Too many IT projects are successful by their own account, yet are not adopted after
implementation. Though each may be well designed and implemented, very often the
final product is not considered a success. To understand why this happens – and
to remedy this expensive situation – it is necessary to see beyond the borders of
traditional thinking and ask, “Where is the business value?”
Even in an ever-changing business environment there are three things we can do to
ensure that IT solutions always exceed expectations by adding business value. First,
we must look beyond traditional thinking in order to uncover the underlying challenge
or need behind the project. Second, we must foster true collaboration. Third, we
must put people first and improve their communication.
By now you’ve probably heard of Siri, the new iPhone’s cloud-based, voice-activated
personal assistant. Siri can check your calendar in the morning, find you the latest
hot spot for lunch, and help you avoid traffic on the commute home. As Apple puts
it: “Your wish is its command.” Like many modern day apps, Siri operates in the
Cloud. But there’s a twist. With Siri, developers and engineers are monitoring your
every request, in a quest to make Siri smarter and more effective based on how people
are using it in real life.
To those resistant to the lure of the Cloud, this does not help its case. A relatively
new phenomenon, the public Cloud is still maturing, still on the expensive side,
and still liable to carry more risk in terms of longer response times and server
crashes. It’s also less private, and if your users didn’t know it before, the example
of Siri will leave no doubt. Already uncomfortable knowing their movements can be
tracked and their accounts can be hacked, how will your users feel knowing their
calendar and other personal information can be so easily watched from the Public
cloud?
With any new project, if you’re not solving user or business needs, why bother?
If you are solving user or business needs but don’t know it and can’t measure it,
what’s the point?
Companies feel pressured – as they should – to engage with their audiences using
the devices and platforms those users keep at their sides at all times: smartphones,
iPads, Facebook, Twitter… and the list expands relentlessly (want to join my circles
in Google+?).
A recent Dell KACE survey of 750 IT professionals found that a majority of employees
are using personal devices to log in to corporate systems, yet 87 percent of respondents
also say that their companies are unable to protect corporate resources and data
from being accessed or stored on those devices. More than 60% believe the companies
they work for are not adequately prepared for the flood of personal devices now
entering the workplace.
Mobile devices have taken the world by storm. They have gone from being a disruptive
technology to becoming a way of life to the new generation. What I call the members
of “Gen C” – the “Connected” Generation – will enter the workforce in even greater
numbers over the next few years.
More data was generated by individuals in 2009 than in the entire history of mankind
through 2008, according to Andreas Weigend, the former Chief Scientist at Amazon.com
and an expert in data mining and computational marketing.
And that was nearly three years ago. Since then, big data has only gotten bigger.
The McKinsey Global Institute offers these numbers to show the predicted growth
of data compared to the predicted growth of the capability of handling all that
data: 40 percent projected growth in global data generated per year versus just
5 percent growth in global IT spending.
A lot of people can be successful when things are going well. But it takes a true
leader to create positive impact from a crisis situation – to maximize the potential
of any given challenging situation and use it to reach the next level.
In the middle of a crisis, it's natural for everyone to be in panic mode. The more
critical the business issue at stake, the higher the level of panic. But if we continue
to operate in that mode, it will make the situation worse and continue the downward
spiral, ultimately resulting in critical breakdown.
The importance of knowledge acquisition and management, as well as the standardization
of processes and measurement of results, cannot be underestimated. Meeting these
critical success factors sets the stage for one of the most important goals of outsourcing
Managed Services: freeing in-house IT subject matter experts from their traditional
corporate functions so they can pursue strategic business roles in the New Normal
of today’s economic landscape.
I wrote about this paradigm shift in the role of IT in my first article for the Managed Services: The New Normal
series. IT must slash operational costs while simultaneously finding a way to play
a significant role in business initiatives. This new role comes in many forms, such
as driving new technology models like the Cloud, creating new revenue streams, or
broadening customer relationships through social media and mobile device apps.
I recently wrote about the importance of teamwork during the journey to Managed
Services. The second leg of this journey, the Transition phase, lays the groundwork
for a strong, ongoing working relationship between the client and service provider
teams.
Each phase also has critical success factors that must be met before moving on to
the next phase. I talk about these in my video blog on Managed Services. For example,
in the initial Planning phase, establishing a baseline scope of service and conducting
a portfolio analysis are critical success factors.
I’ve talked about the beginning of the journey to Managed Services, but what happens
in those early planning stages and how does it prepare you for the more complex
and potentially risky Transition phase?
As I’ve said, transitioning to Outcome-based Managed Services begins with careful
planning, a defined scope of work, and a fixed, predictable cost, all leading to
the delivery of a measured set of outcomes. Though based on a solid, proven methodology,
each plan is unique in that it is custom tailored to a particular client’s needs.
“The beginning is the most important part of the work.” So said the Classical Greek
philosopher Plato, and we apply this theory to almost everything we want to accomplish.
Take for instance the transformation to Outcome-based Managed Services. As with
any journey -- and we do think of it as a journey -- you must start out on the right
foot if you want to reach your destination without stumbling or losing your way.
