CanadianCIO Roundtable: Are CTOs ready to become ‘chief transformation officers?’

A new breed of executive — often in the role of the chief technology officer or chief data officer — are combining technical and business knowledge to lead a change wave at Canadian financial institutions, participants at a roundtable discussion hosted by ITWC agreed.

With new entrants to the market space having a disruptive impact on the financial services industry, traditional players are looking for new ways to compete. To spin up legacy platforms and get a grip on corporate data in a way that can keep up with nimble startups operating with agile technology, the technical leaders at financial institutions are taking new approaches.

Technology leaders discussed the trends at CanadianCIO’s Executive Roundtable, Three goals for new Financial Institution Architecture, hosted by ITWC and sponsored by RedHat and Intel Corp.

“How long until the CTO stands for ‘chief transformation officer?’ asked one roundtable participant, the CISO of a bank. He reflected as well that the idea of the role of chief data officer has been around in the industry for 30 years, but it’s been in the last five years that this role really came to the forefront.

Some impressive skill sets are being brought to the C-suite, combining both technical and business skills, agreed Cory Vokey, territory service manager of Red Hat Canada. “You’re seeing a dynamic shift where very high-level executives know what they’re talking about,” he said. “You can’t pull the wool over their eyes.”

Changing a risk-adverse culture

In part, the change in Canada may be explained by recent hirings of executives from south of the border, added Kevin Felten, enterprise sales and client executive at Red Hat Canada. “Canadian executives say ‘Hey I don’t want to take that risk,” he says. “U.S. executives will say ‘I’ll take that risk and manage that risk.'”

Taking risk in a managed approach and operating with an agile model is defining the way these new executives are innovating at banks. For an industry that’s centuries old and has been relying on legacy technology that’s decades old, moving to modern technology platforms isn’t just a simple upgrade, it requires a cultural shift.

Another roundtable participant in the analytics division of a bank pointed out that the financial industry can be very risk-adverse. Every new project requires partnering with a risk assessment group and that’s where it tends to get tricky. “It’s finding that middle ground and doing that negotiation piece that is sometimes not so much fun,” she says.

Yet at the same time she’s seeing a shift at her organization.
“There’s a mentality now that’s fail fast and fail quick,” she says. “That gives you more options and more flexibility.”

Vokey says that a bank he previously worked with, he saw the bank go through three different tools each costing $20 million and the problem at hand remained unsolved. But when the bank finally tried a different approach of allowing a team of three people using open standards to tackle the problem, it was quickly dealt with.

“It wasn’t about telling the story and failing upwards and spending money,” he said. “You’ve got one guy that can come in and look at it as a system and understand it objectively and solve the problem quickly.”

The ‘two pizzas’ model of agile IT

Roundtable host and ITWC CIO Jim Love reflected back on his time with a consultancy that was catering to big banks, saying that he found more success when working with smaller teams. Working with a small group made it easier to bring in business users to the group directly and collaborate with them. This was preferable to passing along a long list of dense technical specs for a sign-off.
“As long as I could get my arms around it, I found we could get stuff done,” Love said. “It’s the Jeff Bezos model, anything that requires more than two pizzas to feed is too big.”
A proof-of-concept model is one area that small teams can work to bring new applications to business areas, said a roundtable participant that worked in the IT division of a Canadian bank. For example, the bank recently used a three-month proof-of-concept phase to pilot software-defined data centres. Over three months, the performance of the application is measured and the users feel more comfortable with the new model. If those metrics check out and the financing falls into place, the migration is committed to after the three month period.
Still, even getting to this proof-of-concept phase can be a challenge. At this bank, every piece of software has to be certified before it so much as touches the platform.
“You can’t just grab software from the web,” he says. “It doesn’t matter how good it is, it has to go through screening.”
IT department strategy has come full-circle in a way, Love says. It used to be that the IT department acted as cowboys, executing on projects first and apologizing to the business later rather than asking permission first. Then the business imposed more controls over what IT could do unilaterally, and eventually the business and IT started collaborating together on projects. The next step, Love says, is to co-create together.
“It’s back to the old days of business where if the business was short-shifted, the IT guys would go and help out,” he says.

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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