Technology is playing a leading role in financial services business strategy and is considered to be a transformational force. In fact, a recent joint study between Accenture and Oxford Economics indicates 90% of financial services IT executives have a long-term plan for technology innovation in place.1
However, while technology adoption is critical, it’s not enough all on its own. Firms should make the best use of technology to meet customer needs and respond to change quickly―applying technology to implement new approaches and “solutions” that improve business performance.
To achieve this, firms should become more “Agile.” But first, let’s clarify what we mean by that (often overused) word. We believe an Agile methodology is critical but shouldn’t be an organization’s ultimate goal. It should be viewed as a tool whose value is not driven solely by scrum teams and sprints, but also by allowing technology flexibility, workforce adaptability, and end-to-end speed to market.
A common question from financial services firms is if they are behind in adopting Agile, and the answer is probably not. For example, the same Accenture-Oxford study shows that although 70% of financial services IT executives believe Agile software development will grow in importance as a competitive advantage, only 13% are investing in or planning to invest in Agile today.2 Among those firms that are using Agile methods, our experience indicates that many have not yet made the leap to incorporate Agile principles across the organization.
In other words, to advance their digital transformation, firms should expand from “doing Agile” to “being Agile”, integrating an organizational focus and a cultural mind-shift in combination with the process and technology approach.
What’s getting in the way of enterprise agility
No doubt this type of broad change is not easy, and firms face significant challenges in becoming pervasively Agile. Legacy environments slow the pace of change. Organizational and functional silos re-enforce a hand-offs mindset and finger pointing when things go wrong. Cultural behaviors and incentives that focus on “check the box” delivery versus true empowerment can hold the organization back from the nimbleness it requires to excel.
Focusing on methods and tools can launch a journey and drive benefit, but without an organization and cultural mind-shift, challenges cannot be fully overcome. I like to bucket critical adoption facilitators into four areas:
- The Business + IT “Row” Together: As a standalone function, IT can drive benefit, integrating automated testing and DevOps. However, impact is significantly stalled unless there is clear business ownership around a broader Agile agenda. Business and IT should be in the boat together, enhancing collaboration by breaking down silos and clearly linking execution to business and customer impact.
- Reward the Outcomes you Want: Many firms measure effectiveness by the “number of Agile projects,” often narrowly defined as those with scrum teams running sprints. To avoid isolating Agile to methodology, we recommend tracking impact in three areas:
- Outcomes (e.g., productivity, quality, speed to market)
- Execution (e.g., throughput, stability)
- Maturity (e.g., adoption, training)
Always measure teams versus individuals, reward progress versus just achieving a “target”, and continuously evolve as maturity increases.
- Don’t Forget About the Last Mile: It is not uncommon to see projects that apply Agile development result in disappointment when they try―and fail―to deploy. It is celebrated when business and IT work hand in hand, rapidly iterating and aligning on functionality. But as code makes that last step to production, unforeseen roadblocks and elongated timelines can dramatically slow release, and thus impact. Attaining true speed to market should go end to end. As articles and blogs increase their focus on business alignment and culture, we should not put technology to the side and modern engineering cannot be overlooked.
- Everybody Sprints: The absence of executive support and full employee engagement (elements that go hand in hand) can severely limit a firm’s ability to embrace Agile in a way that’s truly transformational. It is just as important for executive leadership to “sprint” with active support for the vision as it is for the delivery teams executing the work. Championing the right behaviors and providing continuous feedback is critical to creating a top to bottom, organization-wide Agile mindset.
From method to mindset to modern delivery―what does it look like when “I get there”?
Reaching a “target Agile state” never really happens, as by definition innovation moves the needle. Instead, firms should focus on embedding extreme customer focus, funding flexibility, the desired teaming structure and incentives, and critical underlying tools. Move away from traditional ways of getting things done toward a fluid, integrated, collaborative approach that touches every aspect of the organization (Figure 1).
Remember that Agile methodology is a cyclical process of discover and evaluate, prioritize, build and operate, analyze and repeat that promotes innovation and change, wherever and however it occurs in the organization. Experimentation, collaboration, and iteration are critical themes. Don’t use an ideal that seems far away as an excuse to stall―just get started!
Financial services firms cite the following as obstacles to achieving desired results from technology investments3 :
- Lack of collaboration with IT (42%)
- Lack of change management (41%)
- System integration issues (36%)
In my next post, I’ll share four things you can do now to overcome stumbling blocks and infuse agility into your technology transformation.