Welcome to Tuum Talks Episode #10: Taking a Business Case Approach to Core Banking Renewal
Recorded Live: Friday, November 8th, 2024 at 10:00 AM CET
Host: Myles Bertrand, CEO, Tuum
Panelist: Sandra Babylon, CTO of Cembra Bank
In this episode of Tuum Talks, Myles Bertrand, Tuum CEO, talks with Sandra Babylon, CTO of Cembra Bank in Switzerland, and former Executive Head of Delivery at ERGO, and Partner at Accenture and PWC.
In her time as a consultant, Sandra advised many banks on digital transformation and core banking specifically. Then she decided to run a core banking replacement project herself as CTO of Cembra Bank.
In this episode, Myles and Sandra discuss a range of topics, such as:
- Life as a CTO
- Identifying problems vs fixing problems
- When the time is up for legacy systems
- Taking a business case approach to core banking replacement
- Why building a business case is only the first step
- The future of management consulting
- Buying a Tesla in Switzerland
- And much more…
Intrigued? Watch below now.
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Watch, read or listen to the conversation below:
Taking a Business Case Approach to Core Banking Renewal
[Full Transcript]
Myles: [00:00:00] Hi everybody. Welcome to Tuum Talks number 10. I’m Myles Bertrand, I’m the CEO of Tuum. It’s an absolute pleasure to welcome Sandra Babylon, who is the CTO of Cembra Bank in Switzerland, and a former Executive Head of Delivery at ERGO and a Partner at Accenture and PWC. Sandra, thanks for joining us today. Great pleasure to have you here.
Sandra: Good morning.
Myles: Great. Afternoon for me, but we have the beauty of being global businesses, it’s great to connect. First question, the most important one I think. What’s the best and worst thing about being a management consultant? Tell us a little about your journey.
Sandra: I was a management consultant working in technology for over 25 years before I changed sides. I was asked by a headhunting firm if I would like to join ERGO Insurance, which is a very different role than being a management consultant.
I would say the best thing about consulting is, it is very exciting. You get to meet lots of people. Even if you’re stuck in a project that is boring or tedious, you know it’ll change. You meet people from all over the world. You meet consulting people, you meet clients. It’s just never boring, but it’s also not very sustainable in a way that you do a project, you’re off, the client is left with whatever is left of that project to deal with the stuff themselves. I was always wondering, how is it on the other side after the projects are done?
When I stepped into my first line role, I not had one or two projects and some other things going on. I had a huge portfolio of 65 projects that all somehow all had to fit together to do the best for the organization. That is a very different role because your thinking tends to be a lot long term. You would also be surprised, as a consultant I always assumed if I have this project everybody knows and they do a lot of things and thinking around this. When you have 65 of those, you step into a meeting wondering, who are these people? What are we doing? Oh, okay, I know what we’re doing. You do remember a lot of things on a very broad sense of things that you do remember, but sometimes you’re a little bit vague on the details.
What does that tell you? Put yourself in the other person’s shoes. Even for you, you have every detail, everything is lined out and it’s so clear for you. Try to put yourself on the other side saying, okay, if this is just not one project, one of 65, what’s the management summary? What are you here today for? Do you need a decision? Is this for information? You need to be a lot structured, and that makes people’s life a lot easier on the other side. That for me was the biggest change to being able to process all of these things at the same time.
Myles: I think it’s really interesting. You see a lot of consulting firms that are heavily involved in a lot of big projects and they sit on the periphery. They give advice, they set strategy, they may even help deliver the project. Then it gets handed over to the customer to operate. Sometimes you do see that real disconnect of what it’s like; even though you’re in the tent, you’re not really in the tent. Operating something is very different to being on the periphery and providing some guidance and some strategy as well.
I’ve seen that quite often as well and it’s really interesting, but you do see more and more people with a consulting background moving very much into operational roles, which is good. What was the maybe tipping point that decided you to take the plunge of, I’m going to stop being a consultant and I’m going to get into the day to day operations and become a CTO?
Sandra: When you would have asked me if I would be interested to switch sides, so to say, some 10 years ago, I would probably have said, no, not interested. Because if you meet so many clients, you do get a lot of insight into the organization and you think, okay, I’d rather be part of the solution than the problem. If you’re consulting, your solution-oriented. You don’t get involved in all the politics. You don’t have to deal with a lot of the admin and budgeting stuff in the background, because that’s not your turf. You’re always part of the solution.
