At Barings, IT culture change pays dividends

Sometimes enterprise require a culture shake-up — or at least a culture harmonization, as Barings CIO Andy Lennon learned when he accepted the challenge of unifying up 5 organizations under on tech umbrella.

Culture is the hardest thing to change in a global enterprise, especially when it isn’t unified. Barings CIO Andrew Lennon tackled this task when he agreed to band together five disparate IT organizations with a goal to create higher value through self-service capabilities.

“We needed a cultural overhaul within IT,” says Lennon, who accepted the challenge at the MassMutual-owned financial services subsidiary in 2016. "We want to be value creators and partners with not only our business but our clients."

The change required Barings' IT to evolve from the traditional service provider to an equal partner capable of collaborating to create value. Value co-creation between IT and the business was a hot topic at the MIT CIO Sloan Symposium in May 2019, where IT leaders were game to buck tradition. As McKinsey Digital partner Belkis Vasquez-McCall noted during a Symposium panel discussion, "In the past, the business defined how to solve a problem and looked to IT to solve it. Now IT executives are co-defining the problem and leading the evolution around defining a solution."  

Put another way, it's no longer enough for CIOs to align IT strategies to business needs; now they must co-create solutions that serve customers. It's an ethos Lennon has adopted as he enters his fourth year leading IT at Barings, whose integration of Babson Capital Management, Cornerstone Real Estate, Wood Creek Capital Management and Baring Asset Management and its 2018 acquisition of Triangle Capital have created a global asset manager north of $300 billion. Lennon sees his IT investments as paramount for helping augment humans with technology, ultimately to drive margins and boost the bottom line.

First step: Insourcing

When Lennon surveyed Barings’ various IT organizations, he quickly learned that most were outsourcing technology services to partners. Babson, the largest of the brands, consumed tech services from MassMutual. Smaller brands used a hodgepodge of tools from third-party vendors.

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Lennon took a green-field approach, building new data centers and a new wide-area network from scratch. He also consolidated Barings' unified communications and collaboration stack under one umbrella to support more than 2,000 associates spanning 40 offices in 18 countries. He worked with Gartner on developing a change management strategy to suit the business. There were countless analyst calls and workshops. Lennon notes one saving grace: Each of the businesses’ tech teams were resourced well enough to pull off the tech unification.

Andy Lennon, CIO, Barings Barings

Andy Lennon, CIO, Barings

“I’d say we’ve done a decent job eliminating or trying to eliminate the shadow IT concept and harmonizing tech into a single unit,” Lennon says.

Barings also now leverages cloud strategically, using SaaS providers such as Salesforce.com to engage with clients, Workday for human resource and Microsoft Azure to pursue data science and machine learning projects. At a time when major finserv brands such as Capital One and others are committed to the public cloud, Lennon says he is continually evaluating the market and looking for opportunities to increase cloud workloads, ideally to free up the staff to focus on more business-critical projects. "Cloud is on our roadmap as we think about the next-generation of our business strategy and our ability to move workloads and data around the globe," Lennon says.

Building toward a self-service future

As most of the foundational elements were implemented, Lennon turned his focus on “looking outward,” querying clients on what they wanted from Barings. In a nutshell, clients demanded more access to information. To that end, Barings' "holy grail" is creating a self-service experience for employees and clients, Lennon says. Ideally, Barings will create an API layer to allow staff to gain documents and insights into clients' investments via a portal. Clients meanwhile would be able to access information about their accounts in a way that they are accustomed to accessing digital services from other consumer brands. A self-service system would reduce process overhead in client services.

This is no easy task; the data layer, collected from internal and external sources, must be rock-solid before Barings can make it accessible via a self-service portal. That requires a lot of master data management work to clean and manage the data in accordance with regulatory and compliance requirements. "To get to that ultimate state, there needs to be change on both sides," Lennon says. "We have to be willing to be that open environment to clients."

In 2020, Lennon is also focusing his team on reskilling and business process optimization that will help employees get more value out of their time spent serving clients while also future-proofing the business. He is retraining infrastructure engineers on cloud solutions, while others are dabbling in low-code and no-code software development. Software bots that automate basic tasks, such as information or help-desk requests, are also on the roadmap.

The ideal endgame is, of course, value creation for Barings. "The important thing was to ensure that we were being enablers — not falling back into the mindset of providing a service," Lennon says. “Tech is a major player in driving our ability to create value for clients.”

Lessons learned

Lennon offers the following tips for CIOs conducting large-scale IT transformations.

Change comes from within. To move beyond the “service provider” stigma, Lennon knew instituting a new culture in IT was critical. “IT can’t change the business without changing themselves. And everything we do had to enable the business to be better,” he says.

Blinders on. To harmonize IT, Lennon forced himself and his team to “work behind the scenes while being blind to the fact that the business needed to continue to operate.” That helped alleviate some of the pressure of the IT work during the transformation, while enabling the business to “march forward and gain share,” he says.

Copyright © 2020 IDG Communications, Inc.

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