Digital transformation: how to meet the challenges of a federated organization


At the start of 2019, I started my role as Business Transformation Manager for the Federal Reserve System, head of the digital transformation direction of finance, human resources and purchasing.

As the central bank of the United States, the Federal Reserve is a federated organization made up of 22,000 employees in the 12 reserve banks. Each bank is its own separate legal entity with its own board of directors, CEO, CFO, IT director, and senior human resources and purchasing managers.

Over the years, technology has consolidated while processes and capabilities have remained disparate, and it has become increasingly difficult to deliver even basic capabilities. With over 40 disjointed legacy applications, most of them in-house, and a high degree of customization supporting proprietary business processes, the system was expensive and difficult to maintain. New hires were frustrated with the poor user experience and difficulty accessing data, and collaboration and innovation was hampered.

It was time for a transformation.

When we launched our transformation initiative, we knew it would be difficult. From a business process perspective, the challenges would be considerable. But by far the biggest challenge was cultural: how were we going to lead the transformation? How would we make decisions? And how will we implement the behavioral changes necessary for the transformation to continue?

In addition, no one expected to tackle this initiative in the midst of a pandemic. But despite all the obstacles we encountered along the way, our team worked hard and performed admirably, and we were able to reap the benefits of this important digital transformation effort. Here is a look at how we scored some of our victories.

Adapting in the midst of a pandemic

During the design phase of our transformation, 30-50 team members would travel to various locations across the country in a given week, reviewing design requirements, meeting with stakeholders, and preparing for upcoming presentations. . When COVID hit, it was first our offshore resources in India that could no longer work from the secure clean room we had built; then, one by one, various places across the country began to impose restrictions. And just like that, we went from face-to-face to entirely at a distance.

As the Federal Reserve, however, we have had to mobilize quickly to deal with the impact of COVID on the economy. It took resources away from the digital initiative and called its timeline into question. We ended up adding six months to our initial 21 month schedule, keeping as many milestones as possible close to the original schedule and allowing time for socializing activities like training and testing. While this gave us slack in the event of a disruption, it also gave our stakeholders more flexibility to meet critical organizational needs while supporting the program.

[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]

In a federated organization that relies heavily on consensus building for decisions, transparency is key. Although empowerment was a key tenet of the project, it was important that we generated support, enthusiasm and knowledge before the launch. This means our 20-30 in-person sessions have turned into virtual sessions with up to 800 participants. All design sessions, design reviews, town halls, demos, and question-and-answer sessions were streamed live and recorded for later review.

This helped tremendously in terms of transparency and keeping everyone in the know as attendees could come and go around topics that were of interest to them. And although more people attended the sessions, decision-making was more efficient because all the people we needed were in the room – from senior leaders and practitioners, to information security and auditing.

This is just one example of how the pandemic opened up opportunities we would never have had otherwise – we just had to be nimble enough to adapt and take a leap of faith.

The value of digital project management

At the start of the program, one of our partner vendors suggested a new SaaS project management tool, which offered easy access to data and transparency. Our project managers, practitioners, testers, trainers and stakeholders can all update their specific tasks and have a consistent view of the state.

While our digital PMO has simplified and automated our weekly status review cadence, it has really shown its value when it comes to failover. Before commissioning, we developed a plan, identified dependencies and made sure we had responsible resources. We went over it a few times with the whole team to make sure everyone understood their role.

When the transition activities started a few weeks before go live, the process was fully automated. A resource would be notified that it should complete a task and when the task should be completed. If they did not accept the task within a certain period of time, an escalation would automatically occur. If they encountered a problem, they could report the task and the appropriate party would be notified. When the task was completed, they marked it as complete and the owner of the next task was notified.

From a leadership perspective, we were able to observe the dashboard, see that tasks were completed, and easily identify areas of concern.

[ Get answers to key digital transformation questions and lessons from top CIOs: Download our digital transformation cheat sheet. ]

Today, the metrics and data to which we have access have made all the difference. We can conduct polls and surveys of team members and stakeholders to see how they fare over the life of a project, where we need to improve, and where we have the greatest impact.

This data is also useful in other settings. In training, for example, if people indicate that a class is not providing what they need, we can quickly fix the problem. Our digital PMO enabled a new data-driven cycle that has been incredibly valuable.

During COVID, our use of digital PMO only accelerated. Team members could seamlessly access everything online, and even those who previously preferred printing over digital were quickly influenced. The pandemic has helped the leadership team embrace the changes we expected from everyone in the organization – critical to making sure the new routines and changes apply.

Data-driven analysis

The day before going live, I sat down with my tablet to see, for the first time, the results of our efforts. I was amazed at the visibility I had on data that I had never seen before. I could see my entire matrix team working on the various legal elements. In one view, I could see their development plans and previous performance reviews and provide feedback on the spot. I could even see the project budget, which previously would have taken days and extra help to come together.

After commissioning, we make every effort to ensure that management has access to the appropriate dashboards and reports. Our goal is to provide the leadership team with immediate access to budget performance, hiring pipelines, key diversity metrics, and more. Ideally, this process will be like teaching people to fish – once they are comfortable, they will continue to learn until it becomes natural. Part of this transformation has been getting people to trust data and trust their ability to be more data-driven.

Hire for digital transformation

Talent and hiring are important considerations when approaching digital transformation. We decided to challenge our management team by asking them not to settle in: we opened up all positions and asked our leaders to find the best candidate for each position, whether it came from within or from within. outside the Fed.

Overall, this strategy has been successful, but there were times when we had to take a different approach. Hiring in the ERP space, for example, can be difficult as resources are scarce and it is difficult to find qualified candidates. Although we took advantage of a partner supplier and some external resources, our goal was to develop as much expertise as possible in-house. These people have not only gained the knowledge and experience to manage the environment in the future, but they have also led the transformation and will continue to improve it.

To look forward

Today, the Federal Reserve is on a much better trajectory than it was just a few years ago. In the months following commissioning, we focus on troubleshooting, support and training, and finding optimization opportunities.

Learn more about digital transformation

Looking to the future, we focus on three priorities:

  • Take a strategic approach to our data through the deployment of standard dashboards in business planning and operational activities
  • Explore other business processes that should either be moved or integrated into the platform
  • Explore the emerging capabilities of machine learning and predictive analytics

We will also focus on the cultural aspects of this transformation, ensuring that everyone remains excited about the new opportunities and that our stakeholders remain engaged in our new direction.

As I stepped down from a CIO role to lead this transformation, I got a lot more in return. This project has given me the opportunity to lead a fantastic team that has had a lasting impact on the organization, as well as a new appreciation for the challenges we face and the ways we can work together to overcome them.

[ Want more advice? Watch the on-demand webinar, The future of leading digital innovation: What’s next, with Nancy Giordano, plus Red Hat’s Margaret Dawson and IDC’s Nancy Gohring. ]


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