A simple chart on a single piece of paper is one of the most effective governance tools used by $900 million online
brokerage firm Ameritrade Holding Corp.
The reporting chart is shared by Ameritrade's IT department with other corporate departments and outside business partners to build trust, according to Jerry Bartlett, senior vice president of application development for Omaha, Neb.-based Ameritrade.
Transparent governance tools to build trust among IT and its business partners is important, Bartlett said, because they demonstrate IT's value to the business, empower IT staff, encourage cooperation among them and drive business success.
"I view transparency as trust, but verified," Bartlett said. The reporting chart was one of the first in-house projects Bartlett initiated when he joined the IT department several years ago. The chart breaks down individual IT projects by total hours spent on tasks and the number of employees working on each task. It also shows target numbers for those categories and the difference between actual and target numbers.
"To succeed, it's absolutely critical to be a true partner," he said.
At his keynote presentation on Governance and Outsourcing: IT as Partner and Leader at a conference hosted by IT executive advisory firm, Robert Frances Group, Bartlett discussed Ameritrade's approach to governance. The conference, "Reducing Risk, Restoring Trust: A Leadership Role for IT" was a two-day seminar, held earlier this month, on managing risk and information security.
Governance -- which can be loosely defined as the daily business processes through which business goals are set, managed and monitored -- can be a sensitive issue, having a tremendous effect on productivity and cost. It can bring significant benefits if executed properly, but also cause major problems if done poorly. "They're not just items to solve small problems and win small gains," Bartlett said. "They can deliver large gains to stakeholders."
Ameritrade's IT department has benefited from the attitude of its CEO, Joseph H. Moglia, who often describes his company as "a technology company in a financial services wrapper," Bartlett said. Of Ameritrade's 2,400 employees, 400 are in the IT department. Moglia's approach enables IT innovation, Bartlett said, including the clear, straightforward governance chart.Priorities are Job 1
A short list of clear priorities is key to deciding how, when and where to invest resources, Bartlett said.
Twice per year, Moglia sits down with IT executives to plan the next six months worth of technology initiatives. Together, they prioritize projects, allot money for discretionary development and adjust the overall budget. The executive involvement ends there, with the departments empowered to set and execute on the handful of priority items.
The tiered priority list enables quick decisions and fast action, Bartlett said. A long list with dozens of bullet points means questions get bumped back up to the executive level and wastes time as workers await approval from the higher-ups.
Tiers allow the department to quickly complete smaller projects when the resources become available, rather than waiting for additional staff to join them in a larger project. The transparent reporting chart enables such projects because staff resources are closely tracked and readily available.
The priority list also allows the company to quickly respond when business conditions change.
"If you don't have a clear set of priorities, you create confusion," Bartlett said. "Without clear priorities, you're shortchanging the organization when it comes to decision making and making decisions quickly."
Upon approval, new projects are measured and tracked along several metrics, such as length of time, number of staff and cost. Ameritrade's goal when rolling out new products is to plan, test and get new projects into production within 12 weeks. These targets and metric measurements are reported to business partners, with constant improvement sought.
"Our goal," Bartlett said, "is to deliver the future to the individual investor smarter, faster, cheaper than anyone dreamed possible."