Successful Leadership IT
Title
Discussion forum of Successful IT Leadership in Hong Kong
Preface
The keys to a successful business are come up with many criteria: business strategies, IS and IT strategies, marketing planning, human resources, investment, etc. The objective of this seminar lead out four key messages: the importance of IT to the banking industry, the role of the CIO, the critical success factors of managing IT, how to be a successful IT leader in Hong Kong.
This paper divided into two parts. The first part is summarized the content presented by Professor Yeung. And the second part is literature study about the evolution role of IT, discussion of outsourcing and offshoring, criteria of making IS planning, significance of investment on training and conclusion of being a successful IT leadership.
The speaker Professor Y.B. Yeung has over 38 years of IT experience with large international financial institutions in both Hong Kong and Canada. He was also a member of the Executive Committee of the Bank. He retired from HSBC on 1 April, 2006. He held the position of Assistant General Manager, Chief Information Officer for the Hong Kong and Shanghai Banking Corporation (HSBC) for Hong Kong and the Asia Pacific region.
Here, many thanks for Prof. Y.B. Yeung shared his working experience in banking industry as our case study. Finally, I would like to say thank you to Mr. Louie Wong, the tutor of this course, he arranged a nice seminar for our studying.
Part 1: The Seminar
(1) The importance of IT to the banking industry
Understand Your Business
In Hong Kong, there are 137 banks and 1228 branches are recorded on Jan 2007. The businesses of banking offer multitude of services. The financial services industry in Hong Kong is one of the most open market places in the world. To successes its business goals the company takes different strategies due to each banking services own its advantage.
There are two businesses of baking – community bank and niche bank. The community bank offers a full service to variety of customers, like HSBC and Hang Seng Bank. The niche bank provides specific services to certain custom, like Citibank. Different type of bank requires different delivery channel to serve their customer, consideration of customer need and investment is a critical thinking.
Understand of IT role
Nowadays, IT and the business are inseparable, the role of IT is no longer a support department, and it is a business enabler. IT provides a competitive edge and a differentiator, for example IT made stock trade faster by using internet. There are two manners to support banking industry by using IT offensively and defensively. The former one gets more customers to generate more revenues. The latter one minimizes the risk and controls the cost, such as reduce risk of credit card bad debt.
Planning Your Business
Define the business strategy is a vital approach for IT deployment. Because IT is part of bank’s operation, it could make business go first. Develop a business plan to support the strategy, then develop IT strategy and plan to support the business objectives. Like, work out a business strategy for a banker at geographic segment. If a bank is focus on local business, define its target customer segment and market share, the demand of delivery channels, investment spend on IT, etc. Other, global or regional focus, the possibility of entry and exit criteria for each country is an especially consideration.
(2) The role of the Chief Information Officer (CIO)
The CIO is state ahead of the bank and works in partnership with the business departments. Create a win-win approach for business goals and fulfill the customer needs. Also understands the correlation between business and IT, provide championship and guidance in the application of IT to support the business. Leverage technology to enhance shareholder value, the CIO steers IT deployment for generating revenue, reducing cost and mitigate risk.
(3) The critical success factors of managing IT
There are eight key points of managing IT effectively: Align technology to business needs; Understand business directions and drivers; Select solutions carefully; Work with technology partners; Use component based solution; Short delivery cycles; Pay attention to e-security; and Staff training and retention.
IT should be part of the business team. To managing IT, the leadership should set IT goals to support the business strategy, formalize relationship management (RM) role. And training IT staff on technical skills, business knowledge and vendor management. Be proactive of thinking the change of user requirement because of business runs and changes.
IT acts as consultants and gives recommendation to company. Using IT technology to achieve the business needs, critical thinking the feasibility and usability of the solution, avoid technology obsolescence, and make consideration of outsourcing. E-Security is vital importance to gain customer trust in using e-banking. IT might use robust and industry strength technology and educate their customer to avoid attack. Shorten delivery cycles is also important as dynamic market place.
(4) How to be a successful IT leader in Hong Kong
Utilize technologies to support the company making profit or save cost is main direction. There is none of business when using a high-end technology but the outcome cannot meet the business goals and fulfill customer needs. IT might align to business at three levels: Strategic Level, Organizational Level and Process Level. Perform business process re-engineering (BPR) at business side and project management (PM) at IT side is a complementary approach. The CIO is a part of executive committee who identifies all stakeholders and decision makers, and monitors the IT strategy that can support the business strategy.
