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Executive in the Spotlight - Skipton

Executive in the Spotlight - Derek Bond, General Manager, IT - Skipton Building Society

Derek Bond, general manager, IT of Skipton Building Society, discusses the challenges that UK financial services organisations face and why best practice in project, program and benefits management is vital to sustain IT leadership.

When Derek Bond, general manager, IT, started working at Skipton Building Society in 2003, he recognised that he had joined a fast-moving and innovative environment; a situation any progressive IT executive relishes. "The pace of change at Skipton Building Society is rapid and the entrepreneurial work ethic, combined with IT leadership, provides the organisation with the flexibility and agility it needs to sustain a leading position in the financial services market. As a successful mutual organisation, Skipton is renowned throughout the industry as a leader in ‘modern mutuality'. This is illustrated by the Society's strategy to use the cost-benefits that its mutual status brings and then strengthen them with a large group of subsidiaries, offering a wide variety of services." Bond comments.

Aligning IT with Business Priorities

"Our aim as an IT organisation within Skipton Building Society is to closely align IT with the company's business priorities and effectively plan, manage and track work and resources. Everything is being scrutinised much more closely by the business and there is no room for rushing IT developments out and then patching issues later. Critical to our success is picking the right work, putting the right people on the work and automating IT processes. We are installing Hydra, a leading project and program management system from The Hydra ManagementPlc , which promises to empower everyone in the IT organisation with tools to perform well across programs, share best practices, issues and knowledge, and improve their project teamwork."

Bond joined Skipton Building Society after a 30-year track record leading high profile development and banking services projects in IT and financial services industries, which included a major European roll-out of a foreign exchange system. He is now responsible for IT in the UK's seventh largest building society which has over 150 people in the dept.

Skipton Building Society

"Skipton is the UK's seventh largest building society and has nearly half a million savers and 100,000 borrowers, serviced both from the Society's Principal Office in Skipton, North Yorkshire and from its network of branches, stretching across the UK from Aberdeen to Plymouth. Alongside the Society's core products of savings, mortgages (both residential and commercial) and general insurance, customers have access to other Skipton Group services, including specialist mortgages, personal loans, IHT advice, wealth management advice, life and critical illness insurance, health insurance and offshore savings."

The Quest to Manage Margins

"One of the key challenges for any financial services organisation is to manage and squeeze margins. Traditionally the interest margins might have been 1.5 per cent or more - a healthier earner for financial services institutions - but now in a low interest rate economy the rate is closer to 1% across the industry. In effect, the core income for financial services companies has been cut by approximately 30 per cent. That is why many executives are looking to get better value out of their management expense, contain costs and achieve real top line growth. The implications for IT departments are not only to introduce new applications and technologies that streamline business practices and improve the trading environment, but also to maximise performance on business projects as well as service-level agreements."

Skipton's net interest margin is, on core activities, one of the lowest in the industry at 0.79%. The interest margin reflects the gap between rates charged to borrowers and rates paid to savers. The smaller the margin, the more value returned to members.

Business Driven IT Department

"We have responded to business pressures by implementing cost-effective technologies that are closely aligned with the organisation's business priorities. But it's more than just implementing IT; it's about getting the whole business involved. There are substantial economic benefits to be gained by ensuring technology investments are firmly tied to strategic priorities: we have moved all our core operational systems away from mainframes to Microsoft Data Centre ServersTM and are exploiting highly scaleable Unisys servers. Skipton has a self-build IT culture, and all in-house development takes advantage of the latest object orientated development environment supplied by Jade. Our technology infrastructure needs to be flexible, agile and scaleable when required. We also find the risks are very different from in-house management and multiple partners."

"We operate a business driven IT department which means we prioritise initiatives on a business case and prove that projects are supporting change by managing service level agreements and benefit streams. Interaction with the business is deemed just as high a priority as cost and budget management because we want to retain our entrepreneurial spirit whilst acknowledging the additional pressures of cost. Consequently, we are looking to improve the automation of our IT processes by introducing Hydra which will allow us to put the right people on the right work, track variations against plan and enable executives to identify and manage change and risk. Adopting best practice in program management will enable us to manage multiple projects and IT service work against the real capabilities and skills of our resources."

Regulatory Change

"We have active projects in all of these areas and manage regulatory and new consumer proposition projects together as they compete for the same IT and business resources. Hydra's portfolio management tool will provide us with a holistic view of projects across the IT organisation and enable us to effectively implement IT governance, planning and new product management in a structured and consistent way. Hydra's unique and flexible approach supports investment assessment, approval and execution - we will not only be able to see our investments and projects from multiple perspectives including cost, expected benefits, risk and schedule but will be able to maximise the use of resources on initiatives that offer the most value to our business."

New Business Initiatives

"New IT and business initiatives that we are currently undertaking include: making product launches rapid and automatic by taking IT off the critical path through the use of next generation software; providing agents with a consistent and holistic view of customer communications across every channel to improve the sales and customer service process; ensuring high automation of mortgage and investment processing by enabling straight-through processing and; enhancing the stakeholder experience by making it easier for staff to provide results to the end customer which translates to a better quality of service."

"When we started the project selection process we identified 42 phases of projects that were competing for the same resources. We didn't have a very objective way of prioritising projects. The interactions and dependencies between one set of deliverables and the next were not easily visible. This meant that we were holding a lot of meetings, undertaking manual correlation of detailed planning, and as priorities changed, spending a lot of time managing the impact. We are an entrepreneurial organisation and always seek to add value through new initiatives. So the ability to be agile and adapt system capabilities is a necessary part of being Skipton Building Society. We therefore needed to manage a project portfolio that is subject to change. In the past it was easier as there may have been one or two big initiatives, but now you are constantly balancing doing things smarter, quicker and managing change."

Adopting Best Practice in Program and Portfolio Management

"These challenges resulted in a tailored requirement for purchasing a program and portfolio management tool. We undertook an extensive review of the market and it didn't take long to realise that the traditional task-centric project management approach taken by many packages really doesn't support ‘joined-up thinking' or provide an extensive, rolled-up portfolio view of projects and programs, enterprise-wide. Contrary to this is Hydra's innovative approach to project, portfolio and resource management which was absolutely perfect to take us through the next phase of company development. Hydra will enable us to find new ways to make better use of our resources and budget, adopt processes that enable us to choose and execute the right technology investments and eliminate inappropriate spending, and make informed decisions that align with our business goals. What impresses me about PMG is that they major in program management, so they don't dilute their focus - you know there's a real passion about getting it right."