However, if you do that for a long time, it always gets a little bit repetitive. You do another project and yet another and another. You do learn, but to really take decisions on the other side requires a lot more information. I was always interested to understand, what are the some of the topics that clients are struggling with? For me, when I got the chance to switch sides, I said, okay, let’s do this. I think even if I may one day, who knows, go back into a consulting role, that would make me a lot better as a consultant because I now do understand what’s happening on the other side. If you are the CTO, the CIO, or maybe also the CFO, the COO, you take decisions with a long timeframe in your mind because you’re trying to do the good thing for the organization, but you also have thresholds.
I’ll give you an example. When you do a project, you typically end up in a discussion, what’s the budget, and we need change requests and all these things. On the other side, if a project now talks to me about they need an increase in budget, I’m wondering someone else has to compensate for that. That money needs to come from someone. Someone has to earn all that money that this project is spending. You have to be a lot more aware about consequences, compensation mechanisms, and also explaining stuff to your shareholders.
And Myles, we’re talking about core banking. The shareholders of an organization don’t automatically get, why would you do this? Unless you attach it to a lot of benefits. That thinking is a little bit different when you are a consultant. You’re more as an enabler sometimes. On the client side, you have to take decisions, do a lot of stakeholder management, including also the outside world, and explain to investors and shareholders why you’re doing things in IT. That was an interesting one.
Myles: Yeah. Don’t contemplate going back to the dark side of consulting.
Sandra: Both those sides are good. I’m not saying one is better.
Myles: It’s nice to see something through to the end, which is what you do when you’re on the operating side. You see the fruits of your labour, I think is the best way to say it.
Maybe just switching quickly, talk a little bit about Cembra Bank, and maybe tell us something that a lot of people don’t know about the organization.
Sandra: Cembra is a very interesting little bank. We are located in Switzerland. We are regulated by the Swiss authorities, and we also publicly traded at the Swiss stock exchange. We used to be GE money bank; some people do remember, global bank financing for all kinds of things. Then we went public 10 years ago, changed the name to Cembra, which is the name of a Swiss pine tree, interesting one. Today we’re specializing in auto and car financing, loans. We also have our own credit card and we do a lot of consumer finance around buy now, pay later. We are a full-fledged bank. We have a banking license, obviously. But we’re not the UBS or the Credit Suisse, which is gone now, of this world, but a very small bank.
Also I think what is interesting about Cembra is, this is a Swiss bank, as you would think it is. Regulated, very risk averse, lots of security things, lots of legacy. But at the same time, we have a part of Cembra which is Cembra Pay, that is a start-up. We built a product custom built from scratch, no legacy, no strings attached, and that is also part of Cembra. The mix of people we have is very interesting, because you have typical banking people, lots of history and we have some more, I would say, start-up tech driven people, and all of that at the same time. That’s basically what we do.
In terms of car financing, this is also interesting, we finance a lot of cars where the manufacturer doesn’t have their own captive bank. We’re having an interesting portfolio; Tesla is the biggest item in the portfolio. We have some other brands such as Jeep. Also we do used car financing, which is also interesting for luxury cars.
Myles, if you ever need to use Swiss, I don’t know, whatever sparks your interest, you can finance that via Cembra.
Myles: I’ll hit you up for sure. That’s really interesting because of that DNA mix. One of the things that we see quite often being a core banking provider, putting ourselves in that next generation, that very SaaS based technology, we know our technology is very strong and we’ve got good use cases of that. But getting the people, the cultural change that’s required within organizations to think differently about how they deliver that, is always one of the challenges we have. The fact that you’ve got this side by side, but you’ve got this innovative arm within the bank that’s doing something quite cool and quite funky with technology, you’ve still got your risk adverse traditionally giving them that DNA to marry together. Now you’d rather being a consultant. You’re on the inside of an organization and seeing that interaction go.
Obviously, you’ve been through some technology replacement as part of your journey. What’s been the most challenging aspect of that for you?
Sandra: When I joined Cembra, our core banking initiative was already ongoing. It was interesting to see, and I saw that as a consultant as well. There was a very ambitious plan to get this done. Typically what happens, as you go you come across a lot of issues and the complexity can be just overwhelming.
