allocations of resources and people’s frustrations, and determine the current basis for performance measurement within the technology division.
The information gathered in the research phase would form the basis of the analysis and examination of the value chain. How and where does technology meet customer needs and where are the gaps? How can the environment be better engineered to meet user needs? What are the alternatives for service/operating models? What unique capabilities help to differentiate the business and how can they create barriers to replication? What business webs can they connect to? What will be the processes for evaluating new work, projects and investments? What is the opportunity cost of changing the way the technology division operates? The answers to these questions will define the strategy model that best meets the technology objectives, supports the business, provides flexibility to adapt to future change, creates opportunities and drives business model transformation.
I also believe in the value that effective technology strategy adds to the technology division itself and how it helps smooth growth. The core objectives of technology management become easier to achieve, if not surpass. Improved customer satisfaction, reductions in operating costs, enhanced agility and responsiveness, enrichment of decision making and investment processes, and a more transparent measurement of performance are outcomes that can easily be attained.
Research and analysis is key
So, how should they look at defining a technology strategy? I believe that preparation is the crux of the process. Specifying what they are trying to improve and what they are aiming to achieve are the starting blocks. Understanding organisational elements such as business objectives, resources, structure, skills, and culture will ensure a robust strategy that will in itself provision a framework and a set of processes to manage changes to these elements. The emphasis of the strategy definition process will be in research; mapping the current technology environment and capabilities to assess the need and impact of change, identifying key trends in the market to propose the vision of the future, and clarifying the needs and objectives of the drivers of technology – the business, individual users/customers and the information systems within the bank. They should seek to better understand current issues with the process – redundancy, under/over
18 entrepreneurcountry
To enable an effective process, communication and consensus are key. Technology strategy will be easier to implement if stakeholders and staff feel an affinity with the process by being involved in it’s formulation. It is important to listen to ideas both up and down the hierarchy and ensure regular updates on progress. Likewise, it is important to look out at the market and competition to benchmark proposals and to assess the appropriateness of objectives. Technology strategy definition is not a one off task, it will need to be revisited and reassessed over time. There is a danger that the technology strategy could end up focusing on cost reductions. Although an important consideration, the technology strategy must work to support business strategy in delivering growth and change for the business.
Enable fluidity in process and agility to adapt Clearly,
I believe that technology strategy
must
be
viewed as an integral part of the business strategy for any financial services firm or they will not survive. The strategy should aim to manage vulnerabilities but focus on new opportunities. Core capabilities must be protected to ensure continued differentiation and competitiveness. A business should always consider outsourcing – focus on what they do best and partner for the rest. There is a case for many banks to exit risk management/trading in certain asset classes by outsourcing to other institutions who have economies of volume. A business must also understand, plan and manage required organisational changes. A bank’s technology strategy should address the flexibility required to cater for a fast evolving market environment, look to eradicate complexity to enable fluidity, and deliver superior information capture, management and distribution to enable more effective decision making.
Will they listen and will they change? Maybe, but the opportunities presented to entrepreneurs as a result of the status quo are tantalising.
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