As legacy systems fall out of favour, many firms are installing new technologies and implementing new processes to manage their information and regulatory obligations. However, it is no longer enough to simply install new systems; firms should be taking steps to ensure those systems are well-oiled and that the operational framework surrounding them is working effectively. With that in mind, we spoke to MC Bernstein Data’s Lynn Molfetta to better understand how businesses are approaching operational effectiveness in practice.
We are increasingly seeing firms struggle with outdated systems and instead investing in new technology to manage their operations. From where you’re standing, are firms building the correct technology framework, with the relevant tools to maintain and manage it?
Companies are increasingly investing in new technology to manage their operations, but an effective technology framework requires a multi-dimensional approach engaging senior stakeholders who can formulate an enterprise-wide operating model that considers Regulatory Intelligence, Governance, Information Governance Technology, and Data Identification and Retrieval. Establishing clear organizational goals, capabilities and responsibilities requires knowledge, people, and processes across all components, supported by appropriate technology. For firms that want to update their technology they must update their approach as well.
At the end of last year, a large financial institution was penalised by the regulator because it had installed a compliance framework but failed to notice that it wasn’t operating. Where firms are installing new technology or new systems – are you seeing that teams are being trained to use the tech properly? Are staff able to check the technology is working correctly, throughout its lifecycle?
I am not surprised that a company installed a compliance framework and lost sight of the ongoing maintenance and lack of controls. Installing a compliance framework is step one. Step two is to ensure there is good information governance that requires ongoing training, monitoring of controls, and management oversight. Companies should approach information governance just as they do other imperatives – focusing on the critical risk and business objectives, and implementing the right operating model. You can’t expect technology to take the place of human intervention.
Technology vendors offer varying levels of training and support, based on operating models and negotiated agreements. As a result, training and lifecycle management checks need to be established internally as business-as-usual. Otherwise, the technology cost could be just an expense, not the investment it should be.
What about legacy systems that are clunky or ineffective – who is testing these? When should firms make the call to look at new models? Installing new technology and systems can often be disruptive. How can firms best implement new models while retaining business-as-usual throughout implementation?
Today, companies have no choice but to address legacy systems. Digital technologies such as cloud-based systems help companies save money, create efficiencies, enhance quality, and promote business products. Legacy systems are typically incompatible with new technologies, costs companies a lot of money to maintain, and impede digital transformation programs.
To eliminate business disruption, IT must apply an interdisciplinary approach ensuring key stakeholders are engaged and linking the benefits of digital transformation to the information governance strategic initiatives and organizational goals. With the growth of data, companies are finding it difficult to govern and safeguard information, do not have the time or budget, let alone have the ability to garner executive understanding and sponsorship. Engaging stakeholders early on in the process saves time, money, and ultimately gains the knowledge, backing and support needed during the implementation process and for ongoing business-as-usual.
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