Digital transformation: one size fits all does not apply

What do a butterfly and the emission of water vapour have in common? At first sight nothing, except that both are the results of a transformation, the latter of a certain quantity of water, the former of a caterpillar. Nobody would usually compare both, since the nature of these transformations, the context in which they take place, their initial conditions and their internal mechanisms are totally different. Yet, against all odds, this is typically the kind of confusion organisations make when dealing with their digital transformation.

digital transformation
What do a butterfly and the emission of water vapour have in common? At first sight nothing, except that both are the results of a transformation – not a digital one however

Digital transformation and change management

It’s time to give up on the assumption according to which technology, supported by what we pompously call “change management”, is supposed to drive transformation through the introduction of new practices. More often than not, “change management”, in that case, is a mere glorified mix of communication (more or less inspired) and training (more or less eye-opening). A living proof of this new era is the recent name change of the Enterprise 2.0 Summit, one of the most prominent conference in Europe, dedicated to digital enterprise transformation, into Digital Enterprise Summit. This change is the logical outcome of the growing awareness among organisers of the need to consider collaborative practices not as an end per se, but as a key element of digitalisation, a process involving business, processes, delivery, and even organisational structures.

Digital transformation is everybody’s business

Another important sign that shows that digital transformation is definitely everyone’s business, is the October 27th-28th 2015 HR Tech Congress. This conference was previously held in Amsterdam (this year it will be taking place in Paris) and is dedicated to digital transformation from a Human Resources point of view. This is a significant event. It also serves the purpose of demonstrating that HR departments, previously known to resist change, are now moving ahead. If you can’t beat them, join them. The event will most probably attract 4,000+ human resource managers and professionals.

At the same time, an increasing number of organisations are appointing, or have already appointed, a Chief Digital Officer. A new role which stresses the growing need to transform all business channels whose aim is to interact with customers. It is yet unclear, however, whether businesses are moving ahead because of the fact that their customers are hyper connected and putting pressure on them in order to modernise or because of an internal urge to rethink the way they work. Too often, businesses rush to apply off-the-shelf solutions, as if technology were making it useless to adapt to both industry and business context. Read more

Digital transformation: reinventing retail banking (1)

The retail banking market is being completely reconfigured . New players are entering the market and new expectations are awaited. Hence, retail banks need to change the way they operate in order to adapt to this transforming market, and maintain their ability to grow. Digital transformation is at the core of this challenge, let us see why, how, and where all this will lead. This is the first instalment in a series of blog posts in which I will be tackling digital transformation in the banking sector. In this piece I will emphasise the importance of the fine-tuning of the banking customer experience and business model changes. The aspects linked to the back-office, the impact on jobs, and the internal processes will serve as subjects for future posts.

The impact of digital on banks and their clients

With regards to the banking sector, digital is considered a path of natural evolution rather than a path of revolution. This is due to the fact that information systems have already played a strategic role in the dematerialisation of banking processes for a long time. Nevertheless, retail banks must enrol in this large digital transformation process, to readjust to the new characteristics of the market. Such changes are happening in four areas:

  • Customer experience optimisation
  • Shift in operational processes
  • Change in internal processes
  • Reshaping of business models

The current model of retail banking is based on a physical network of branches offering a complete panel of banking services. This model is outdated because both of its cost and the lack of customer satisfaction it produces. Although the resizing retail networks could help reduce operating costs, this would not be sufficient for financial institutions to better comply with new market conditions.

digital transformation
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Consumers’ new expectations
Let’s start with the indirect impact of digital. Connected daily on at least one social network platform from a mobile phone, consumers have new expectations; more interaction and a seamless relationship to start with, as well as an easier, simpler access to bank services, not to mention ease of use. Consumers are increasingly reaching higher levels of digital integration from a personal point of view, and this leads to more demands which banks, just like other brands, need to address.

Branches opening hours are often incompatible with their clients’ working hours. Access to banking services and to personal requests via a financial advisor are perceived as unbelievably and unnecessarily complex by consumers in this day and age.  In the 1990s, banks did design new ways of addressing such requirements: call centres offered an opportunity of expanding working hours. However, in a world where everything is accessible 24/7, this is no longer sufficient in the eyes of today’s customers of the banking sector. Read more