“Regardless of whether our clients bank with us in person, via computer, or by phone, we want to provide them with service and value that differentiate us from our competitors. We are continually looking for new technology solutions to help us accomplish this.” That statement was made last October by Jim Rager, vice-chairman, RBC Financial Group, when the bank announced that digital imaging technology will retrieve cancelled cheques in seconds rather than days. It also previewed Canada’s first interactive voice response for telephone banking. As senior vice-president of e-Business and RBC Global Services Technology, Tom Wolf is responsible for RBC’s technology strategy.
IT Focus: What criteria is considered when assessing the potential of deploying new IT?
Tom Wolf: I find one of the biggest parts of my job is figuring out the timing of technology investments. If you invest in technology too early, it can be potentially very costly if it’s not adding competitive differentiation for you as a business. If you invest too late, it can also be very costly for you in terms of opportunity lost. The other thing is you may be implementing technology that a year or two later you are looking to retire, so you may be implementing the wrong technology. So the timing of technology investment is a very important question for all of us. That’s one of the primary things that the business looks at us to have expertise in.
IT Focus: How do you go about tracking IT trends and establishing IT strategies that maximize the business value to RBC and bring a strong ROI?
Wolf: I think there are different levels of it. At a high level, we make sure we have an overall direction statement within IT. Just as a business you have strategic goals and directions, we want to make sure in IT that we have an overall vision and strategy and that the decisions we make really are aligned with those strategies. We want to make sure that the IT strategies are aligned with our corporate business strategies but also support individual business strategies as well.
As an example, our vision statement is: to be an enterprise-wide technology organization that drives client-focused business solutions. You want your visions and strategies to be a litmus test for you in making a decision around an investment and the timing of an investment. We have four strategic objectives aligned with the strategy:
• focus on the client (both the internal and external client);
• drive efficiency and effectiveness by establishing common infrastructures, applications and approaches to IT;
• lead the enterprise to technology excellence; and
• promote employee innovation and creativity.
We create a clear line of sight from this vision and this strategy to what people do from day to day. If you don’t do that, then it’s just a piece of paper sitting on the side. A clear line of sight means that you line up your various initiatives to the strategies; that you’ve got ways of measuring success — how you know you’re getting there; that you’re communicating to your employees as to what that really means; and you have success stories.
There’s a high level infrastructure around strategy and the key thing is that it really is part of what everyone does. There isn’t this little side group that owns technology strategy. It is part of everyone’s responsibility.
IT Focus: How does RBC keep track of what’s new or how existing technology can be deployed in a new way?
Wolf: We have other types of processes around architectures and standards that have very specific strategies around technologies. And we have processes on how we look at technologies and how we bring technologies into the bank. We follow a process that I think started with the Gartner Group: using technology bricks which divide technology areas into component pieces. These may be mid-range systems or e-mail systems or different types of middleware. We’ll have standards on them revealing our current standards; where we are in zero to two years; where we want to be in three to five years; what are the emerging technologies; what technologies we want to be retiring now. It’s basically our roadmap around certain types of technologies. We have brick owners — people who are tracking those technologies. When we build an application, we’re taking technology components like bricks to build them.
We are pretty strong architecturally at RBC. We have an architecture group and we create design patterns for creating systems. You can create a lot of different houses with a pile of bricks so we want to give some guidance as to how to build houses that don’t fall down.
We have other types of processes around looking at emerging technology as well. From a central point of view we look at emerging technologies and will maybe fund some research and look at whether we should begin investing in them. We have a governance structure around looking at architecture and setting standards around the architectures. We have various working groups that are looking at new technology and will make recommendations on whether we should be adopting them or not.
We do have an advanced technology group that will be looking at two or three technologies that we or they think will be particularly disruptive to financial service companies or to RBC and technologies that we may want to get some hands-on experience and begin to prepare for.
IT Focus: Can you give me an example of that?
Wolf: Wireless payments. It’s not here now but it is something that may be emerging that could have a major impact on us. Something in the past could have been the Internet. Very disruptive. The way that the Internet stuff started here was more of a skunkworks project that was partly funded that way.
We’ve got all sorts of ways of looking at technology and helping us be innovative as well. Innovation comes… from… getting the right type of processes in a big organization that help you build off of what you already know and help you create new and innovative products.
IT Focus: So that’s for example how the digital imaging capability came to be deployed?
Wolf: Yes. What I think is extremely important in all this is how well aligned the IT organization is with the business. That is absolutely critical. In this particular case, we had a really important business need around digital imaging. It had been on our radar track for a while and the timing was right for us to make that investment and for the business to make that investment. We knew that we could do it technologically. The great thing is that some of the issues that you have to think about in terms of techno-logy adoption is, first of all, is the business ready for it, but more importantly, is the customer ready for it? So customer adoption is absolutely critical when you’re doing customer-facing systems.
IT Focus: How do you gauge that customer readiness?
Wolf: Sometimes we actually go out to the customer and ask them. The business will sometimes have focus groups. We will do prototypes or pilots to judge the adoption. We’re not shy about looking at how successful others have been at doing things, whether it’s within our own industry or in other industries. We use the research groups like Gartner Group or Tower Group to help us judge some of that.
Gartner Group has something called a technology hype cycle. Gartner plots the technology on this hype curve so you can see when the technology is ready to be mature. We’re ready to use them but we have our own view of when it is the right time to be adopting different technologies; can it scale; are there real issues with it; is it secure. If a technology is really going to give me a competitive edge, I’m willing to take the risk because it is giving me a very good reward. The important thing is, just like making a financial investment, are you getting enough reward for the risk you are taking and do you really know what the risk is?
IT Focus: Would the speech technology be an example of watching the hype?
Wolf: Yes. Early on I used to be in the business of doing natural language processing in the mid-80s. The technology has come a long way. There can be advantages of adopting early if you feel it can make some huge difference in a business proposition like attracting customers or reducing your servicing costs or whatever. For us, the timing was good now. Not real early in the curve; not late in the curve either. We are currently in the pilot testing stage. We hope to be in a position to roll it out later this year.
