By Sundara Sukavanam, Chief Digital Officer at Firstsource
It comes as no surprise that digital transformation has catapulted up the priority list for business leaders – the pandemic made it a business mandate. This is reflected in a recent IDC study showing digital transformation investment growth rates are accelerating worldwide.
Yet, at the same time, 70% of digital transformation projects fall short of their objectives. To increase the chances of success, its important leaders learn from the experiences (and past mistakes) of others to sidestep challenges, from planning to implementation. Here, I highlight four common pitfalls when planning transformation and how avoid them.
#1 Focusing on big milestones over incremental benefits
Large scale digital transformation initiatives tend to have big, ambitious milestones that often overlook smaller checkpoints and incremental results. Let’s take a performance management project as an example. A common mistake would be to spread milestones over four long, distinctive stages lasting six months. For example, stage one – create a structure for key performance indicators (KPIs), stage two – define the KPIs, stage three – design a database, stage four – create the visualisations.
What happens when you get to stage four and discover you don’t have the data to measure the KPIs defined in stage two?
You need to break the project into smaller chunks and run a simpler version of all four stages in parallel. For example, as part of KPIs you want to measure Net Promoter Score (NPS) for an employee. You trial this idea and it fails – your ecosystem can’t give you this data. But this failure gives you visibility.
It is better to have five small failures in different places, learn and pivot, than failing the entire stage. Incremental touchpoints are important, they help you to sense-check those milestones. They also allow you to celebrate small successes along the way which are important for team morale.
#2 Budget decisions by consensus
You need clear accountability for transformation – through the appointment of an executive sponsor – with success defined on hard benefits. If you’re spending £20 million on the programme that’s expected to deliver ROI in one to two years you need to start measuring that today. The budget needs to be tied to those results.
Decisions by consensus don’t always work, this is especially true for transformation budgets. The executive sponsor must have clarity, accountability and authority over the project and the budget.
When the budget is coming from another department, the department head can outline what to track and act as a sounding board. But the executive sponsor leading the project needs to make the final decisions based on results they see (or don’t see) – because they are closest to the actual execution.
If the project has spent £6 million and lacks results the sponsor needs to ask – Should we continue doing this? Going back to the incremental benefits philosophy – as a sponsor, your ability to mitigate tough calls is improved by the visibility you get from having many small checkpoints throughout the project.
#3 Overestimating organisational readiness
Number three on the pitfall list is overestimating your organisational readiness. Every change has a knock-on effect on the rest of the business. Identifying potential ripples in advance can better inform the organisation about its readiness for change.
When it comes to digital transformation specifically, readiness includes understanding the current state and trajectory of digitalisation. Digital adaption goes beyond adding plug-ins or building an app for your business. It is about digitalising the core of a company model.
Evaluating readiness requires critically considering at the infrastructure, expertise, strategy, and workforce in place. Misjudging any of these can lead to poor outcomes. For example, in 2011, General Electric (GE) tried to assert itself in the digital software space by creating an IoT platform and modifying its business models. Four years later, it created a new programme to leverage data, with the view of turning into a tech powerhouse. Billions of dollars were spent, yet the company failed to realise its vision. The reason? Many felt GE tried to do too much across a large organisation at once. Many parts of the company just weren’t ready.
#4 Overlooking dissenting opinions
The fourth pitfall is glossing over dissenting opinions. While the leadership hold the strategy and make final decisions, it is people on the ground that implement and experience new systems and processes day-in-day out. Working with your people to understand challenges they face and getting their honest feedback on solutions sound obvious. In reality, this essential step is often missed. Or even worse, employees have an option to feedback but without real possibility or open forums for them to raise concerns.
To avoid this, senior executives need to introduce strategies like steering groups to empower freethinkers and encourage teams to confront uncomfortable topics. By gathering input early and often, employees will feel valued and part of the transformation journey, increasing their desire to implement and embrace new changes.