Typically, organizations start off with, we’re just going to put this in, we have an API layer, we connect it to some of the key systems, and then we’re done. That is typically not the case. It certainly also wasn’t the case in Cembra. But when I joined, this program also had a good track record, because we went live with our new core banking platform for the leasing business. The new business is already on there. You could see the benefits of putting in a new core banking platform quite easily in operations, for instance, because now we have automated approvals. We have a KPI, which is an interesting one, called time to yes. That increased by time six by putting in the new platform. People really did see a difference.
Before the go live, a lot of people were assuming, why are we doing this? I don’t see how we can do it differently. The process that we have is in place. It’s manual, lots of interactions, but the imagination to design something new from the inside is sometimes limited. Not because people don’t think, how can we make it better? But they’re so much stuck into the frame of reference in how they do things, that you do need people from the outside coming in and really challenging processes.
That phase basically led through, I would say not valley of despair, but people were really unsure, is this a good idea or no? Because at the end of the day, even if your processes are crappy, the technology runs. It’s there, it’s always been there. It’s like a safety net because you know what you get. You might not always like it, but it’s very safe. But going through this exercise of simplifying business processes, and also getting rid of capacity at the end of the day, was not very easy because a lot of people were wondering, why do we need to change that in the first place?
It’s not a burning platform, and core banking typically isn’t. The technology might be old, but it runs. Your host might not be fancy things, but it’s very reliable, it’s scalable, and it runs forever.
People, depending on where you come from, you’re wondering, why are we doing this? connecting that to benefits and the strategy also was key in Cembra. Now that this thing is live, people get it. They say, I now understand that. I think sometimes when you look into other core banking implementations, if you don’t get that why, communicate it, probably have it written down somewhere but communicate it to all of the organization, it will be a very hard struggle because people will question it all the time because there will be tons of issues.
There will be times where you think, we’re not going to make it, there’s no way we’re going to make it. If you then don’t know why are we doing this in the first place, it is very difficult to do this.
Myles: I always say humans naturally don’t like change.
Sandra: Of course not. If I give you a new laptop Myles, you don’t like that. If I take away your phone, you get a new one, you don’t like that change.
Myles: I remember the day I had to go from BlackBerry to the iPhone, and I thought my world was over. I kept my BlackBerry. I went through every model there was, I kept it until the day the platform was going to get shut off. But now I’m the same. If you asked me to go from iPhone to Android, I’d be like, I can’t talk to you. Even my staff laugh at me, because I still run Outlook and Excel and PowerPoint on my Mac, and I refuse to use Gmail.
Even as digital friendly as we want to be, we still have our habits. It’s interesting to hear that. I think that’s exactly the story that we see a lot with what we do. [00:15:00] Because yes, we’re a next generation core banking, but we don’t come in and say we’re going to replace your world. But we’ve been very successful at exactly that, come in and fix a problem in one area or help you launch something new, then you’ve got that, people then get on the bandwagon.
I love the analogy you used, the six times speed up. There are examples where just by changing the technology, you can keep your same credit decisioning model, you can still apply your same risk matrix, et cetera. Because you’re digitizing and using really good technology, instead of taking you four to six weeks to make a decision on a loan, you can get it done 24 hours, 48 hours.
Sandra: Absolutely. What I did when I joined Cembra is I went to one of our processing centres, so to say. I asked them about how, did you do it before and what would you see as the benefits? Those are some of the things I share in discussions quite quickly. People get it.
If you see this guy, all kinds of material that he used to have on paper, asking the dealers, can you send this as well? Yes, put it on the fax machine. Then archiving that somewhere, looking at some other models, switching applications back and forth in order to finally get to that, yes, we will finance your car, took forever. Having these people as ambassadors is the best. Because if I tell people, they assume, she has an agenda. She’s the IT person, of course she thinks that’s a great idea.
But using those anecdotes, those examples, or even having these people incorporated in the program to make sure that they let us know where the current pain is, and understanding what’s the journey and how is it now better, that makes all the difference. Because otherwise people always fear this is a big endeavour, it takes forever, lots of budget will be required and there will probably be overruns; let’s rather not get involved.
If you’re in an organization where you reach that point, it will be very difficult to pull through because people will assume that this thing, we don’t really know why we’re doing, maybe the CTO decided this, or maybe someone else did, but we really don’t want that. Then you’re not going to make that a success. The organization has to embrace that.
At the end of the day, this is not so much about a tech transformation only, it’s an organizational change and a change journey. Absolutely.
