Our world changed fast. The pandemic brought a new perspective to the organization’s flexibility. Those who had systems flexible enough were able to cope with the changes that were needed to adapt. Adjust their businesses to keep serving the clients, introduce new products that met their target’s new needs, and deploy mechanisms that made remote working possible.
Such changes were especially painful to traditional banks. The new social rules severely punished the ones heavily dependent on clients’ physical presence in branches. The “old-style” financial institutions eventually adapted, but many opportunities to satisfy existing customers and attract new ones were lost.
The Burden of Legacy Systems
It was not a lack of knowledge about the social-economic conjuncture. Board and management teams were well aware of the situation, but how could they follow market needs with a heavyweight system on their shoulders? The problem was not anticipation – it was agility.
Old legacy systems were built to last. Companies would acquire a new monolithic core system, and they expected it to last a lifetime. After (a most likely painful and lengthy) implementation, the stable solution would fit companies’ basic needs. And that worked for a long time. However, monolithic systems do not cope with today’s real-world needs, which are profoundly marked by the constant need to change.
Monolithic systems are obviously able to change. But at what cost and how fast? Outdated core software relies on big teams with specific knowledge about the ancient programming language in use, which is often highly vulnerable to mistakes – changes are not worth it if you are breaking everything around you. It all comes down to the fact that new features are a long and troubling process.
To be able to cope with this new agility-centric paradigm, organizations must adopt what we now know as a composable approach.
Composability is a natural acceleration of the digital businesses that we live in every day. In simple terms, this translates into creating an organization made from interchangeable building blocks that can be switched on and off or created from scratch whenever the strategy demands. The approach is particularly prolific in delivering the resilience and agility these interesting times demand.
According to Gartner’s predictions, by 2023, organizations that have adopted a composable approach will outpace their competitors by 80% in terms of implementing new features.
With Quidgest’s composable approach, traditional banks will be able to handle the challenges their current operations are facing swiftly:
- Customer expectations are shifting more often. Clients now demand more straightforward access to communication tools and service use. Monolithic systems do not cope with introducing new products or tools to establish a fruitful remote relationship with the clients.
- The Fintech-threat. Startups in the banking and financial industries are changing the game with digital-native operations.
- Strict regulation. Regulation updates are happening more and more. Traditional core systems have a hard time handling the constant changes, and a law change usually means hefty costs for the banks using outdated technology. We recently helped BBVA, ING and Banco do Brasil with their agile approach to regulation.
The composable approach also creates the perfect environment for knowledge engineers – people who have a deep business understanding (from the client’s needs and journey to the way the business operates) but lack hands-on technical skills.
With composability, knowledge engineers can easily comprehend where technology can be applied, switched, or merged and create new market opportunities. Such empowerment nullifies the “Chinese whispers/ broken telephone game” between the strategic business decision departments and the IT teams.
Planning with No Restrictions
Being built to change and (not) to last is a fundamental shift of perspective. With this, we are suggesting the composable strategy will not last. On the contrary, we mean that the approach will be centered on changing and not on staying put. The more often and faster you can change and learn, the longer you will remain competitive in your field of work.
With Quidgest’s composable approach, you will plan short, medium, and long-term with no strings attached. Technology will no longer be a constraint to your new strategy. Technology will be an enabler.
In sum, by using Quidgest’s composable approach, you are creating the environment for knowledge engineers:
- Ready to change;
- Ready to change fast, safe and efficient;
- Ready to use the existing internal skills to drive your business more efficiently.
Article posted with permission of Quidgest.