As your guide to Managed Services, we start you on your journey with a clear scope
of the work involved and a fixed, predictable assessment of the cost. But we don’t
stop there. We also define a set of outcomes that will be ascertained with delivery
and performance metrics. This is the crux of Outcome-based Managed Services.
Every mortgage company today is ripe for reinvention.
But most are missing out because they're focusing solely on reaction.
If you run a mortgage lending or servicing company today, you're facing market disruption.
Unemployment has led to a high percentage of distressed mortgages, which creates
chaos on your company's business processes and systems. Companies face increasing
scrutiny on loan quality and policy adherence, requirements to complete more exhaustive
reviews on a higher percentage of transactions with fewer staff, and continuing
pressure to fast-track loan processing while ensuring compliance.
In my previous article,
I talked about the paradigm shift in IT brought on by the New Normal economic order,
and how the new Outcome-based Managed Service model supports IT's new role as a
business growth enabler.
But how do we get from here to there? And how do we address the concerns that CIOs
have, rightly so, about the risks.
As the Greek philosopher Plato said, "The beginning is the most important part of
the work." So it is too with the conversion to Outcome-based Managed Services. Those
of us who guide companies through the process feel it helpful to think of the move
to Managed Services as a journey, and it's imperative to start that journey on the
right foot.
Company executives like to maintain control of IT system activities by keeping them
in-house, where they are "all visible, all the time." I can understand this feeling
because, as I revealed in my last post, I've always wanted to know about everything
that goes on around me, how it all works.
But as I also noted, this visibility and control comes at a steep price: the rising
Total Cost of Ownership. Why? The traditional mission of IT has been to keep an
organization's systems "up and running." As IT systems grew, added more services
and became more complex, the IT department simply hired more staff to meet the increasing
demand. And so TCO was destined to keep on growing.
When I was a young boy growing up in India, my grandfather would ride me through
the busy streets of our small town on his bicycle. I was amazed at the buzz of activity
around me and wanted to understand all that I saw. I wanted to know how everything
worked.
My grandfather always used to smile and say, “Kailash, you ask too many questions!”
Fast forward to the present day and I know this curiosity has served me well. Throughout
my education and career, I have been motivated by a strong desire to seek answers,
clarify ambiguities, and unlock mysteries.
I’m passionate about chess, and one of the things I like best about it is the ability
to recreate the game afterward. When I was competing in tournament chess, I used
to replay games sitting on the other side of the table to see if I could learn something
new.
In mortgage outsourcing, this is the area that receives the least attention. Once
the project or engagement objectives are met, most buyers and providers shake hands
and start thinking about what’s next.
But engagement review is the step we can learn from the most. If we skip it, we
miss an important opportunity to reinvent to reach the next level of success in
the BPO relationships. This rule applies equally in IT engagements, as well. The
ability to capture and share what we’ve learned in a way that solidifies that knowledge
for future projects is what ultimately improves process and creates sustainable
growth.
The Transition to an Engagement Model That Activates Sustainable Business Outcomes
As the business environment becomes even more competitive, the current IT trend
toward the Outcome-based Engagement Model of Managed Services is poised to serve
organizations well into the future. New Normal Catalysts are leading the way. Are
you a New Normal Catalyst?
The phrase “New Normal” was coined because the economy emerging from the 2008 financial
crisis is fundamentally different than the market we knew before. More than just
a regular business cycle, the New Normal represents a basic restructuring of our
economic order.
IT is undergoing a paradigm shift as part of this restructuring. Traditionally seen
as a cost center, IT is being challenged to take a more integrated role in corporate
growth initiatives as a pivotal business growth enabler.
I play chess, and growing up in India my childhood idol was GM Viswanathan Anand, who just happens
to be the current world chess champion. When I was a kid, he was the role model
in chess for every Indian. I used to watch him and recreate his games, and I read
every interview he gave. His passion for the game was infectious.
In any endeavor – whether it's business, sports or chess – the players with the
most passion will rise to the top. They will be the ones to spend more time studying
strategy, honing skills, analyzing opponents and practicing.
Likewise, from my experience, the single biggest differentiator between success
and failure in a BPO relationship is passion. A BPO partner who doesn't have a passion
for the customer's business and industry will not be able to execute at the highest
level.
As they say, "Risk is your best friend." The FDIC took a serious risk during the
mortgage crisis, providing assistance to financial institutions to take over failed
banks. As reported by the Wall Street Journal, the FDIC's tab for
failed U.S banks nears $9 billion, and FDIC officials expect to make an additional
$21.5 billion in payments over the next three years.
But while those figures seem high, it is extremely encouraging to see that the damage
has been less than the predicted figures. It looks like the approach had a positive
impact on the mortgage meltdown. Financial institutions can resolve issues with
the majority of distressed loans, resulting in a lesser amount to be leveraged from
the "loss-share agreement" pie.
An article in Forbes India ("Outsourcing's House Call") discusses
the new opportunities for business process outsourcing providers in the mortgage
industry.
It echoes what UST Global has been saying all along – that there are plenty of opportunities
for mortgage lenders and servicers to boost productivity, reduce costs and improve
quality through what I like to call, "right-sourcing" – determining which business
processes can more efficiently be handled by a partner, and then managing that business
process outsourcing (BPO) relationship to maximize its potential.
