Geoff Wenborn, Chief Digital and Technology Officer at People's Choice Credit Union
This is story is about enterprise level digital technology and rapid change in Financial services but applies to all industries. We hear a lot about FinTech’s, and every news article seems to be advising on how to become digital or providing tips on Digital transformation but how many established organisations in any markets really achieve the objective of being digital first? How many fully execute the change required to make it real?
When I hear about a bank or large-scale institution making costs cuts and creating more efficiencies in the business with the share market applauding, I worry that they miss the point. Yes, when cuts are made the business may be more efficient, but it will it be better and more competitive? Are they missing the opportunity to grow by delighting customers or becoming digitally competitive? By not focussing on that step now, will they be further behind when they are inevitably forced to transform?
Neary every organisation is investing in digital technology which they hope will change the landscape with automation, intelligence, better information or new digital capabilities. The result though is a lot of stranded investment value. If scale investment in technology is implemented without an organisational mindset shift most of it is like lipstick on a pig. Fundamental business change across all areas is very hard. It takes too long, costs too much and benefits at a project level are usually not fully realised. The journey to change often needs to sustain focus through leadership transition which is a killer. Being truly digital must be the destiny and yet it needs alignment across multiple business divisions over time with sustained willpower. The technology can be built but the change leadership and sponsorship to be digitally competitive in an ongoing manner is rare. The objective has to be a real and fundamental shift in all areas of the business.
There are few legacy companies achieving the outcomes from digital investment in a way that is future proof and sustainable for the long term. In market players, like big tech, already have the culture, the cadence and the platforms to continually evolve and grow new services and innovation. It is possible to compete in a digital world and even grow quickly, however, most organisations successfully creating new opportunities are starting afresh. That is with new digital capability, not transitioning from a legacy model (and mindset) to a deeply digital way of operating. The laws of nature do apply to technology and most corporate systems are in an advanced state of decay and are simply too hard to replace, patch and fix. In traditional companies’ technology debt is rampant!
So, what is required and how do you do it? Let’s say we are a large or medium sized institution and we want to be competitive in business for a long time. There are new competitors cannibalising the business value chain and all sorts of other challenges to maintain margin, comply with regulations and increase customer engagement. We know it is not a fair fight as many competitors just have better technology capability and may appeal to a younger or new demographic.
To compete differently we must have an enterprise digital technology platform, a change culture and a fast-paced cadence for delivery. All that may seem obvious but how is that delivered and why don’t organisations ever seem to execute on the total scope of change needed to create that culture and mindset. Is it that we undermine ourselves? Halfway from the caterpillar to the butterfly we are disrupted, divert focus or give up and consequently have even more complexity to manage. To use a favourite metaphor - there are so many fast caterpillars out there trying to compete against fully transformed butterflies! It is imperative to be all in and complete the cultural transformation.
An enterprise scale change has many unconscious internal organisational barriers in legacy or traditional mindset organisations. Internal support areas can be working against the transform change going on without even being aware of it. Even when everyone buys in and supports the vision and the strategy internal functions and processes often stay the same. Internally, people rationalise the constraints as necessary for process, control or management of risk or make change exceptions to legacy process and systems.
What I see is that for every step forward in Transform there are obstacles needlessly thrown in the way by well-meaning bystanders. Too many cooks in the kitchen? We must understand that to compete in the future, as an enterprise, we need to be able grab new technology out of the box and use it straight away. That must be the objective, same as on a personal level when you buy a new mobile phone with the latest technology built in. With that phone you can be immediately productive. The technology capability being delivered by enterprise scale providers is good enough and all the people are now tech savvy and smart enough so let’s get on with it. The truth is we must accept the risk, learn the lessons, adopt and adapt. The technology will work if you don’t mess with it and can persist to keep it current.
In other words, have we really thought through what it takes to change? To compete forever requires a sustainable change to the way we think and the way we do things in every facet of our business. Today the ability to truly Transform from a legacy business model is really limited by the mindset rather that the technology capability notwithstanding that most companies have a platform that is 30-40 years old at least in parts and it needs to be replaced. Like your mobile phone, your TV or your car! My advice is to grab the tech from your partners, leverage their skills, update, upgrade and get on with it quickly.