We gave a keynote at last week’s Tech & Trust Summit in Amsterdam, talking about success factors of corporate digitalisation.
Last week on October 3rd we joined the Tech & Trust Summit organised by Holland Fintech and Holland Quaestor. The event was initiated for those who are working within the Corporate Service Providers (CSP) ecosystem and wanted to know more about how digitalisation affects their business.
Other start-ups and solution providers that presented at the summit were ComplyAdvantage (UK), SMART GOVERNANCE (Portugal), The ID Co. (UK) and Finos Global (NL).
Corporate Services Industry: Digitise or die
A few key points of our keynote about digital transformation in a corporate context:
Digital transformation is a long-term game
We tend to overestimate the effect of technology in the short run and underestimate the effect in the long run. When it comes to succeeding in digital transformation, the players who now invest in their future are the ones who will finally win. Often we hear from clients that the anticipated market disruptions due to technological or regulatory shifts didn’t happen so far. Thus, it’s normal to wonder if anything changes at all. However, exponential growth looks like a flat line once one zooms in close enough. Digital transformation is therefore not about what happens next week or month, but about what’s likely to happen in over the next 3-10 years.
The three levels of digital transformation
On the most basic level, there’s incremental transformation: doing your homework to keep the lights on. Many of the start-ups that presented during the event provide great digital solutions that make tedious and slow corporate processes faster, better, or cheaper. Every company should have a plan to keep up with the latest technological solutions to ensure lean and efficient processes and that’s what incremental innovation is about.
The next levels are transformative, i.e. adapting or developing new business models and disruptive, i.e. inventing completely new businesses. These kinds of strategic levels are there to answer the fundamental questions: how are my customers and the business environment changing now, how is it gonna be in 3-5 years? What’s my business model now and how do I need to change it to be prepared for the future?
Why digital transformation is not about technology
Digital transformation is affecting all industries. Even though Uber, Facebook or Apple get a lot of press coverage, there are a lot of changes happening in the B2B markets, too. One particular industry that’s currently on a transformative peak is the financial services industry. Focused digital providers are unbundling the large universal banks, who need to prepare their organisations for the future – now. While many banks have invested heavily in new IT infrastructures, i.e. they have done their homework, it’s not enough. Digital transformation can only succeed when new technologies are complemented with a new business model. Technology per se is not a strategy. It won’t give banks a competitive advantage or an answer to how to compete in the banking industry of the future, that’s why the transformative and disruptive levels of digitalisation are of massive importance. For example, BBVA didn’t only invest in upgrading their IT, but experimented with various new digital business models, from Banking-as-a-Service to standalone challenger banks.
Three simple success factors to kickstart digital transformation
- The most important success factor is top-management commitment. If digital transformation is initiated at the middle management level, it is most often bound to fail. The sense of urgency and willingness to invest in new future streams for the organisation must therefore come from the top and needs constant exemplification inside as well as outside of the core organisation.
- Entrepreneurial strategies need a neutral ground, politically as well as technologically, to experiment, fail, and learn. Afterwards, the successful projects can be integrated to the core organisation and scaled from there. In contrast, if new business models would be implemented directly from within the core organisation, e.g. the IT department, it will most likely never even reach pilot stage due to misaligned interests and processes.
- Start today. Digital transformation is about understanding how the market is changing, what to do about it and about developing new capabilities. It’s about implementation and tangible results, hence there’s no need to create fancy innovation hubs to generate PR buzz.
Let’s get in touch if you’re interested in starting the journey with us.