The ability to do ever more online, from ordering your lunch to rustling up a mortgage, has dramatically changed customers’ expectations of the any company’s customer service. This is especially true of the financial services (FS) sector where almost every service FS companies offer can be provided digitally.
Customers’ use of established technology firms like Google, as well as upstart start-ups like Venmo, and SigFig has just piled the pressure on more established FS firms to give customers a high quality, low-effort, and useful digital experience. And this isn’t easy for these firms, as they often have less nimble processes for introducing new products or designing, launching, and running the technology required behind the scenes.
As one head of wealth management from CEB’s member networks put it, “We spent two million dollars to develop a technology roadmap. What we got for that investment was one lesson: don’t do it. Client demand changes too fast. Technology changes too fast.”
The struggles of FS teams are not because of a lack of finances. FS executives have invested heavily but normally in ways to build and implement all the technology projects they have decided on. FS firms in CEB’s memberships have adopted Agile and other methodologies, refreshed legacy systems, and brought in contractors. A cottage industry now thrives selling tools and consulting to accelerate technology implementation.
But as FS firms – like their counterparts in other industries – become more complex and global, all this focus on implementation doesn’t add up to technology projects being completed more quickly. In fact, only 15% of the main “stall points” for technology projects happen during the implementation phase, 85% of those stall points happen earlier – during the planning phase.
Why You Should Focus on Technology Planning
CEB data from a survey of over 1,100 FS executives show that the average firm can see a return on its technology investments 2.5 times more quickly by improving its technology planning. In particular, firms should focus on three aspects.
Decision-making: Speed up decision-making by reducing the impact of project “handoffs”, targeting resources to strategic projects, and making full-scale vendor evaluations the exception.
One bank in CEB’s networks prioritized projects by their “strategic impact” instead of a more short-term return on investment calculation. This almost doubled the amount of time that development teams had for coding, and accelerated their annual output of new technology designated as providing “strategic capabilities.”
Flexibility: Allow greater flexibility by ensuring that more judgment is used by managers when putting processes in place to develop new technology, that every process decision defaults to choosing the fastest way of doing something, and that IT’s role in technology projects is as “adaptive” as possible.
One big north American retail bank avoids a “one-size-fits-all” methodology approach for low-risk IT projects. When managers assessed the projects being worked on, 80% were assessed as low risk and so were required to be conducted using a “light methodology.” This saw a 50% jump in projects completed on time and within budget.
Alignment: Improve alignment by communicating speed, emphasizing it in performance metrics, and measuring and reducing the effort required for cross-silo coordination and risk processes.
Another retail bank in CEB’s networks aligns its risk management communications to make it more relevant to business partners and to help them provide the inputs needed for risk assessment of projects as quickly as possible. This messaging approach reduced the average time that partners spent providing these inputs from four hours to 45 minutes.