What are three key factors for optimising value in tech-driven transformations?

The first is business design, which is critical to drive productivity in business operations and contribute to profitable growth.

When you introduce technology-enabled change in an organisation, it’s essential to look at the whole process end-to-end. This includes how the change impacts complementary levers like skills, data, and functional structures. If not, the change could simply add to existing workloads as people create workarounds to fit the change into their existing ways of working.

For example, a Financial Services organisation we worked with had an extensive front-to-back reporting process, handling many data points.

It decided to implement a management information (MI) dashboard using a well-known vendor software. The firm’s IT people implemented it successfully, but business design was not considered. As a result, the dashboard failed to deliver the expected efficiencies in terms of reduced effort. If anything, people spent more effort trying to adapt their existing way of working to fit the dashboard, rather than totally overhauling processes around the dashboard.

People continued using spreadsheets to format data sets in the right way for the dashboard. They used the dashboard to analyse the data and create charts. The charts were then extracted back into the spreadsheet to create tables to include in reports. This even included taking screenshots of charts to paste into reports.

The final reports were meant to be used by senior leaders for decision making, but the datasets had been aggregated to such a high level that they were not able to examine them in more detail. For example, data points were aggregated in crude red, amber and green ratings, but it wasn’t clear what resulted in an amber rating.

Those responsible for reading and acting on the reports complained there was insufficient detail behind them, with any queries requiring lengthy analysis.

The second factor that’s often overlooked is the misalignment between the overall business strategy and the specific business outcomes of a programme. You need to be able to prioritise initiatives that directly contribute to the business strategy. But if you don’t know how the outcomes of an initiative align with the strategy, it’s very hard to do that.

One approach is to create a thorough set of prioritisation criteria. All the initiatives in the programme are assessed against those criteria. Those that score the highest can then be prioritised.

Crafting the criteria is key. They need to reflect what matters most to achieve the business strategy and they need to be frequently reviewed and reassessed.

In the insurance dashboard example, priority was given to a specific solution (the dashboard) without adequate consideration of the outcomes. It was not weighed against a broader view of where the solution would sit in an overarching process, how the business would interact with it and whether it was targeting the right pain point, or whether it would lead to additional workarounds and overheads as the underlying problem remained unresolved.

The business strategy was meant to focus the organisation on improving efficiency and effectiveness. But not enough thought was given to why and how a dashboard would help achieve that.

An alternative approach would have been to frame the problem as a way to improve the reporting process to create faster reports that enabled users to drill down into the data enough to help with their decision-making. These features could have been prioritised and the dashboard positioned as one of the ways to deliver that outcome, rather than the dashboard itself being seen as the solution.

The third factor that’s often overlooked is the need to be the guardian of value at every step. You need to quantify measures of value and then trace the value along the various deliverables, right through to the individual features of a new technology implementation. You have to continually ask, ‘does this feature contribute to delivering the value we defined at the outset?’ So at key points during the programme (including the end), you can demonstrate how value is captured by the organisation at every stage.

The MI dashboard initiative, for example, could have had KPIs or operational metric targets attached to it, such as a reduction of time to complete an ExCo report, or number of basic queries from the senior leaders consuming the report, and someone should have been monitoring those KPI as the project progressed.

In reality, it is rare that lofty, generic goals of ‘efficiencies’ or ‘bottom line growth’ are broken down to specific value metrics. If they are, it is only at the start of the programme, not throughout and rarely at the end. Even if they are tracked at the end, it is already difficult to take corrective action in a cost-effective way,which often leads to more missed opportunities.

Most programmes will consider these three areas – and more – at the outset. The key, however, is to maintain a relentless discipline and rigour to make sure they are continuously considered throughout the programme, rather than assuming that standard governance structures will be adequate to address them.

This is why – for programmes that are too big to fail – a partner like KPMG is invaluable. KPMG has the skills, deep experience and road-tested methods to help you deliver meaningful change in your organisation.

We’ve supported diverse organisations across the financial services sector to implement ambitious change programmes. Our specialist team knows the pitfalls to avoid and best practices to apply to ensure the full value of your transformation is captured.

If you’d like to discuss this topic in more detail, don’t hesitate to contact our Business Design & Operations Transformation team.