Success takes consideration…
Digital transformation, and its rewards, are undoubtably at the forefront of most business leaders’ agendas. It’s a well-trodden path that’s seen many sub-optimal results, and so it’s understandable why the leadership is wary. We’ve learnt a lot about the process over the past 20 months and it’s important that organisations build on the experiences of others. Avoiding the four common pitfalls discussed above is a good place to start.
Cloud technology in banking: Why adoption is on the rise
Alpesh Tailor, Executive Director at digital transformation specialist GFT
The banking sector has never shied away from innovation, whether it is new products to improve customer savings habits or new ways of interacting with people and business, but embracing new technologies such as cloud has, until recently, been relatively slow. However, leading global financial institutions such as Goldman Sachs and Deutsche Bank have accelerated their adoption of cloud, which can provide insights for efficient technology transformation across the sector.
We conducted research to measure 21 medium-size and large banks’ sentiment and operations regarding cloud technology. Examining the relationship between cloud technology and banking professionals, our research provides an insight into the overall finance sector’s perception of cloud technology and how its application can improve banking procedures and efficiency.
A significant trend showed that the way people use their finances and banking systems has changed, particularly when it comes to payments and transfers. Our research revealed that 86% of bankers have adopted cloud services to harness its virtually unlimited scalability, citing a definitive change in transaction behaviour as the main reason for moving to the cloud.
In the world of retail banking, buy-now-pay-later, open banking, and contactless payment systems have revolutionised the way people use their bank, making financial management easier and more efficient. However, despite these evolutions, high street banks are playing catch-up to the challenger banks who possess fewer legacy processes and, therefore, an easier migration to new technologies, such as the full utilisation of cloud and artificial intelligence.
The cloud provides a dependable, scalable, and flexible data system that allows traditional banks to modernise quickly and stay abreast of the innovations that ‘born-in-the-cloud’ challenger banks are bringing to the market. An increasingly popular way of doing this is by adopting a hybrid and multicloud approach.
Most organisations are considering diversifying their cloud technology, with 76% of bankers now agreeing with the importance of implementing multicloud systems in order to benefit from resilience and security improvements made by the main cloud providers. These cloud ‘hyperscalers’ also provide regular updates and continue to release exclusive new services and platforms as they continue to innovate.
Our research indicates that cost optimisation is a primary reason that banks are looking toward the cloud for their future storage needs, with 81% of bankers confirming they have adopted cloud technology to save costs.
Installing and maintaining on-premise IT systems is lengthy and costly for financial institutions. When using the cloud, however, purchasing and installing hardware is no longer required as the cloud service provider hosts all the required infrastructure. The management of the hardware is included within this, reducing the overall cost of IT support further.
Technological innovations are usually heralded for their ability to streamline operations, making them quicker and more secure. Our research illustrates that 62% of bankers believe organisational culture and inertia to be a key challenge within the sector. Besides being flexible for scalability and cost, adopting cloud technology can bolster organisational efficiency, since banks can spend fewer resources managing the relationship between trading volumes and payment infrastructure. Bankers acknowledge this opportunity, with 95% of organisations understanding that cloud technology can reduce time-to-market.
Overcoming misconceptions with cloud technology
Misconceptions usually exist around any emerging technology and our research found that this theme continues with cloud technology.
43% of the bankers we spoke to admitted that security concerns have impeded full cloud migration – a concern that has frequently been confirmed when speaking to financial services institutions. However, cloud providers invest heavily in the security of their cloud infrastructure which, as a result, makes it almost always safer than its on-premise, client-owned counterpart.
One aspect of adopting the cloud that continues to cause concern, is that which is commonly termed the ‘digital skills gap’. More than half of banks claim a lack of cloud-savvy employees internally has slowed down adoption. At GFT, we understand that this is a major issue for the adoption of cloud technology in all sectors, including banking, and have committed to training and encouraging young people to learn the required skills and enter the sector. We recently launched our Manchester Innovation Hub – a dedicated location to support the upskilling and growth of tech roles in the north.
