In my last blog I discussed the key trends of
Digitisation and Digitalisation, and the process of exploiting digital assets to maximise new revenue and value opportunities. In this blog I will be discussing the key pillars for digital success:
- Clear Vision & Strategy
- Architect for Digital
- Innovative & Agile Culture
The digital agenda is changing the very nature of business, making markets more dynamic and putting the customer at the heart of the organisation. It is no longer sufficient to digitise separate end to end value chains by applying a digital veneer to existing activities. Banks need to move from a product centred approach based upon physical distribution to a new customer centric structure based on digital distribution.
Financial services organisations should consider the lessons from the Telecoms industry where AT&T, a large scale government owned monopoly providing local telephony services in the US and Canada, was broken up in 1982 into 3 separate “NetCos” or baby bells. These individual “NetCos” are responsible for the underlying operation with the “ServiceCos” providing the service direct to the customers. In this model, banks would become “Transactional hubs” or “high cost processing platforms” with new “ServiceCos” (or FinTechs) providing the service direct to the customers and effectively disintermediating the banks.
“Banks are much more nervous about being left with high costs, highly-commoditised processes and not much growth” Morgan Stanley.
Fast forward to 2016 and banks are facing significant structural reform, such as Basel and Dodd Frank legislation, but at the same time have the opportunity to embrace the new digital eco system.
In this new digital ecosystem, commerce and future business success is highly dependent on 3 key pillars of a (i) Clear Vision & Strategy that is (ii) Architected for Digital from the ground up coupled with (iii) an Innovative and Nimble culture.
1. Clear Vision & Strategy
A clear vision and strategy underpins the digital roadmap and is paramount in order to articulate how digital will support and enable business to reach its strategic goals and aspirations. This needs to be owned by the CEO to drive execution, promoted through opportunities such as digital visioning road trips, to secure buy in and commitment across and down the complete organisation.
2. Architect for Digital
Today, Digital goes beyond mobile and the conventional mobile app. It requires the process of Digitalisation to change a business model and provide new revenue and value producing opportunities.
Digital and the ability to innovate at the core of the organisation is a critical skill set that will require new talents, pioneering capabilities and creative competencies.
Digitally Proficient Workforce
New digital skills will be required especially in new emerging technologies, such as data analytics and connected commerce (IoT). This will require investing in and up-skilling existing teams as well as bringing in skilled and focused expertise in to the organisation.
Arup the engineering consultancy famous for the Sydney Opera House and many of the world’s most iconic bridges is training 3,000-4,000 employees in digital skills.
Critical to success is adopting an agile and iterative operating model, transforming IT development to deliver the speed and agility business users require.
This should be underpinned by a flexible sourcing strategy to utilise increasingly commoditised technology services based on cloud technology, from multi channel commerce enablement and mobile payments through to customer journey analytics.
A streamlined digital operating model will require new governance frameworks to embrace all key business units and ensure that key risks are managed and mitigated efficiently. This will include appraising the risk from the wider technology ecosystem, managing new emerging opportunities and mitigating threats in a well informed and cognisant manner.
3. Innovative & Agile Culture (Digital DNA)
The new digital world is a multi mode, omni channel, multi device ecosystem where the customer is king and innovation, speed of delivery and quality is highly prized.
As part of its new Digital DNA an organisation has to think digitally first and foremost across all its key processes. To support this pace of change an organisation has to adopt an innovative and agile culture, underpinned by cross functional teams that can embrace collaboration and is willing to takes risks to build new capabilities at a faster pace.
Digital is all about innovation to put the customer first and foremost at the centre of the organisation. This can only be achieved by establishing a (i) Clear Vision & Strategy (ii) Architecting for Digital from the ground up and building (iii) an Innovative and Agile culture.
If you are struggling to understand digital and how it impacts your organisation, please get in touch with me.
Email : ian@IanAlderton.com
Tel : +44 (0) 7702 777770