Jean-Michel Ares has been the CIO of such august organizations as Coca Cola and GE Power Systems prior to assuming his current role as Group Head of Operations and Technology at BMO Financial in Toronto. His strong background makes it less of a surprise that he has moved beyond CIO. He has an advanced degree in electrical engineering and an MBA, both from McGill University in Montreal. He also spent time as a telecommunications and banking consultant at McKinsey & Company. He strongly believes that more CIOs will advance to operations leadership posts among other roles above the CIO role due to the natural tendency for those who occupy the role to be highly networked, and equally comfortable in taking on risk through the development of innovative ideas and risk mitigation, represented by investments in security, for example.
Though he is correct that more CIOs are likely to follow in his footsteps, it is no wonder that he was one of the pioneers, given his drive to push IT to be both a driver of efficiencies, but also a source of potential revenue augmentation.
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Peter High: You are the Group Head, Technology and Operations at BMO Financial Group. Can you briefly describe your area of responsibility and the parts of the organization that report to you?
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Jean-Michel Ares: I am responsible for Technology, Information Security and IT Risk, Product Operations, Sourcing and Governance, Real Estate, and our newly created Data Analytics team under a Chief Data Officer who also jointly reports to our Chief Operating Officer.
High: You are one of a growing number of particularly successful CIOs who have moved beyond that role to be responsible not only for technology but also for a broader set of capabilities. How did it occur to you and your colleagues to combine these areas of focus under a single executive?
Ares: My view is that it is about effectiveness and efficiency. If you look at a bank, technology and operations are the foundation. Essentially, the business teams will develop products – a mortgage, a loan, a card offer, a mutual fund—and technology and operations will work in partnership with these teams to create the business processes, infrastructure, and IT systems that will bring that product to market. Day to day, technology and operations supports the flow of information across these products, so having T&O together simplifies the business model. Whether it is a retail banking or a wealth management team, T&O really needs to act as one to support these teams.
The other element is that having T&O together creates a foundation that enables improvement across the bank. We are working on digitizing the bank, and when you do so you have to consider the business processes, looking at those from front-to-back or from the business to product operation, and technology and data must work together. Pulling them together, I think, gives us a sense of cohesiveness and the ability to execute effectively.
High: What is your perspective on the evolution of the IT function? What has separated those whom have been successful as IT leaders— perhaps including those who have ascended to broader roles, such as yourself—from those who have not? What are some of the things that have enabled you to go on a journey like this?
Ares: The CIO role certainly gives one the opportunity to really understand the enterprise very broadly. When you are a CIO in any industry you have to work on the commercial, engineering, sales, and distribution processes. In a bank, you have to work with the channels, marketing, risk, and front-end teams. So the ability of one to see the entire enterprise is key. I think the learning around operational excellence, program execution, and transformation is critical. Last, but certainly not least today, is the ability to abstract and come up with innovative ideas. So operational excellence, transformation, and innovation are the three characteristics of a leader that can have significant impact on your company.
High: What are some of your team’s objectives for the foreseeable future?
Ares: We have four areas that we have called out as areas of “operating focus.” We are focused on the brand, channels, data analytics, and process. For my team that has significant implications. From a brand perspective we are working very closely with our Chief Marketing Officer to re-launch the brand while looking at how technology can support the launch, elements of digital marketing, and analytics together. With “channels” there is obviously a lot of work on digital channels. From a data and analytics standpoint, it is really central to our bank. There is a lot of work being done to continue to evolve those capabilities that are critical, both from a customer experience and risk management or regulatory standpoint. “Processes” has seen a lot of work to digitize the bank; most banks that have been around for a number of years have not only a large amount of processes but also a large amount, still, of paper. So there has been a very disciplined effort around using technology to digitize processes across the company.
High: You’ve mentioned, for good reason, digital business. What are some of the ways you have though about partnering within that space in order to solve this puzzle correctly?
Ares: There is no question that digital, analytics, and mobile capabilities are critical going forward. In that, the Chief Marketing Officer and teams within the business have a pivotal role to play—and that is where the CIO needs to be a great partner.
There are elements that the CIO brings to the party that I think are unique. For example, how we architect analytic solutions to combine data and platforms that have unique characteristics to generate insight. Also the way we architect channel platforms for speed to market. But it is clear that the CMO has to play a pivotal role to define the brand, working together with CEO and other business teams to bring that to the market place and our customers.
