• Paul Oh, Leon Leung and Chris Rogers
  • Published: 21 September 2022

Capco’s Paul Oh, Leon Leung and Chris Rogers on why APAC firms need to embrace Modern Delivery practices holistically to capitalize on the digital-first era.

The need to deliver new products and services more rapidly to market has led APAC financial institutions to embrace Agile methodology, which emphasizes friction-free interactions, fast iterations and cross-functional teams. However, the benefits seen from delivering individual projects in a more Agile manner are yet to be fully realized at an enterprise level for most organizations, notes Paul Oh, Capco’s APAC Modern Delivery Lead.

Modern Delivery: changing how banks think about Transformation

Capco has looked to redefine how Modern Delivery embeds the new ways of working into business as usual, says Oh: “It’s a set of approaches that aims to sustain the flow of digital-based improvements across the organization and improve their impact on cost-to-income. Modern Delivery must go beyond merely adopting Agile at scale – it requires wholesale change with new ways of thinking and operating,” Oh says.

Modern Delivery - How Modern Delivery is Shaping Successful Firm-wide Transformations

This includes creating a clearer line of sight between business strategy and investment deliverables, says Leon Leung, Principal Consultant, as well as decoupling management and delivery structures so that they accommodate decentralized ways of working and innovation. “Modern Delivery also includes practicalities such as restructuring how budgets are set to help pivot the funding flow quickly towards the initiatives that are gaining more traction than others,” Leung adds.

So what are the most compelling use cases for a Modern Delivery approach?

Strategic and adaptive investment

One challenge facing APAC financial institutions, says Oh, is ensuring investments and new initiatives continue to be aligned with the firm’s changing strategic priorities. The problem often lies in too tenuous a link between the outcomes the business needs to create economic value and the delivery team’s agreed ‘deliverables’.

That makes it challenging to keep initiatives aligned as new market information is learned, and to spot the early warning signals that a delivery approach is not working in relation to the desired outcome – which would allow implementation teams to pivot into a different approach before it’s too late.

Modern Delivery requires the formation of alternative governance structures that define success not in terms of traditional deliverables, but in terms of clearly defined business outcomes tied to measurable key results and strategic leading indicators. Many organizations do not find it easy to adapt traditional governance structures to focus on outcomes using the right metrics and data, says Oh.

"Modern delivery defines success in terms of clearly defined business outcomes tied to measurable key results and strategic leading indicators."

Paul Oh

However, by implementing Modern Delivery approaches to data models and delivery management systems, he says, “we are able to make early warning signals more transparent to managers, enabling them to better orchestrate and adapt capital investment across multiple value streams, in line with objective evidence and any lessons learned.”

Consider, Oh says, the example of a firm that wants to build out an offshore delivery model. Traditionally the firm might consider offshore teams to be an extension of its operations, however, quantifying the investment value of the offshore delivery center is difficult without end-to-end integration. A Modern Delivery approach can help reshape the offshore model so that it provides a foundation for rapid experimentation, with a clear line of sight to desired outcomes using the right metrics. This allows firms to make investment decisions based on outcomes achieved, rather than cost-play.

Ultimately the goal, says Oh, should be to create an enterprise-wide approach to adaptive investment. “Introducing adaptive investment and decision-making right across the business may mean that firms need a dedicated platform to help them define and track the right outcomes, connected to delivery metrics in something close to real time, in order to better understand how and where value is being delivered,” says Oh.


(Re)thinking enterprise practices

A majority of APAC financial services firms are now moving from experimenting at a project or divisional level with Agile adoption to wide-scale adoption across the enterprise. As firms try to scale up transformation efforts, they often find the same issues holding them back, again and again.

“The big challenge when introducing new ways of working at an enterprise level,” says Leung, “is the disconnect between how large financial institutions are run – management hierarchies, rigid governance processes, annual budget processes – and the core principles of agility.

"Behaviours at the enterprise level are often the mirror image of Agile thinking."

Leon Leung

For example, the Agile approach to delivering a business outcome involves conducting a series of rapid iterations, each followed by testing and quick decision-making by the delivery team to refine the delivery towards the target outcome. That kind of decentralized decision-making can be challenging to facilitate through traditional APAC management structures, where seniority, steep hierarchies and traditional reporting lines tend to hold great sway.

However, financial institutions have fiduciary and regulatory responsibilities and must prioritize security and customer privacy, so they don’t have the same degree of freedom as an unregulated tech start up. “Modern Delivery offers proven ways to help management achieve the right balance between creativity and sound project management,” says Oh. “It’s not simply about getting rid of existing organizational structures, which is usually unrealistic.”

"Modern Delivery offers proven ways to help management achieve the right balance between creativity and sound project management."

Paul Oh

The solution is to enable emergent delivery teams by using performance incentive systems, people structures and overall employee experiences to support the right behaviors from front- and back-office staff. “A holistic alignment of incentive systems to team goals, delivery structures and adopted Agile-based principles is crucial in sustaining agility at an enterprise level,” says Oh. This includes building behavioral and competency-based talent programs to embed Modern Delivery thinking into ‘business as usual’ across the firm.

New ways to unlock legacy platforms

The final challenge facing APAC financial institutions, says Oh, is extracting greater value from limited people and technology resources in an environment where the legacy platform problem will not disappear overnight, despite an increasing trend towards cloud and hybrid cloud strategies.

“Firms have ended up relying on legacy systems but also over-relying on specialist technologists,” he says. “Meanwhile, the technology talent that should be building strategic solutions is spending too much time maintaining legacy systems or adapting them to day-to-day business needs. This is an incredible burden, with the total cost of ownership (TCO) of technology expected to increase by 5% globally in the next year.”

A better approach, says Chris Rogers, Modern Delivery enterprise technologist, is to unlock legacy platforms using technology modernization roadmaps to enable enterprise-wide technology democratization. “By implementing agile, stateless, micro-service architectures and Low Code/No Code strategies,” he says, “we can free up specialist technologists to concentrate on more complex and strategic problems.”

Low Code/No Code (LCNC) strategies allow those with no coding skills to build and adjust business tools, giving power back to the business lines that are closest to driving operational efficiencies. “The target operating model,” says Rogers, “should be to empower everyone in your enterprise to innovate, and not to stifle operational agilities due to decision maker and technologist constraints.”

"The target should be to empower everyone in your enterprise to innovate."

Chris Rogers

However, if these strategies are to succeed, he says, they must often overcome resistance from those in the organization who remain concerned about the risks of a more decentralized approach.

“Given the overall opportunity to increase return from technology spend by up to 35%,” says Oh, “this underlines why the wider lens of Modern Delivery – which looks at how digital transformation is enabled through organizational systems and emerging business models, rather than simply through adopting Agile practices or tools – is so helpful.”