A portion of the article is included in the link below, as featured in the ‘Finance Today’ segment of the Sri Lankan daily newspaper Ceylon Today.
‘I see the value in having a seamless digital experience, but I need to get buy-in from the rest’, is a sentiment we often hear in the early stages of our engagements with BFSI firms.
This is a dilemma many tech leaders in financial services face. It’s a core responsibility to transform the organization so that it’s nimbler, creates more customer value, and unlocks fresh revenue ability. But they’ve got the added pressure of senior executives and the Board breathing down their necks.
A Deloitte survey revealed that CFOs continue to see IT as a cost center, with over 50% of the IT spend believed to be to maintain day-to-day operations rather than improving existing capabilities or creating new ones for the business. This is a long-held problem in perception that makes it tough for tech leaders to justify their investments.
So, the ‘burden of proof’ rests with tech leaders, making it a key responsibility of your job today. As a CIO, CTO or Head of Digital Transformation, how can you prove that your planned tech investments will deliver business and customer value and gain buy-in? We will explore the first and most critical part of it here: the mental shift.
The Modern Tech Leader: Look Inwards to Understand Self and Redefine Organizational Role
A 2018 tech survey by McKinsey highlighted that the IT departments of the most successful companies displayed a specific trait. They were led by CIOs who weren’t just ordinary tech enablers but took an active role in shaping the organization’s business strategy and agenda.
Fast forward to today, and it is common for financial services CIOs and CTOs to be invaluable business partners driving value, which has made it simpler for them to identify tech investments that align with overall business objectives and prove ROI.
But it isn’t an easy shift for financial services tech leaders to make. It starts with a change in self-perception of one’s role and purpose within the organization. To achieve this, among the different points discussed in the evergreen McKinsey study, we’ll focus on the more critical ones to this mental shift.
1. Know the business: an accusation levelled at tech leaders by CFOs (in the previously cited Deloitte survey) is that there are very few tech leaders today with intimate knowledge of the business they’re trying to support. And to get to the root of the business, your business unit leaders, front-line managers and customers can be your greatest aid. The McKinsey survey highlights a top financial institution where tech and business leaders attended user listening and feedback panels to effectively guide their teams in the process of building their digital products. This is one way to develop the necessary business acumen and address the needs of end customers, going beyond attending C-suite and strategy meetings.
2. Collaborate with business leaders: the Deloitte survey also highlights cross-functional business partnering as a top challenge for IT functions. It has long been said that financial services tech leaders aren’t good collaborators, although we don’t believe this is true (at least now). As pointed out in the McKinsey study, a transformative CIO must actively engage with other executives and form true, partnering relationships with common goals, mutual responsibility and accountability. This will allow you to not only get buy-in quickly but also help prioritize specific initiatives in the tech transformation that fulfill their business needs, while ensuring the products and services IT develops are actually utilized.
3. Be a tech translator: another obstacle to getting tech buy-in is the knowledge gap other leaders experience involving tech and its business application. Now, if you already have a robust understanding of the business, you can easily translate the language of business objectives into tech solutions and vice versa for the business leaders. By removing the technical jargon and speaking in relatable business terms, you will facilitate effective collaboration and decision-making among executives from different domains. Translate to get buy-in, basically.
In our work with banks and financial services companies, we constantly notice how this shift in tech leaders’ perception of self and their evolving role helps them get tech buy-in more quickly. Of course, this is the first step, and to really get the go-ahead from business and other leaders, you’ll need to objectively prove tech ROI, which is where KPIs such as the cost to acquire a digital customer become critical.
We’ll explore this in-depth in a future article. But transformation starts within, so look inwards first, tech leaders.