I have heard that comment on a few occasions, where people ask, “Is it the CIO or CMO?” but for me it is actually very simple— it is both. The ability to work together is what differentiates companies that are going to win.
High: You mentioned, understandably, that one of the areas under your purview is security. Can you talk about your approach to security?
There is no question for every CIO that security needs to be one of our top priorities. If look back at the CIO role fifteen years ago, you would still have security as one of your top priorities. But the level of intensity today is different. That is a function of the environment and level of sophistication of the threat; it is far greater and evolving at a pace that I don’t think the industry has ever seen. That requires a different approach, and I think that CIOs need to first build a very strong internal team, have the framework that ensures a comprehensive set of capabilities, as well as a regular benchmarking diagnostic.
The role of external partners is critical. The notion that any company would have all of the necessary expertise internally is probably not right. Having strategic partnerships with external experts is pivotal. The other aspect is having discussions with others in your industry, in our case banks, to vector in on the most prevalent threat and effective defense mechanisms. There are hundreds of things that need to be covered when it comes to security, but execution is about working with others to really sharpen one’s focus on the most critical priorities.
High: It seems like a theme we are covering in several different areas is that of collaboration.
Ares: I think that is exactly right. Building relations, working within teams, and being able to set a clear direction are all a part of it. I would add an element to that: the network that you build. Over the years I think that each CIO has the great opportunity to build relationships, which is pivotal. I look back to the people I met earlier in my career, many of whom I am still in contact with, and the value in having conversations is that is gives you the perspective key to help run an enterprise.
High: You have been the CIO in remarkably diverse set of industries from industrials to beverages to financial services. What have you found to be some of the common denominators of success as an IT executive across industries?
Ares: I am absolutely fascinated by that because I think to truly enjoy the role of CIO you have to have a strong desire to continue to learn. You need to have that curiosity, the desire to learn the details about how companies work.
Having done that for almost twenty years now I look at some of the foundational themes, and there are many. You really have to build relationships with executives to understand how the business operates, then understand the data structures, application sets, and most importantly, the operating platform of the company. As the CIO, you really are the steward for the operating platform of the company. That operating platform is the foundation that serves millions of customers as well of thousands of employees; the way that platform is designed makes the difference between a firm that has great operational excellence and capabilities and one that does not. You have to understand the wiring and blueprints to be able to take that firm to the next step of evolution.
Some of the common themes are around process, data technology, operational excellence, program execution, and leading and building teams. Clearly a bank is very different than a consumer goods or industrial company, but there are still many, many foundational principles that you can take from one industry to the next. In fact, best practices in one industry very often benefit the next industry you operate in.
High: Has your ability to use what has worked in other industries to think more about the new industry you are entering been an advantage?
Ares: Absolutely. In financial services, for example, “processes” is an angle that manufacturing or consumer goods companies have focused on for many years. GE did. Coke did. Bringing the process focus over from industries like that is one very good example of what you are describing.
High: For those looking to emulate your successes, what might you suggest?
Ares: The first is the team that you build and your ability to select talent that is going to be able to work together cohesively. I learned this early in my career at GE, and even earlier, which is that the team that you can assemble is pivotal. If you can work together effectively, partner with the business, and build good working-relationships and credibility, that will go a long way.
Obviously operational excellence is the ticket to the game. If your team is unable to keep the lights on and operations running day to day, you will never get the opportunity to talk about strategy and build in new capabilities. Once the team is in place and the operations are running smoothly, I have been fascinated by pushing the thinking in terms of what can be done for the enterprise. But it boils down to operational excellence, and then over time moves to innovation.
High: What technology trends particularly excite you?
Ares: For me it boils down to analytics. We are still in the very early stages of what is possible. The diagnostic was that maybe, as an industry, we haven’t quite done a great job on small data yet. There is so much data proliferation, moving into the world of machine learning and so on. We are very focused on getting the foundation right, and I think that every CIO needs to make sure that is in place before you go and chase advanced capabilities.
I do believe that the combination of analytics, mobility, social networks, and the “Internet of Things” are the elements of change that I look forward to.
Date: January 26, 2015