As the banking industry undergoes a revolutionary transformation, it is more apparent than ever that legacy technology platforms must evolve to enable enhanced customer experiences, customer acquisition channels, and back-office operations. Many community banks find themselves questioning whether they have the right IT to support their business goals and enable growth. Here are five essential steps to unlock the potential of technology as a strategic driver for your bank.
Step 1: Include IT in the corporate strategic planning process
To turn goals into actionable plans, it is crucial to involve IT in the corporate strategic planning process. IT leaders who actively engage in strategic planning can bring fresh ideas and perspectives that other business leaders may overlook. By including IT from the outset of the strategic planning process, you can ensure that technology is aligned with your bank’s strategic objectives.
Step 2: Foster alignment and collaboration between business and IT
One of the critical steps in enabling IT to drive strategic outcomes for your bank is fostering strong alignment and partnership between the business and IT teams. Every technology initiative should be clearly linked to a specific business initiative or objective. By identifying the business value and impact of each IT project, you can ensure that technology investments directly support the overall business strategy.
To effectively achieve alignment, it is crucial to have an executive sponsor and a dedicated business owner for each technology initiative. These individuals will play a pivotal role in driving the project forward, providing the necessary business context, and ensuring that IT solutions meet the specific needs and requirements of the business.
By fostering collaboration between business and IT, you can harness the collective expertise and perspectives of both teams. This collaborative approach not only improves the quality and relevance of technology initiatives but also enhances communication and mutual understanding between business and IT stakeholders.
Step 3: Develop an IT strategy aligned with business objectives
Developing an IT strategy that aligns with your bank’s business objectives is crucial for driving successful technology initiatives. To create this plan, it is important to gain a comprehensive understanding of your bank’s opportunities, risks and gaps. This analysis will help you identify areas where technology can play a strategic role in addressing challenges and capitalizing on opportunities.
While developing the IT strategy, it is also crucial to evaluate the potential impact on your bank’s budget. By incorporating a resource plan and budget considerations into your IT strategy, you can understand how the plan aligns with your financial resources and make informed decisions about investments in technology.
Step 4: Implement an effective governance and investment process
Implementing an effective governance and investment process is crucial for balancing capacity and demand within your IT team. This governance framework creates a structured approach for managing technology investments and ensuring that they deliver maximum value. It should include an IT Steering Committee responsible for evaluating new investments and initiatives. The committee plays a critical role in assessing the business needs, strategic goals, associated risks, required budgets, anticipated return on investment, and project timelines. The committee should evaluate initiatives based on answers to the following questions:
- What are the business needs?
- What strategic goals does the initiative support/progress?
- What are the risks associated with doing/not doing this?
- What budget is required?
- What is the anticipated ROI?
- What is the required timeline?
IT initiatives require investments not only of financial resources but also in time and effort from your team. By carefully selecting and prioritizing initiatives, you can avoid overwhelming your IT team and ensure they have the capacity to deliver high-quality outcomes. When implemented properly, you can make informed decisions about where to allocate your resources, ensure that technology initiatives are aligned with business priorities, and drive successful outcomes that support your bank’s strategic objectives.
Step 5: Create operational accountability
Formalizing the evaluation of people, processes, and technology that drive business functions is vital for continuous improvement. Conduct regular semi-annual or quarterly reviews between the business owner and IT support to assess usage patterns, identify capabilities gaps, uncover extended use opportunities, address the need for enhancements or upgrades, and determine when replacements are necessary. Remember, solutions are owned by the business and supported by IT. It’s easier to enhance or fix existing solutions than to replace them entirely.
Unleashing the strategic potential of IT with Hartman Executive Advisors
The future of banking lies in leveraging technology as a strategic driver, and with the right approach and support, your bank can thrive in the digital era. Reach out to Hartman Executive Advisors and let us help you navigate the path to success. Our experienced team of banking experts can provide the guidance and experience needed to navigate the complex IT landscape and position your bank for long-term success. Contact us today to learn more and embark on your journey towards IT-driven strategic outcomes.