The CU Journal recently reported on the changing demands on CIOs. I'm one of them. How do you see that role changing, and what does your panel primarily expect and want from CIOs/IT staff at client credit unions?
Eric Panepinto, Chief Technology Officer, USERS, Valley Forge, Penn.
Credit union CIOs/CTOs are being expected to demonstrate greater business acumen and to focus on ways that technology can positively impact the business and the bottom line. They're expected to develop technology plans that support the credit union's business plans, and not implement technology for technology's sake. In that context, they're also expected to focus on using the organization's IT resources as effectively as possible, and that often demands striking a balance between retaining some functions in-house and outsourcing others to a trusted partner. When USERS partners with our client CIOs/CTOs, we expect an ongoing dialogue that keeps us informed of the credit union's strategic plans and helps us understand which IT functions have the greatest value to the organization vs. which are more "utility" in nature. Then we can recommend ways to outsource the utility functions, so the credit union can focus its vital IT resources on more strategic projects. It's also important for the CIO to articulate the credit union's appetite for change. When we know how quickly our clients want to move forward with adopting a particular technology, we can better plan and prioritize our product development efforts and stay in sync with our clients' needs.
Todd Zerbe, COCC, Avon, Conn.
Today's CIOs face a continually increasing array of challenges. Information security has risen to the top of the list of responsibilities on which the CIO must focus. The CIO must understand the importance of protecting member information and the credit union's reputation. Developing a comprehensive IT security plan, executing that plan, monitoring the plan's effectiveness, and proactively enhancing that plan to meet emerging threats is essential for a successful CIO.
Simultaneously, shrinking margins and increasing competition are forcing CIOs to focus on efficiency. Efficiency gains can be made through automation of manual processes, integration of disparate systems and functions, workflow analysis and improvement, and careful implementation of appropriate new technology. This requires thorough analysis of existing practices; a keen understanding of and belief in the credit union's short and long term goals; research into systems, vendors, and other institutions that have faced similar challenges; and the ability to think creatively outside the box to devise sound solutions to the challenges the credit union faces.
Another important change in the role of the CIO that has occurred over the past several years is that the CIO's job requires a great deal more interaction with others. Successfully achieving gains in IT security and efficiency requires collaborative efforts and buy-in throughout the institution. Similarly, the CIO must also be able to work collaboratively with technology vendors. The CIO should have a well formulated technology plan detailing what they need to accomplish, communicate frequently with their technology vendor to convey the institution's requirements, and have the perseverance to attain win-win solutions. A technology vendor who is a true partner should appreciate and respect those CIOs.
Mark S. Coronna, Chief Marketing Officer
Wolters Kluwer Financial Services, Minneapolis
Strategic alignment, the optimization of a financial organization's technology capabilities to effectively enable its business strategy, has pervaded technology discussions for nearly ten years. Strategic alignment argues that effective organizations use technology to help shape and grow new business opportunities as well as transform the business.
A credit union's CIO plays a major role in determining the extent of its technology capabilities. As part of the management team, the CIO identifies areas technology costs can be reduced so daily operations are performed effectively in meeting all the credit union's requirements for system performance, security and scalability. These costs often represent the majority of a credit union's total technology spend, leaving fewer than desired funds available for new product development and for required investments, such as keeping the credit union's applications compliant with changing regulatory rules.
Building on continuous improvements in the technology infrastructure, more effective CIO's realize they have a role supporting a credit union's growth agenda. Reallocating lower value dollars from the technology infrastructure into activities like helping bring new products to market faster supports a higher-order contribution for the CIO and the credit union.
Even more effective CIOs realize technology can transform the credit union by radically reengineering business processes for material gains in performance. These CIOs look at new technologies and their potential impacts on the credit union's business and sponsor appropriate pilot projects.
To reach the higher contribution levels defined by a highly-aligned technology organization, the credit union CIO has to see himself or herself as an owner of the organization's growth agenda, as well as a steward of its cost structure. That ownership must be based on being an active contributor to the credit union's strategy, not just an effective executor of the strategy.