Myles: I think a lot of organizations forget about that. They make these decisions and they don’t think about the change impact. That should always be called out up front.
What’s been the biggest value generating lever for you? Has it been cost efficiency? Has it been revenue? Or has it been a combination of the two that’s allowed you to grab more market share? What are the leavers that you’ve been able to use as part of these projects?
Sandra: It’s probably a combination of all of these things, because the application landscape we have is quite old. Is it for cost? Not on technology so much, but more around efficiency in operations and the business processes. It’s a mix, I would say.
What Cembra did quite well is they did not fall into the trap that I’ve seen as a consultant many times, that people see that as an IT project. Pretty early on, they made the CEO and the CTO sponsors of this endeavour, which changes everything because then you really embrace it as an organization. Some clients that I’ve worked with as a consultant typically end up saying, this is an IT program, they’re just replacing that platform. Business is more in a consumer mode, which is not helpful because you have to be in the same car, and not in the trunk somewhere, but sitting with the IT on the driver’s side to do this jointly. Otherwise this will not be a success.
As a consultant, I would echo also what you said, Myles, typically people don’t see that as a cultural change program as well. They assume it’s something in tech. We put in a new platform and then we’ll be done with it. But it does change the way people work together. You also need to set up a program that runs a lot different than other IT driven initiatives that you might have done as an organization, because it requires a lot of people, a lot of change, and you just set it up and run it differently.
I would assume that when you, from a Tuum perspective, talk to clients, they have all this complexity in their head. Then they are challenging you, tell me how you would do this quicker, and how do we make sure that everything we can do now is also in your Tuum solution? Because they assume that you’re replicating what you have, but making it better or more efficient. Sometimes you have to have a conversation at the beginning of this program that this is not the case. Because if you don’t tackle it early on, it will always haunt you, because people compare what they have and then they assume, this is not what I’m getting, it can’t be good. Because you’re under the assumption that everything that I have now plus is the scope. It actually isn’t, it’s a different scope.
Myles: 100%. If you don’t have, I call it the courageous conversation, if you don’t have that early on you can get really caught up. I agree 100%. Many times we see, we’re having a great conversation with technology, but business just is on a completely different level. Or it’s business we’re having a great conversation with and technology is, no, but this is the way we do things and we’ve been doing it this way for 30 years.
That interconnect between both technology and business is critical. Also that courageous conversation of, we’re not just going to replicate what you do over here and do it over here. You’re going to get to a better outcome, you’re just going to get there a different way; you need to think that way going into the project. When we have those conversations early on and people get aligned, to your point, you have very successful projects. They go really well, and the business gets really supportive of that, which is fantastic.
You’ve answered a lot of good stuff through here. But what’s the next big challenge for you? You can’t sit on your laurels and do nothing. What’s the next big challenge for the bank?
Sandra: Currently we are in the process of bringing the next products to our core banking platform, which is not more of the same because it’s always a different product, requires different things that need to be done. That is one big endeavour. At the same time, we are foreseeing to get rid of all of our host applications. Our workplace has already migrated to the cloud, so that’s awesome. But we want to do that for more and more applications to also finally then get rid of our host-based applications. That will be a first.
If you run organizations and banking, or financial institutions overall, I used to say that the host will always be there. If you have an atomic bomb, I think it will still be there and run because it’s so difficult to offload everything that runs there. A lot of people would also probably say that’s right, and we don’t even know what it does all the time because it’s like a living organism. How can you get rid of that? That’s a very ambitious endeavour.
We have planned to do this, and we are currently have a big initiative to offload our host and make sure we find a new home for everything that we used to have on that host. This is a very long journey, but we are foreseeing that we will give us a lot of benefits as well. Because as we do that, it’s not that we don’t like the host. It’s more around re-platforming and doing things differently because we have to, and creating that sense of, we really will change that now. It is a lot of change, and the business case itself is driven by that notion that we’re changing something.
It’s not that we have to turn it off. That’s not so much the story. The story is more an opportunity and an obligation to now think about our application landscape and how do we do things differently. That’s the big thing.
Myles: Yeah, that’s very ambitious. I can tell you I’m a bit of an advocate. I think it’s almost impossible for a modern, reasonably sized organization to be on a single core these days. Particularly if you’ve been around for a while, you’ll see a lot more, yes, you’ll transition a lot to next generation technology, but you’re always going to have this little bit of legacy on the side. to your point, it’s a living, breathing organism. Some things you just don’t know. To always being able to get completely off it, I don’t know. But certainly maybe the reliance on it will come less and less and less, because you need OPEX efficiency, 100%.
