Despite the global credit crunch and the squeeze on their IT budgets, banks and other financial institutions are still spending on projects with quantifiable benefits.
However, service providers are going to have to change their approach to providing solutions to these organisations if they hope to win – or retain – a share of those budgets.
That's according to Rogan Davies, head of financial services at The IQ Business Group, who says that for the next few years, "back to basics" banking will be the norm and the only investment in IT is going to be around business as usual and simplicity.
"More than ever before, banks are focusing on project spend and the relevance of these projects. Projects – even those that had been approved previously – are being ranked and detailed justifications are required as to why the project should continue.
"Where projects cannot be linked back to improved client satisfaction, reduced operating costs or increased financial benefit, they are increasingly being stopped – or simply not started," he adds.
Rogan believes the days of large organisations allocating money across the business and allowing managers to spend on all sorts of projects in the hope of obtaining benefit or improvement, are over.
Rather, the trend now is for financial institutions to confine their spend to projects in which the benefit can be aligned to the overall business or tactical strategy and where there is immediate or short term benefit.
"And it's no longer just the CIO signing off projects and engagements. This has become the prerogative of the CFO and CEO," he adds.
The challenge for service providers, therefore, is to become more engaged with their clients in upfront scoping sessions, some paid for and others not.
"As service providers and consultants, we have to spend more time getting to know the business or challenge and then making suggestions about where we can and cannot help; and where we can deliver products and solutions that are both cost effective and relevant to the South African market.
"If we are unable to prove this benefit, we risk having the projects cancelled prematurely, hurting our delivery reputation or creating an environment where the client feels they have wasted money. Indeed, in the interest of building or maintaining a long-term relationship of trust with clients, it may even mean having to advise clients whether or not to continue with specific projects, or whether to refocus on different areas in the organisation.
"Indeed, service providers hoping to survive in the current economic downturn need to truly partner with their clients and help them to chart their way through this difficult period," Rogan says.