iBPM solutions – Optimising for the Future: Navigating iBPM Implementations - Banking blog

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Intelligent Business Process Management (iBPM) has become a pivotal enabler of organizational transformation. Gartner assessed that 81% of organizations with iBPM capabilities have experienced noticeable, beneficial shifts in their operational frameworks.

Building on the insights shared in our first (here) and second blogs (here) on iBPM, here we provide our experience on the optimal timing (“When”) and best strategic approach (“How”) for the integration of iBPM into a financial institution.

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Signs that an iBPM implementation would be beneficial
Innovation in the banking industry is moving ahead fast, stimulated by new technologies like Generative AI. This means financial institutions need to continuously upgrade their technology stack to meet evolving client expectations. At the same time, emerging FinTech companies are altering the traditional banking landscape by leveraging their all-digital structures. In response, incumbent banks are introducing a higher level of automation in many of their client-facing and non-client facing business functions to innovate and to maintain their competitiveness.

iBPM is one of the means chosen by banking institutions to address these challenges. We found three key indicators which show it is the right time to carry out a digital transformation via iBPM:

  1. Lack of innovation and adaptation: Innovation, adaptability, and the means for expedited market propagation are imperative if financial institutions are to be successful today. An ageing technology stack, outdated operational methodologies, and rigid organisational structures are at the heart of failure to respond to new trends and make renewal essential.
  2. Low client satisfaction: Client satisfaction is key to building lasting relationships in an increasingly competitive market. If it is a struggle to provide easy, user-friendly experiences due to a mix of outdated, mismatched tools in client-facing and back-office applications, the infrastructure needs to be renewed.
  3. Lack of efficiency and resourcing: Efficiency in operations and cost management are crucial. By streamlining processes and maximising resource use, productivity and profitability are improved. Similarly, difficulties in staffing and resourcing are major barriers to productivity. The use of digital technologies, including iBPM, especially in high-effort operations, has proven to be an effective means to overcome these constraints and the risks associated with them.

Steps to successful implementation: a 5-step approach
Implementing iBPM is about operational transformation through manageable, progressive steps. The primary focus is to have a concise plan to integrate iBPM effectively, optimising the value delivered. Our 5-step approach has proven to be effective in supporting an iBPM implementation:

  1. Root cause assessment: Before the start of any iBPM implementation, a root cause assessment of the observed business inefficiency must be conducted. The analysis covers the business and operational model, including at least its process and technology aspects, to enable the organisation to understand which levers need adjustments. Once the root causes are identified, Key Performance Indicators (KPI) and their metrics must be evaluated to document the baseline for subsequent steps.
  2. Identification of needs and objectives: Once the root causes are assessed, the target state has to be identified. This means determining objectives derived from future business needs, expected improvements, and the advantages of these changes, all wrapped up in a viable business case.
  3. Gap analysis: The gap assessment establishes the link between the current state challenges and the future state requirements. It generates the insights on required changes and improvements but also on areas which can continue their current operations. An analysis of internal resources must be undertaken to understand the capacity and capability constraints, which can be addressed through different delivery models (see below).
  4. Action plan: Based on the identified gaps, a targeted action plan and specification of the implementation is developed. This includes the elements of the initiative as well as a prioritisation of quick wins versus long-term implementation goals.
    In this step selecting the right iBPM suite is crucial, matching the specific process automation, data integration, and analytical needs. The implementation itself can be done using either an agile or traditional waterfall approach, each with its own features and benefits, as explained below.
  5. Roadmap definition: Once the required actions are determined, a transformation roadmap helps to provide a structured and effective guideline for the implementation. Regular checks against the baseline metrics and KPIs are required to judge the overall success of the actual objectives behind the iBPM implementation.

How to deliver?
The decision on a delivery approach for iBPM depends on the company’s internal resources and expertise. Consider the following three options, internal delivery, hybrid delivery and external delivery, detailed in the graphic, to identify the right approach.

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Overall, whether an organisation selects internal, hybrid, or external delivery depends on its internal capabilities and experience, resource availability, and desired level of commitment to the iBPM project.

How to implement?
When planning for iBPM, deciding who will be executing the implementation is just as critical as choosing how it will be delivered. The 'how' — whether through Agile or Waterfall methodology — dictates the project's execution style.

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Agile methodology
Agile is all about flexibility and adjusting to changes quickly. It suits companies expecting to refine their processes as they go, responding promptly to feedback and evolving requirements. Agile breaks the project down into small sections, allowing teams to address changes and improve the product step by step.

Waterfall methodology
The Waterfall methodology is a linear approach in which each stage of the project must be completed before moving to the next. This methodology works well for companies that have a set plan with well-defined goals and only minor expected changes along the way.

Choosing between the Agile and Waterfall methodology depends on the company's preference for flexibility or structure in the project's execution. The key is to select the path that aligns most closely with the company's operational style and strategic goals.

How to ensure success?
To ensure a successful iBPM implementation, the initiative has to be embedded within the organisational structure. This is most easily achieved by establishing a dedicated, cross-functional team, including stakeholders from the client-facing business, IT, operations, and client service. Guidance and support from a senior sponsor helps to integrate the iBPM initiative into the bank's culture while reinforcing the commitment to innovation and excellence from senior management. Change management as well as clear and open communication are two other factors that must not be forgotten in the recipe.

Conclusion
The financial services sector is evolving rapidly and iBPM stands out as a valuable means to keep up with the required pace of change. It offers a practical response to common challenges, such as obstacles to innovation, low client experience ratings, and poor efficiency.

iBPM is most successful when the focus is on regularly updating and optimising processes in an agile way. This allows organisations to adapt and evolve their operational strategies effectively, ensuring they are aligned with industry trends and client needs. The key to an effective iBPM implementation is a well-planned project approach. A structured implementation strategy ensures the integration of iBPM proceeds seamlessly and is impactful.

Key contact

SCruz

Sergio Cruz - Partner, Consulting

Sergio is the lead Partner of Deloitte’s Business Operations practice in Zurich and has more than 25 years of experience in Consulting. He focuses on large-scale front-to-back digitalisation programmes in financial services and has worked on several large assignments both in Switzerland and abroad, covering the implementation of regulatory requirements and the definition and implementation of target operating models and process optimisations.

Email | LinkedIn 

DOuschan

Dominik Ouschan - Director, Consulting

Dominik is a Director in Deloitte’s Consulting Business Operations team in Zurich and has more than 10 years’ experience in Consulting. Dominik’s main area of expertise is target operating models related to client lifecycle management. He is the lead for Deloitte’s Industry Solutions offering, focusing on front-to-back platform replacements. His expertise also includes the IT stack enabling an efficient and effective support of the front-to-back business processes.

Email | LinkedIn 

TVancura

Tobias Vancura - Manager, Consulting

Tobias is a Manager in Business Operations | Cloud Engineering with over 5 years of consulting experience. He is highly experienced in working with international teams and effectively implementing automation into business processes to reduce complexity and support steering. He supported clients as a lead for large- and mid-scale Cloud Transformation projects in retail, communication, and life science industries.

Email | LinkedIn 

MaikMadoerin

Maik Madörin - Senior Consultant, Consulting

Maik is a Senior Consultant in Deloitte’s Business Operations practice in Zurich with over three years’ experience in Consulting in the financial services sector. Maik has experience in large digital transformation projects, mainly in the banking industry, where he focuses on target operating model design and operational transformations.

Email | LinkedIn 

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