I like what you’re saying as well. I’ll just make a statement, which then moves into a question I think there’s a lot of parameters in the market now, which are really driving different behaviour and making banks like yourselves behave differently. The first is the consumer. They have big expectations. They want everything always on real time, really quickly, as fast as possible, and I don’t want to go to a branch. I want to do everything on my device or digitally, which I think is changing a bit of behaviour.
But the second thing is, I’m a true believer that AI will have some real traction in financial services, particularly around credit decisioning, servicing, support, et cetera. That’s where you’ve got to have a tech stack which supports that. You can’t have a legacy platform that goes to sleep for five hours while it does its batch processing, et cetera. You need that always on, real time front to back capability. We see that as a great opportunity for ourselves. What are you guys thinking about AI? I don’t think it’s a right here right now, but I do believe in two, three, four years time, it’s going to become a very effective tool for financial institutions.
Sandra: Absolutely. Most of the banks that I’ve known have used machine learning for quite some time. That’s not just AI and it’s not generative AI either, but it tells you that the use cases that are pretty dear to our heart are already there: fraud detection, making sure we do a better decision making, things like that.
As a bank though, you have to make sure you do that in a privacy respecting manner. That’s one point. Another interesting point is if you are residing in Switzerland, there’s also additional regulation around making sure that the data does not leave Switzerland in some areas. That’s how we navigate around this currently.
However, having said that, the use cases that you can think of are limitless. What most banks that I’ve talked to are currently doing is they’re trying to set the foundation and then thinking about those use cases. In some organizations, this used to sit in IT and you have this IT lab and techie people explaining to the business. We changed that in Cembra, we’re doing it a little bit differently. We will have the business drive these use cases, because the good ideas come from the business. Our tech team will enable and help them do these things.
However, I’m sure you’ve seen that as well, there’s also a lot of hype around AI. People think it can do everything. It can come across all of these silos.
Myles: Yeah, it’ll come down. I think it’ll come down, right now the hype’s still there, but I think three or four years, two, it’ll become a critical part of our industry.
Sandra: Exactly. We also need to separate signal and noise a little bit all the time, because people get very excited about AI because they heard great things. They even might use that for all kinds of things. But typically a lot of people use it like an advanced Google search and then they stop, which is not what AI is about. We also do a lot of literacy around this, doing training sessions, also enabling the team to understand what is different now. Google was there; you can search things. No, that’s not what AI is about. Also helping them understand how quickly the innovation circles have become in AI.
If you would ask AI a question 18 months ago, you can tell this is not going to fly. Now this is totally different. There are more and more things that you can now do in a very clever way, that weren’t possible only 12 months ago. It’s also important to keep up with the speed of innovation.
Myles: Yeah. I must admit, I will disclose I have used chatGPT to punch out a few emails and write a few things for me. Hey, we’re guilty of that. Great to meet C level executives. What’s challenging about, particularly in Switzerland, what’s challenging about being a C level female executive? How do you find that working?
I have a number of C levels that work for me and work side by side with me, but banking and financial services is still a bit of a boy’s world.
Sandra: Yeah, it is, unfortunately. When you look into the numbers of female C suite all together, let alone tech, it’s very discouraging because it’s not improving. Although there’s a lot of pressure on especially the German speaking countries now, because some of our countries have regulation in place to ask you to have a quota on the non-executive level. I think this is also drilling down a little bit on the executive, so the C suite teams. However, it is still a little bit of a challenge.
[00:30:00] It’s also a cultural change because you have to be comfortable with different people doing things that you might say are not so obvious. Typically what I get asked is, do you have a degree in IT, something around information technology? I always say, nope. Then people look at me like, oh my God, how can she be the CTO? I’ve been doing this for over 25 years, but I still get the question, well, you didn’t go to university and you don’t have an IT degree. It makes you wonder. In technology, you don’t have to have a degree in informatic technology to run IT. But you have to be curious to learn things. We’re seeing more and more of people with a different background joining the tech workforce, which I think is awesome. If you’re open, you can learn all this stuff.
Technology is not so much just around bits and bytes and data centres and things. It’s more around people and change, and everyone can learn these kinds of things. But it is a long way to go. When I look into my home country, Germany, we always do the data crunching. How many female C suites do we have? The recent study they did is, we still have more people called Christian in CEO levels than women altogether. There’s more Christians than females, which is interesting.
