A featured contribution from Leadership Perspectives: a curated forum reserved for leaders nominated by our subscribers and vetted by the Construction Tech Review Advisory Board.
Siemens
Shaping the Digitalization of Financial Services
I would definitely say the evolution of IT at Siemens Financial Services (SFS). We worked together here with our partners on the operations side to find the optimum solution for the company.
We started out as follows: Our German IT departments were decentralized in various units within SFS, which allowed for only minimal coordination and cooperation on the demand side. That’s what we wanted to change. What’s more, many issues can no longer be resolved at a local level. So, as a first step, we placed all the individual IT departments under the umbrella of a centralized IT service for Germany. Then we bundled Demand IT and Supply IT to form a joint organization. Finally, we applied this model to another eleven countries, affecting 220 employees in total.
When solving issues that were often very similar, we were able to harness synergy effects. For example, we bundled our expertise in regulatory requirements to enable us to provide better support and advice to the various companies. Given the present environment with ever increasing regulatory requirements, this decision proved to be spot on.
In terms of technology, where do you see the biggest hurdles in your pursuit of even more efficiency?
Continually extending the IT landscape doesn’t necessarily provide the best basis for responding to market requirements, which are often very agile and demanding, because the market moves faster than our technology in many areas.
Another challenge lies in the everyday digital experiences of our users in their personal lives, with WhatsApp, Amazon and co. increasing expectations when it comes to user-friendliness, features, and speed. They then naturally expect corporate technology to work just as easily and seamlessly. But security requirements such as the essential encryption of content and high availability mean this is not always a given in the business environment.
How do you ensure the right balance within your IT team between day-to-day business and innovative projects?
IoT solutions can be applied to improve efficiency, enhance security, or reduce operating costs
I must admit that striking the right balance is a tough and continuous task. While everyday IT operations demand stability, precision, and predictability, innovation requires exactly the opposite, namely: curiosity about new developments, lateral thinking, and a good deal of risk-taking. So, completely different skills and pretty much the opposite approach to issues are required here. However, both fields are equally important to a future-oriented business. By making budget decisions in favor of innovation, we are purposely setting trends for the future. At the same time, we are making sure that each and every manager acknowledges the staff members taking care of the day-to-day business and shows them the right amount of appreciation. Otherwise some employees can end up feeling neglected, since they are ‘only’ there to keep things ticking over. On the contrary, they are the people providing the necessary platform for innovation by constantly optimizing our response to daily challenges.
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How can the organization best be structured to optimize a cooperative partnership between IT and business operations?
As far as I’m concerned, structuring the way we think and act in organizational charts and departments–i.e. in separate organizational units–is now outdated. A far more effective approach is to bring together the experts required to solve a particular problem or work on a project in a flexible, topic-driven way. That’s how you create a role-based organization, which changes hierarchies or even (temporarily) removes them under certain circumstances. Managers and staff members are not only required to have a rethink but also to unlearn what they know.
In your opinion, which technology trends are gaining momentum at the moment?
In my view, our “IT Northstar” is our guiding light leading us into new territory. This is our vision of a collaborative digital economy, based on data, which will form the operational backdrop for Siemens in the future. Here, customer interaction determines the company’s activities. Physical and virtual aspects merge into one, and production becomes flexible, modular, and intelligent. The company itself will function as an open and highly integrated component of collaborative networks, with algorithms also playing an increasing role in decision-making and implementation.
Can you give us any other insights into the challenges facing Financial Services?
We need to view digitalization as both a challenge and an opportunity: an opportunity to continue evolving the role of IT and put less emphasis on costs and more on business value. For instance, due to the more closely integrated cooperation between IT and specialist departments, the mutual exchange can open up entirely new possibilities. At the same time, the importance of technology itself is constantly shifting, and the way teams work together is also a key success factor. This is about much more than a change in corporate culture–this is about motivating people to take a completely different approach. It’s also important to discuss risks and opportunities openly in the process.
So what advice would you give a CIO facing challenges similar to shaping the digitalization of Financial Services?
Communicate, communicate, communicate – and do so across all levels! Nobody has the answer to every single question. Maintaining a certain degree of calm in the face of the widespread pursuit of perfection is also helpful. I find the 80/20 rule appropriate in many cases. Additionally, an open learning culture needs to be more than just lip service; it must be actively demonstrated and fostered within the company so that all parties feel equipped to take action in any situation and are encouraged to learn from their mistakes.
Check Out: Financial Services Review
