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Moving beyond the Technical Comfort Zone, Financial Industry CIOs Are Redefining Their Strategic Roles, Says Tabb Group Report on Value Management WESTBOROUGH, Mass. --(Business Wire)-- Aug. 4, 2004 -- After a 10-year roller coaster ride of spending and innovation highs followed by plummeting budgets and loss of organizational control, chief information officers (CIOs) in large financial firms today have a much different job from CIOs of the 1990s. According to The Tabb Group's new industry report, "Value Management: Aligning IT to Assure Success," a combination of diverse technology and business management experience is in great demand, which makes this an opportune time for CIOs who possess a strong set of business strategy skills and a C.V. to match."Technology's role across the financial organization has changed dramatically, from that of supporting business lines, to being a strategic partner for senior management," says the report's author, Barbara Edington. Aligning business and IT across the enterprise today encompasses more than simply attending weekly meetings to agree on priority lists. New roles are creating new internal responsibilities, explains Edington, which provides new sets of opportunities for those CIOs willing to stretch far beyond their technical comfort zone. Based on interviews with CIOs at 12 firms from a single location with a small IT staff to global firms with billion-dollar size IT budgets, the report addresses the rationale behind the statistical results, focusing on why CIOs make the decisions they are now forced to make to sustain their role internally. CIOs face tremendous pressures around cost, quality and timeliness. "In the short term," says Larry Tabb, CEO at The Tabb Group, "nearly all will face regulatory-guided projects with challenging deadlines, demands for outsourcing and requests for a dedicated effort toward improving the bottom line, simultaneous to pressures in managing to a higher level of quality than in the past." Asked to describe the current issues they face, only 27% said that technology was a key issue and that legacy or infrastructure issues were a leading concern, followed by the same issues confronting traditional managers: budget, people, the business and value. Key points in the report include: -- Asked to define their role, 92% said "partnering with the business" was their most important function, with five out of 10 claiming strategic vision. Over 80% report directly to their firm's CEO. -- While the broad mix of legacy systems, business applications and Web-enabled services is creating a niche for IT personnel with multiple technical knowledge areas, the need for strategists is immediate. -- Reliance on IT management committees is strong as only 25% of the participants use formalized tools to assist in the management of their IT portfolio assets. -- CIOs now have many more organizational "masters" to please, including the CEO, CFO, board of directors and, thanks to Sarbanes-Oxley, the Patriot Act and Basel II, outside regulatory bodies. -- Whether based offshore or domestically, outsourcing creates a new dynamic for CIOs who face decisions critical to the bottom line in terms of profit margins, and which introduce dramatic change elements in workflows and IT operations management. The report also covers the role of the reporting structure and its influence on IT investments, the IT investment process, the use of IT portfolio management tools, six methods of measuring value and four non-technical factors contributing to IT successes, including the role of the business analyst, e.g., "to BA or not to BA." A copy of the report is available at www.tabbgroup.com/research. About The Tabb Group The Tabb Group is a financial markets technology strategy and planning consultancy focused on helping financial services firms, vendors and technology integrators better understand, create, align and execute their business technology visions. Based in Westborough, Massachusetts, The Tabb Group was founded in June 2003 by Larry Tabb, a 24-year financial markets veteran and the former vice president, securities and investments at TowerGroup, until recently a division of Reuters Group, where he managed research across the capital markets, investment management, retail brokerage and wealth management segments. For more information, visit www.tabbgroup.com. |
