IT Strategy projects in the Financial Services Industry

Types of projects

IT Strategy projects can generally be classified in three different project types:

  • Assessment of existing strategies and IT landscapes
    (IT Due Diligence, IT Healthchecks, IT Reviews, IT Benchmarks)
  • Formulating new IT strategies or new IT sub-strategies
  • Implementation of major changes in the IT
    (IT Strategy Implementations)

Potential triggers for IT strategy projects

In financial services there a few external factors that have a tremendous influence on the IT strategy of financial institutes:

  • cost pressure
  • increased regulation
  • competition through innovative business models, FinTechs, Tech Giants and other non-banks
  • changed customer behavior

Internally financial institutes often struggle because of:

  • legacy systems (difficult to customize, hard-coded parameters, resource bottle-neck, high maintenance costs)
  • redundant application and data
  • complexity in the IT landscape
  • non-transparent product portfolio among different entities
  • etc.

General approach for IT strategy projects

Actions in major IT strategy projects can be structured in three phases

Initial Investigation (Data Collection)

The phase involves an analysis of existing IT structures and external factors. The analysis is normally based on the review of existing documentations and focused workshops and interviews.

Assessing the existing IT structures:

  • Existing IT strategies and business model
  • IT project portfolio
  • IT governance
  • IT controlling and cost structures (run, change)
  • IT architecture
  • IT organisation
  • IT processes
  • IT application landscape, products, services

Assessing external factors:

  • Business strategy
  • Existing and new regulatory requirements
  • Existing and new customer / stakeholder requirements
  • Innovation

Conception (Analysis)

The conception phase is typically characterized by three steps:

  • Identify the target pictureDerivation of goals and strategic thrusts (based on above investigation dimensions)

    Depending on the specific project setting, there are many possible ways to accomplish this task.
    In some cases it might be an easy task as there are only parts of the IT structures that need to be lifted from one state to another. But if there are conflicting goals that shall be matched by the an IT strategy, it might be necessary to collect measures or hypothesis, prioritize them, cluster them to scenario’s and compare the scenario e.g. by calculating business cases for every scenario.

    in fact most of the conceptual work is carried out in this step. The management needs to be involvement in this process via workshops and regular reporting. In any case it is the project principal or sponsor that needs to approve and decide upon a certain scenario.

  • Identify what needs to be done (GAP-Analysis)In a next step, the gap needs to be described thoroughly. The core of this step is the identification of activity spheres to read the target picture.
  • Definition of success factors and KPIsThe final conceptual phase involves the definition of KPIs and success factors to track the progress and define the target state for the activity spheres. Without this step, any kind of investment can’t be objectively successful.

The analysis is based on above initial investigations and further agreement workshops with principals and sponsors.

Implementation planning

  • Roadmap
  • Investment planning
  • Base decisions
  • Adjusting the project portfolio