When it comes to digital transformation, financial institutions are in a unique position. Armed with deep pockets, such organizations can access the best that technology has to offer. But because of their size, regulatory requirements, and potential risks of large-scale transformation and disruption, they often struggle to succeed when it comes to IT projects.
This was a common challenge discussed at a recent CIO Roundtable. Sponsored by OpenText, the roundtable was attended by several IT executives in the financial services sector. To overcome this challenge, many executives have realized that they need to involve business decision makers in the early stages of digital transformation and digitization projects.
Aligning with business goals is critical for digital transformation success
Mike Bolte, Director, Business Value Consulting at OpenText, describes the importance of involving business teams early in any IT initiative.
“It’s so common for organizations to hit a failure or stall point, where IT has started the digital transformation journey without consulting the business team. Business and IT teams need to work together from the beginning. Nobody in IT wants to hear from business, ‘that’s great, but we’re not aligned.’”
According to one attendee, creating a formalized process for IT and business has been key to initial transformation successes.
“We have only begun migrating our applications to the cloud and consolidating our infrastructure, but the importance of involving the business team in IT decisions has already become clear,” says the executive. “We are now working to create a formalized process that our tech and business teams will use to collaborate on solutions going forward.”
But IT may still face challenges, even if they work closely with business teams. According to Jim Love, CIO and Chief Content Officer at IT World Canada (ITWC), enterprises tend to have many unintegrated applications – particularly organizations that grew up through acquisition.
“Business decision makers often see integration and architectural initiatives as ‘plumbing’”, says Love. “They don’t understand it, and they struggle to see the value in it.”
If you’re going to do digital transformation, you must have a use case
According to Bolte, the most effective way for financial institutions to succeed at digital transformation is by building business use cases. That’s exactly what they did to help one of Canada’s leading mortgage lenders begin the journey to double their business.
“Our client was looking to grow their business exponentially,” explains Bolte. “To accomplish this without digitization and digital transformation would have required them to double their staff – something that would be unacceptably resource-consuming. Their internal IT team realized this, and reached out to us for help in 2012 with the goal of reducing the cost of growing pains and increasing operational efficiency.”
“We began by identifying a single business process that we knew we could accomplish in a reasonable timeframe, and that would also have a significant impact on their business,” says John Palazzolo, Director, Solutions Consulting at OpenText. “This was the process of the brokerage-broker-homeowner interaction. Because the speed of this interaction correlated directly with our client [the brokerage] acquiring and retaining customers, it was a relatively easy case to make to the business team.”
“Increasing the efficiency of our client’s communication workflow required us to translate their Salesforce Community Cloud so that we could integrate it with SAP. This opened up a new opportunity for us to begin looking at their unstructured data and how we could begin to understand and ingest it – not just from a communications workflow perspective, but from many other angles as well.”
The result of OpenText’s work wasn’t just a reduction of over $24M annually in their client’s underwriting process – although they were pleased with that. OpenText was able to use this project to identify 19 additional processes where redundancies and inefficiencies existed. The success of this initial process led to a multi-year digital transformation initiative. It serves as an example of how building a use case and getting a quick win can reveal more opportunities for transformation while building confidence with senior business decision makers for further initiatives.
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