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Technology

How American Express Increased Transparency in 2019

At the September 2019 Committee on Finance and Information Technology (CFIT) Meeting in New York, Vincent Cartafalsa and Maria Savage, both Directors in the Finance Technology & Innovation Department at American Express, provided an overview of the company’s fintech transformation journey.

After some previous transformation successes within selective parts of American Express Finance, attention turned to the entirety of the department and how the overall technology investment process could be more effectively planned and managed at a portfolio level.

What led to this examination? Even with their past successes, there were several areas American Express found would benefit from continuing on the transformation journey:

  • Historically, all finance technology investment decisions were siloed and made within each functional group (project-level, ground-up approach).  While pockets of cross-functional conversation existed, there was no strategic program that addressed the portfolio (top-down) holistically on roadmapping or allocation of funding. This made meaningful communication of progress extremely difficult at the executive level.  
  • Ranking of these investment decisions also proved difficult, as they were spread across both regulatory requirements and some harder-to-quantify areas that had no existing reference points (such as implementing new frameworks and multi-year journeys to improve data and infrastructure platforms).
  • The regulatory environment required the majority of finance’s technology investment dollars.   This resulted in a much smaller portion spent on other initiatives, even though some of these other areas may be highly strategic in nature and foundational for future growth.  With scarce resources, the question then became: how do we right-size all investments?
  • The relationship between the finance department and IT became strained at times over ineffective communication and fulfillment of these competing priorities.  This made it difficult to see beyond short-term reactive outcomes and drive toward the more meaningful and strategic business outcomes of the long-term.

With all of those factors as a backdrop, it was clear:  Transformation was very much still in need – now at an even larger scale.  Finance decided on an agile approach. The objective was to change the way the company went about making decisions and how they were carried out.  It was also necessary to engage and partner with the technology department in a better way.   This could help remove some of the reactive and opaque work efforts and evolve the process into a more transparent, rolling, and forward-looking view.  Finance identified a core group of people to form the American Express Finance Technology and Innovation Team.  

With the team in place and some of the objectives now clear, the group moved quickly to begin improvements in the following areas:

  • Bridging the product owners with their technology counterparts in a constructive, governed forum that occurs on a regular ongoing basis
  • Identifying true pain points and value positions
  • Visioning for success and how to measure it
  • Mapping between today and tomorrow (with steps on how to get there)
  • Integrating the executive level strategic themes with the tactical planning and delivery (in terms of messaging, systems, technology, and people)
  • Creating transparency on spending and when outcomes were truly being achieved

One of the most significant priorities in the first year of the team was development of a governance process in which the team bridged both Finance and Technology departments through a monthly Fintech Steering Committee (consisting of the CIO, CFO, senior leadership, product owners, and technology vice presidents).  This fintech steering committee was used to develop and refine an overall strategy for the transformation, which is continually reinforced throughout both the governance process and the cadence of work through collaborative meetings.

It was essential that there be constant communication among all of the stakeholders (from executive leadership down to the tactical managers) in order to align with this strategy.  These two aspects, the governance and the steering committee, brought the right people to the table with the right priorities to begin correctly ranking and making decisions on outcomes.  It benefitted everyone involved and gave the executive leaders the frame in which to have the right conversations.  It gave the product owners the go-ahead to plan on true priorities in an agreed upon sequence.  And it gave IT a better starting point from which to execute and deliver on their work. By continuing to leverage this collaborative approach, the Finance Technology and Innovation team intends to continue driving change across the finance organization.  

The biggest lessons learned: Communication, definition of roles and responsibilities, portfolio segmentation and a prioritization scoring model, are all critical to obtain a picture of themes, priorities, and allocation of capacity.  And when governed effectively, this will build the foundation to support the future of technology enablement, engagement of teams, and growth in the broader business. American Express has genuinely increased transparency and engagement at all levels of this agile process and capacity in now being managed and reported on in a rolling view.

Now that a baseline has been established, a next step will be to drive a more focus on innovation through existing and emerging technologies.

 

At the time of this writing, the finance transformation is expected to be an ongoing process at American Express and the Finance Technology and Innovation team was embarking on a new round of planning for a robust 3-year strategy to begin in 2020.