Coordinating Technology with Strategy

“War is too serious a matter to entrust to military men.”

Georges Clemenceau, Prime Minister of France during the First World War, uttered this memorable line as the generals of the Western Front struggled to cope with new technologies introduced by the Industrial Revolution. For four years, the generals pushed their nation’s resources to the brink of exhaustion with little accountability or thought to overall strategy.

In a similar vein, many community banks struggle with the swift and often overwhelming pace of technological change. To manage continuous change and ensure that technology serves the institution’s overall business strategy, banks must focus on three important governance principles:

Develop baseline statistics. Most bank CEOs can provide the last quarter’s delinquency rate to the third or fourth decimal place. However, most would be challenged to provide an accurate estimate of the number of bank workstations and mobile devices. It’s not just CEOs who would have difficulty; many chief information officers and Information Technology (IT) managers also would be hard pressed to provide an estimate. However, baseline statistics such as the number of workstations and mobile devices is the first step in the governance process.

Baseline statistics might also include the amount of data storage capacity available to the bank, the number of help desk calls processed, and release levels of major operating systems and applications. Once a baseline and history is documented, management can begin to observe trends and, more importantly, develop Key Performance Indicators (KPIs) and internal Service Level Agreements (SLAs) to measure and monitor the IT function.

Reflect on project success and failure. IT touches all bank functions and frequently requires large and costly migrations, implementations, and conversions. Successful management of these projects is dependent on clear communication of project goals, costs, and timeframes. Many of us have witnessed projects judged to be “on time” and “under budget” only because the timeframe and the estimated costs of the project had been adjusted since initial project approval.

To encourage reflection, consider closing each major project with more than a pizza party. Best practices suggest that these closing conversations should include an honest appraisal of the project’s successes and areas for improvement. These conversations will bring improved understanding of the bank’s capabilities and gaps and, most importantly, accountability to the process.

Create a forum. CEOs rely on the assistance of their board of directors to manage the complex world of banking. A technology committee that includes the bank’s decision makers provides a CIO or IT manager with the same forum to articulate goals and objectives. The committee should avoid simple rubber stamping of IT decisions but should demand clear explanations of technology solutions and the process used to arrive at the recommendation.

To paraphrase Clemenceau, “Technology is too serious a matter to entrust to technologists.” Community banks should consider building a foundation of transparency and accountability within their governance structures to ensure that technology supports the bank’s goals and objectives.

Mr. Schaus is president of Phoenix, Ariz.-based CCG Catalyst Consulting Group. He can be reached at [email protected].