Below is a lecture from CMU on September 18, 2007. It is by Randy Pausch and is called The Last Lecture: Achieving Your Childhood Dreams
A nod to Kim Hatch for bringing my attention to this.
I have used this blog to talk about platforms in recent posts. Last week, Richard Veryard, a UK blogger and “business technology evangelist” picked up on what I wrote in his blog here. Richard asks will financial services firms provide “radical improvements to customer experience and services”. He doubts it will happen soon, ends his post by saying “I live in hope”…
I to have hope that financial services companies will innovate in their product offerings and will get away from feeing the customers to death and a focus on their own bottom line to the detriment of their customers.
Examples are starting to trickle in… Here is one from earlier this week from PNC Bank. The PNC Virtual Wallet is a special set of accounts with little to no fees (assuming minimums are met) and provide a set of services around managing cash flow and savings.
Do you know of other examples?
I’m at the MIT CIO Symposium and am sitting in on the Financial Services panel. Here are my notes and I apologize if it comes out as a bit of a stream of consciousness:
Niraj Patel (Witmer LLC)
Marc Gordon (CIO, Bank of America)
Keith Dennelly (MD, State Street Global Advisors)
Joseph McCartin (CIO, National City Corp)
Guillermo Kopp (ED, TowerGroup)
Business IT alignment goes beyond business & IT all the way to the customer
One way on of the panelists worked to get alignment was to get on plane with user on flight all the way to Tokyo
B of A… IT is embedded within the business. People sit physically in the same location as the business. IT has a seat at management table. They are completely integrated parts of their businesses. Working to get aligned with customer is their commitment. Marc (and other B of A executives) spends 4 hours per week directly interacting with their customers.
State Street… His group is paid directly by line of business. Alignment is natural for them.
National City… IT used to have a line of business alignment. Now durable process orientation – alignment with customers. Ability to integrate product and services for customer benefit. Key direct reports are called Business Information Officers.
TowerGroup…. Don’t look inside out anymore (read: are the business processes aligned to what is being delivered to the customer). Instead, look outside in… What does the customer need and want? Web 2.0 technologies enables the customer to know faster what the companies can do for them. Clear focus on customer brings alignment both internally and with the ecosystem of suppliers.
What changes do you need to be making based on the economy, etc…
B of A… Doing 3 large acquisitions / integrations at once (typically they did acquisitions serially). The amount of change they are dealing with is unprecedented. They need to focus aggressively on only what needs to be done. Need to be keenly focused. “relentless focus” to handle the capacity of what needs to be done. They have had a dramatic reduction on the number of projects with almost no decrease in total spend.
State Street… Major leadership changes internally. Challenge to bring new leadership team up to speed and to make sure the technology team is aligned to their objectives. Focus is also a key. Customer of experience is a key – information more readily available and timely.
National City… Mortgage mess has made it very nasty. $7 billion recapitalization. Before this – all key projects were protected. These were all transformational. He did have to reduce staff and they did this by drawing down contractors. They closed some systems as they exited businesses.
TowerGroup… Customer driven innovation in products. Collaboration tools. Business intelligence. Customer intelligence. Need to release capacity for innovation. Typical FS firm uses 80% of IT spend for maintenance. Need to push that number down to increase innovation.
B of A… This is a time to differentiate ourselves – bring products to market to help customers in their situation.
How do you innovate given what the consumer is going through?
B of A… Traditionally bank was organized around products. Now it is organized around customer. We are agents of change. We have always had a platform for change, but that is a burning platform today. It is a wonderful time help customers.
National City… Know me, look out for me, reward me, and trust me. What is the customer’s objective? Business architecture review board is all business people and facilitated with IT. This group sets the strategy IT initiatives. Even given the financial challenges of the bank not one of these strategy projects has been impacted.
Are you willing to spend more to get another customer interaction?
B of A…. B of A measures failed customer interactions, and can translate that in dollars, customer experience, etc… It is critical for them to get more customer interactions.
State Street… Increased demand for business analytics. Institutional trading used to be a relationship game, now an analytic game.
From the Q & A
B of A… Expected to be the low cost IT department in the industry. Currently they are 25% better than the norm. The goal is not just to maintain that cost advantage, but improve the advantage.
B of A… Sponsoring the MIT Media Lab for 5 years. The goal of this sponsorship is to answer “what is the next generation of financial services?”
In yesterday’s WSJ, there was a quick article about how keeping it simple paid off for one champion programmer. In a nutshell, the story is this – TopCoder ran a component design competition where 9 finalists had 6 hours to produce a solution to a given problem. The winner’s secret? He spent the first hour interviewing the person who wrote the requirements, and then designed and coded a solution that met the written and unwritten requirements and did nothing else. Wow, what a boring and simple solution. What did our winner get? $25,000 for 6 hours of work…
Many tech projects fail / disappoint / underwhelm because they fail to meet the requirements. Many tech departments and IT service providers work in a mode where they code first, and ask questions later. Their goal is to get something out there to meet the need, and then clean-up the mess after. However, all to often, no one takes the time to actually clean-up the mess after…
The winner in this simple contest highlights something to me – fixed price engagements are critical in IT projects. By working on a fixed priced basis (again regardless of whether you use internal or external IT teams), the team putting the fixed price bid together is forced (if they want to manage project risk reasonably) to do significant up-front work nailing down the requirements, detailing the design, solidifying the plans, and establishing effective change control processes.
With modern project management / program management tools such as Daptiv, and collaboration tools such as wikis and blogs, projects can be managed more transparently than ever before. By combining transparent project management, open honest communication, fixed bids, and reasonable risk management, your IT department or IT service partner can dramatically increase its success rate on IT projects.
So one question that came to me after yesterday’s post on platforms is this -> Is better to solve the problem at hand simply and directly, or build / deploy a platform?
Here is one answer I saw recently about whether to switch from PC’s to Mac’s in business.
Adopting—or even just adding—a new platform is more than buying a new computer: current applications need to be assessed for compatibility, sometimes requiring replacement or supplementation; employees need to be trained and conditioned to work in a different environment; and current support staff and procedure needs to be modified—and often supplemented—in order to span both the old and new platforms. The amount of time needed to successfully and effectively deploy something new is far greater than the time needed to throw out an old PC and buy a newer one. (source: http://www.macuser.com/business/macs_in_business_making_the_ca.php)
Switching to a platform is an event. It has switching, training, launching costs. These costs need to be considered. The benefits of a platform are often hard to quantify, but need to be considered as well. Accordingly, there will be many cases where making the solution a platform will not be worth it.