Many financial institutions are suffering the negative effects of a disconnect between the business strategy and the role of IT. Financial institutions are looking outside their IT departments for innovative technologies that can reduce costs and time-to-market. Some Fortune 500 companies are eliminating their Chief Information Officer (CIO) positions entirely, with IT staff being allocated to business units to provide the units with more control over technology resources.
While well-intentioned, this approach may create technology silos, increase data fragmentation, cause confusion about IT’s role, increase security and compliance risks, and decrease transparency across the organization. In the current environment of high capital costs and increasing regulation, institutions without world-class IT departments that are closely aligned with the business will find it more difficult to innovate, keep costs in check, adapt quickly to market changes, and achieve other business objectives.
Leading institutions enable their business leaders to play an active role in IT governance. A well-crafted governance model improves collaboration between the business and IT. The business units can leverage the big-picture knowledge that IT has amassed over the years, while IT can position itself as a valued business partner that brings a unique perspective by contributing insights and ideas beyond the technology realm.
Leading institutions are taking a phased approach to building a new IT organization that is aligned with the business, including: