As we celebrate “freedom day”, it is an opportune time to reflect on the last 18 months. The pandemic is one of those events that dramatically disrupted the status quo for almost everyone, for long enough, for it to be more than a punctuation mark in the human story. The global financial crisis in the late noughties and the oil crisis and global inflation of the seventies turned out to be mere punctuation marks. The world continued in much the same way as before after a brief pause. The two world wars were different. Their impact was severe, felt by all, over a prolonged enough period to trigger a reset of the status quo. They signposted the end of a paragraph and the beginning of the next chapter. A reset across the social, political, and economic fabric of the world.
I for one hope that the pandemic will usher in a significant reset. That we don’t just sleepwalk back to the way things were before. My wishlist for the scope of reset ranges from a change of our indiscriminate, conspicuous - and dare I say, unsustainable - consumption, to our impact on the environment. I also think we need to resist some unintended adverse trends that may take hold, including erosion of data and information privacy. These are big issues that need to be addressed, but they are not the focus of this blog.
Instead, I want to focus on a more pragmatic change. A change EXcubed can make a direct contribution towards - digitalisation in fund management. The use of technology to transform internal and external processes and interfaces between people. In particular, I will focus on digital transformation of processes and interfaces in my industry, fund management. In this blog, I want to share my thoughts on WHY we need to seize the opportunity for transformation right NOW.
WHY?
Employees, service providers, and clients of asset management organisations have had to operate remotely during the pandemic. The ease and speed with which we have all coped has taken most by surprise. We have done what humans do when faced with adversity. We adapt. We cobbled together solutions. Interfaces and processes that previously were manual and required physical interaction were replaced by zoom calls, emails, electronic signatures. These were far from seamless and smooth, but they were a stop-gap. They worked.
Post 'freedom day’ we will gradually return to the office and start interacting with colleagues in other cubicles and on other floors. We will have face-to-face meetings with our clients and service providers. However, if we go back to the same old manual processes and physical interfaces, we will have missed a great opportunity to use the pandemic as a catalyst to improve on what we had before. An opportunity to digitise processes and interfaces.
The answer to WHY we should use the pandemic as a catalyst to digitise both internal and external processes and interfaces is therefore obvious to me. For the fund manager looking inwards, the potential to significantly enhance efficiency, accountability, consistency thereby improving profitability, information, and compliance is significant. Looking outward to the client proposition and experience, the potential to improve responsiveness, transparency, timeliness, and quality of information will in the short term be a competitive advantage and in the medium, a fundamental requirement. It is a win-win.
WHY NOW?
The answer to why right NOW may be less obvious.
Change in general and digitalisation, in particular, is not easy. People and organisations resist change. The status quo is often perceived to be less risky. The bigger the organisation and the more established the processes the more difficult it is to change. That is why digital disruptors are often new players (or offshoots of established players) - because it is easier to start afresh than to change. The post-pandemic reset, therefore, provides a catalyst for large/established organisations to do just this.
The past 18 months have forced part of the change on us. Before we fall back into the old ways again, AND WE WILL, organisations have a window of opportunity to build on the change that was forced on us. A window to digitise processes and interfaces with lower resistance from all stakeholders. And stakeholders aren’t limited to people in the organisation, it includes clients and service providers. We are all more receptive to change NOW, but that window will close.
The resistance to change is not entirely down to complacency or lack of vision. There are legitimate reasons why it is more difficult for established organisations to adopt digitalisation and change. Integration with legacy systems and technology. Disruption of existing offerings, business processes, and clients. Complex migration of data. Above all, the significant investment, time, and resources needed to effect digital transformation. Budgets end up being exceeded by multiples. Time to market likewise. Worse still, the perceived benefits can be elusive too.
In my next blog, I will focus on HOW. How to make this change less disruptive. How to make it more sustainable. How to make it less risky. Above all, how to make it happen quickly and cost-effectively. Thus addressing the primary reasons why change is resisted.
I will follow the blog on “HOW” with “WHAT” organisations need to do to effect change. EXcubed has developed a tried and tested methodology and agile process of implementing digital transformation in fund management.
In my final blog of this series, I will share a brief case study of a successful digitalisation program in fund management carried out by EXcubed. The proof of the pudding.