Better together

Exclusive: Andrew Armishaw, CIO of HSBC Holdings North America, on the importance of aligning business with IT.

It was rather a surprise that on my introduction to Andrew Armishaw, CIO of HSBC North America Holdings, that he answered with the hint of an accent from the North of England, Bradford to be precise. No doubt softened by the two and a half years he has spent in Chicago. Two and a half years well spent as, amongst many other achievements, the weekend after we spoke he managed to find the only bar outside of England showing the soccer playoff final between Swansea and Barnsley, (despite hailing from Bradford he supports Barnsley!). I guess you can take the man out of Bradford (Barnsley)…

Back to business, and I was intrigued to find out what someone from the one of the largest bank brands in Britain brings to HSBC in the US, where outside of New York State, despite being one of the top 10 financial services organizations in the country, its profile is still being built? It was with great interest that I got to find out, in the age of killer IT applications, more about the much discussed relationship between IT and business and why alignment between the two is so important to the success of any financial institution.

Winds of change
Our discussion starts by addressing the current feeling that the role of the CIO and IT is changing, a point to which Armishaw agrees, albeit with a cautionary note: “Whilst I think the role of the CIO is changing, you can’t take for granted the basics, the bedrock of the role. If you don’t deliver very high quality, very highly resilient, very high performing cost effective systems, you don’t get the opportunity to do the other things. You’ve got to deliver your projects with a lot of focus, energy and drive.”

But assuming you do those there are some interesting developments taking place. “The first, and it’s one we do here, is we run the technology organization as if it was a commercial company; it is a wholly company itself, we don’t do business for anyone else, but we basically run it, we have an annual price list, we have to drive down our prices each year, we allow the business to consume what they can afford and it’s our job to try and drive efficiency through it. So we try and make our IT services appear as if you were buying them from the outside so you get a sense that we care commercially and you can benchmark them.”

Typically, the technology group supports most if not all businesses for HSBC in North America from applications data centers to networks for virtually every business and, as such, it has a great picture as to what’s going on in those businesses and in some cases is the only large-scale group that has that full picture. “As all banks are challenged to get more out of their business, we are one of the groups with a window as to what’s happening in all parts of the organization, we have to play a much more active roll in saying how we leverage those components across the businesses – it’s a huge thing and I think it’s one of the reasons why the management group here are very committed to always having the IT group at the senior table,” something of a refreshing change for IT.

Armishaw also believes that IT is increasingly becoming a big communicator of the brand. “You need to communicate the brand over the internet or through an ATM. If you look at most banks the vast majority of the transactions now are through direct mechanisms. You need to think of yourselves as communicators of the brand of the bank, so you’d better be intimate with what the organization stands for and what it’s trying to communicate.”

But, as with any amount of change it is necessary to fully appreciate the bottom line: “never take for granted the day your systems aren’t working and you can’t get your projects in, people don’t want to talk to you about the other stuff, they want to know why the ATM is down,” Armishaw states in a knowing tone, a good time for me to move on perhaps.

Singing from the same hymn sheet
Earlier in our discussion, Armishaw mentioned the importance of focusing on aligning business with IT and why this is so important. Pressing this point further he explains that the main reason for this is because banking is now so much about technology.

One of the upshots of this is that, despite it’s increasing prominence, not everyone has followed this development with the same amount of enthusiasm – I’m sure we all know of 20 year veterans who swear that a pen and paper or flip chart are the only business imperatives and can often be heard enquiring why “people don’t use the phone anymore”. More subtly put, Armishaw believes: “You still have a lot of senior people in the businesses who have developed in their career without a lot of hands on involvement with the IT function,” as such, “it’s absolutely our responsibility to explain what we do, what are the services and how they’re core to those businesses; they should also feel they are driving the agenda. I think in a lot of companies, business executives don’t feel that they drive the technology agenda, they just get to vote on it on rare occasions. “

There’s an emotional aspect to this as well. “I think a lot of IT groups don’t present themselves as a service provider, they don’t treat their businesses as customers, and they’re somewhat divorced and disengaged from them. So there’s a practical element that says that if we understand the business we’re going to develop the right systems and the right infrastructure. IT therefore needs to show it’s very engaged with that business and very excited about making that business more successful, and that you understand the technology group can only grow and prosper if the businesses grow and prosper. It’s a very simple philosophy.”

On the face of it, this is a very simple philosophy, but there’s still the hurdle of differences in approach between IT and business staff that need to be taken into account. We all have pictures in our head of the typical characteristics of people in business, whether they’re from IT, sales or senior management – not all of which are necessarily flattering. So it is important to get past these stereotypes and appreciate what we all bring to the table.

It’s the personality that’s important
Being careful not to make generalities, Armishaw suggests that there are often fundamental differences in characters of IT and business employees: “IT people tend to be pretty analytical, and approach a situation focused on structure and projects and how to deliver them. Business people on the other hand, tend to approach a situation from a more commercial, entrepreneurial angle.” Projects work best when these two groups are very closely engaged and they understand the benefit of the different approaches and personalities that each group brings to the table.]

As such, one of the things Armishaw is very keen on is moving people between the IT and business disciplines to get a greater appreciation of the underlying business (see The Apprentice sidebar). “We’re having some success at this because it does give people a different view. Nobody has the monopoly on the right answer in this but I do think it’s important the IT people understand that in the end, if you’re not supporting and driving commercial success it doesn’t matter. You need to understand how your structure, controls and projects help the organization be more commercially successful.

“As we all know, sometimes what is commercially successful isn’t always logical. What consumers buy, and what they like and do isn’t quite as rational as we think. What we encourage our IT people to do is really understand why our businesses are commercially successful or not. Look at why we have an advantage with customers rather than just analyzing the process – why are we successful, what are the things that make the difference to end customers and the reasons they buy and how can IT influence that.

“So we encourage people to get out to branches, call centers and onto the internet to understand how customers buy and what drives them to buy, because sometimes it’s not what you think.”

The driving force
I therefore wonder whether this is an admission that IT is there as a service to the business facilitating their demands as opposed to driving development, and to a point it is. “In general I would say all the best products I’ve seen have had a very clear business sponsorship, there’s no doubt about that.” But of course this isn’t an admission of pure IT subservience as Armishaw continues to explain that IT still has a responsibility to shape the agenda: “If they see things being built that they think are either impractical or not commercial, then you’ve got to raise that. If you just do what you’re asked that’s not enough. You have to look at what you’re asked and you have to present alternatives and explain why what might appear to be a very good commercial way of doing something isn’t.

“With the best will in the world, you’ve got to educate them from time to time. You have to be in the position to influence the agenda, not just execute it.”

N.B. For the record Barnsley won the final. It looks like Armishaw knows who to back.