Bridging the Business-IT Divide03.06.2014
Achieving consensus between business and IT has become paramount for capital markets firms due to a changed regulatory environment, which requires nimbleness and agility.
“Regulatory mandates have pushed a lot of IT spend,” said Josh Sutton, an executive at Sapient Global Markets. “You’re also seeing new business models emerge where functions that used to be performed by each bank individually are moving into more of an industrialized utility solution and consortiums are popping up that didn’t exist one or two years ago simply because there weren’t the fiscal drivers to necessitate that.”
Sutton, who is the global business development lead for capital markets and part of the executive leadership team at Sapient Global Markets, says that within trading and risk management, technology is far and away one of the large expenditures. One recent estimate puts 2014 expected spend for IT for financial services firms at about $430 billion.
Sutton cites a study by research firm The Standish Group which found that only about 39% of IT projects are succeeding as defined by delivering on time and on budget with the requested functionality. Eighteen percent were complete failures with the remaining 43% being either late or delivered with subpar functionality.
“That’s somewhere between one and two hundred billion dollars this year that’s going to be effectively wasted on a disconnect between what technology is delivering and what businesses asked for,” said Sutton. “At a time where you got more dramatic change going on in the industry than we’ve seen in close to 100 years, you also have a fundamental broken system where business is not getting the results from technology that it wants.”
The solution lies in getting the business and IT groups on the same page.
Sutton noted three components of getting IT and business aligned. The first is starting programs that work with business users, not the IT team, to define how the program is going to be measured. “What is the actual mandate for the program? That has to start with the business, not technology,” he said.
The second is leveraging visualization to a much greater degree than ever before. “The world we live in now with our children having dramatically better technology on their iPads than some of us have on our systems that we use day-in, day-out has created a fundamentally different expectation of usability and the ability to make decisions,” Sutton said.
The advent of mobile, social, big data, and cloud services will require an entirely different set of IT skills and roles — many of which are yet to be invented, according to Fred Magee, adjunct research advisor with IDC’s Research Network, “We believe there are clear indicators that the existing role of technology management will evolve in a few short years to a set of roles that includes management of innovation, information intelligence, customer experience, and digital business presence,” he said.
The third component is delivering projects in very small chunks that can be pushed to the business “so that it can see real results on an ongoing basis rather than step-by-step waiting for 18 months for a big-bang program to come out,” Sutton said.
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