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The Business Value of Transformation is its Best Argument

Over the past few weeks, I’ve followed an animated discussion about the total costs of core transformation on a banking discussion forum. Two interested parties are at work: first, bankers who balk at the cost and lead time of such projects, and second, technology vendors in vehement denial.

Both have a point. But that’s not the issue.

A transformation project is a big deal for banks, and so they’re not likely to decide about it in a hurry. Yet none can deny its impact. Therefore, the best way to convince top management to fund transformation is by demonstrating that it will deliver measurable business value to their bank. But how is that possible when different stakeholders understand business value differently and there simply aren’t enough ROI measures to put that debate to rest?

It takes a different approach.

Early transformation models stopped at consulting. The new one puts its money where its mouth is to not only propose a value-driven strategy, but also see it to fruition through enterprise solutions delivery. It starts by articulating business value in ‘hard terms’ – like cash flow, net margin and topline, and brings practical capabilities to the fore to implement change initiatives on the ground. Then it closes the loop by tracking the impact of these change initiatives on business value.

By providing a clear line of sight to the costs of transformation and resultant deliverables, the business value-driven transformation approach preempts many questions that bank managements are likely to ask. And in the process, dismantles their reservations.

Transformation de-risked with transparency I’d say…what say?

 

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Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 July, 2011, 19:26Be the first to give this comment the thumbs up 0 likes

Core banking vendors who go that far would surely provide an unbeatable value proposition. But, given my personal experience with a few of them, I'm not sure how many of them would want to go that far. There are midway approaches that could use (say) maintenance cost arbitrage between legacy and modern systems. These alternatives are equally effective in bringing down customer objections while being far more palatable to vendor executives.