of dollars, executives admit that as they waded through the hardware and databases they lost sight of what CRM was really about: improving interactions between customers and the institution. "CRM was designed to make things better for the customer, but in practice it was more about the provider's views and preferences," say Craig J. Kelly, executive vice president for marketing at SunTrust Banks Inc., Atlanta.

The overpowering tendency to skew initiatives toward corporate priorities and away from customers constitutes the greatest challenge with information technology. Even highly efficient companies will fall behind if they cannot achieve revenue growth, which is why technology must also serve the larger purpose of enabling distinctive customer service. For senior managers, an essential requirement in achieving that goal is keeping it in sight.

Mr. Johnson is publisher of Banking Strategies and president and chief executive officer of BAI.

Copyright © 2003 by Banking Strategies, published by BAI.

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