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Culture and Partnership
When it comes to company resources, information is critical. Companies of all sizes can thrive or fail based on their ability to access reliable and current information about costs, customers, competition and more. Gone are the days of the business treating IT as order takers. IT and the products it delivers is the engine that drives an organization to make better decisions. When leaders recognize the value that data, innovation and business intelligence bring to the table - and the interdependencies among them - the result is better business performance.
IT Investment Tied to Business Imperatives
At Capital One Financial Corporation, business is keenly focused on offering a variety of consumer lending and deposit products. As the competitive environment in the financial services industry has continued to intensify, we recognize that our businesses will continue to demand greater innovation, flexibility and efficiency from its IT organization.
Helping our lines of business better prioritize projects and maximize IT spend were the driving factors in the implementation of Value Chain, a multi-pronged approach to revamp the way the company prioritized, scheduled and staffed IT projects.
The key to managing this cultural shift was asking the business to help own the IT portfolio, and getting divisions in the same room at the same time to prioritize the projects in the pipeline. Prior to this, requests from business units were decentralized, sometimes leaving IT with questions as to which projects were most important. By standardizing the prioritization process, internal business partners receive a transparent view of IT scheduling, delivery and, most important, cost.
Born in our U.S. Credit Card division, then rolled out across the enterprise, the overall results have been compelling. Our portfolio of projects has been greatly reduced in terms of the number of projects being requested. At the same time, there has been a significant increase in the number of projects and the revenue value delivered.
By creating a clear Value Chain of decisions for the business, we have transformed our IT product portfolio. By reviewing areas/processes/platforms we've targeted for investment based on business imperatives, we can deliver the right projects with the right resources on the right schedule. Integrated processes have eased staffing constraints in key areas and produced solid results: more than 130 IT projects were delivered for the U. S. Credit Card division alone in 2005, almost 50 percent more than expected
What may be the most remarkable aspect is how it all happened - through partnership and teamwork, sharing of labor and taking on new responsibilities. Several hundred people pulled together and not only helped deliver, but exceed, some lofty goals for staffing and delivering projects. This is indicative of the people and the innovative culture at Capital One that fuels success.
Innovation through an Information Based Strategy
Innovation at Capital One means not just creating something new. It means creating something of value to both customers and the company.
One requirement for a successful business-technology partnership is to have a culture that can quickly change and adopt innovative solutions. We're fortunate to have an environment that loves to experiment and that keeps our technology thinking fresh. It's something we work at every single day.
Because the business of Capital One revolves around data and the use of technology to make use of information, data is critical to our success and is the foundation of our Information Based Strategy (IBS). IBS combines advances in information technology and sophisticated analytical techniques to identify, manage and take advantage of business opportunities. It has given us the ability to use technology to improve customer service, increase productivity, save money and grow as a company.
The key to IBS is mass customization, scientific testing and information technology. Scientific testing spawns continuous, breakthrough innovations, which in turn become products that are of value to our customers. Behind the scenes, sophisticated relational databases enable IBS. We use databases to analyze transactions of consumers and to test new product ideas. The process helps Capital One identify winning ideas before money is committed to marketing a product.
BI Optimizes Process and Decisions
In addition to powerful databases, we utilize business intelligence (BI) which in turn ably supports IBS. BI refers to a variety of software applications that analyze the raw data we gather and extracts useful insights from it. BI as a discipline is made up of data mining, online analytical processing, querying and reporting.
Within any company, there are always many opportunities to save money by optimizing business processes and focusing decisions. At Capital One, we have found that our ability to analyze and creatively interpret terabytes of data creates a competitive advantage, making BI essential to our daily operations.
Collaboration and Alignment
Our BI initiatives are closely aligned to our business strategies. As we go down the road of implementing new products or processes guided by BI analysis, we identify potential trouble spots and address them head on.
We have found that it is important to analyze how our executives work and consider what information they need in order to facilitate quick, accurate decisions. In the planning process, we assign system architects to interview end users in attempt to address concerns up front. We instruct skilled developers to pay close attention to data quality and devise performance metrics that are most relevant to the business. We then task project managers with providing accurate performance metrics. We test, we learn and then we repeat the process all over again. It's a formula that has worked well for us.
Agile Methodologies
BI analysis on more than one occasion has inspired Capital One to launch a new product.
Getting products to market quickly is an enormous pressure on any business. Traditionally, companies in the financial services industry have been slow to adopt new software development methodologies and embrace innovation. Products tend to be developed in stages, with code available for customer review at the end of each stage and additional features added in each of the iterations until full functionality was achieved.
Capital One has adopted a new system for speeding up the way it develops new products for its customers. Called the Agile Method, it requires tight collaboration between product and IT managers, who physically relocate into a shared space during the development process. The results have been extraordinary.
Since January 2005, we have completed 20 projects using Agile Methods and have 30 others in the works. Pilot projects have realized from 30 percent to 50 percent and greater improvement in time-to-market. For example, two projects were completed and delivered within 10 weeks using Agile, versus the average of 16 to 18 weeks for projects of the same size using our traditional methods. Agile is helping Capital One pull revenue forward more quickly, beat competition to the punch and deliver innovative products to customers more quickly than ever.
Collaborative, co-located developers working in shared space are able to build relationships and hash out issues as they arise. Capital One IT associate reaction has been very positive, tied to reaching quicker outcomes and stronger camaraderie. New working relationships are built daily throughout the company as contributors on all levels are drawn into projects. Most important, business and technology specialists are working together to create strong business outcomes.
Getting Results: Strategy Matters
We are proud of the fact that we have been able to move from a position of strength to make business decisions based on a need, opportunity or a BI analysis. We would be the first to admit that technology alone does not provide competitive advantage. But, the strategic use of IT to improve processes can strengthen competitive position.
When leaders recognize the value of IT and make it a core competency, they make better decisions, have more disciplined management processes and govern with performance-based metrics. The result is a stronger bottom line and better business performance.
Katherine Busser, CIO, U.S. Card Division, Capital One Financial Corp.
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