Platforms – Are they coming?

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?

MIT CIO Symposium – Financial Services Panel Notes – “Customer Experience” & “Focus”

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:

Panelists are:
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)

Alignment
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?”

Keep it simple…

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.

More on platforms….

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.

Some thoughts on platforms in financial services

As I’m on my last of 5 flights in 54 hours, I am thinking about the word Platform… This is a word that is being used a whole lot these days. Facebook is a platform. eBay is a platform. So is Amazon. Apple has several platforms: the iPod, the iPhones, the iTunes Music Store, the iMac…

What about financial services platforms? Sure, the firms I’ve worked in talked about their Equities business as a platform to deliver a variety of services to clients (e.g., sales & trading, research, banking, etc…). Then there are the technology platforms: the core order state engines (or order management platform), the messaging platform (was rnet the first platform I used in my career?), and the database platform. Is the instantiation of SOA a platform on which a variety of applications can be built? Sure…

Are there platforms that are external to the financial services firms? Surely, your Bloomberg terminal is a platform, and a pretty useful, albeit expensive one. Other products try to be a ubiquitous platform like Mayor Mike’s, but as I sit on my flight tonight I can’t think of a better Financial Services platform. What did I forget?

What makes a good platform? While not a comprehensive list, good platforms need to be extensible, they need to have utility beyond utility envisioned by the designers, they are foundational, they are simple, they are focused, they are powerful, they scale, and they are open. As we live in the age of Web 2.0 / Enterprise 2.0, I think modern technology platforms need to add two more features: (1) they incorporate, facilitate, and/or leverage collaboration, and (2) they are accessible and/or leverage the Internet (and are reachable via Web Services and/or SaaS?). What did I miss? Do you agree with my list of what is a good platform?

So, why does this all matter? When I designed applications I tried to build solutions that were a platform. One of the people in my career that had big impact on me told me that the best solutions solved not only the problem you were being asked to solve but two others. Over time, I took that to mean you should look to build solutions that either were a platform or solutions that leveraged an existing platform.

Amazon’s EC2 platform has revolutionized how startup technology firms launch their initial solutions. That platform takes away the need to have servers and lines in data center (and all of the staff and technology required to service this). You no longer need to forecast your demand and buy headroom. You simple pay for what you need and provision more space / power on the Amazon platform on demand.

What can financial services learn from this? I’ll explore that in future posts, but I encourage you to jump in and frame that conversation.

Talent challenges for Financial Services companies

Yesterday I had lunch with an old friend (and let me call him Mike for the purposes of this blog post). We had not had lunch together in over 15 years, and we both enjoyed catching up. My friend works at a large bank, and as I explained nGenera’s mission to him, his answer was “well that makes sense, but our firm can’t think in those ways” and “I wish the CIO, Jim, would take the time to consider these issues”.

As I reflect back on the lunch, it is those statements that keeps singing in my head… Why wouldn’t a large multi-national bank be interested in becoming an nGen? Wouldn’t they be better off if they do – and better off in the terms that Wall Street talks about – better off with increased shareholder value? Why wouldn’t a CIO, even in a challenging economic climate, want to strive to collaborate and innovate?

Let’s call Mike and Jim’s firm B.O.B. (Big Old Bank). B.O.B. is an amalgamation formed through purchasing and partially assimilating dozens of banks (some of which were quite sizable to begin with). They have many cultures. They operate in many countries. They popular press is questioning whether they are going to survive. They have a siloed and dysfunctional set of strategies that are not coherent and rational. They have an annual budget process that does not complete until well into Q2 and starts again in Q3. The budgets and strategies are top down and the people on the ground, the embedded leaders, are not consulted on preparing them, so they generally unrealistic, and the goals of the strategy and budgets are largely unmet in the end.

Our hero, CIO Jim, wants to be successful and has been at a firm that was successful. He knows how collaboration works. He knows how motivated empowered teams can do extraordinary things. However, he is fighting a mountain of resistance at B.O.B…. Jim has told Mike it will take 3 years and he’ll change the culture at B.O.B., and will make them a success.

