As the banking sector heads into the fall, chief information officers and their line-of-business counterparts are reexamining the processes and priorities for 2005. Improved profits, increased compliance requirements and the prospect of stepped up M&A activity are compelling reasons for banks to look across the enterprise for opportunities to reduce costs, streamline operations and open doors to new revenue streams.

All this while keeping pace with the competition, traditional and non-traditional players alike.

It’s never easy, but bank CIOs are well positioned and very serious about achieving the obvious. Cost reduction. More focused IT spending on longer-term strategic initiatives. Faster, more effective systems integration in a post-merger environment. Heightened security. Enterprisewide risk management. Branches designed, equipped and staffed to serve as the bank’s hub in a multichannel distribution strategy. System architectures that exploit flexibility firmwide. More effective business process management. Outsourcing. And enhanced payments and Internet services that provide retail, small business and corporate customers with consistent ways to better manage their finances remotely and more tightly tie them to the bank, which, in turn, can lead to more products per customer.

The intense scrutiny on where technology can and is making a difference within an organization-or not-is crucial to a bank’s overall financial, business and operational performance. A recent survey of senior IT and finance executives at 30 blue-chip companies revealed that more than $300 million per year is wasted on poorly managed IT projects.

The survey, conducted over a three-year period by Business Engine, targeted executives within the financial services (48 percent), healthcare (nine percent), retail (19 percent), telecom (six percent), transportation (six percent), and other sectors (12 percent) in corporate America.

Within the financial services industry, the survey found that 90 percent of the total missed cost savings was attributable to mismanagement in three key areas: failure to align IT with the business, lack of visibility and control, and underutilization of of offshore outsourcing.

The findings suggest that CIOs should align IT more with an organization’s business rather than functional efficiencies in project management. That has been long talked about in the business, but not consistently achieved. The old saying, “You can’t cost cut to excellence,” comes to mind. Now more than ever, this is the most compelling reason to put the business first.

from:
http://www.banktechnews.com/article.html?id=20040802VNQL72PT