The leadership of IT possesses excellent communication, people and negotiation skills. Work effectively with people at all levels, be a good listener, salesman and consultant. Use business language in presentation as the actual application of technology is more difficult to realize the benefits. Identify problems proactively and offers options for the business to make a choice. The leadership should have knowledge in project management, planning and budgeting. And, ensure technology deployment is sensible and cost effectively.
Part 2: Literature Survey and Discussions
Phenomenon of IT Evolution
In the course of evolution, the role of IT has a big transformation in business. Many years ago, IT was used for handling business operation by Data Processing (DP). In the end of 19th century, it changed to Management Information Systems (MIS) to support managerial decision making. Nowadays, Strategic Information System (SIS) is ushered in a new era. The role of IT no longer just servers a business, intelligent use of IT can help to achieve competitive advantage. Like, HSBC using 2-factors security to make their e-banking service differentiated.
Empirical Study of Outsourcing and Offshoring
On research, there are many struggles about outsourcing and offshoring for many years. In the seminar, Prof. Yeung mentioned about HSBC ramp up India outsourcing, and the participants raised some questions about this topic too. Most business and IT person are regarding what would it gives benefit to a company.
According to CIO Jury Articles on 31 Jan 2008 – Outsourcing ‘increases IT costs’, Nicholas Bellenberg , IT director at publisher Hachette Filipacchi UK, said that “Outsourcing only usually saves money by reducing resource requirements, although benefits can include better experience and access to technical and management skills”.
However, Richard Steel, CIO at the London Borough of Newham, argued that “It depends how bad the service being outsourced is. I would contend that, too often, services are outsourced because services are failing – in which case they can be improved – often to only a mediocre level. As a generalisation it would be hard to save money – and maintain excellent service – in a well-run service.”
Some industry proven that outsourcing brings advantages to their company in the past experience. Nevertheless, the impact of business change on the IT infrastructure might put sensitive or critical data at risk. Like the case of HSBC claims customer fraud in Indian services center posted at Computerworld on Jun 2006: “HSBC Electronic Data Processing (India) Private Ltd. has claimed that an employee stole confidential data and misused it to defraud 20 of the bank’s customers in London to the tune of $425,000.”
“IT must be able to reduce security risks via such capabilities as monitoring and controlling access from a single point and keeping information in the business center, under the management and control of the IT staff, and also must be able to defend intellectual property and competitive advantage by ensuring that only authorized individuals can access the company’s information and business applications.”, stated by Citrix Systems, Inc.
Furthermore, the rising salaries and quality of labor is another concern. An article of India’s Coming Boom in BPO post on IT Business Edge stated that, “Although there has been some speculation about a possible slowing in demand for offshoring, fueled by news of rising salaries and shrinking labor pools in popular offshore destinations such as India, that doesn’t appear to be the case for BPO.”
Outsourcing and offshoring might bring benefit to company, however, wrong metrics analysis and execution could get into loss. Therefore, deliberation of analysis the business situation and geographic environment is vital importance.
Recommendation
Make IS planning – create a scenario plan is an advance preparation of getting the business back up and running. The IT leadership should be proactive work as a business partner instead of following the business direction. Forecasting the opportunities and risks in your business, it doesn’t mean predict the future but preparing for the future.
Fortifying the network security is not enough, focus on capabilities, uncertainties and estimate boldly. To analysis the external environment likes competitor, economics, political, etc. Identify a focal issue of time frame, geographic and relevant market segments in the industry. Use scenarios and factor matrix to present the company’s advantages and possible confronted uncertainties in business language is recommended.
Investment on Training – study from the case of “India’s Coming Boom in BPO”, demanding of labor has relative technique is growing. It is not only a rising salaries problem if lack of providing training, also, it would make the business run slowly.
The CIO role survey recorded (2006) shown in Appendix Fig 2.1, “Aligning IT with the needs of the business” is stay at the first priorities as a CIO. So that, leading or managing IT should have relative skills and understand the relationship among business, IS and IT strategies. Investment in training for senior and middle management cannot be neglect as a result of the trend of IT role is changed.