I don’t see how Jim has 3 years to do this – if he does not solve this talent problem, and solve it quickly one of two things (or both) will happen:
(1) B.O.B. continues to have problems competing, and sells itself, shuts down, or other such remedy
(2) Jim loses his job

Jim needs to understand that he is facing a crisis, and in that crisis, he needs to act decisively and deeply. He needs new models of operating. He needs to be an nGen leader and he needs nGen talent.

Specifically, he needs to
(1) Harness the power of his embedded leaders by encouraging and rewarding open, honest, and collaborative communication. Put up a wiki! Look at what Best Buy did with theirs. Leverage this for innovative ideas. Projects that make sense. Solutions that add business value.
(2) Establish a process of continuous strategy, and a vehicle (the wiki again?) to collect and transparently vet all ideas publicly.
(3) Provide skills training for his key leaders on how to operate in a nGen
(4) Let teams self-select to solve issues. Another customer of ours had a consulting company pitch them 9 months and $1mm+ to put up a functioning wiki and get it adopted. The CIO there challenged his team and told them anyone who helped get a wiki up on the weekends would be paid $10,000 each for their troubles. It was done in one weekend for $50,000.

Jim, I know you are crushed right now, but I think it is time you acted decisively and deeply.

YATP… Yet Another Twitter Post.

While vacationing in sunny Florida, I managed to see two interesting posts on Twitter. The first was a couple of days ago from Katie Tierney’s Confessions of a Recruiting Newbie blog – I’m twitdicted. In her post, she argues she’s addicted to Twitter, and finds is a powerful tool to find and disseminate information. She calls the state she’s reached on the Twitter Maturity Curve to be twitdiction. Then this morning I saw JP’s post on Twitter – Musing about things I can do with Twitter that I couldn’t easily do before Twitter. JP tells the story of how he was pointed toward an interesting article in the New Yorker from a good friend because of her tweet about it.

When I explain Twitter to people who have not used it, I clearly am doing a bad job because they just don’t get it. The don’t see the utility. They think I’m a bit crazy. What I learned from Katie and JP is that maybe my explanation is not all that bad after all… Maybe seeing the utility is something that comes in an “aha!” moment after using the tool for a bit. Maybe, just maybe, it comes after jumping in feet first, trying it out, and seeing the power of the completely disjointed conversation you are having with friends and co-workers who, in this day-and-age, might be nowhere near you and frankly you may have never met.

Yes, I’ve never met Katie or JP. Katie and I work together, and have seen each other on Skype and have spoken countless times. JP is someone I’ve come to respect through his blog. Today I follow Katie on Twitter, but more and more I think I’m going to look to people like JP and start following them too. I’m realizing more and more the useful information that I’m missing only following 13 people on Twitter. Intellectually I understand the value of weak ties, but Katie and JP put that power into words for me today.

So, added to my New Years Resolutions… Start following more people on Twitter… Okay, back to the beach.

New Paradigm for Financial Services

Today I’m very proud to be a member of the BSG Alliance as we have acquired New Paradigm. I have talked about Wikinomics and blogged about it since I finished the book in June. I’m still in a bit a shock that I’m part of the same team as Don and his world class team.

My clients have asked me about what differentiates a firm like BSG Alliance from other firms that might be talking with them. Quite simply, the leadership of BSG Alliance has the foresight to partner with a firm like New Paradigm and with people like Don Tapscott. We are not a consulting firm per se, but we are a platform company. We offer a path to outcomes that are specific for each client that leverage our applications, our research, our people, and our eduction capabilities. So, what does this mean for how my team and I approach our customers, Financial Services firms? We had a strong story, and now have an unparalleled story.

Our platform combines:
* Pre-eminent thought leadership from the likes of Don, Tammy Erickson, Frank Capek, Andy Shimberg, Vaughn Merlyn, Brian Magierski, Susan Scrupski, Esteban Herrera, and others…
* Business simulation and visualization technologies of BSG’s newly acquired Industrial Science
* Custom application development, project management, and business analysis from our team of FS professionals
* A SaaS platform on which you can collaborate, use to connect with our applications and third party partner applications, and use to build your own applications
* A custom research and training team that have been at it for 20 years
* Workshops focused for Financial Services professionals

It it hard with a blog (and I don’t have Seesmic yet…) to express how exciting a time this is for us at BSG Alliance and New Paradigm.

