Recent dynamics on financial services businesses – such as small margins, political pressures and an influx of new regulations – have stretched technology resources to, and in some cases beyond, breaking point. However, with IT spend forecast to have an average Compound Annual Growth Rate (CAGR) of 6% or so over the next 5 years – why is a technology sale becoming even more difficult than ever before?
There is huge scrutiny on Financial Services businesses in the current climate and how they operate, spend their (and sometimes taxpayers’) money and treat their customers. From a technology perspective, it must feel like a war is being waged on these businesses. With enormous existing demands to maintain creaking legacy systems, often patched up rather than fully re-platformed, through to immediate and mandatory new regulatory requirements with, at least initially, very pressing and fixed timelines. There are often several battles taking place on various fields and it’s difficult to see the direction that the war is taking. The generals have to constantly evaluate their strategies and tactics to try to secure overall victory only in the knowledge that their decisions are always going to be scrutinised with the benefit of hindsight and that every decision is potentially career threatening.
The supplier community needs to be sympathetic to these pressures and provide confident and compelling reasons to help their customers buy. Solutions looking for problems to solve are not going to be welcome nor will be a dogmatic philosophical approach to how to win the IT war. The CIO in today’s world makes a full range of decisions based on their precise needs at a certain moment in time and will not be wedded to a “one size fits all” dogma. Much of the debate will centre on agility and specific, specialised skills and needs versus a centralised or control agenda. For example, every major decision may have any, or all, of the elements below:
- Build or buy?
- Centralise or decentralise?
- Outsource or keep/bring in-house?
For those of us in the supply side, we need to be articulate, consultative and compelling in how we solve real and specific problems. We need to be clear on the methods and approaches that work to solving the problem. We need to be able to offer a range of delivery models. We need to be sympathetic and more agile to respond to the pressures of the CIO and we need to be subject matter experts not just technologists. This may mean greater awareness of the details of regulatory requirements and the operational challenges that technology is being asked to solve. One thing seems clear though, the pure technology play has had its day.
Jim Muir of AutoRek will be speaking at FTF’s upcoming ReCon London conference on May 9th. Jim will provide insight on how to recognize emerging financial control problems, and debate how the market will evolve from a pure “technology” sale.
Attend ReCon London for timely discussions, networking & a Drinks Reception with the Industry’s Thought Leaders!