By John Pettit, CTO, Backstop Solutions
I recently spoke at the OPAL Public Funds East Summit on the topic of digital transformation, a trend we've noticed a tremendous pressure on public funds to embrace. As a CIO of a public pension, you’re wrestling with the explosive growth of both qualitative and quantitative data, resource and funding constraints, asset complexity, and the need to overcome information silos.
There are additional pressures as well: growing retiree bases, a low interest rate environment, and plan under-funding, while you’re still being held to performance targets and funding mandates. Meanwhile, many investments’ long life cycles outlast the tenure of much of your investment staff. As staff leaves your organization, so does a tremendous wealth of knowledge.
In this environment, your office must become more than an investment function—it has to become an intelligence unit. Many CIOs are recognizing that they need to become a “digital CIO.” Given these pressures, you may be asking yourself, “What technology should I go out and buy? Let’s do an evaluation and then implement, as quickly as possible.”
Not so fast. Don’t jump – while technology, if implemented properly, can hold the key to addressing your challenges, you’ll want to lay the groundwork of digital transformation ahead of making any decisions about specific vendors. The key to successfully implementing technology is to focus on business impact, culture change, a community of partners and capturing knowledge.
From a business perspective, the approach should be outcome focused. Your aim should be to increase intellectual capacity and “work smarter, not harder,” increasing efficiency and providing better service to members.
The cultural piece is the toughest for many organizations. Culture change requires organizational transformation, and that can’t be done without executive sponsorship. But culture change is critical to achieving digital transformation.
Taking advantage of community means engaging with people and sharing information. Who can you work with or bring together to improve your overall experience, and what information can you share securely to give you an edge?
Finally, you need to focus on knowledge-based processes driven by the desire to capture and organize usable information. If you’re not capturing usable knowledge, what’s the point in digitizing?
Some words of advice
As Backstop’s CTO who has seen many of clients go through this very process of transformation, I have some parting words of advice.
- In considering technology, make sure you’re innovating on a solid foundation. That foundation should be based on data management, data governance, data mobility and data analytics. You also have to ensure that your technology is flexible so it can grow and branch out as needed.
- Your data management efforts should be designed to break down silos and take a holistic view of data flows. A successful transformation will be marked by a sense of “our data” rather than “my data.”
- In approaching data governance, you should take a data stewardship approach focused on compliance, security, privacy and quality. The latter characteristic—quality—is particularly important. In the data world, quality is king. You also need to implement appropriate data security.
- In emphasizing data mobility, you acknowledge that locking up information leads to poor adoption of new technology, and could result in a failed implementation or the rise of more shadow IT systems. But if you take the right approach to data mobility, everything is connected: people, devices and systems.
- Don’t be afraid of shadow IT. It’s going to happen, so focus on why it’s happening and what might be driving it. Learn and assess the risks and always focus on outcomes.
- Data analytics is the payload. It’s where real insights are unlocked and you can build business intelligence that can help automate workflow and bring in additional information. Don’t overlook artificial intelligence—its value is real and it can produce the next wave of efficiency. And think about cloud-based opportunities first—you don’t want to lock an expensive system into a single resource.
- Finally, in making your digital transformation, find a partner who can help you launch quickly, measure success and evolve with you. Practice continuous learning with ongoing education and training, and create a program that rewards people for engaging in the right activities.
Digital transformation is doable. If you take the right steps, you can become a successful digital CIO.