Conclusion of being a Successful IT Leadership
According to the Training and Development Committee of the HKIHRM, Mr Tsui Lap-fung, Vice President and Co-chairperson said that “Utilizing effective negotiation skills is a realistic approach to successfully meeting the challenges of today’s rapidly changing environment. It helps to resolve conflicts and create win-win outcomes. Managers frequently face situations requiring high-level negotiation and conflict-resolving skills, such as managing the ever-rising expectations of employees and clients, as well as dealing with different business partners, vendors and suppliers. In addition, without good communication skills, it is difficult to conduct an effective negotiation process to minimize conflict.”
Therefore, a successful IT leadership is concluded as following condition:
- Have leadership abilities in coordinating and leading development efforts to completion.
- Create a vision of where the organization should be and a strategy for how to get there.
- Engage the executive team to ensure that strategy translates into action.
- Possess excellent interpersonal, organizational, and communication skills, and have proven to be goal-oriented, diligent and resourceful.
- Solutions-Oriented Lead, with proven track record in highlighting and resolving issues in a diverse, technical environment and coordinating team efforts and problem resolution.
- Resource management with various support groups, teams (on & off-shore) and vendors.
Finally, keep in mind that the critical IT management insights is understand the company’s needs, assessing organizational strengths and weakness, defining a IS planning and leveraging by Scorecard and aligning IT & Business Goals.
Appendix I: Speaker at Seminar
Professor YB Yeung is currently an Adjunct Professor with City University of Hong Kong. He has over 38 years of IT experience with large international financial institutions in both Hong Kong and Canada. Prior to joining the City University, Professor Yeung held the position of Assistant General Manager, Chief Information Officer for the Hong Kong and Shanghai Banking Corporation (HSBC) for Hong Kong and the Asia Pacific region. With over 3,000 IT staff reporting to him, his responsibilities covered setting and directing IT strategy, software design and development, IT operations and telecommunications. He was also a member of the Executive Committee of the Bank.
Apart from his duties in HSBC, Professor Yeung had been a Board member of the Belgium based company SWIFT (Society for Worldwide Interbank Financial Telecommunications) since 1994, representing Hong Kong and HSBC. In addition to his main board duties, Professor Yeung was Chairman of the SWIFT Technology and Production Committee, Chairman of the SWIFT Asia Pacific Council and Chairman of the Hong Kong SWIFT User Group.
Professor Yeung retired from HSBC on 1 April, 2006. After his retirement, he accepted several HKSAR government appointments. The first one is an appointment to the Hong Kong Deposit Protection Board by the Financial Secretary. The second one is a committee member of the Qualification Framework project sponsored by the Education and Manpower Bureau. In September, 2007, Professor Yeung was appointed to the Board of the Lottery Fund Committee in Hong Kong.
Appendix II: CIO Role Survey (2006)
References
- Applegate, L.M., Austin R.D., McFarlan, F.W., Corporate Information Strategy and Management: Text and Cases, 7th edition, McGraw-Hill, 2007.
- Computerworld HSBC claims customer fraud in Indian services center, [Online], Available: http://www.computerworld.com/action/article.do?articleId=9001462&command=viewArticleBasic&taxonomyId=17 [27 Jun 2006]
- CIO Jury Articles Outsourcing ‘increases IT costs’, [Online], Available: http://www.silicon.com/ciojury/0,3800003161,39169878,00.htm?r=1 [31 Jan 2008]
- CIO Role Survey (April 2006) Achievement is the Issue, Not Survivial; Allan Alter, [Online], Available: http://www.cioinsight.com/c/a/Research/CIO-Role-Survey-April-2006-Achievement-is-the-Issue-Not-Survival/2/ [6 Apr 2006]
- Citrix Systems, Inc. Supporting Business Change for Successful Outsourcing and Offshoring, [Online], Available: www.citrix.com/English/ps2/segments/h/documents_onecat.asp?contentid=38177&cid=White+Papers – 44k
- IHRM Press Release “Leadership and Communication Skills are Key to Business Success, [Online], Available: http://www.hkihrm.org/ihrm_eng/ih_pre_01.asp?id=69 [18 Jul 2006]
- IT Business Edge India’s Coming Boom in BPO, [Online], Available: http://www.itbusinessedge.com/blogs/sts/?p=297 [31 Jan 2008]