Thanks for this thought-provoking post. Many CUs struggle with the IT risk issue. Too often they see it as risk aversion instead of risk management. They avoid any IT risk under the banner of security instead of seeing it as simply risk management.

–Mark

This post was mentioned on Twitter by leimer: New blog post: The Secret Of High-Performing Credit Unions? http://bit.ly/9eK1y4 /via @rshevlin…

Jeff: You’re spot on. I didn’t mention it in the post, but I did a study last year that looked at how those three dimensions of IT management correlated with the performance of 750 community banks. Performance, however, in the community bank study, was respondent-reported growth in customers, product adoption, and retention. For the CU study, I used NCUA data.

Morriss: I’m not trying to “surprise” anyone. I’m trying to get people to see that there’s cause and effect. The “cause” here is IT management practices, the “effect” is investment in technology. But so many people — and you know some of them — run around yelling for CUs to implement the effect w/o understanding the cause.

Quintin: I’m honored that you’d comment here. My Gonzo Banker coffee mug is one of my two prized possessions in life (the other being my collection of Grateful Dead concerts on my iPod).

Your points are all spot on, but in my experience there’s another, and often intangible, element to the executive support dimensions: Some execs just “get it” and some don’t. I think it has a lot to do with their functional background and experience.

My experience also tells me that there’s no silver bullet for getting commitment or improving coordination. The firms that I’ve seen make improvements have a hard time explaining exactly what they did,, other than “work hard”.

I think it’s a lot like a political campaign. You need the combination of key national support (analogy: some key sr. execs) AND a good grass-roots organization (mid level IT and business folks) working to make changes.

* CU Strategy: A solid credit union strategic plan that defines what is it trying to accomplish, and disciplined execution
* Technology Strategy: Support for the CIO/I.T. leader as they develop and execute a strategic technology plan that supports the CU strategy (among other things plan should discuss I.T. strategies that support CU strategies, guiding principles about how I.T. will be managed, technology trends impacting CU, and provides a roadmap for investment for each business/support unit)
* I.T. Governance: An engaged management team that wants to contribute to good I.T. governance by forcing initiatives to tie to strategies in that CU strategic plan and the key metrics the CU wants to improve over the planning period; the management team must be strong enough to say “no” to initiatives that are a poor fit, too

“Flavor of the Month” and “All You Can Eat Buffet” models where every project makes it into the hopper are I.T. department and I.T. satisfaction killers, so executive buy-in and discipline in the above are key if I.T. is going to be able to execute and enable the kinds of high performance described above.

As for business/IT coordination, that process works best when I.T. is recognized (and funded) as an enabler vs. a utility. Maintaining some flavor of business analysis role allows I.T. to proactively collaborate with the business, understand needs, and recommend appropriate solutions instead of reacting to the next project that lands in the pipeline.

I agree with Mike’s risk avoidance comment. I.T. and I.T. risk groups need to hold up their end of the deal too by not just answering “no” to every request that has security implications but by telling the business how they can get to “yes”, managing risk vs. avoiding it.

These basic, blocking and tackling issues are core to credit union AND bank/thrift success. One of our credit union clients is guilty of the lack of 3 (IT/Business unit coordination), and found themselves paying for IT components they did not use and performing manual processes that could be done electronically.

Great post to center credit union managers’ attention.

-Jeff