Six ways to improve IT project execution and follow-through
By Judith Sears
Just about everyone’s done it—undertaken an IT initiative with soaring hopes only to sputter, stall, fail or never fully deliver on expectations. Unfortunately, as banking operations and IT systems converge, the consequences for faltering IT executions are rising steadily.
“You can’t separate technology and operations any longer,” says Sherry Jessen, IT consultant and manager with CliftonLarsonAllen LLP. “IT is embedded in the way we do business each and every day.”
That means the impact of failed IT executions is widespread. With profitability, customer service and competitiveness at stake, community banks must learn to get IT execution right.
ICBA Independent Banker spoke with several technology experts on the financial services front lines about how to keep IT project execution on track. All in all, the interviews revealed six practical pieces of advice to follow to help prevent your community bank’s IT projects from going astray.
1. Get technology users’ buy-in. IT projects can change depending on how people do their jobs, and most people resist change. Banks are often “siloed” by departments and specialty functions, yet it’s critical to get upfront involvement across all departments that will be affected by IT projects from the very beginning of the process. “If you don’t have good buy-in, you won’t get very far,” says Steve Huff, senior vice president of CoreFirst Bank in Topeka, Kan.
Senior management should build consensus by soliciting input and presenting the potential benefits of an impending project. In addition, build a cross-functional project team that provides input and then champions the changes out to the business lines.
2. Maintain good information flow. Lack of information flow creates surprises, which is never good for successful IT execution. Aim for a widespread understanding and awareness of ongoing projects. Good information flow starts with the active involvement of your community bank’s IT steering committee and cross-functional teams for each project.
But that’s just the start. As IT and operations converge, it’s critical for banks to anticipate how IT projects will impact day-to-day operations. For example, a project that enables “counter capture” may impact how tellers process items. At first glance, it might not be obvious that tellers should be on an IT project team, but in practice, it could make the difference between a successful execution and a disappointing one.
“The IT guys know they’re putting in new imaging technology, but they aren’t in a position to think of the implications as to how counter capture happens in the branch,” explains Dan O’Keefe, vice president of Booz & Co. Inc., the New York consultancy.
Make sure that people with knowledge both of business and technology are involved with IT projects so they can spot implications of the technology for business and facilitate information flow.
3. Keep senior management engaged. No matter how solid an initial project plan might be, once execution hits the real world, adjustments will be necessary. If senior management isn’t involved with those decisions, projects are apt to flounder.
In a senior management vacuum, IT staff may make decisions just to keep a project moving forward. But those decisions may not always align with the business strategy. Alternatively, IT staff may reduce the scope of a project to meet a business-mandated schedule. But, while the schedule might be met, the project’s expected value may be compromised.
“What happens a lot is that senior management pushes it down to the ‘do-ers’ of the organization,” Jessen says. “Then there’s not enough communication, and senior management isn’t part of the implementation. That disconnect leads to failed execution.”
Project plans should be continually validated once they’re underway. “A continuous validation process between technology and business ensures that requirements are correct and executed correctly,” says Mark Bashrum, vice president of corporate marketing and strategic intelligence for ESI International, a project management consulting firm in Austin, Texas. “It’s always about maintaining alignment between the business side and execution of IT initiatives.”
Continual validation with senior management helps ensure that IT projects deliver as planned. Only senior management can prioritize the many initiatives facing an organization, and they are also the only ones who can place the right resources on a project and keep them there. “Projects can lose sight of why they started the journey—what’s the true economic value they’re trying to deliver?” O’Keefe asks. “Having clarity of purpose is key to success for any IT strategy implementation.”
Effective portfolio management is another crucial reason for senior management involvement. Without ongoing oversight, a bank can wind up with several half-finished projects, all understaffed and demoralized. It only takes one new regulation to completely scramble an organization’s priorities.
“Given the velocity of business today, it’s very easy for a bank’s priorities to be misaligned,” says Paul Koziarz, chief development officer of Computer Services Inc., the core processing and technology firm in Paducah, Ky. “It’s a real weakness of many firms.”
4. Break down IT project execution into components. Many IT projects fail simply because they’re too big. In analyzing the findings of an IT project management study conducted in 2011, Booz & Co. found that only 7 percent of IT projects budgeted at over $10 million were successful in meeting their original goals. Conversely, of projects under $1 million, 73 percent were successful.
The take-away: Whenever possible, keep the scope of IT project implementations as focused as possible. “Always look for ways to break apart massive projects into smaller initiatives because it reduces risk,” O’Keefe says.
For example, when deploying a new end-to-end lending platform, a community bank’s first implementation might be only for lines and letters of credit under a certain amount. Once that implementation is successful, the bank could follow up with a commercial real estate portion. Take small steps to foster successful execution.
5. Exercise rigorous project management skills. Project management is its own discipline, but accountability and metrics for success are noteworthy components of good IT project management and execution. Too often, businesses ask for technology to meet a strategic goal, but then don’t make the time to meet with IT to evaluate solutions and participate in the implementation, Jessen says.
The solution, she believes, is to make the business side as well as the IT side accountable for the project implementation. That means performance evaluations, bonuses and other incentives should be tied to how successful a project is.
Accountability, in turn, requires metrics for success. Successful project executions define success before they begin. Metrics may vary, but they usually involve factors such as deadlines, deliverables and resource allocation. “If you’re not measuring, your project will break down,” Koziarz warns.
Because many IT projects will be undertaken by an understaffed IT team that’s already stretched maintaining current systems, good project management will set reasonable expectations for timelines in regard to other IT services. Brad Smith, president of Abound Resources Inc., a bank consulting firm in Austin, Texas, suggests that an internal service level agreement between the IT and business departments can help clarify expectations for everyone. With established performance standards—such as how quickly help desk requests from frontline staff will be resolved—IT will be better positioned to allocate resources between day-to-day operations and the needs to execute a new project.
“It helps move IT from a triage mode to a more long-term perspective,” Smith says.
Rigorous project management also keeps track of problems. Huff recommends keeping an “issues log” to help prevent problems from falling through the cracks. “Take the issues log and get in front of the project team,” he advises. “Have a weekly meeting and talk through the open issues. That helps everybody know this is a concern that we need to jointly resolve.”
6. Leverage vendors and other third-party capabilities. Community banks are generally not in a position to be application developers or to differentiate themselves in the marketplace through their IT power. IT consultants (perhaps projecting their natural bias) are unanimous on this point: Devote your resources and energy to being a great community bank. Get outside help for IT development.
“Using outsourced help allows IT and the bank not to worry about being the best IT department in the world, but to focus on being the best lender in the world—which is where they’re supposed to be spending their time,” Koziarz offers.
“Don’t over-invest in IT,” O’Keefe echoes. “You’re better off leveraging the out of the box functionality of a commercial loan platform rather than trying to tailor it to a unique operational need within a community bank.”
IT project execution may not be easy, but it doesn’t need to be a nightmare. Community banks that up their game in the six areas outlined here will create the conditions for smoother, more efficient execution of their IT strategies.
Judith Sears is a writer in Denver.