The only change we’ve seen over the past 10 years is it used to be Tumas or Christian, and now it’s the other way around. But the amount of women in a C suite is not increasing as quickly as you would think it should be. I hope this is something that we will see changing over the course of time, because we’re so focused on gender diversity now.
There’re other aspects. What about workforce over 50? If you have a five in front of your age number, people assume you’re too old to learn stuff. No, you’re not. I have scrum masters that are 57. Why not? Diversity in all directions I think we need to also tackle.
Because look at it, the German market alone, I read that the other day, is lacking 1 million tech people. If we can afford to not look into people who are over 55, or women, or people with a different cultural background, or people who don’t speak any German to fill these roles, then we have a problem.
Myles: I agree. It’s funny, I have a five in front of my age as well, and I have moved to Estonia as part of my role. But the one thing I did discover that Estonian is the second hardest language on the planet to learn. I haven’t even bothered to try now, go there from that perspective.
Last formal question, then we’ve got some stuff on the Q&A which I’ll throw out as well. But what’s your proudest achievement in your professional career?
Sandra: For me the proudest moments, and there are many of them, is every go live we do. I think it’s just fantastic because it’s like launching a rocket into the sky, and you find that a lot of preparation is needed. You have fails as well. But once you bring this stuff live and then you look back, and remembering how you discussed with your teams, we’re not going to make it, this is impossible, and then you do, that’s the proudest moments. Every go live for me is another little victory against the adversity of doing tech stuff.
Also, I’m proud of the little things. People who might be thrown into the project, and after the project is done tell you, “This was the best thing ever. I learned so much!” That’s my ah moment because I firmly believe that you have to try stuff. You might like it. It’s very true for IT. I found a lot of great talent along the way who would have never thought that they would like working in technology, and they do. This is some of the stuff I’m proud of.
I could list figures and numbers and achievements. Typically as a C suite, you have that under your belt. If you read my resume, it says all of the formal things. But these are the things that I’m even more proud of.
Myles: I love to hear that. It’s also what you said before about, I think your role and my role, my role I call myself a servant leader. My job is to create an environment or a platform for my people to be successful, and that facilitates. It’s exactly that. There’s nothing better than someone in your team or someone you work with, and they come and just like that they go, “That’s just the best thing I’ve done.” That’s the way. It’s not necessarily even the dollars in the bank or anything like that, it’s how you can bring a team and create a culture of individuals from a diverse background, et cetera, and getting them working collaboratively and you’re all on this journey to a fantastic outcome.
I love hearing that because I think that’s what creates a great culture in an organization as well, really having that. It’s fantastic.
All right, a couple of questions on the Q&A. First one for you, Sandra, in your experience, what are the most critical elements that should be included in a business case for a core banking replacement to gain buy-in from senior leadership or stakeholders?
Sandra: The critical elements are cost, timeline, and benefits. Cost and benefits together will make that a business case. Whereas the elements are clear; everybody gets it, it’s not rocket science. I think the thing to get right is benefits realization over time, and be really clear about what other benefits are you tackling and can you quantify those? Because there might be elements that you cannot quantify just yet, but do an assumption around that.
If we’re talking about process efficiencies, you would say, that’s very difficult to measure. Just put an assumption around this, but make sure you can track that later on. As you go in that journey, think about how you will prove that value realization along the way. Also don’t be too naive around costs. Typically, those programs are multi-year endeavours and they’re not done easily. Don’t underestimate the amount of effort that needs to go in to integrate a new core banking system, to test it thoroughly.
Also think about how you can slice the elephant. Because if you do everything in one big program, there’s a high risk to get derailed because your design phase just never ends because it’s so complex. People assume, we only do this one program, this one release, so I have to put everything I ever could think of into that thing. Then you won’t get it done.
I think the delivery approach is also something that needs to be factored in the business case. How many releases are you foreseeing? How do you go about continuous deployment, continuous integration once you have completed the program? How will you make sure that the decision making along the lines will also incorporate business benefits? Because if you run this as an IT function, your view on business value realization, but also limitations might be a little bit, I wouldn’t say clouded, but if you don’t do operations how would you know what that work around that you put in place now actually means for them? In order to get stakeholders on board for this, you need to show how are we tackling these kinds of things? How do we make sure we realize that value that we promised? And how do we do the decision making along the way?
