RBS Meltdown a Sign of the Times

Headline December 3, 2013:  RBS admits decades of IT neglect after systems crash

Four years ago I returned to Canada after spending a couple of years in the UK working for a leading Global Bank.  After acquiring over a decade of technology debt, this Global Bank had decided it had two choices:  transform itself or be acquired.  It chose transformation.

And this was the beginning of a business and IT transformation that saw the creation of a three-year, £240M investment program called “Getting IT Right”.  I was recruited by the Group CIO to implement a COO function within Information Technology, which at that time in the Retail & Commercial Banking arm (not including Capital Markets) had over 7,000 FTE on-shore and off-shore.  Part of my role involved managing Getting IT Right, which included determining how our £240M pool of discretionary funds would be allocated to projects to fix IT services, improve efficiency, introduce greater transparency to business and ultimately, to invest in the platforms and services appropriate to a leading global bank.  This was a world-class case study on how to renovate, modernize and transform a highly neglected technology estate and application portfolio on an international scale and I had a front row seat.

Flash forward two years and while back in Canada, I was contracted to lead a modernization of two five 9’s data centers that had been neglected for over five years.  Life critical applications were being developed and expectations were that the data centers be modernized NOW.  In this case, the data center transformation was everything from data center cabling, the DC network, frame storage, security and virtualization.  Work that took exactly a year to complete.

Flash forward another year and I find myself at a large transportation and logistics company – doing what?  Transformation of an IT function and systems that had been neglected for about 12 years.  This transformation involved everything from enterprise architecture, data center operating system upgrades/replacements, security governance and operations, application portfolio version upgrades, implementing disaster recovery site and protocol, standards, methods, process and governance.  We introduced certification for our professionals and ran the six-week programs to allow our staff certification of business analysts, project managers, quality analysts and architects – accredited by George Washington University in the case of the former and TOGAF in the case of the latter.  This transformation took two years to complete.

So that’s the side of the story wearing my technology hat.  But lets put on a business hat for a moment and reflect on what might have happened to these organizations had they not chosen to reverse the certain collision course that they were on for some kind of major meltdown.

In our leading Global Bank, “shadow IT” was everywhere.  The card products business people had arranged their own outsourcing for the merchant component of their application because the cost of internal IT was deemed to be too high.  However, the deal they negotiated had no disaster recovery and no provision for right of first recovery in the event of an incident.  So when the outsourcer had a fire in their data center, there was no priority to stand the cards application back first.

This type of “shadow IT” may have continued unabated and make no mistake, bad technology can take down highly complex, aging and integrated applications. RBS is an example of this.  And in a perfect storm could put a company out of business.

In the case of our government agency, they would not have been in a position to host critical applications under development – an activity that is central to their mandate.

In the case of the transportation and logistics company, their modernization took two years.  If they had not taken that course and made the investment, they would not be pursuing major strategies now underway.

Technology is central and critical to everything a business does and the days of wondering if “IT matters” are long gone.   As Bob Dylan said “the times they are a-changing”.  And it’s about time. RBS is an example of where many companies could be heading if they have neglected their IT estate and applications – and I suspect there are a lot of companies out there that fall in this category.

About Heather Cambpell

Heather Campbell is Executive Vice President, Transformation. Heather specializes in supporting organizations that are undergoing complex IT Transformations. As the former CIO of Canadian Pacific, Heather led a highly successful three-year transformation and modernization of the IT portfolio until spring 2012.

Previously Heather was the COO, IT Division, Global Retail and Commercial Bank at Barclays PLC based in London, UK. There she led an IT transformation under the banner of “Getting IT Right”, a three-year £240M investment program focused on fixing IT services, improving productivity & efficiency, introducing greater transparency to the business and directing investments in platforms and services appropriate to a top five leading global bank.

Heather has held executive positions at Rogers Communications Inc., BMO Financial Group as well as senior management positions at CIBC and KPMG.

Heather has won numerous industry awards for her work in IT including a CIO Canada award for teamwork in the development of an online trading system for BMO Nesbitt Burns private clients. In 2012 she was the only Canadian CIO to receive a Transformation CIO Award for her work at Canadian Pacific from the CIO Executive Forum based in Boston.

Heather has an MBA from Queens University and is a graduate of the Directors Education Program at the University of Toronto’s Rotman School of Management. Talk to Heather about the future role of the CIO.