Article originally published in Mortgage Introducer March 2023 – page 13
There is a well-known piece of management advice about trying to eat an elephant? The answer, I’m sure we all know, is that you do it one bite at a time. But thereafter the advice stops – and this can be really unhelpful because it doesn’t tell you which piece to eat first. When you are dealing with an issue the size of an elephant in the operations of a business, broker or lender, that matters.
Prioritising is important when you are reflecting on big change. Yes, make it incremental but if you do not get the bits in the right order then you will still fall short of achieving your goals.
It’s a good way of thinking about how to fit out businesses for the future, particularly when it comes to technology investment.
The list of tech providers promising to deliver bespoke systems and data propositions tailored to your specific needs, delivering optimum user experience to intermediaries, borrowers and all other parties it’s necessary to interact with – it’s endless. The proverbial elephant.
What’s appropriate for your business aims today is highly unlikely to be what’s appropriate tomorrow, let alone in five years’ time. So the order in which you attempt to solve the problem is important. And that’s the case that chief technology officers are having to make to boards. There is an acceptance that investment is needed, desperately in some cases.
But there’s also the return on that investment which has to be factored into that decision. Over how long should that return be calculated? When are we going to have to scrap this system and replace it with another all over again?
And, often overlooked is the time and energy it takes to train staff and get the buy-in to new systems. If it is costly, or implemented badly or inefficiently, the worst case scenarios can result in a seriously unhappy workforce and a need for cultural change that adds mo time and cost to the project.
The result for so many businesses is that these tensions lead to inaction. And the problem that technology investment is seeking to address gets bigger and more complicated – not to mention increasingly expensive.
The key to successful investment in tech – where the return on cost, efficiency and the bottom line is easily justified – is to create a system which progresses almost by stealth. And that means making the most of interoperability – which is your friend.
All businesses have multiple considerations when it comes to the role of technology. Customer service, service delivery, efficiency within the business and when it comes to reliably working supply chain and distribution partnerships and data sourcing and processing.
Connecting these considerations and maintaining the flexibility to reshape those connections is what interoperability is all about. Using the best of what is available in an operating environment that is agile and can accommodate quick change from learning.
But although interoperability is most often thought of as IT systems plugging into each other, creating an infrastructure that can evolve without having to tear the building down and start again, I think it’s more nuanced than that.
Operations is not a business function that refers only to the technology that underpins process; it is fundamentally about how effectively people interact with that process. What’s in it for them? This is where the increase in knowledge through new improved and better data together with lending interoperability really does add value to people’s working lives.
Using technology effectively is fundamental to it delivering on its potential and that’s what I mean by stealth.
It’s more important to have a lodestone that delivers a coherent infrastructure when a thousand tiny decisions are made over time. These changes, be they in data sources or data interactions for example, can give access to insight immediately that can make a real difference for some that resonates across a business. As the example of success seeps out into the organisation it grows its own momentum.
Systems and technology evolves in line with the latest developments if you take this approach.
New data streams can be easily integrated to improve system performance in such a way that users find the improvements they experience helpful. Change is incremental, almost unnoticeable in the evolution of daily routines, yet hugely empowering in its impact.
From the decision-maker’s perspective it also makes the investment case much more palatable. Costs are spread consistently over time, smoothing out budget events and thus making the return easier to deliver because the outlay is cheaper.
The loss of efficiency you get with one big change is avoided, adding another financial incentive to the investment case – something boards love (and who can blame them).
To end with another cliché: a problem shared is a problem halved.
Well, a problem broken into 100 pieces is eminently manageable if you start at the right place.