The Downside Of Digital Labs For Financial Innovation

The race to digital is heating up in financial services (FS) organizations; increasingly, the engine making this happen is Agile. Why? Quite simply, it is software that makes any financial business truly digital. Organizations are therefore in a rush to become great at rapidly innovating, developing, and delivering new software products to win new clients and retain and serve existing ones.

Oliwia Berdak and I have just published twin reports — one for eBusiness and channel strategy professionals, and one for AD&D leaders — that share our findings on how FS organizations are trying to ramp up their digital innovation capabilities rapidly by leveraging Agile and other innovative models. 

Our key finding comes in response to a question: Are you building a digital lab that contains great developers but is isolated from key business leaders and other technology management teams? If the answer is yes, don’t! If separate digital units pursue disruptive opportunities, they will often end up with just front-end apps or proofs of concept that are impossible to integrate and scale with same speed they were developed.

Given this potential downside to digital labs, what should you do? We found that successful digital innovation happens via broader collaboration and a shared purpose across the entire organization:

  • Bi-modal or two speed IT is an admission of your failure to transform. You must build cross-functional or multidisciplinary teams who’s goal is to deliver with one speed: and it’s fast!!. To get there you'll transition different teams through different speeds based on the constraints to resolve. A continuous delivery pipeline capability will help you throuhg that journey.
  • Think quality@speed! 
    You don’t want speed without quality, so you must involve security, testing, and architects earlier in your sprints. You must build in quality from the start. Formula 1 teams have turned quality into a stepping stone to faster speeds and victory. You must do the same. Form a tight agile partnership with your digital business strategy execs and operations. 

  • Do everything possible to join forces with digital business executives and fuel sustainable business innovation. Involve all the necessary stakeholders early on, in the core or in the extended team. Push Agile and DevOps in a concerted program, together to make the transformation to digital and fuel sustainable innovation.

All in all, digital transformation involves scaling Agile in your enterprise, rather than in an isolated lab. If this means going through an intermediate step with WaterAgileFall, go for it — but only if you do it right. (For more information on this, read this brief.) For many enterprises, this could be a successful stepping stone on their digital journey.

Running a digital transformation with Agile? We’d like to hear about successful stories, so write to us, at dlogiudice@forrester.comand oberdak@forrester.com.

Comments

The Downside of digital labs for financial innovation

Nice.

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