With digital transformation well underway for many businesses, one of the main questions that remain is how to accelerate the pace of change to gain a competitive edge.
At the recent Executive Strategy Forum in London, cross-functional collaboration and shifting culture took center stage as the means for organizations to make change more rapid. It may seem obvious, but while the technology itself is the focus of change, people are after all the agents of such change, something the IT industry has ignored in the past.
As Jenny Wood, Head of Performance and Business Management at RBS pointed out, digital transformation has been a watershed moment for the IT industry: “I was just reflecting on how far technology conferences have come. A few years ago, you wouldn’t have heard anyone speaking about mindset and cultural shift in this setting, yet now these are both common conversations being had within IT.”
The relationship between driving the transformation of technology strategy and championing a cultural shift in the business is key to improving accountability, transparency, and strategic alignment with the business. As seen from the presentations, there is a demonstrable need for IT to undergo a mindset change to move from a cost center to a value creator, one which Technology Business Management readily supports.
Changing to an "always-on" mindset
For RBS, this mindset is intertwined with its drive for cultivating a ‘commercial culture change’ among its staff. Jenny Wood emphasized that this isn’t just about cost cutting – “it’s also about providing value.”
The finance industry itself has seen a seismic shift in recent years, with technological advancements at the forefront. Technology is now more integrated into the banking experience than ever before, in the form of banking apps and trading automation.
Now, customers expect an ‘always on’ approach, and the market has been disrupted by new entrants in the forms of challenger banks. However, this comes with an associated cost, and as Wood highlighted, banks now need to marry the need for a commercial mindset with the desire for driving innovation through technology.
Wood’s aim within the business is to encourage people to apply this ‘always on’ mindset to when it comes to thinking about sustainable and effective technology investments, paying attention to long-term benefits and not just short-term cost savings. In order to do this, people need to first have a better understanding of the current state of their portfolio, know how much they are spending on the tools that they use, and align this to their value.
This differs from the traditional view of IT’s role, which would task them with simply deciding on the best technology for the job and not thinking strategically beyond that.
“The closer you can get technology embedded around those who interact with customers, the better the outcomes will be,” she said. And to achieve this without massively overspending, the commercial mindset needs to play a part, supported by a Technology Business Management framework.
Building culture and transparent communication
Founded in 1992, Saxo Bank has always been ahead of the curve. “Our CEO says that we were a fintech before that term was even invented,” explained Richard Douglas, Global COO of Group IT, Saxo Bank, an end-to-end facilitator of global capital markets. However, it’s had some catching up to do to match modern day fintechs when it comes to modernizing technology.
Shifting its culture has been part of this, which has had wide-ranging implications for its value chain, sales organization, and technology investment portfolio.
In order to do this, they needed to galvanize teams across the business, from compliance to IT, Ops, and even finance, educating them on the importance of such a bold program, highlighting the positive impact the move would have.
This was key to helping IT to align its approach with the rest of the business, especially finance: “The way finance runs finance differs from how IT needs to see its financials,” said Douglas, touching on the need for IT to make technology costs and their drivers intelligible to those outside of IT.
This then helps to make technology purchasing decisions smarter and more focused on overarching goals like digitization. It’s also important, Douglas said, not to underestimate the time and effort required of IT to help this cultural change in other areas of the business: “You need to take them on that journey and show them how you’ll support them in that transition.”
Driving business success from the IT function
Cultural change is at the heart of digital transformation, both for those inside and outside of IT. There’s a need to educate employees on the potential value that can be driven by technology investments, but it takes a number of changes.
It’s on IT to always be thinking about how they can help the rest of the business to improve and optimize technology usage in the long term rather than simply signing off on the cheapest or best technology. This mindset requires clear communication; however, and technology leaders who use a clear framework to do this, such as TBM, stand to benefit greatly.