Have banks lost IT?

Further to yesterday’s dialogue around TQM, I got into a conversation
with a couple of folks about the fact that we don’t have real STP, Straight
Through Processing, in most financial firms.

One senior manager said that he had started focusing upon
STP back in the 1970s and couldn’t believe that, thirty years later, we still
do not have it.

Most of the people I talk with, when asked: what levels of STP do you have, give me
wishy-washy answers of oooh, around 60 to
70 percent. Around is not good
enough, the bank should have an exact level of processing straight through.

In fact, we then got into a much longer dialogue around
enterprise management and monitoring systems, and the fact that most firms
struggle with enterprise management.

It is down to the very nature of fragmented structures,
legacy systems, merged and acquired operations, that make the enterprise view
hard.

Hard but achievable, so why is it not achieved?

A view put forward was that it does not make sense for some to
have this view.

It makes you far less accountable if you cannot measure your
complete operation, than if you can.

What?

Apparently, for some, it is better to avoid end-to-end
processing and full enterprise dashboards if it means that the CEO cannot hold
the COO, CIO and CxO to account.

In other words, TQM and STP is counterproductive for some,
as it is better to fudge it and keep the processing in a separate, fragmented
structure than in an enterprise based, integrated one.

This discussion is so counter-intuitive to common sense that
my radar of ridiculousness was raised.

It was then heightened by a comment from elsewhere that the
CIO’s main role is to block change.

A CIO wants to maintain the status quo as far as possible,
not to change things and risk messing up.

The CIO is there to stop the business pushing the envelope
and to keep things just so.

Most CIO’s only keep their jobs for four years.

The first year is trying to find ways to
fix the crap their predecessor was challenged with or put in place.

The second year is choosing new solutions and planning the
implementation of change.

The third year is struggling to make the change and finding
your peers and colleagues asking questions about what you are doing.

The final year is being found out over-promising and
under-delivering and getting the call from the CEO to think about garden leave
whilst you look for a new role.

This is why most financial firms have not solved the
enterprise view or delivered maximised levels of STP across the board.

How do you solve the problem?

Either outsource all the IT to someone who can do it for you
or put your trust in the CIO, back him or her to the hilt and let them make the
change the firm needs to be effective for the future without the Sword of
Damocles hanging over their head.

Both choices are tough, which is why most do not make one,
but avoiding the tough decisions is even worse if it means you only fudge it or
have a rough guess of your processing operations and no exact knowledge.

So the message has to be that if you really do have no
enterprise view of risk and operations, no idea of your straight through
processing levels and no capability to see your way out of fragmented systems
unfit for the future, then sort it out or you really will lose I.T.