For instance when you do testing and you plan for testing, you should do that with a business focus. Put the business critical stuff first, make sure this is up and running. Don’t bore people with stuff that they don’t care about maybe, but also is important. I think that the core banking Business case is one that has a lot of owners, and it should probably not be the IT owning this but someone in the business; either someone who’s responsible for a line of business, can also be the operations person, should be the sponsor. I think then you have a chance to really get a business case.
But I’ve also seen organizations that say, “Guys, let’s not kid ourselves. There is no business case. We’re doing this for an IT replacement to make sure we have newer technology, and that’s it.” I’ve seen that. I’m not sure if it really is the best way to approach it, because if you’re doing something just for technology’s sake, I would as a CEO, Myles, you’re a CEO, I would probably question these things quite tremendously. Why would we do something that is only beneficial for tech? Not doing that. It needs to be a joint decision.
Myles: That marriage between tech and business, as we talked about before. I agree with you, a lot of organizations come into the same, you have the elephant, just big bang.
It’s just not the way to do these things. It’s these incremental slice, slice, slice, incremental transformation over a period of time. You de-risk it for your business, you make it work efficiently. Big advocate for that as well.
Last question. What are some of the key adoption and data migration challenges you’ve experienced, and how much of it was sold by your partner or how much have you had to sold that yourself when you’ve adopted the newer technology?
Sandra: Data migration is one of my favourite hobbies. It’s also one of the things that constantly gets underestimated, because people sometimes just assume, we just migrate the data left and right and then we’re done. Typically it’s much more tedious than that, because you’re not just migrating from the old legacy platform to your new platform. No, you’re touching every single system around that as well.
That’s the complexity that when you have an external provider helping you on this, if they’ve done this before, they know the complexity. What they don’t know is the legacy around it. This one is typically a joint endeavour.
Many organizations that I have seen underestimate the amount of complexity that’s in the migration. Sometimes they assume that the provider will do this. Truth is, you can only do it together because you don’t have all of the knowledge from the source system and from the legacy. You always have to do it jointly, and you have to prepare and test for that thoroughly before you do the migration. If possible, I would also advise to split the go live of the platform from the actual migration, because it takes a lot of pressure to get everything done at the same time. When you do these things in parallel, sometimes it’s more difficult to distinguish, is this a software problem or it a data problem? It gets all mixed up and tangled up, and the analysis part of this is very complex.
Sometimes if possible, depending on what you put in and where you put it in, it could be a good idea to go live with a new business first and migrate existing business onto the platform later on. But even if you do that, you have to build it in mind with, okay, we’re going to migrate the data. The devil is in the details as they say, because the data structure might be hugely different. It’s always worthwhile to have a migration on your agenda quite early on, staff some good architects, make sure the legacy people who understand the legacy are also part of that program.
It might not be the sexiest part, but it’s the make or break at the end of the day, if you don’t get your migration done.
Myles: I’ve seen so many where people have done the business case, they want the new technology, then there’s this line item which is double the cost for migration. The the board goes, what’s that for? And they go no, and these projects get killed. I think that’s something that we’ve taken a lot of pride in as a newer player in the space, is we’ve invested a lot around migrations, what we call smart migrations, and we’ve worked a lot. I agree 100%, it can’t just be us, the vendor, and it can’t just be you, the customer, it has to be us together.
We’ve got a couple of case studies where we were very closely intertwined, and then it’s like an absolute good news story on how migration went. I’m a big advocate for what you’re saying there as well. I think it’s 100% the right way to approach it.
Sandra: Myles, the sponsor or stakeholder story of that, it’s like cleaning out your basement when you move. Everybody hates it. We all know it. We all know what’s in that basement. I don’t know what’s in my basement, but that’s really why you don’t cut the cost on the migration, because this is cleaning out the basement before you can move. You don’t want to underestimate that. That’s what I use with my stakeholders, cleaning out the basement, and they all get this look because they know.
Myles: They know what it means. Sandra, we’re out of time. Thank you so much for joining us today. It’s been an absolute pleasure to talk to you. For our audience, hope you enjoyed the questions, with the great insight that Sandra provided. We look forward to seeing you on the next Tuum Talks. Thanks a lot.
Sandra: Thank you very much for having me. Have a great day!
Myles: Pleasure. Have a great day. Bye.
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