Financial services firms want to make a meaningful digital transformation in a relatively short time, but rarely have the means to do both. It’s a true dichotomy, and one that seems like it requires infinite wisdom and subject matter expertise to choose between the two. Up until this point, firms have had to choose between a holistic, meaningful transformation that takes several years, or one that lacks meaningful depth but is put into motion quickly.
The firms who choose meaningful transformation will often take on 18-month implementation projects that will cost millions. Even worse, the over-engineered system will be irrelevant once they’re live, and will require massive development work to iterate. It’s been the downfall of countless companies who tried to take on massive BPM projects, only to pour millions of dollars into a project that doesn’t seem any more real two years later than the day they started.
Duke Nukem case study!
In the 1990s, a computer game called Duke Nukem 3D became one of the best-selling games of all time. Like a hyper-violent James Bond crossed with an Arnold Schwarzenegger action hero, the game was crude and full of swagger, endearing fans to its one-liner spouting protagonist. The developer, 3D Realms, quickly began work on a sequel, eager to cash in on its newfound fame and fortune. But, as a Wired Magazine profile chronicles, it worked on the game for a staggering 12 years (when most games take two). The company eventually fired its employees in 2009 and were subsequently sued millions for its failure to deliver the game.
Why? Because the company attempted to achieve something on an unrealistically large scope. It was on the cusp of revolutionary computer technology, as processor speed grew exponentially, and it thought it could break new ground with the technology. The problem was that the lead developer insisted on making the game as high-tech and new as possible. It came near to finishing it several times throughout the years, only to start from scratch again once it realised that in the time it took making it perfect, the technology had already passed it by, rendering its once visionary outlook obsolete, leaving it spinning its tires in a digital swamp. It was frozen in time.
It’s a tale of warning to those who think that a massive development project costing millions will emerge on top. A BPM consulting firm can bring impressive software to the table that’s highly customised, but the 18-month implementation period puts you firmly in last place compared to your competitors, and gives you an outdated solution by the time it goes live. It’s not much better for those who choose the quick and easy option either. It’s often a patch or quick fix such as opting for digital forms and electronic signature, solving only 1% of the problem, sacrificing depth for time. It’s a Band-Aid for a case of internal bleeding.
Perhaps another example will cast light on the solution between the dichotomy of meaningful transformation and short time: studying “desire paths”. Desire paths refer to grass footpaths that are created through erosion and heavy pedestrian traffic. It’s a common enough concept in the wild, but it’s an invaluable concept for urban planning.
Many universities take this concept into account when designing pathways and optimising space. The University of Calgary, Virginia Tech, Berkeley, and many more, have realised that when their engineers designed a campus with research, planning and designs for the best concrete pathways, students would just walk across the grass instead, ignoring the path even if it was five feet away. So they took a new approach: wait to see where the students walk, then build the paths to match the “desire path” of least resistance.
Instead of trying to predict what might work, they observed real ‘data’ and responded appropriately. The same principle applies to undertaking large transformations over extended periods of time.
Building a digital system from the ground up means sitting down and attempting to foresee every little detail, from business rules, compliance rules, use cases, forms and exceptions. It’s peering into the future through a darkened mirror, taking guesses at shadows. And after you’ve hunkered down and spent 18 months working day and night to bring it to fruition, it’s a clunky behemoth only prepared for the issues facing firms 18 months ago, but ill-prepared for the issues of the day, and even less prepared to adjust for the future. It’s impossible to predict not only how technology will have shifted in that time, but also how compliance rules will have changed. Compliance is constantly shifting with the wind, as are client expectations (which are next to impossible to predict).
Hindsight is always 20/20, but foresight never is. Financial institutions need to adopt an agile software mentality that bypasses the dichotomy between meaningful and short. This more nuanced third option isn’t as elusive as it seems. Institutions should look towards agile software that allows them to deploy in weeks, not months, with the ability to iterate as needed – iterations based on data gathered.
To achieve meaningful digital transformation, firms need to stop trying to either predict the future or outrun it, and focus instead on software that allows them to be functional from its launch, and to be flexible for the future.
Main image: OnBlast, Shutterstock.com