Are you sure you want to win the digital race?
“The most important thing is to participate, not to win”. Really? Nobody believes in it, but that’s what we tell our children. To be honest, not even my 6 year old son really believes that, and I actually don’t think that my 3 year old daughter does either. We all know that 2nd is the first loser. Silver in boxing hurts and silver in poker is very expensive. And the concept of silver and bronze doesn’t even exist in football. The winner takes it all, right?
The digital race is on, but is it one you really want to win? Could it be that it’s so hard to win, that you risk losing all the other races of the season if you try?
I often meet clients and prospects who say “we need to do something about our digital solution”, “we have decided to go digital”, “we want to be digital pioneers” and so on. When I ask why, they look at me as if I’m stupid. I rarely hear someone say that they want to use digital tools in order to support their overall business strategy, to achieve better quality in their client experience or to increase capacity and profitability. It often seems to be driven by some kind of desperation, or fear that they are not digital enough. I ask them why, because I wonder if they have thought through what they want to achieve by throwing more money at digital solutions click resources.
Digitalization is an important part of any industry today. But being perceived digital will not make you successful. A digital solution on top of flawed core systems, inefficient APIs, poor data quality and in a dated technical environment, will not help your business thrive long term. Think about yourself: For how long would you use an online service with the most amazing design, but that delivered wrong numbers, and late? Maybe you would rather prefer a simple and efficient tool that gave you the exact, accurate information you needed, and fast? As an investment manager, if you want to offer your clients the best of both worlds with great design and superior efficiency, the question becomes: will it add real value to your clients and your business, or just cost?
Successful digital projects
There are many factors that come into play on the path to digital success, but one key factor I see is when digitalization is part of an overall business strategy. This normally gives the highest ROI, and also supports the very reason why you are in business. The overall strategy defines your purpose, what you are delivering to your clients and why. I think it’s critical to never forget or underestimate the client perspective. Don’t forget that the client experience is based on the total value that your infrastructure can deliver, not only the digital solution. Thinking that a fancy app will define the overall client experience is a common mistake.
A digital solution built solely for you comes at a high total cost of ownership (TCO). It takes time, money and effort to build and maintain. But if your goal is to win the digital race, no matter what, then this is where you need to go. However, if your goal is to have a digital solution that supports your business strategy in the best possible way, you need to go deeper. Finding the right tools that allow you to differentiate your business, using standard components where it makes sense, will likely give you the lowest TCO. And the highest ROI, since you will have more time to enhance all the other tools you use to support your business strategy, and make sure you make the most of them.
Digitalization is a must in our industry, no doubt, and calls for action. But the principles remain the same as before: Focus on the client, figure out what you need to solve for them, and find the right tools to support your strategy. You might not win the race this season, but perhaps the bigger win is yet to come?
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