What’s in it for me?

The first event started as a bit of fun and evolved into a deep conversation. The second was thought provoking – I had an aha moment. The third evoked a reaction, and I typed the first draft of this post. The fourth spurred me on until I pressed “Send to Weblog”… As each event happened, I kept thinking what’s in it for me? This question keeps coming at me from my friends at Financial Services firms as they look at Enterprise 2.0 tools and technologies and Social Media. They wonder if there is an ROI from weak ties (borrowing the term from “The Strength of Weak Ties” – the personal interconnectivity that is formed loosely in LinkedIn and Facebook are often “weak ties”, as you may not know the person particularly well). They wonder if all of this personal interconnectivity is helpful or harmful. While they can see the value for some of this in their personal lives, they wonder about it professionally. Is this a waste of time? What will their managers think of their use of these tools? Are they exposing themselves too much? Can FS firms allow these technologies? Can they stop them? Has the iPhone changed everything?

Event 1… I have immersed myself in e2.0, the tools, the thinking, etc… I’ve jumped in feet first, to the point that a friend of mine (a younger single friend of mine…) put on my Facebook wall on Monday that I am “more wired than the 20 somethings [he] typically date[s]..”. Okay, my pithy reply to his wall post could have been the end of it, but we started an e-mail exchange… Here’s some of what he sent me:

you’ve got plaxo, linked in, facebook, twitter, aim, and so on.. more than me.. and you’re using them more than the college kids I know.. seems a bit over the top perhaps.. I’m actually dropping nearly everything in favor of facebook.. and that’s only for real people i’ve met/know to see.. and while i might check it somewhat regularly, i’m personally lowering my networkedness.. it’s all too much.. too many things to manage, too many e-mail addresses to check, too many notifications of change.. gmail, my facebook, and my cell number.. that’s it for me now.. i’m not the only one feeling this way.. even seeing some retaliation from 25 year olds, who pretty much grew up in a post AIM world.. just saying.. and don’t forget… every time you change something in one of your networks, a message goes out to others telling them as such.. it’s fun at first, but after a while people might think you’re spending all your time on twitter and not enough on things that actually matter..

In my reply, I talked about the value of experimentation with these tools in order to understand the utility of them. However, it did get me thinking that I might be broadcasting too much information about what I am doing, and broadcasting it too widely.

Event 2… Tuesday, I was talking with a buddy of mine as we commuted into NY after a nice game of squash. He is a trader on a desk at a major Wall Street firm. He was asking me how with all of the regulations around electronic communications could firms allow iPhones on trading desks. People now have a good web browser, their personal e-mail, and the ability to IM friends in their hand – none of which run through the corporate compliance server or corporate firewall. I can imagine the headache this causes firms. As part of the settlement between the SEC, NY Attorney General, NASD, NASSA, NYSE, and State Regulators with Wall Street firms, firms are required to abide by the following:

The insulation of research analysts from investment banking pressure. Firms will be required to sever the links between research and investment banking, including analyst compensation for equity research, and the practice of analysts accompanying investment banking personnel on pitches and road shows. This will help ensure that stock recommendations are not tainted by efforts to obtain investment banking fees.

In practice this agreement and other like regulations require communications between various parties at investment banks to be monitored to ensure compliance with this agreement. The iPhone adds a serious challenge to the monitoring of the communications between various parts of the investment bank.

Event 3… Yesterday, a colleague of mine, Steve Douty, posted this post On Collaboration. He starts his message with this:

“Collaboration” is one of those vague, multivalent terms – like “Web 2.0” – that can mean many things, and also nothing at all. Because of this, it’s hard to get people to do it: “Why can’t you all just collaborate?!” It’s also hard to sell just on its own merits.

He proceeds to discuss the value of collaboration, and explores why Friendster has fizzled while Flickr and Wikipedia have flourished. He discusses 7 characteristics that make Flickr and Wikipedia different; these are: Vision, Purpose or outcome, Topicality, Running start, Continuous flow, Refresh, Logical end. While the discussion he started it excellent and thought provoking, I could not help thinking a lot of the adoption of platforms comes back to the utility of the platform in general, and what’s in it for me.

