A Business Technology Place

Can we change the secret sauce of IT?

The value of IT.

Connecting disparate systems is one of the main value services that Information Technology teams offer to business customers. I used this point at a presentation before employees that are not in IT to answer the question “what does IT do?”. If you are not in IT you see this each week when you send or receive communications with a different company, wait for financial roll-ups from an operating company, or query product related information from an online catalog. Behind the scenes there are programs running to collect and manipulate data for presentation in a way that helps drive business processes.connections

Chris Curran of CIO Dashboard recently posted about the changing landscape of Information Technology integrations. Curran expresses a view that, “In reality, success is predicated on achieving consensus between all participants on a common data model.” He was referring to a concept known as service oriented architecture (SOA) in which IT teams make integrations more consistent by creating a common service for subscribers to call. As as simple example, we might create a tax service that takes an address as input and returns the tax rate. There is no need for everyone to write their own tax service when the call can be standardized. But what happens if the service is more complicated and involves transforming data? Some services may take an order for multiple products and decide if the order goes to a single fulfilment location or if it splits to multiple locations. The service may have to decide the naming of attributes for the products (size, quantity, material, etc.) Now each participant or subscriber must agree to the business rules and logic in the data. As the service grows with more subscribers then each time a change is made it requires oversight and agreement between all the subscribers.

Making spaghetti.

Is this type of architecture “increasingly untenable” as Curran suggests? I agree that it leads down a path that can create one-off solutions and is not scalable. In my experience, the “project driven” approach of organizations is a common factor that leads to this result. Reality is that:

  • Bigger organization or the one with upper-hand in negotiations tend to dictate the communication protocol and systems used.
  • The organization willing to expend IT staff often dictate communication protocols.
  • Organizations want to integrate applications because this is what their employees see and feel to transact business. This tends to lead to one-off solutions.

Can we untangle the spaghetti?

The thought of furthering consolidating and centralizing services is appealing. Curran suggests that published APIs are part of the solution. This does put the onus on the subscribing organization to consume the service and keep their own business logic local. But not every customer my team services is willing to pay an IT programmer to write code to an API. Integrations are often influenced by which side of the integration offers programmers to create the solution.

As organizations move more of their operations “to the cloud” or to overseas programmers they lose technology workers with the institutional knowledge to help write business logic. I think this will lead towards a tendency to use established services rather than writing new logic by using the API.

At the end of the day how we do integrations may change a little as we develop new options for how to integrate. But people, data, and money will continue to dictate how business gets done. More times than not, it’s the speed to market that often wins over the best way to accomplish a task. That doesn’t make it best solution and often contributes toward solution spaghetti, but it is reality.

Onward and upward!

Customer loyalty for banks and credits unions

Customer loyalty can’t be talk about enough in the market place.
I read an article on BankTech.com by Matt Gunn entitled 5 Things Everyone in Banking is Talking About. Matt discusses “Loyalty/Stickiness” as one of his five banking topics of the day. Reality is that customer loyalty is always a topic of concern for businesses despite their industry. But I think Matt’s point is about the urgency of loyalty at this time. New financial regulations are impacting fee income for financial institutions which is resulting in dramatic shifts in standard bank offerings.

Customer loyalty is made from customer focus.
The articled triggered a thought about an blog post that’s been on my “to write” list for some time. The big idea is that online banking integrations to financial services and products help create stickiness that promotes customer loyalty. But it’s done so in a way that creates value for the customer. A few weeks ago I wrote about how online banking integrations help customer focus efforts. Another effect of effective integrations is they make online banking the launch point to related financial services.

The importance of online banking as a financial portal is more important than ever.
If online banking is tied to other financial services such as bill pay, account opening, loan applications, credit monitoring, credit card transactions, etc. then it becomes a master portal for the customer. The financial institution’s brand is the primary brand within portal and the primary relationship that is linking all of the additional services. This creates stickiness and loyalty.

The opportunity for integrations is at hand.
Savvy financial institutions will have personnel in directly responsible for eBusiness integrations that customers use through the online banking experience. In effect, the online banking experience becomes a banking branch. It offers access to transaction based activities that can be completed by customers as self-service activity.

Expanding the use of online banking is not losing customer touch.
At first thought this may seem counter intuitive because pushing more transactions to the online banking application takes customers out of a branch where relationships are built and loyalty is formed. Reality is that mobile devices and the accessibility of broadband services have created a world where consumers try to bank from a variety of locations. Brett King, in his book Bank 2.0 : How Customer Behaviour And Technology Will Change The Future of Financial Services, discusses this concept of consumer choice. He says:

Customers choose the right channel at the right time for them, depending on a number of factors such as time constraints, always-on availability, complexity, and the likelihood of a ‘deal’.

My credit union gets it.
In the past couple of years,  my credit union has integrated with personal finance manager Finance Works (by Quicken), Turbo Tax, and a remote deposit service. I should note that I stopped using my local version of Microsoft Money and replaced it with Finance Works. This year, I didn’t purchase a local copy of Turbo Tax. Instead, I used the integrated version offered by my CU. It is becoming my financial portal for more and more activities. Combine that with no gotcha fees, above average deposit interest rates, and below average loan interest rates and customer loyalty doesn’t seem like such an elusive concept.