The FX eCommerce space is becoming increasingly challenging and at the centre of all this is the IT director, who will this year again be tasked with delivering more with less.
Ageing and legacy systems need to encompass ever more – more products, regions, regulatory controls, and reporting – typically with smaller budgets and fewer people. The constant need to make the best use of limited resources to meet business expectations at a reasonable and accountable cost in the face of these pressures renders the job of the IT director ever more difficult. In doing so, it has also made the role increasingly central to the success of financial institutions.
Current challenges reflect three things: uncertainty arising from an evolving regulatory environment, the imposition of increasingly stringent and onerous penalties, and the squeeze on margins resulting from an increasingly and globally accessible FX marketplace.
In today’s business climate, rarely, if ever, is a list of work or projects smaller than the available resources. As a result, task prioritisation is an increasingly difficult and critical job. The responsibility for working through this process for individual components falls under the remit of the IT directive, but overall rules of the game are usually dictated at a higher level, typically by fluid business imperatives.
An IT director needs to decide how projects will be ranked and rated alongside each other with a suitable scale to be able to make clear, strategic decisions on how best to allocate resources. The need to respond to the redefinition of priorities handed down by the business must form part of the overall IT strategy, with attendant budgetary and manpower contingency issues. Although this uncertainty goes against strategic behaviour, the IT director must ensure that IT strategy is sufficiently robust to cater to the fluidity of the business.
Typically, IT budgets are both shrinking and comprise multiple funding sources from different business lines. Technology groups need to manage this matrix of paymasters and create a high-level coherent resourcing plan. The IT director needs to gather requirements from all business sponsors, size and cost the work involved to deliver the requested functionality, and build a book of work for the year. A means by which to prioritise the work will be required in line with what all parties involved need and want.
Stakeholders require a high-level view of all the work requested. This data must be accurate and sufficiently transparent to allow them to make informed prioritisation decisions. The IT director’s plan would show who has requested the work, what is involved, and how much resource is necessary to deliver the functionality. Additionally, there must be a level of uniformity to allow comparison between work requests. The output from this process would be a run-book of IT development based over an agreed period of time.
As the budget process is usually annual, organisations typically have a yearly IT roadmap. Those involved should recognise this as an aspirational schedule because market events, increased regulation or business changes can easily derail a plan that is too rigid. There is also a case for having a shorter period of planned work with a more flexible longer-term view, which will allow unexpected changes to be more easily absorbed.
The prioritisation process is a key attribute in the deployment of scarce technical resources. An iterative method allows flexibility for the business to change priorities in a relatively short period of time.
Value-based prioritisation is a mechanism that tries to achieve the maximum business value in the minimum time possible. There is a concept of ranking the ‘value’ of a piece of development work, which would be based on agreed criteria. These weightings could be risk reduction, revenue potential or technical measurements. They would be applied across the work catalogue and provide a matrix of ranked development requests, essentially, a shopping list for the business to assess. This method can provide an adaptable and iterative development process. The stakeholders need to be actively involved in the business features’ delivery schedule and would be able to continuously adjust requirements as necessary. To be successful however, this approach needs an effective governance structure where all relevant stakeholders, both in business and technology, engage in reviewing business priorities regularly.
Business partners also need to be able to understand, at a high level, the repercussions of changing the priority of an in-flight piece of development. For example, not releasing a near-complete component could make sense at a business level, but would have implications on downstream systems that would necessitate more costly development work at a technology level. Project managers need to be able to articulate these inter-dependencies to business partners as part of the decision-making process.
Ultimately, although the main role of eCommerce IT groups is to deliver business functionality, there will always be essential technical programmes that deliver little discernible business benefits, but are critical to the continued viability of the IT platforms and components. This type of work includes architecture or software upgrades, new technology infrastructure, and addressing technical debt. These are often longer-term projects that need consistent funding to achieve their goals and ensure that the technical framework continues to be capable of supporting the ongoing FX business. The IT director should own and allocate the budget for these types of projects on agreement with the business heads.
There is a continuing debate about the merits of strategic goals versus tactical objectives. If business stakeholders are only assigning priorities for IT deliveries for a rolling six-month period, does there need to be a view on a longer-term strategy or, as in most organisations, is a shorter timeframe all that the business can realistically dictate? This is yet another challenge facing the IT director.