Capability-based prioritization model achieves earlier ROI and decreases waste

Description of Company

Established in 1865, chartered and headquartered in Omaha, Nebraska, the client provides corporate banking, investment banking, retail banking, wealth management, and consumer lending services at locations in Nebraska, Iowa, Colorado, Texas, Kansas, and Illinois. The bank operates a total of 93 branches throughout the Midwest. In addition to the traditional banking services, the bank operates a nationwide consumer credit card in partnership and co-branding arrangements with other brands and retail establishments.

Size

$20B in Assets, 5000 employees

Number of people impacted across the organization

• Directly, up to 1000
• Indirectly, all 5000

The Business Problem

The organization was experiencing many of the same pain points across the financial services industry as a result of several decades of delaying modernization of platforms, frequent acquisition and consolidation of business lines without rationalizing technology and processes, and, in general, staying firm with big upfront design and waterfall governance systems:

• Year-over-year increase in baseline IT budget of nearly 10%
• Nearly 80% of resource utilization applied to business support and technology lifecycle projects with limited ability to focus on meeting customer demands.
• Heavy focus on “middle-management” and project management to orchestrate across an architecture built, staffed, and managed in separate organizational structures with varying release cadences and          complex dependency management, including long, unexpected lead/wait times
• Frustration in the business over the increasing cost of technology  services and simultaneous degradation in quality and timeliness of service

Our Approach

We used a model known as Our Compass to assess how different business capabilities were performing today and compare that to how they needed to operate to meet the needs of the business and their customers.

The Organization began with most teams operating in a Predictive/Emergent fashion though a few outliers were attempting to work in Adaptive/Emergent, frustrated with a multitude of dependencies on legacy systems and inability to progress quickly through environments to a release of working tested software.

A majority of the teams supporting legacy systems and traditional banking operations will progress through to the Predictive/Convergent quadrant and Basecamp 2. The teams directly supporting Digital Interactions and Customer Service capabilities will progress to the Adaptive/Emergent quadrant and Basecamp 4 to realize the greatest opportunity for meeting the demands of the market and delivering the best, intended Customer Experience.

The Steps of the Transformation Journey

• Initial 2-day executive discovery workshop
• 6-week deep-dive into findings and crafting an End State Vision and Transformation Roadmap
• Two 3-month Pilots to demonstrate the proposed structure, governance and metrics of the End State Vision and improve the Transformation Roadmap based on real-time lessons and frequent retrospectives
• Activation of an Executive Steering Committee and Transformation Leadership Team
• Immediate, early capability modeling and performance gap analysis to rally business champions together around problems faced across the enterprise
• Definition of a clear and advertised enterprise strategy and opportunities to share a vision with the organization and create a cohesive direction for all to move together
• Engagement with HR and Change Management organizations to begin messaging and early training/education about Agile and the planned Transformation
• After completion of the Pilots, focus on building out the future structure and a more specific transformation roadmap
• Based on the Enterprise Strategy and Vision, 3 months of working across all of the business units and service lines to identify opportunities and initiatives
• Crafting of the needed Portfolio Teams in parallel and partnership to the Strategy work in order to identify an epic roadmap to execute the enterprise strategy and opportunities
• Analysis of pre-transformation utilization, throughput, and other metrics identified approximately 35% “waste” in the delivery system due to wait time, dependency conflicts, and other concerns
• Development of a business case for transformation to outline the options of an organizational structure, including right-sizing the number of IT staff, to bring the operational costs and annual IT budget in line
• Discussions with Finance around changes to future Capitalization policies to further improve the Business Case
• After an initial Epic Roadmap is identified, ramping up of the needed Program and Delivery Teams required to deliver

Early Successes:

• Defined a structure that will meet similar level of demand on IT teams with 25% fewer staff members
• Pilot Teams delivered projects in half the time (based on similar size and complexity) when built around stable, cross-functional teams
• Capability-based Prioritization brought attention to the problems of the enterprise, whereas priorities in the past were set by business with the biggest budgets or loudest voices
• In addition to improvements in structure and governance, technology thought leaders worked together to craft a roadmap for platform modernization, including a plan to begin encapsulating capabilities that will benefit from minimizing dependencies.