Adopting the next big thing, providing new offerings to customers, complying with the latest regulation and meeting constant deadlines can become all-consuming for capital markets IT executives. With so much to do, it's easy to overlook the importance of stopping once in a while simply to think.
But not for Peter A. Magrini, EVP of technology at Northern Trust Corp. According to Magrini, world-class organizations employ world-class IT thinkers at every level -- top to bottom.
"Anyone can do the mechanics," he explains. "What's really important is how you put the pieces together, in a creative way, to produce an outcome that never existed before. ... So being thoughtful is what we're asking our IT people to do."
And it's paying off. Visionary thinking by the investment manager's 1,200 IT employees has helped make Chicago-based Northern Trust ($684 billion in assets under management) a leader in implementing new technologies such as cloud computing.
Just last fall, Magrini reports, Northern Trust completed a three-year platform-as-a-service (PaaS) initiative. The private cloud supports more than 180 applications serving the firm's 10,000 employees worldwide. Having significantly reduced relative capital infrastructure spend versus applications development -- down 15 percent over a 10-year period, according to Magrini -- the highly-scalable environment has enabled a tenfold growth in IT applications with a staff increase of only two to three full-time employees, he notes.
Such efficiencies add up when your overall IT budget totals $1.8 billion over the next three years. "Now," Magrini says, "instead of focusing on infrastructure and utility functions, we can focus on innovation and the client service experience."
Functionally, this change in direction requires a larger paradigm shift. Magrini says his team will significantly expand IT's engagement management and consulting initiatives by moving from a traditional model -- where IT takes orders, constructs solutions and hands them back to the business -- to a partnering strategy. "We'll be ensuring the lines of business we support ... have access to the human IT resources required to affect, enhance and execute business strategies," he explains.
In fact, Magrini forecasts that all capital markets firms will undergo this shift toward combining technology and service. "Social media and cloud computing are well under way. Now the challenge [for capital markets firms] is getting the knowledge we have out to a geographically dispersed client base," Magrini asserts. "Because you can't always meet face to face, you need to ensure the right person is providing the right information for the right client, delivered through the right channel."
To allow Magrini to concentrate on this effort, Northern Trust recently hired a new CTO, Scott S. Murray, to oversee hardware and software infrastructure. Both Magrini and Murray report to Joyce St. Clair, president of operations and technology. Together they collaborate with the firm's entire management group.
To achieve the desired results, Magrini's top IT priorities fall into three broad project categories: enriching the client service experience with technology and content; facilitating a global operating model by tightly integrating business process management (BPM) to streamline middle- and back-office business processes; and integrating new capabilities quickly, whether they originate from organic innovation or from an acquired company. Success in each, Magrini says, will be assessed by measuring benefit realization, client satisfaction, delivery timeliness and budget adherence.
For client service experiences, the focus is on bringing the advantages of personal technologies to the investing space. "People want more than just reporting or mobile transactions," Magrini contends. "It's about showing how a change impacts the many components of a situation, not just the high-level outcome."
Among other things, Magrini envisions using animation to bring information to life. "We need to take fairly complex strategies and turn them into a more visual experience -- where a person can quickly and simply see the impact of making one small change, without navigating financial-speak," he says.
Magrini compares the task to the old adage about moving from data to information, then to knowledge and, finally, to wisdom. "Reporting was data and information," he says. "Now we have the opportunity to evolve to offering people knowledge."
For the middle- and back-office BPM initiative, a combination of technology tools and custom integration will provide the desired workflows, according to Magrini. "We're enabling a controlled and transparent global operation model, where work starts when the sun comes up in East Asia and keeps going until it sets on the West Coast of the U.S.," he says.
"The goal is passing work around the globe rather than just doing work around the globe," he adds. "As a result, we'll gain agility, flexibility, risk reduction and quality improvement."
The third effort, faster innovation integration, aims to support all forms of growth -- among current clients, from acquired clients and into new markets. "With our approach, whenever we integrate something, it's available to the entire client base," Magrini comments. "So the faster we can integrate features and functionality, the more streamlined and seamless the firm can be."
Pondering the Future
Accomplishing these initiatives, Magrini notes, requires partnering with a who's-who list of technology players. Additionally, Northern Trust will continue pushing for, and adopting, standard protocols. "Whether we're talking about HTML5 or SOA [service-oriented architecture], many tools and technologies are finally catching up to their original promise," Magrini says.
One technology, however, is missing from the deployment list: software as a service. "Today, many of the SaaS offerings ascribe to the Henry Ford school: You can have any color, as long as it's black," Magrini explains. "Fortunately, that will change in time."
Moving forward, Magrini says, his most exciting plans involve adoption, over the next two to three years, of technologies that he calls game-changers. "We're looking at a set of tools that sit in front of, and interoperate with, collaboration technologies like SharePoint, wikis, social media, Google search and even the 300 bookmarks you have on your desktop," he reveals.
Although Magrini declines to provide specific examples, he describes the tools as a type of "front page" that aspires to reduce the inefficiencies inherent in today's explosion of collaboration options. "The technologies we're evaluating allow employees to explore new ideas that there hasn't been time for because everyone spent so much effort ensuring they had the latest or most accurate information," says Magrini. "If you can bring to bear the power of your company, your technology network, your employees and your employees' extended personal networks, that's going to be a huge opportunity in our marketplace."
Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio