Don Anderson, Senior Vice President and Chief Information Officer at the Federal Reserve Bank of Boston, discussed what it takes to use technology to automate back office tasks during his keynote presentation to Argyle’s CIO membership at the 2018 CIO Leadership Forum: Data Strategy & Innovation in Boston on May 2. In his presentation, “Automating the Back Office,” Anderson described how his organization’s efforts to automate and scale its back office activities are driving increased productivity and efficiency.
Machine learning, artificial intelligence (AI) and other state-of-the-art technologies are helping businesses across all industries drive unprecedented results. Yet incorporating innovative technologies into a company’s everyday operations and maximizing the value of these technologies often can be difficult.
For the Federal Reserve Bank of Boston, the organization strives to use best-in-class technologies to automate its back office operations. However, the organization has encountered many challenges along the way.
Massive amounts of data are readily available to the Federal Reserve Bank of Boston. But streamlining data collection and analysis had been problematic due to limited adoption of machine learning and AI.
“At the end of the day, we’re taking all of these algorithms and crunching them,” Anderson said. “So, just imagine what we could do with large amounts of data.”
The Federal Reserve Bank of Boston also faced technical challenges due to back office solutions developed and deployed by third-party vendors.
“We’ve got a lot of technical challenges, and the way we’ve built out our back office, there’s a lot of one-point solutions,” Anderson indicated. “This led to a lot of security issues and a spider web of data.”
Furthermore, technologies that could have helped the Federal Reserve Bank of Boston keep pace with various financial industry regulations were not implemented into the organization’s everyday operations.
“We’re not regulated, but we’re heavily audited and scrutinized,” Anderson stated. “But imagine if we were able to feed large amounts of data using machine learning and focus on the risks that an organization is facing.”
Change management proved to be a major issue for the Federal Reserve Bank of Boston, too. Although the organization wanted to integrate new technologies into its day-to-day operations, driving change across multiple departments was difficult.
To obtain buy-in throughout an organization, it is paramount to highlight the benefits of new technologies to key stakeholders. That way, CIOs can show CEOs and other business executives how new technologies can lead to meaningful business improvements.
“We need to do things that are going to add value and change peoples’ lives,” Anderson indicated. “But you’ve got fear of change and other things that [may prevent this].”
CIOs must foster a culture that encourages innovation and transformation. If employees are willing to buy-in to new technologies, they could incorporate these technologies into all departments across an organization. As a result, an organization could use new technologies to automate many back office tasks.
“The technical stuff is easy … but [the problems] really involve the culture and a fear of change,” Anderson stated.
Moreover, CIOs must take ownership of back office applications. If CIOs dedicate the necessary time and resources to learn about these applications, they can identify app problems before they escalate. This enables a company to minimize the risk of obsolete or ineffective back office applications that otherwise may hinder a business’ productivity.
“In many cases, if somebody doesn’t say, ‘I own it,’ then nobody really does anything about it,” Anderson noted. “With a lot of our back office applications, no one took ownership, so they sat there.”
Strategic decision-making plays a key role in the overall effectiveness of technology investments as well.
If CIOs collaborate with multiple business departments, they can determine which technologies can help a company accomplish its immediate and long-term goals. Plus, CIOs can implement technologies that are scalable across an organization’s back office operations and will serve a company well for an extended period of time.
“When you’re allowing a business department or business line to make a decision about something that is not strategic, chances are this department or business line is going to mess it up,” Anderson pointed out.
CIOs should teach business departments about how different technologies work and their benefits. By doing so, CIOs can help employees leverage these technologies and optimize their value.
If CIOs can show employees how assorted technologies can help these workers streamline their everyday operations, a business and its workforce could benefit. In this scenario, employees can use myriad technologies to become more productive than ever before. At the same time, a business can leverage technologies to reduce its operating costs, bolster its productivity and accelerate its revenue growth.
“Keeping people not focused on the technology is important,” Anderson said. “We want to keep people focused on the business capabilities of technology and what they hope to achieve [with it].”