The Challenge of Market-wide Transformation

The pressure for transformational change is often felt across a whole market sector. External factors compel all organisations to pursue similar transformational outcomes, and a rash of similar initiatives becomes apparent across the market.

Market dynamics such as this create both risks and opportunities for individual organisations: move quickly, with accuracy and certainty, and there is a competitive edge to be had; move more ponderously, or without setting up for success, and you are likely to be left behind.

Such dynamics can be seen in several sectors (for example, healthcare and life sciences, logistics and ecommerce, entertainment and leisure). Whatever the sector, when such pressure for concurrent transformation is felt, there are many common challenges to overcome, some of which we outline below

In this article, we focus on financial services. The trigger for sector transformation in this case has come from government which has recently indicated a desire to double the size of the mutuals sector, citing the following reasons:

• To serve members rather than shareholders
• To boost local economies
• Increase business diversity in the marketplace
• To support the housing market
• To improve financial inclusion and community reliance

With over £150bn revenues and £200bn insurance assets spread across building societies, insurers, co-operatives, friendly societies, and credit unions, this is already a substantial sector.

Challenges to be overcome

Reduce regulatory impediments, as currently smaller organisations are broadly subject to the same regulatory requirements as the giants of the UK financial services industry – this lack of a ‘level playing field’ could inhibit competition.

Significant shifts in capability will also be required, such as moving away from traditional ‘branch network’ models to the digital channels and offerings that will be necessary to double the size of the marketplace.

Ever-increasing customer expectations as they experience innovation with other FS organisations (and beyond), e.g. for same day mortgage approvals.

For the mutuals sector, now is the time, and the opportunity is there but it is undoubtedly  an ambitious step for most in the sector.

Shared opportunities and requirements

The upshot of all this is that most organisations in the FS mutual sector are looking at the same opportunities – for example:

• How to rid themselves of legacy and technical debt: the systems and processes that have served them well for years, but which are now creaking and no longer fit-for-purpose. You  you can click here to read more about Tackling Legacy Technical Debt.
• How to better manage data to provide greater insight and performance
• How to embrace new technology to better manage data and provide new digital offerings
• How to do all this whilst adhering to regulatory requirements.

Taken together, these considerations have led to a significant and widespread investment drive for legacy modernisation, re-platforming and migration, technology investment, and data strategy and exploitation.

The partner imperative

Many organisations have change expertise in-house, yet the need to deliver BAU and to keep the lights on alongside the complex change means additional capability and capacity is required. Filling such resource gaps piecemeal is possible, yet often leads to ‘fragmentation fatigue’, where ensuring moving parts work together in harmony can quickly turn from mild irritation, to drama, to crisis.

Experience has shown us that organisations with such a transformation challenge, and no prior track record of similar change, require a delivery partner, rather than simply a supplier of resource, or a piecemeal ‘DIY’ approach to resourcing. Such a delivery partner must bring the following characteristics if efficient, effective and sustainable change is to be delivered.

So, when this happens, what do organisations in these “hot” sectors need from their change partners when it comes to delivering their transformational goals?

Deep and relevant expertise: through people who have worked in the sector and grappled with similar challenges before.  Beware! The mini-glut of demand across the sector will attract generalist opportunists – both service providers and individual contractors

Value, flexibility and the right ways-of-working: for many organisations their transformation will be a ‘once in a lifetime’ event and there may be only one shot at success.  Precious investment needs to be spent optimally and carefully using a partner that recognises this – supporting full-time delivery or part-time assurance as required

Independence: a partner that will provide you objectivity, free from any commercial relationships with integration or technology solution providers.  Transformation delivery will involve many parties and providers – the right delivery partner will act as the “glue” ensuring alignment and setting-up all involved up for success all involved.

Tailored approaches: one size does not fit all with transformation:, proven approaches can be the starting point, but they will need to be adapted to suit the context

Desire to not out-stay the need to stay client-side: augmenting delivery capability and capacity, whilst shaping and aligning the client’s need to build self-sufficient capability at the end of the transformation journey.  Fit in and stand out, but don’t outstay the welcome

Trust and independence: a partner that will be with the client for the long-run, guiding leadership to build awareness, confidence and to avoid common pitfalls.  Transformation delivery may involve many parties and providers, and the right delivery partners will act as the “glue” ensuring alignment and setting all involved up for success.

In essence, what transforming organisations need is a partner that demonstrably works “client-side”, enabled by a flexible delivery model that can be tailored to each client’s unique circumstances and business drivers.

Click here to read a brief case study describing our recent work helping to stabilise a major re-platforming programme, or to read more about our Financial Services journey.