The financial services sector has become dependent on spending vast amounts of money with large consultancies and systems integrators that fail to deliver any major changes or reap any benefits.
That is the passionately held view of Jan Joubert, chief executive of digital business transformation specialist Rainmaker Solutions. His blunt message to chairmen and chief executives is that they need to break the habit fed by the IT industry, big consultancies and IT departments.
He warns: “Corporate IT and outdated procurement practices perpetuate this archaic approach to systems and contracts. It often comes in the guise of a seemingly shiny, but actually ill-fated target operating model. Requirements are set at a fixed moment in time and are often spurious, bearing little resemblance to user, customer and market needs.
“To make things worse, they spend up to 18 months procuring a supplier to deliver this mess and lock them in for five to ten years.
“This is sheer lunacy because by the time it is implemented, it will be two to three years out of step with the business, users and clients. It is obsolete on delivery.”
Mr Joubert accuses IT and procurement departments and suppliers of hiding behind compliance, security, governance and legacy to convince senior management that there is no alternative. Poor processes result in a repeated cycle of failure.
Fintechs enthusiastically harness the benefits of service design anchored in user needs and technical innovations, such as automation, artificial intelligence and the cloud, which are changing the economics of IT, allowing newcomers to snatch customers from complacent banks and insurers.
Mr Joubert’s answer is to remove the blockers in the way of change, harness the benefits of technological innovations and most importantly adopt a user-needs design-based approach.
He does not pull his punches and advocates: “Fire anyone feeding that addiction to this outmoded way of doing things and find a partner that can help break the cycle of damaging behaviour.”
Rainmaker helps companies draw up a crystal-clear aspirational vision for the business and align it to the pace of technical change, championing an iterative and adaptive approach that enables continuous improvement.
It encourages IT departments to focus on areas that deliver value, where IT can rapidly provide a competitive advantage, and to focus less on the provision of ancillary commodity services, such as e-mail, cloud-hosting and networking. “IT has a role to play in driving change, not just keeping the lights on,” advises Mr Joubert. “Focus on those areas that truly differentiate you and move the needle for your business.”
Rainmaker encourages disruption of poor buying behaviours, moving to shorter IT deals that can be amended quickly, yet still allow room for long-term relationships with trusted suppliers of best-in-class products.
One of its clients is a global financial services company, where it worked with people across the organisation to define its purpose, understand its needs and highlight opportunities for change.
In just six weeks, the IT department was being seen in a different light by the rest of the business, appreciative of its collaborative and consultative approach.
As a result, IT was elevated to a place in the boardroom because senior management saw the value it brought through rapid development and deployment of new products.
Not only does this change in approach transform the way businesses work, it reduces costs. Rainmaker claims it typically identifies and starts delivering efficiency savings of 30 to 60 per cent over a 36-week transformation plan.
Any change in any organisation needs champions and Mr Joubert says that for financial services companies, the stakes are so high it cannot be left to IT departments and must come from the top.
He says: “I think chief executives have to take responsibility for technical transformation because in many cases their IT teams are actually acting as blockers to change. I’m appealing to business leaders, who instinctively know that IT is getting it wrong, and telling them to have the courage to take a radical approach and stamp out this addiction to archaic processes.”
Rainmaker Solutions has a wealth of experience in delivering transformation across the private and public sectors, and openly shares its knowledge and techniques to help others.