CIO Challenge - Project Management
It's when firms have multiple departments competing for the same finite technology resources that things can get challenging for IT managers, says Lehman's Beyman. "It's a constant juggling act to make sure the lights stay on." He says firms want to drive productivity and "get as much bang out of every [technology] dollar they can. I spend a lot of time constantly thinking about productivity."
At the same time, new regulatory initiatives are being added to the mix - like Sarbanes-Oxley and the U.S.A. PATRIOT Act - which can derail the best-laid plans. Nobody likes regulatory initiatives that are imposed upon the industry, Beyman says, but he adds, "As new regulations come down the pike, clearly you have to comply. Ultimately, it makes you better."
The result, Beyman says, is that "things always get crowded out. There's always a list of things you want to do and can't get done because you don't want to spend the money or can't get enough people." To accommodate the competing demands, Beyman does a couple of things. First, he stays on top of budgets. The annual budget, he says, is always under scrutiny and, "We constantly reforecast." Second, he understands that there's discretionary spending and non-discretionary spending.
If demand for a new project suddenly emerges, or a project that is already under way requires additional resources, then Beyman looks for ways to "beg, borrow or steal" from another budget line, such as IT maintenance. "There's an art to it," he says. But it still comes back to getting business-unit buy-in and letting the business units determine their priorities.
Beyman adds that it's important to regularly monitor and scrutinize IT projects. "Project managers can get themselves out into the weeds in a bad place and thrash around and spend money badly." Early warning systems can alert IT managers to problems before projects become bigger spending headaches that require additional resources to be siphoned from other tasks.
John Wellington, senior director of wealth management and advisory services at Advest, a Hartford, Conn.-based financial services firm, agrees that juggling competing IT interests is tricky. "You need to make sure that whatever dollars you spend benefit the widest audience possible and make the most people happy." It also means making tough decisions about a firm's direction.
For example, Advest was once a self-clearing firm at a time when clearing your own trades had cachet on the Street. With the commoditization of clearing, however, it made no sense to spend the millions of dollars needed to keep up with the Joneses and maintain a state-of-the-art system when a firm could go out and buy that service at a fraction of the price, Wellington relates. So Advest eliminated that function.
As Advest moved from a business based on transactions to one in which remuneration is based on assets and advice, the firm began using technology as a carrot for its advisers. That meant investing in tools - like a high-end education platform and financial planning and reporting tools - that drive holistic wealth management, rather than in trading technologies that assist advisers who do one-off trades. "We don't want to make it easier for the guys who are more transactional to do business," asserts Wellington. The move has paid off, he says, with revenue running slightly ahead of the firm's goals.
Wellington has also seen a demand for more compliance and audit tools, given the current regulatory environment. Though compliance has demanded more resources, it's necessary spending. "A weak set of compliance and surveillance tools can cost you a whole lot of money if you can't catch some problems that legally you are required to catch," he notes.
Like his colleagues, Wellington, who oversees the adviser channel, says the key to managing IT in the current environment is understanding the business unit needs and developing a priority list. "One of my jobs is to be out there among the advisers and listen to what their issues and concerns are. It's my job to take the pulse of the people and assimilate what their needs are and develop a priority list."
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