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Technology organizations have to break out of the traditional confines of an “order taker” or “service provider” role, and become an enabler and accelerator of top-line growth. Over 90 percent of our interactions with clients are digital; the web is arguably our most important channel. At any given company, technology now has a much more prominent role in strategy, so CIOs have a more important voice at the table than ever before. They have to bridge the gap between the business and technology worlds, and part of that means playing the role of educator we have to demonstrate the value that IT provides, shedding the “cost center” mentality, and get our leadership teams to be as passionate about technology as they are about their businesses, so that they can really envision the most innovative possibilities. There are also times when IT has to take the lead in adoption of technology, piloting and championing new capabilities; we took this approach with big data in particular and are now seeing huge demand for those technologies.
I consider myself the luckiest IT leader, because our leadership team gets technology. Our chairman even decided to host a recent offsite in Silicon Valley, because he knows it’s important to stay connected with what’s going on there. In truth, we were virtual (without store fronts) before the internet existed, so technology has always been a key enabler for us. Our rotational model for leadership has created an advantage here. Our prior CIO just retired from running the retail business, and the CIO before him is our current Chief Investment Officer. Doing these tours of duty has given them an understanding of technology that is critical in today’s C-suite. Before moving into the CIO role, I spent time outside of IT running our high net worth investor business and our advice services group, among other things. As leaders at Vanguard, we understand and respect each other’s needs because we’ve walked in each other’s shoes.
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"Understand IT’s strategic value proposition, create a vision, and articulate a clear strategy to your organization."
Delivering Business Value at Startup Speed
Today’s businesses and by extension, their IT organizations have to be nimble enough to respond to a rapidly changing technology and business landscape. We adopted agile practices years ago, but today, those principles can truly be practiced by moving to a continuous delivery mode. Instead of packaging all features together into infrequent releases, we can release a true minimum viable product, gather feedback, and incorporate those learning’s into the next set of features. To get there, we’re breaking apart our monolithic applications into simple, modular, services. We’re shifting testing left and making heavy use of automation. We’re automating and optimizing our build and deployment infrastructure, leveraging cloud computing. We are also investing in the data capabilities now to be able to measure client behavior and results in real-time, as opposed to months.
Our goal is to enable the delivery of business value through software at startup speed. We recognize that if IT just stops at creating a continuous delivery capability, without our business adopting a real “test and learn,” flexible approach we will fail to realize most of the benefits. So we are approaching this as a true “lean” transformation for the enterprise, applying those principles all the way from business idea to funding to production release. In those areas where we are leading the way with these concepts, we have seen it transform our relationship with our business partners. Instead of being perceived as too slow, expensive, and difficult to work with, we are now responsive and innovative.
Additionally, we have a full time CISO that also has an embedded IT security office within the organization. Whether or not organizations choose to have a CISO/CSO, or if IT has that responsibility or not it’s important that the security functions maintain relationships with someone that has the entire risk context for the enterprise in mind. They need to be accessible and accountable to people at the highest levels of the organization.
Run IT as a Business
By that I mean, understand IT’s strategic value proposition, create a vision, and articulate a clear strategy to your organization. Define how your teams add value and create initiatives that accelerate the company’s objectives. Don’t fall into the trap of the service provider mentality and wait for others to dictate your strategy. Technology is the business, and if business leaders don’t see it that way, it’s your job to convince them. As I reflect our IT journey, I think we followed five very basic steps:
First we evaluated the landscape. We examined the challenges and opportunities facing Vanguard IT (globalization, market volatility, cyber threats, pace of technology change, and war for talent) all defined an enduring “new normal” for IT .
♦ We envisioned a different future. Given what we knew about the landscape, we debated the future state of IT, and chartered a mission statement and visioning document to describe it.
♦ We defined how we add value. We defined a Jim Collins-style flywheel that described how we provide value to Vanguard and our shareholders. This flywheel has become a framework for which we set goals for our strategic efforts, as well as a communication vehicle used with business leaders and IT employees.
♦ We enabled our journey by going through the largest organizational alignment in the history of IT, and we defined a 3-5 year roadmap of initiatives, which will close our gaps and capitalize on the opportunities. We also worked to become a true team focused on a com mon end state for IT.
♦ We measure our success. We built an IT scorecard with outcome-oriented measures, to quantify the value that our strategic efforts are producing over time.