Ask any CIO at a financial institution what keeps him or her up at night and you'll likely receive a variety of answers. But when you take those different answers down to their root cause, odds are you'll find they all lead to one thing: data. Next to actual cash itself, data is probably the most precious asset a financial institution has. And for good reason.
While we may refer to what we sell as "products," in reality they are more accurately classified as offerings. There is nothing to look at in a showroom, nothing to ship, nothing that will make a noise if you drop it. There is simply an agreement that something will happen, such as funds will become available if the customer signs on the dotted line. That's what makes data so precious to us and why we're more protective of it than the average mother lioness is with her cubs.
If that isn't enough of a downside, consider that in exchange for those lost REM cycles the people assigned to monitoring the flow of data generally find it to be a career limiter. It's ironic. They're doing something that deeply affects the very core of the business-you might legitimately call it mission-critical-yet when it comes to career advancement this work doesn't have the cache of other IT positions.
I know, because I was there in my position as CIO of MasterCard. What I've come to realize since then is that if I had it to do over again, I wouldn't manage data internally at all. I would selectively source that function to a company that specializes in data infrastructure as a managed service.
That probably seems almost heretical to those of you still fighting the good fight. How could I possibly even consider allowing my data to be managed outside of my internal control? Wouldn't I feel a lot safer (and sleep a lot better) knowing my own people are handling this important task?
Not really. The truth is, data infrastructure management is one of those technology tasks that is easily detached and controlled on the outside. It's the best of both worlds-you maintain secure physical control of corporate data assets and the service provider continuously monitors performance while implementing proactive maintenance. While it requires a certain set of specialized skills, it's not the technical challenge it once was-remote technology has stabilized and matured to the point where reliability and security is not such an issue.
What's important instead is being able to focus on data-to have eyes constantly watching the system, looking for warning signs and making corrections before they cause a problem. That's not something an internal IT department can afford to do, at least not very well. But since it is the sole business of a data infrastructure management services company, they are able to focus on watching the system without getting caught up in all the other distractions and crises to which an internal resource can be subjected. And they'll have their resources available 24x7 365 days a year so they can react to any anomalies immediately, rather than having to rub the sleep from their eyes and login remotely-or get in the car and drive to the office. Specialization is nothing new. It is part of the maturing process of an industry. Keep in mind that up until the year 1745 or so, barbers were also surgeons.
The same pattern is in effect today. The emphasis is on business intelligence-slicing and dicing data more effectively to realize greater value from each customer and offering-rather than on physical management of the data systems themselves. And deriving added value at financial institutions through strategic management requires a high level of support and creative thinking in order to maximize profitability.
For years, we have been working on accumulating data, whether it is through face-to-face contact, phone contact, Internet self-help systems or other means. That's the reason we have ERP, CRM and other such systems in place. The challenge has been getting the data out of those systems and leveraging it to generate incremental revenue, especially in the competitive, non-interest profit centers. If we can segment and analyze the data properly, we can figure out what customers really want, what original purchases lead to add-on sales and fill the holes in our customer relationships.
For example, if we can determine that customers with a certain account level have shown a great deal of loyalty in those transactions, we may be more successful in selling mortgages or brokerage services to them than we would by simply doing a mass mailing. We can target what we're doing to appeal to them. All of that takes time and thinking though. And it's tough to get that level of thinking when our people are busy monitoring data management screens and troubleshooting sub-standard performance.
Offloading the management of database monitoring and maintenance allows CIOs to redirect their precious, limited resources into more strategically-oriented roles. Doing so not only helps with the overall business, it provides some additional benefits as well.
Since the complexity of the infrastructure is well out of proportion to the worth of having internal IT personnel keep up with it, offloading this function provides a better ROI on those resources. In other words, they're not spending a lot of time learning things that may or may not crop up between now and the next revision of the technology. It is not only the data infrastructure service provider's responsibility to keep up with all the changes, large and small, in all the various systems-it's their business.
Immediacy of maintenance is also improved in most cases. Patches and upgrades are applied promptly, rather than when internal personnel can get to a non-emergency on their checklist. It's a simple matter of prioritization. To the internal personnel, it's one of many things that needs to be done and to the outsourcer, it is a high priority.
Outsourcing data infrastructure management improves the career prospects for internal IT personnel who used to be tasked with monitoring system functionality. Business alignment, not system optimization, is the new measure of performance. They now can spend more time providing high-value services that will help them get noticed within the company and advance their careers. Not to mention adding to the bottom line of the company itself. All of which helps us reduce costs for training and on-boarding new personnel while keeping accumulated knowledge and potential IT stars within the company.
You can try counting sheep, drinking warm milk at bedtime or even using a high-tech white noise generator. But if you really want to sleep well at (and all the way through the) night, get at the source of your anxiety.
Replace the nightmare of complex internal data infrastructure management with one of the new breed of specialist. It'll free you and your people to think more strategically during the day. And it will give all of you more opportunity to enhance your careers. Sweet dreams.
Jerry McElhatton recently retired from MasterCard as President of Global Technology and Operations