Event 4… The last night, another colleague of mine, Brian Magierski, posted this post on Social Media and the value of weak ties. Brian discusses the value of Weak Ties, and references the work of Andrew McAfee and Mark Granovetter (and like Brian, I’m not going to repeat it here). He then goes on to discuss his personal use of Facebook at Twitter:

I find that Facebook and Twitter in part do the job of keeping me aware in short snippets of downtime each day as to what my extended network of mostly ‘weak ties’ are doing (both small things and major life/career shifts). The job these SNS services are doing for me in part is to keep me connected and informed of the whereabouts and whatabouts of a substantially larger number people than I have ever been able to remain connected to in the past. These snippets get burned into my brain and my searchable SNS services for recall in an On Demand manner when required. Yes, it’s also entertaining.

I agree these two tools specifically are entertaining. As a social tool Facebook is great. As a work tool, I’m not convinced, but I see the potential. The mix between social and work people on my Facebook friends is a challenge or me – I don’t want my social friends and work friends to see the same info… This fact alone forces me to limit my use of Facebook artificially. I like having Twitter update my status there. I like the RSS feed out of it. Plaxo Pulse allows you to differentiate between professional, social, and family relationships. I think having that in Facebook would make Facebook more useful for me. Twitter has been a fantastic way for my co-workers and I to get stay in touch. My direct team is spread the northeast at our clients, and my extended team is spread around the US and Europe. Twitter is an easy and definitely entertaining way to stay in touch in 140 character so less…

Social networks, enterprise 2.0, web 2.0, etc… are all tools. They are the hammer and wrenches of this electronic era. These tools help us in our personal lives and they help us in our professional lives. As with any tool, you want to choose a tool that helps you with accomplishing something. You can’t drive a nail with a Phillips head screwdriver. Once you have the tools, it all comes back to a simple question of “what’s in it for me?”. I have tried all of the social networks, e2.0 tools, web 2.0 tools, etc… If there is no utility in the tool for me, I drop it, and drop it fast – I don’t have the time to linger. Yes, a friend occasionally asks me to take a second look at something, but that is the rare event. More often then not, the tool isn’t useful enough for me so it follows the usage trajectory that Steve discussed in his post.

While it is true that I have tried more tools that I care to admit, but I only use a couple daily, and I have set my browser (currently Flock) to open each of the following each morning:

* Google Reader – for reading my RSS feeds,
* Facebook – for fun and reconnecting with old friends, and strengthening ties with new ones,
* LinkedIn – for business networking,
* Plaxo – for address book sync’ing (but not yet for Plaxo Pulse as I don’t feel utility there yet),
* Twitter – for fostering teamwork within my co-workers,
* WordPress – for my blogging,
* SocialText – for our wiki work,
* Ning – for our firm’s private social network (note: I tried to create a social network within my family and there was no interest, so we dropped it – fast), and
* Kalivo – for collaboration with co-workers and clients.

All of these are useful for one or more specific things for me. Yes, some of the utility comes from the collaboration and conversation. Some of it comes from the weak ties it helps maintain. However, in all cases there is a utility for me…

What does this have to do with Financial Services and IT? Frankly, everything! My friends at the FS firms are struggling with the question of “What’s in it for me?” as they look at these tools. The IT leadership is struggling with the ROI of some of these tools. They are driven by short-term budget realities, and don’t have the funding to invest in Weak Ties. I’ll argue that this is short sighted, but it is the reality of their lives. The Legal & Compliance departments are struggling how to control the activities on such ubiquitous and disparate platforms. Using LinkedIn is commonly thought to be a sign that you are leaving the firm. People are starting to use it for business networking given the richness of the data there. Facebook is blocked by some firms’ firewalls as being not work related. However, our friends at Apple and Research in Motion have put tools in our hands that are more powerful then the desktop machines we had a few years ago, and these tools can’t be controlled in the traditional ways. Their use is going to only increase. FS management needs to decide how to respond. Are they going to be a NGE?

Creating an exchange at the Exchange – Part III

Here are links to the other bloggers from the Wf360 event at the NYSE that I blogged about here and here: Don Dodge, Howard Greenstein, Tom Guarriello, Dorian Benkoil, Christina Kerley, Francois Gossieaux, Russ Nelson, and Isabel Walcott Hilborn.