Pierre Dulon is the chief information officer of Crédit Agricole Corporate & Investment Bank (Crédit Agricole CIB). He recently spoke with The Boston Consulting Group's Antoine Gourévitch about his lean-driven transformation of the company's IT organization, including challenges to implementation and the invaluable role played by change managers in driving the effort forward.
Can you briefly describe Crédit Agricole CIB's activities?
Crédit Agricole CIB is the corporate- and investment-banking arm of Crédit Agricole Group, one of the world’s largest banks by total assets and one with a global presence. We offer clients a range of products and services in capital markets, investment banking, structured finance, corporate banking, and international private banking.
As CIO, you spearheaded an effort to transform Crédit Agricole CIB's IT function. What was your objective in launching this initiative?
The objective was to become a stronger partner to the business. Specifically, we sought to accomplish three things: become closer to our clients by becoming more flexible and reactive, become more efficient from both an operational and a financial point of view, and develop the necessary internal competencies to become a learning entity that would continually perform at a level of excellence. So the overarching goals were greater agility, efficiency, and competence. This encompassed a range of individual ambitions, including optimizing our sourcing mix, proposing more innovative solutions to the business, standardizing our IT methods and better integrating IT developments across the organization, accelerating our project-delivery cycle, and reducing our maintenance costs and operational risks.
How large is Crédit Agricole CIB's IT organization?
We have approximately 2,600 full-time equivalents and an annual budget of €500 million.
When did the transformation kick off, and where are you in the process?
We launched the transformation in 2010 and plan to complete it by the end of 2014. So we're through the bulk of it. In terms of seeing results, we expect to reach our quantitative and qualitative goals in 2014.
An interesting aspect of the transformation is that it utilizes lean principles. Lean is typically associated with manufacturing and, to a lesser degree, services—but not IT. Why did you use it here?
We believe that the lean mindset—which is focused on creating value by eliminating waste—is highly relevant to IT management and will become increasingly so as lean matures as a management discipline. Applying lean to IT is certainly different from applying it to manufacturing, however. In IT organizations, the waste is hidden, the "products" are typically unique, and the decision making is relatively advanced. But if lean is applied properly, I believe it can be a very powerful tool for IT improvement. It has ultimately allowed us to make significant reductions to our project cycle times, limit the amount of rework we need to do, and optimize our standards for planning and testing, to note just a few of the benefits we've seen to date.
How did you design the transformation, and how did you apply lean?
We divided the effort into 14 streams and specified six as priorities: global support, test practices, sourcing mix, projects, management rules, and infrastructure optimization. Our initial plan was to utilize a top-down, process-oriented approach. But we met with some difficulties early on. In particular, the rate of adoption of the quantitative and qualitative targets identified by our process experts was below our expectations. We determined that this was due to small gaps between what the experts had designed and recommended, which made perfect sense on paper, and its "real world" value—the operational teams couldn't always see how the new processes would meet their needs and actually improve things. So the uptake suffered and that caused some problems.
To address that, we decided to add a team-oriented, bottom-up element to our top-down approach. A key part of this was the creation of dedicated change managers to support our operational managers. We drew these change managers from our internal ranks and, critically, trained them in lean tools and principles, such as value-stream mapping and force-field analysis, so that they were equipped to identify obstacles to the transformation and determine how to accelerate it from a local operational team's point of view. We assigned a change manager to each of our six IT lines of business.
Did appointing change managers and training them in lean resolve the issues you faced?
Yes, but not right away. We needed to make some adjustments. A critical one was to supplement our change managers' training in lean with training in, literally, change management—the diagnostic, analytical, and cultural levers necessary to change people's behaviors. This would give them the knowledge not only of the "what" but of the "how to." Most of our change managers had backgrounds in project management and were not well versed in change management skills.
We also had to broaden the reach and mandate of the change managers. Initially, we had segmented their efforts on a stream-by-stream basis. But this led to continued thinking in silos and inconsistency in approaches and progress among the different streams within a given IT line. So we had to adjust our change managers' orientation. This delivered some key benefits. For one, we have been able to more readily recognize and replicate the innovations and approaches of the best teams across the organization. Expanding our change managers' reach has also allowed us, for example, to recognize that our efforts to continually simplify our project-management methodology were counterproductive—the project managers were getting confused because they didn't know which version of the methodology was current. We resolved this by versioning the project management documentation.
So we had some challenges in optimizing our use of change managers. But we resolved them, and these managers have proved a critical link in the transformation process. Their value, and the value of lean tools and principles, has become obvious to everybody.
Where has the value been most visible?
In the way it has empowered and transformed our IT middle managers. The assistance of change managers who are knowledgeable in lean has given our IT middle managers the tools to take ownership of the transformation and make it work. It has also developed our IT middle managers as professionals, helping them make the transition from team leaders and technical experts to genuine managers and coaches. So there has been a longer-term benefit as well that will help them and our IT organization going forward.
With the transformation winding down, what are your next objectives?
The next step for us as an IT organization is to try to ingrain the culture of change and continuous improvement that we have developed through the transformation into our DNA. As part of our efforts to do so, we are planning to develop an internal training academy, similar to what we did previously for our project managers, to train additional change managers—we want to double our current seven—and to reinforce the change management tool kit. Our target tool kit will leverage a combination of lean, our experience in change management, and Six Sigma methodologies for measurement. The academy will initially be solely for IT, but we have designed it so that it can be shared with operations, with which IT shares many ambitions and constraints. We also think the academy will be a way to attract and retain IT talent.
Based on your experience, what advice would you offer other CIOs who are engaged in or contemplating a transformation effort?
The use of change managers who can deploy lean management principles has been a key to the success of our transformation, and I would recommend that CIOs involved in similar efforts at least consider the idea. Developing change managers can also bring long-term advantages, given that IT organizations are increasingly being called on to transform themselves on an ongoing basis, and the ability to efficiently manage change is thus a necessary requirement. I would also recommend that CIOs utilize a mix of internal personnel, who have a strong understanding of the company, and external resources who bring powerful methodologies and have an outsider's eye. The combination of perspectives and insights proved highly valuable in our case.
Beyond that, I would suggest actively leveraging HR, as it can be a key asset. Measuring progress is also important, as is communicating clearly and regularly on the transformation's status in order to keep people informed and engaged and to counter the skeptics. Finally, for the CIO, demonstrating personal commitment to the effort is vital.