Note: The author was formerly a divisional CIO for the payments division of U.S. Bank, and for the Business Systems division of Deluxe Corporation.
Steve Williams, Cornerstone Advisors, Scottsdale, Ariz.
In the future, successful CIOs will change their brand from being the manager of the IT department to the executive who brings together IT and business resources to constantly improve the organization. For most credit unions, this means CIOs will have to help lead a culture change, as the majority of business areas and IT functions struggle to collaborate effectively. To realize this culture change, CIOs will need to develop stronger planning and collaboration processes without creating bureaucracy. IT planning, project management, software lifecycle management and process improvements methodologies like Six Sigma are all disciplines that need to mature for credit unions to effectively get value from IT.
Chris Barber, SVP-CIO, WesCorp, San Dimas, Calif.
The answer greatly depends on the size and complexity of the credit union. For the smaller CU CIOs, they will be more likely to be tactically and operationally focused whereas the larger CU CIOs will lead the business unit interaction and alignment with company goals. In all cases, the demand on the IT organization is growing due to the increase in complexity of service offerings, NCUA requirements for detailed risk assessment functions, and costs of compliance with laws and regulations. In our case as a larger enterprise CU, the significant areas of focus for IT leadership are on project management, resource allocation, alignment with the business unit goals, and increasing collaboration between functional IT teams.
Christine Pearsall, VP Marketing & Sales Support
Summit Information Systems, Corvallis, Ore.
Credit union and vendor expectations of the role of CIO over the past 10 years have changed dramatically. A decade ago, DP managers wrestled with unwieldy disparate systems and battled the clock to complete overnight jobs and schedules. As technology was an on-going battle, IT typically played the role of translator to staff forced to constantly adapt to system changes. However, the promise of seamless system integration realized with common standards and regulatory changes introduced by the Gramm-Leach-Bliley Act in 1999 coupled with the aspiration of many credit unions to implement Sarbanes-Oxley practices more recently, have necessitated a role change for IT. Now adaptation to change has become the mandate for IT, the result of responding to business process needs rather than system process change. Today's CIO-the title upgrade itself a reflection of the role change of IT within the organization-must now play the role of corporate "listener." The IT department is the credit union's business initiative fulfillment specialist, focused on delivering the best technology solutions to meet or exceed defined goals.
The Summit account management practice has evolved with this repositioning of the CIO and IT staff at credit unions, and with it the expectation of the role they play in the vendor relationship. Today, the CIO is the executive level interface in the strategic process of documenting the client's annual business initiatives with the aim of jointly developing technology strategy and tracking business process and financial performance improvements.
David McConney, EVP/General Manager,
Credit Union Core Systems, Harland Financial Solutions
Pleasanton, California
Performance and efficiency demands are pushing IT personnel to "step outside the box" in order to deliver results. As budgets stay stagnant or grow moderately, delivering on these demands becomes even more of a challenge. Just how much can IT positively influence business performance? And yet, IT departments have much more responsibility and are relied on more today than ever before. Experience and expertise is called upon from all parts of the business; from simple computer requests to very complex software requests.
Heightened security has also forced IT into a new role; one of ensuring both credit union and member data are protected. So, in addition to keeping all systems up and running at all times, IT is charged with maintaining ease-of-use and performance for those that have authorized access to systems while preventing unauthorized access. Not an easy task and certainly one that is unique for each CU.
As a strategic partner to credit unions, we rely heavily on the input and guidance provided to senior management within our credit union clients from IT. If this expertise is not present and clear goals not articulated, delivering results from the IT and vendor perspective is at risk. IT staff that are "plugged into" the financial industry, the credit union and its strategic goals, technology trends at large, the latest security challenges, and that support technology decisions based on ROI and other key performance drivers are the best positioned to provide the proper input and guidance to the credit union and its partners to ensure the credit union's.
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