Digital transformation is enabling organizations to differentiate at the front - resulting in higher customer acquisition and increase customer satisfaction and standardize at the back through operational and process simplification - resulting in increased efficiency and profitability.
Today, digital Strategies are getting executed at 3 levels, i.e. Business, Operations and IT - I call them the ‘Holy Trinity’. While digital transformation initiatives vary in shape, size and complexities, it is important to align all three layers to execute the digital strategy.
- Business strategy - CEO, CMO, CSO driven – for example, one of the largest retail bank in UK wants to be the number one bank based on NPS by 2020, delivering a world class omni-channel customer experience through self-service, mobile banking, social customer service etc.
- Operations & Infrastructure strategy - COO driven - for example, One of the largest bank in UK wants to reduce the total operating costs in billions; Another large bank is implementing global standards for customer on-boarding and another large credit card issuer is adopting agile infrastructure strategy using CLOUD to reduce time to market
- IT Architecture and Technology strategy - CIO, CDO driven - for example, a large global bank wants to reduce IT footprint by 50%; another large South African bank wants to standardize channel and integration architecture to deliver services better and cheaper
The success of digital strategy lies in putting together a target operating model (TOM) to set up the right environment and KPI's to measure them at all levels. Unable to do that results in initiatives getting lost in transition. Hence, while executing digital strategy, one should consider the following aspects to deliver faster, better and cheaper:
- Business case creation and prioritize initiatives
- Deep market research - External stakeholder interview, customer & marketing analytics, CRM analytics, multi-channel analysis, market trends, surveys, competition analysis
- Idea generation based on persona driven framework for different customer segments and products
- Start small - POC, Lab services for rapid innovation
- Portfolio assessment, prioritization, ownerships and sponsors
- Business value streams defined with success criteria, KPIs, milestones, budgets
- Operation & infrastructure alignment
- Gap analysis to understand business process and operations change so as to optimize business process, reduce manual interventions, improve automation and STPs
- Measurement & analyze operation KPIs - Monitoring, alerts, reporting, continuous improvements etc.
- Agile infrastructure strategy - Private, hybrid or public CLOUD infrastructure. on-demand infrastructure provisioning, charge back and administration policies
- DevOps strategy - IT and Operations alignment to set up an infrastructure for an agile development process
- Operation work stream defined with success criteria, KPI, milestones, budgets and Service Owners
- IT alignment
- Gap analysis of technical architecture to meet the needs of the business plan and roadmap across IT platforms - Online portal, mobile, social media, customer service, collaboration, web analytics, marketing optimization, content & campaign management, Integration & API strategy, business process simplification and payments (Cash & Liquidity Management, Sanctions Screening, Alternate Payments etc.), real time customer and marketing analytics and offer generation (Big data)
- SDLC process alignment to set up an Agile development process
- Clear Rent-Buy-Build strategy - RENT - SaaS, BPaaS platforms; BUY - Lending, payments, cards, savings, trade, derivatives etc.; Build Strategy - Architecture for channels, Integration, BPM, Information, Big data design standards
- Set a design and architecture governance model
- IT work streams defined with success criteria, KPIs, milestones, budgets and program owner
Achieving a synergy among Business, Operations and IT ensures that there is end to end visibility and transparency. It also increases the ability to course correct when things go wrong and also ensure equilibrium among holy trinity to execute faster, better and cheaper.