Half of financial services firms are focusing their strategies on market-facing innovations, according to Diamond Management & Technology Consultants, Inc.® (NASDAQ: DTPI). The problem is, chief information officers at most of these firms are missing out on the opportunity to contribute toward growth.

The results of Diamond's Third Annual Diamond Digital IQ® Study uncovered a troubling trend for CIOs across the retail, commercial, and investment banking sectors. While 74% of financial services CEOs and senior-most business leaders are active champions of technology, and many of these firms rally around innovation strategies, only 24% of the CIOs at these firms are primarily responsible for customer-facing technologies.

?Technology can be the engine behind increased profits, loyalty-building customer experiences, and the ability to navigate today's dynamic regulatory environment,? said Jeff Hesse, managing partner of Diamond's Financial Services practice. ?The CEO who isn't leveraging and demanding more market-facing innovations from the CIO, and the CIO who isn't engaging in and driving these strategies with business leaders, are both missing the mark. At risk is not only better overall company performance, but also the possibility of losing the ?C' in their titles.?

Diamond asked 724 senior business and IT executives?160 of them from financial services firms?their opinions on topics such as the CEO's role with respect to IT, the CIO's role in business innovation, overall business/IT alignment, and IT management practices. Collectively, responses help determine a company's ?Digital IQ.?

The Diamond survey results seem to imply a shortcoming of the CIO. Based on the data, it appears the CIO's role has been weakening precisely at a time it should be growing stronger, given the advent of new technologies that could potentially improve business more than at any time since the emergence of the Internet in the late 1990s.

?Financial Services executives we surveyed put ?leadership abilities' and ?innovative thinking' at the top of their IT executive wish lists?much higher than ?deep experience in running IT operations,'? said Chris Curran, Diamond's chief technology officer and co-author of the study. ?The business clearly wants the CIO to drive growth as well as lead the IT function, but it appears the vast majority of these CIOs focus mainly on improving the IT organization and business processes.?

Diamond's Third Annual Digital IQ Study is available by request to DigitalIQ@diamondconsultants.com, and available online.

The C-Level Executive with Multiple Hats

More than any other C-suite member or functional head, the CIO fills both ?staff? and ?line? roles. In the staff role, the CIO has to provide the information to control the business, comply with regulations, and measure performance. In the line role, the CIO drives productivity, increases sales, and helps foster innovation.

Some financial services CIOs are meeting the challenge to drive significant business value at their firms. Diamond's survey results indicate that what sets these firms apart is an executive team that creates an environment where three critical dynamics foster better performance:

  • Alignment – Business and IT leadership, and their respective strategies, are tightly integrated.
  • Mobilization – The CIO ensures that there is a roadmap in place for the corporate strategy.
  • Execution – The ability to effectively translate strategy into results is bolstered by sufficient resources and clear accountability along the way.

?There is no question that alignment starts at the top, but it's up to the CIO to create the ?trifecta' of alignment, mobilization, and execution,? said Hesse. ?The overall survey data show that higher-performing organizations are three times as likely to have confidence in the CIO.?

This year's Digital IQ study offers clear direction for organizations who expect greater value from their IT investments.

First, it is vital that the CEO expects the CIO to deliver both excellent leadership of the technology function and also drive growth in the business. Second, CIOs who demonstrate they are capable of delivering on their staff responsibilities by providing excellent support to the rest of the business must be engaged with rest of the senior executive team. Third, the CIO needs visibility into all IT spending, even if control of some spending lies outside the IT department.

?The financial services CIO can only create real value if he or she is helping shape strategy, resource allocation, and execution plans,? said Hesse. ?CEOs will miss opportunities if they view their CIO simply as an order-taker and not a ?demand-shaper.'?

About Diamond

Clients trust Diamond Management & Technology Consultants, Inc. (NASDAQ: DTPI) to help their companies grow, improve margins, and increase the productivity of their investments. Working together to design and execute business strategies that capitalize on changing market forces and technology, Diamond's consultants are experts in helping clients attract and retain customers, increase the value of their information, and plan and execute projects that turn strategy into measurable results.

Diamond's capabilities are rooted in deep strategy, technology, operations, and industry experience. The firm's approach to client service is based on objectivity, collaboration, and an unwavering commitment to its clients' best interests. Headquartered in Chicago, Diamond has offices in New York, Washington, D.C., Hartford, London, and Mumbai. To learn more, visit www.diamondconsultants.com.

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Diamond Management & Technology Consultants, Inc.
Nicholas Braude, Media Relations, +1.312.255.5802
nicholas.braude@diamondconsultants.com
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Christian Sadlier, Investor Relations, +1.312.255.5711
christian.sadlier@diamondconsultants.com