Going forwards, cloud technology is the primary option for banks seeking to evolve and scale their business, whilst minimising risk, time and cost. Bankers recognise these benefits and the overall findings of our research suggest they will continue to grow their investment in cloud technology. Whilst evolving traditional legacy systems is very challenging, cloud technology continues to advance and we believe that over time it will become a powerful mainstay within the financial services industry.
A Smarter World: What role will electronics play in 2022
There has been a sharp increase in technology and devices designed to make our lives simpler, faster and more productive in recent years.
Industry 4.0 is taking the digital revolution of the late 1900s one step further, combining cyber-physical systems with the power of the internet of things (IoT) to automate computerised decision-making and enhance efficiency. As a result, intelligent technology has surpassed the simple tools and gadgets people enjoy using every day; it has become a driving force for innovation and problem-solving for businesses worldwide.
The first generation of ‘smart’ technology products provided enhanced connectivity, allowing people to stream video on smart televisions or communicate wirelessly between devices. But with the development of artificial intelligence (AI) and machine learning (ML), our devices do more than simply talk to each other; they collect and interpret data to inform user experience and automate processes that would typically require human guidance.
From watches to phones, building controls to medical equipment, we are heading towards a ‘smarter’ world at lightning speed. So, in 2022 and beyond, technology will continue to evolve and improve its capabilities to deliver personalised, mechanised solutions that will optimise functions and enhance our day-to-day lives.
How will smart tech change our way of life?
The pandemic has significantly impacted global technology trends, with lockdowns contributing to heightened activity within the consumer electronics industry.
The demand for games consoles, smart televisions and other entertainment devices led to an 18% increase in the global consumer electronics market (excluding North America) in the first half of 2021, reflecting pandemic-related behavioural changes and consumers’ growing expectations for premium electronics. Following the outbreak of COVID-19, the public is also more conscious of their health and the limitations of our health services than ever before. Wearable technology such as smartwatches — which can remotely monitor and record physical health data — is, thus, becoming increasingly appealing.
As more and more businesses embrace remote working models, employees are enhancing their homes with innovative home technology, too. Demand for devices such as mobile stereo headsets and headphones spiked in the wake of lockdowns. Organisations are also embarking on digital transformation to secure online networks and optimise energy efficiency in modern offices.
The future of the electric vehicle market also looks bright. With governments facing global pressure to reduce carbon emissions, major automotive manufactures like Bentley, Volkswagen and Audi have pledged to cut fossil fuel cars from their product portfolios by 2030. And despite the pandemic-related semiconductor shortage that crippled the automotive industry, UK electric vehicle sales jumped 186% in 2020.
How will the electronics industry meet demands?
In a digital world, technology is embedded in everyday objects, and ubiquitous computing connects devices through continuous networks of sensors and servers — all of which must be carefully designed and produced by electronics manufacturers. As a result, the future of electrical engineering will depend on the industry’s ability to address the technical and logistical considerations for delivering these advanced systems and equipment.
From smart grids to intelligent lighting, IoT has the potential to revolutionise the way we live. With technology permeating so much of our lives already, local governments are investing in ‘smart cities’ that will harness data collected through the IoT and cloud-based technology to tackle social issues and improve urban life, sustainability and transport. However, the IoT will also be essential to developing new electronics.
Brexit, the pandemic and labour shortages have impacted supply chains and threatened to stunt the industry’s ability to keep up with ever-increasing demand. But embracing IoT can streamline processes, provide accurate real-time data to mitigate supply chain disruption and improve the overall quality of printed circuit boards (PCBs) and other core components within electronics. Plus, as sustainability is a core focus for businesses across sectors in 2022, developments in AI and ML will be crucial to ensuring systems are operating with the minimum energy output.
From remotely controlled wire cutters to industrial robotics performing monotonous tasks in factories, investing in robotics will also be crucial for electronics manufacturing services providers. While the industry focuses on training the next generation of engineers, adopting robotics will reduce the likelihood of human error that might affect manufacturers’ abilities to continue delivering high-quality electronics products at scale.
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