06 Mar Fusion 2008: Robert W. Baird's IT a strategic partner
Madison, Wis. – As a global financial services firm that has grown revenues from $180 million in 1994 to $729 million last year, Milwaukee-based Robert W. Baird & Co. operates in the fast lane of the IT sector.
Baird’s institutional desk trades 2.3 billion shares a year, so, the electronic trading system has got to be right, notes CEO Paul Purcell. Increased volatility due to hedge funds and the highly leveraged nature of the market means that Baird’s trading and supporting information technology systems have got to be failure-proof, no matter what. Mistakes can cost the firm millions, so there is no margin for error.
“With this extreme volume and volatility, technology can’t fail,” Purcell told a gathering of information technology professionals at the Fusion 2008 symposium in Madison. “So, the technology is really important, because you have huge financial liability.”
Baird’s IT function is a strategic partner in every one of its five businesses, as it services private investors, corporations, and governments. The challenge is to keep information flowing to and from clients, and to do it seamlessly.
“You can’t do all of this if you don’t have a great relationship with your IT people,” Purcell said.
Breaking down silos
The Fusion Symposium explores the relationship between CEOs and CIO is business and government organizations.
At Baird, that relationship between Purcell and Chief Technology Officer Brian Brylow must be particularly close. Baird has information technology staff dedicated to each of its five business units. They are involved in strategic planning at the front end of the process, and are involved in making budget decisions.
“Brian’s key people are strategic partners,” Purcell said. “It is absolutely key to how we run the businesses. We are a global firm, and speed is really important, and speed can kill if you are not careful.”
In his 14 years at Baird, Purcell has seen an evolution of IT’s role.
“I think we’ve had it right for the last six or seven years,” Purcell observed. “That’s when we crossed over from being an enabler to being strategic partners. It’s been part of our strategic planning in all of our business units for the last five or six years.”
Prior to that evolution, Baird was not unlike other financial services firms in that there was a tendency to develop silos within the organization. The challenge was to break down the silos, including the IT function, and integrate them as a partner, Purcell said.
“You’ve got to break down all of the silos and create one team, and that takes time. How do you get everybody on the same page? You want to get a very large percentage of your people, including the shareholders, going through the same door. Most of the firms in our industry sold out rather than doing that because that’s really hard, breaking down the silos.”
Historically, IT had a lot of people who were czars, Purcell noted.
“They were like, `Come to the Mountain, and I’ll tell you what to do.’ Well, that’s not the way we run our business. We all come into the room and we work together. So, it’s a question of getting the right people – you’ve got to get people believing – and it happens in stages. It happens over time.”
Process evolution
Brylow says there is a strong awareness within the various business units of Baird to bring in him or another IT manager at the front end of the business planning process.
In the budget process, Baird spends a lot of time identifying what it wants to do in the coming year by looking at potential partners and how it fits the firm’s overall strategy. How these strategies fit the cost model also helps to determine what system the firm’s Technology Committee ultimately recommends.
“We have gotten better at this in the last 3 to 5 years,” Brylow said. “I am invited to these conversations. There is an awareness to bring us in at the beginning.”
Brylow explained the soul searching that occurred when a rogue technology purchase is made by a department on its own, and that technology is ill-suited or doesn’t work the way it was intended.
“When we went through enough of that pain, we started realizing early on that if we don’t have these conversations about how we can provide business solutions, and not toys and technology that we thought we were cool, but to really be a partner at the table… that process has evolved over the years.”
Other Fusion stories
• Mark McDonald at Fusion 2008: Shift focus to distinctive IT solutions
• Increasing IT’s business value a highlight of 2008 Fusion symposium