Fifteen years ago, the Harvard Business Review wrote “IT doesn’t matter”, calling it a commodity input and an overhead to be cost-managed. That’s hard to believe considering how IT (and software, specifically) has moved from a back-office function to a primary customer interface. Digitally native companies continue to spring up and no industry is off limits. Today, IT or digital technology is not only a major enabler of disruption across whole industries, but fundamental to a company’s survival and success.
Transforming legacy finance organizations
Companies are often expected to behave like tech companies, but transforming into a digital leader is easier said than done. Rapid change is difficult in enterprises like banks and financial institutions that are hundreds of years old, with established processes and deep-rooted cultures.
Established financial service firms, like many other businesses in government, resources, and manufacturing often face challenges like extensive legacy systems, the need to consolidate systems as a result of mergers and increasing customer expectations. Add to that digital adoption, market-driven technological innovation, financial innovation and the emergence of new digital business models—and it is not surprising many businesses don’t know where to start.
Many organizations report digital transformation initiatives taking 18 months from problem to solution. In today’s fast-moving environment, the solution is likely to be out of date by launch. In order to get time back on their side, enterprises need to change how they engineer technology by shifting to an engineering mindset.
Specifically, established financial firms need to:
- Create an engineering culture that drives autonomy and shared consciousness. Where necessary, recruit top talent in addition to building the capabilities of the existing team.
- Establish an engineering leadership group that sets and drives direction. In their "Five Building Blocks of Digital Transformation”, the MIT Center for Information Systems Research refers to an Accountability Framework, which gives clear ownership of and coordination among a growing set of digital offerings and components.
- Change mindsets, methods, tools and delivery. Consider the change management needed to support this undertaking. It is essential to build effective communication to celebrate successes and share failures and lessons learned.