Taking IT to the next level

Business Management talks to Basil AbdelNabi, Head of Information Technology for Arab Bank, about the challenges facing today's CIOs.

“The supply and demand situation for skilled IT resources has not changed much during the global crisis in the many regions where Arab Bank operates, and this has prompted us to broaden recruitment strategies”
-Basil AbdelNabi

The job of CIO/Head of IT is increasingly seen as moving from a purely technical to a more managerial focus. Do you agree with that assessment?
Basil AbdelNabi. Of course. The mix of skills that CIOs must possess has increasingly taken a management focus in the past two decades, which is not really a recent development. Managing an IT function requires a complete grasp of all aspects of running any business, far and beyond the technical dimension. This involves the management of budgets, staff, quality, delivery times and cost effectiveness, and most importantly, the understanding of business needs and alignment with corporate strategic goals.

IT is an organisational enabler impacting practically all processes and employees. The mix of systems requirements and business needs exceeds most other industries in technical and regulatory complexity. Effective IT management requires a thorough knowledge of managerial skills, business, regulatory and technology trends to allow optimal alignment to corporate strategy. To effectively meet the demanding regulatory and business requirements, all bank processes must be integrated seamlessly into a cohesive whole. This enables the bank to successfully and competitively address local market demands, mounting regulatory standards, internal process controls and the delivery of quality services to various customer segments, each having different priorities and needs, around the clock and around the globe.

How do you think the role of CIO has changed over recent years in general?
The role of the CIO has taken a broader business dimension. CIOs are more involved in participating in the prioritisation of bank strategy and the subsequent translation of the strategy into a portfolio of programmes and projects covering systems implementation, automation of processes, process re-engineering and delivery of 24/7 services. IT staff are responsible for providing cost-effective solutions that are aligned to the bank's strategy, and thus need to master a variety of skills. These include knowledge of business processes, in order to facilitate the prioritisation of functional and technical needs; creativity in providing low-cost short-term tactical solutions and workarounds until the strategic projects are in place; and leveraging outsourcing options through strategic vendor alliances.

The CIO's title itself places emphasis on information as opposed to technology. Thus CIOs today need to focus on business value creation, to understand core business processes, ensure service continuity and quality and to have access to all the required metrics to measure and track progress on these fronts. CIOs need to know how to manage risks, whether this involves the delivery of new systems, dealing with process risks or maintaining high availability of current services. Finally, CIO roles include the ability to solve business issues and communicate the impact of their initiatives to business stakeholders, in addition to having a sound knowledge of technology best practices and rapidly evolving standards.

IT is no longer seen as a commodity, but as a vital factor in supporting business and driving competitive advantage. Is this the case at Arab Bank, and how is technology being utilised to improve performance?
IT has been compared in industry circles and from an operational aspect, to utility businesses such as telecoms; however, IT is also a primary business enabler as well as a direct factor in achieving higher business efficiencies and customer satisfaction. Banks achieve competitive advantage today directly through technical innovation and time-to-market of technology solutions. Bank management is very aware of this, and have supported IT-related strategic initiatives by establishing some years ago bank-wide functions, such as the enterprise project management office, to ensure that global strategic projects are governed in an effective and systematic manner to achieve timely completion.

The Chairman and CEO of Arab Bank follows up on the progress of all strategic projects and provides his full support to these initiatives. Other initiatives have been carried out to implement sound IT governance processes, to ensure that strategic projects are business-aligned, and to ensure that they are governed under one set of policies and standards, through the implementation of projects such as enterprise project management systems and enhanced organisational structures across all business and support units. Such a setup ensures a high rate of success across strategic projects, by enabling better accountability and holistic project management across all concerned divisions.

Would you say that the top management at Arab Bank are alive to the transformative power of technology? How difficult is it to convince the board of the necessity of investment in IT?
Top management is indeed aware of the transformative power of technology, and the process of obtaining the required endorsement from management is a systematic and orderly one. It involves the development of business cases and ROIs for every initiative, prioritisation of projects within each division, and later, reprioritisation of strategic and tactical projects across the bank. This approach provides a healthy business/IT alignment and ensures quick buy-in from all business units and from the board. The Chairman and CEO, Abdel Hamid Shoman, has always been a supporter of obtaining the necessary technological advancements in terms of systems and software, and has set the tone for the bank in terms of how important IT is, not only for the business, but for customer service and efficiency.

Most of the world is suffering in the global recession. How has Arab Bank been affected and what impact, if any, has it had on IT and your budgets? Have you been asked to do more with less?
Despite the financial crisis, Arab Bank achieved record profits in 2008 and has maintained healthy ratings from rating agencies. Despite the financial crisis, IT investments this year have exceeded prior year budgets by a considerable margin. However, IT is always accountable to do more with less, and we have managed to cut unnecessary costs by identify cost-effective solutions, eliminating custom systems that require costly maintenance, merging multiple solutions and eliminating redundancies. As systems and processes are consolidated, so are vendors and their maintenance and support contracts. By the same token, virtualisation of hardware is an ongoing process to optimise processing power and minimise power consumption, training and system administration needs.

What are some of the main IT challenges you face at the bank, and are any of these challenges unique to the Middle East?
Some of the main challenges relate to finding competencies on niche technologies where skills and vendor support are sparse in the region, which we are managing to address through selective strategic partnerships and outsourcing through local and multinational vendors. The supply and demand situation for skilled IT resources has not changed much during the global crisis in the many regions where Arab Bank operates, and this has prompted us to broaden recruitment strategies and to enhance skills through increased online and classroom-based training programs.

What is your approach to technology: do you build in-house or buy in from external developers? What factors inform these decisions?
Our strategic direction is to acquire packaged best-of-breed solutions. This constitutes the bulk of our applications today and was one of the drivers to eliminate countless custom applications, thus considerably lowering maintenance efforts and mitigating operational risk. Some development is maintained across country-specific and niche applications requiring localisations or custom-tailored functionalities. The additional factor that drives this decision in addition to risk mitigation is the faster time to market for product and service delivery through system configuration and parameterisation as opposed to software development and customisation.

What do you see as being your main priorities over the coming months and years?
IT organisations in multinational banks are required to deliver quality services and localised products, achieve quick time-to-market and implement cost-effective solutions. Working in such a global and complex environment requires the ability to achieve economies of scale through standardisation, centralisation, automation and optimisation of service and support processes. Our main priorities are to deliver on our three-year strategic plan, while continuously enhancing our services and new technology by delivering faster, more cost-effective and higher quality value-added services.