3 reasons why you should prioritize a value roadmap over a technology roadmap
The digital banking landscape is becoming more competitive than ever with neo banks and digital speed boats. Implementing a value-driven roadmap is extremely important to stay ahead of the pack.
We’re living in a time when not only is the banking landscape extremely competitive, but also one where customers are always wanting a top-tier experience. Often, when financial institutions take a look at their current offerings they might use a tool called a technology roadmap that outlines the feature capabilities of any application. However, as the engagement banking era ignites, this type of roadmap simply won’t drive us into a sustainable banking future. Instead, it can hamper the potential of realizing true business value. So, what’s the alternative? A value-driven roadmap.
Improved business outcome with a value-driven roadmap
The essence behind a value-driven roadmap for a financial institution is to establish the definition of value for an enterprise and its customers. It offers a pathway to achieve this in the most optimal way. This style of roadmap is also about showcasing how the value directly correlates to a higher net promoter score, revenue growth, and cost reduction for the business. During this article, we’ll explore how the value-driven roadmap uncovers gaps in the existing strategy, creates organizational-wide alignment, and fosters a culture of ownership and innovation.
Understanding the ‘status quo’ for improved value
One of the biggest challenges that banks face when trying to define a value-driven roadmap is understanding its status quo. This initial part of the process takes a microscopic look at the current state of the financial institution via evaluation and benchmarking. In turn, a clear picture surfaces of pain points, inefficiencies, and gaps in the existing strategy for customer acquisition, customer servicing, operating model, and employee efficiency.
For instance, at Backbase, we recently crafted a value-driven roadmap for a US-based credit union. To kick off the undertaking, we evaluated the existing end-to-end customer journeys and related operational processes. Then, our value consultants benchmarked key performance indicators which uncovered areas the credit union needed to focus on during the initial and later stages of its digital transformation. From this, the company decided to first fix the basic servicing of existing customers and then launch digital onboarding for new customers.
By working alongside value consultants and crafting this type of roadmap, banks gain a great starting point for value-driven improvements. Also, defining the value levers, key performance indicators, and having a benchmark of the status quo allows companies to easily track and measure the progress of their transformation program.
Creates organizational-wide alignment on value-driven strategy
There can often be a lot of push and pull as to whose department or products are more important. The beauty of having an external consulting group, such as Backbase, means we’re able to carry out a holistic review of your banking operations. This is invaluable because going forward the company will then have an unbiased roadmap that serves as a framework for teams to establish the right definition and benchmark of value. From here, the company is able to define the long-term business outcome they want to achieve. The value-driven roadmap can then be used as a guidance tool for the product developers to meet the desired outcomes.
Let’s look at Filipino Bank as an example. The Backbase value consultants created a value roadmap for the bank, alongside different stakeholders from various departments such as loans, deposits, customer servicing, and marketing. At the start of this endeavor, each department wanted to make their theme a value-driven roadmap priority which caused a lot of tension and conflict of interest.
This is where our value consulting team came in and did an all-encompassing review of the bank. We then organized a cross-function group across the various departments and included them in formulating the roadmap based on the value of different customer journeys. The roadmap was designed with the value levers at its core and envisioned clear financial value for each theme. Thus, it was easy for us to get everyone on the same team as we were able to communicate the rationale behind the roadmap prioritization to different stakeholders.
From our value consulting experience at Backbase, delaying the implementation of projects due to departments being unable to agree on the correct approach can cost the financial institution up to 20% per year. For a bank that has a return from digital banking of around $40 million a year, this would be a loss of up to $8 million dollars — and the longer the delay the higher the missed opportunity price tag becomes.
Example: Value-driven Roadmap for Digital Banking
Value-driven roadmap fosters a culture of ownership and innovation
Today, many enterprises are gravitating towards a culture of a flat organization, with fewer or no levels of middle management between staff and executives. This more relaxed structure aims to enhance the creativity of each and every employee. When the value-driven roadmap is executed by these teams it offers a sense of priority and ownership to the staff members and that is when the spirit of innovation is triggered.
Effective communication lies at the heart of strategic alignment when it comes to carrying out the value roadmap plan. Making sure all employees understand the roadmap comprehensively is key to having smooth execution.
For instance, the Backbase value consulting team recently helped a US based credit union to craft a value-driven roadmap. The process included collaboration with the credit unions teams, where the members deep dived into the value of each roadmap theme and aligned on the desired outcome. During the roadmap execution those involved actively contributed with fresh innovative ideas that would maximize the value and out-of-the-box capabilities of the end goal. Of course, this can only happen with a sense of ownership among each and every individual.
Achieve valuable Engagement Banking
The market’s becoming increasingly crowded with neo banks and digital speed boats that have new business models focused on customer-centricity. So, it’s more important than ever to adopt and implement a value-driven approach so your financial institution can compete comfortably in this emerging landscape. As we’ve explored in the article, it’s crucial to shift your mindset and communicate clearly with your employees what the desired value goals are. The value consulting team at Backbase are experts in deploying an evaluation or tweaking an existing roadmap to extract value. Having this holistic overview of your company goals and the value levers behind it is the first step towards creating a business case for true engagement banking.