Greetings everybody!
I will follow up on the typical choices the incumbent explores to drive long-term goals and short-term success by popular demand.
I will continue referring to the financial industry segment as many professionals agree they have a complex scenario between incumbent leaders and new digital-born leaders (FinTech).
In today’s episode, I will address this dilemma from an internal choice point of view (self-centered).
This topic started with a conversation I had with a friend (and Newsletter follower), during which he made the following question:
– As Digital Transformation is a journey, sometimes there is a conflict between the perfect solution, reached after several steps, and a quick fix, a “lukewarm” solution, to address a critical situation. Any thoughts?
New thoughts on the incumbent predicament based on internal transformation.
Typically, the Digital Transformation that the incumbent and the new digital-born leader face goes in opposite directions.
Typically, the incumbent journey is from the inside to the outside, reviewing and refreshing values, processes, and traditions to address digital interactions.
On the other hand, digital-born leaders have less concern about legacy values and traditions. Typically, they can set the new corporate values synergistic with process and technology platforms to drive digital interactions with Customers and Partners.
Why are the corporate legacy values important to revise?
Let me put it this way; Digital Transformation includes a people mindset transformation.
If we accept a company as a legal entity, should we apply Roman poet Juvenal’s expression?
“mens sana in corpore sano”
A sound mind in a sound body (or Entity mindset readiness is as essential as Entity technology readiness).
It is almost impossible to succeed in this journey if the business leaders don’t accept the new mindset and drive the transformation to their areas of influence.
This is a transformation where the CIO has a critical role (prioritizing and managing resources and funding), but it is not IT-centric but rather business-centric.
So, let’s say that the corporate mindset was reviewed, addressed, and required changes were identified and embraced by the business leaders. What else can we do to expedite the change? (Digital Acceleration, right)
1. Agile Methodology Adoption:
Whenever I talk with business leaders about their need to update a critical core application, the most common feedback is that they need this to improve their response time responding to new market dynamics. That level of flexibility is typically expedited by embracing Agile Methodologies.
2. Enforcing SWAT Security Teams for Enhanced Security Controls:
This seems obvious, but not for everyone. Digital Transformation is about building Customer intimacy and driving long-term profitability, opening your business platforms to customers in a multichannel approach.
Are you sure your IT infrastructure is ready to handle the interaction in real-time with customers, partners, and hackers?
Doing this typically means ensuring all of your IT platform is protected from hackers that now have new ways to penetrate your intranet.
A couple of real examples:
1. A couple of weeks ago, I sent an e-mail to a long-term customer (Financial institution, incumbent). The reply I got from the business leader was an e-mail asking me to register my e-mail address in their new corporate e-mail vault. By doing that, and from now on, they know my e-mails come from a secured-ID, and since then, every time they send me an e-mail, I get notification from their system telling me I need to log in to their e-mail vault to have access to their message.
2. Nowadays, many Systems Integrators recommend customers to build new services by acquiring or developing “composable” applications and connecting these applications via APIs. There is a new trend on hackers to penetrate Customer’s IT environments by exploiting API vulnerabilities. This is happening both on incumbents and digital-born organizations: there are news of hackers penetrating FinTech and stealing Cryptocurrencies by exploiting APIs vulnerabilities; just a sample: SCMagazine API vulnerabilities are the tip of the iceberg
The typical solution is to build and enable new cybersecurity teams to ensure that all the IT footprint is free from vulnerabilities from a Digital Transformation point of view.
3. Enabling Testing Teams to perform Application System Integration Testing using Regression Testing Tools
Some of you may not be familiar with Application Regression Testing.
Do you remember those quizzes when they showed you two pictures and asked you to find some differences?
Regression Testing is very specialized testing that reviews the complete footprint of your application (menus, navigations, input, and output) and checks that the application behaves exactly as planned, so no unexpected behavior (application bugs) is introduced in the system during a regular application upgrade.
It is traditionally used to verify the correct operation of migrated applications but recently is also utilized to identify application development bugs and ramifications to other systems.
Why is this important?
Please remember that a consequence of a well-executed digital transformation initiative is that you will be able to learn from customer interactions in real-time and to adapt and change your business models, solution, and services to respond to new and existing customers.
Your core Applications will require periodic updates (agile methodologies, remember?), which will increase your chances of having defective application changes that can propagate their effect enterprise-wide (a consequence of the removal and replacement of siloed applications).
Any example of typical use of Regression Testing in this context?
Regression Testing is heavily used by customers being regulated by external authorities, such as Banking, Healthcare, and Life Sciences. Regulations require these customers to show evidence that all systems operate as expected and that all customer information is protected.
As the customer moves into its digital transformation journey, incorporating Regression Testing capabilities is an effective way to verify the integrity of an application and its data: no application bugs were introduced in the platform during regular updates and upgrades.
One final comment:
Some very sophisticated Regression Testing tools in the market (1) can create testing cases with no coding, and (2) have AI algorithms to reduce false-positive cases: capable of identifying that a report has aesthetical changes but keeping data integrity.
If you want to know more about regression testing, please let me know; I am glad to assist.
Good enough?
Next week, we will discuss other typical self-centered initiatives to drive business change.
As I said before, these initiatives are typical but not exclusive of Banking, Insurance, and Finance companies.
I appreciate your letting me know if you see value in me continue developing these topics.
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Cheers,