Infosys Finacle thought paper on Banking Business Transformation Framework & Technology Capabilities & Capacity.

1. Transformation: The bridge to an
enterprise’s future
Thought Paper
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2. Transformation: The bridge to an enterprise’s future
Definitions of business transformation can As previously stated, business transformation
differ from company to company; however, is a term used to refer to strategic, enterprise-
transformation generally refers to strategic, wide change programs that have a profound
enterprise-wide change programs that have a impact on the organization’s end-to-end
significant impact on an organization/company. capabilities, technology, environment, processes
Transformation programs tend to focus on: and performance. If correctly planned and
addressing market change; reducing cost due implemented, business transformation has
to new economies of scale at a domestic or significant impact across the entire organization
international level; achieving growth by seizing with implications and benefits that deliver
(speed to market) each and every opportunity results to the bottom line. The most common
offered by the existing and changing markets. drivers for business transformation initiatives are:
Whether the intention is to expand capabilities, • Corporate transactions - mergers, acquisitions
boost efficiency or to improve profitability, and/or divestitures; Global and/or domestic
business transformation has become a way of competition - changing market conditions;
corporate life. There is no doubt the forces of
• Changes in the global business environment;
globalization will continue to drive high levels
of business transformational activity for the next • Strategic people, process and/or technology
several years. efficiency changes - changing business model,
outsourcing/ off shoring, cost reduction,
There are two major forms of transformation:
consolidation, etc.;
• Fundamental change that generates a strong
• Emerging trends and new technologies – digital,
impact on business results, such as mergers
pervasive computing, new commerce;
and acquisitions, outsourcing, or strategic
initiatives. These programs usually involve • Support for new and emerging markets;
external players and generate major
• Enterprise-wide technology changes;
transformation across significant portions of
the organization • Enterprise-wide restructuring/reorganizations;
• Transformation Programs that generate • Value-chain improvement initiatives (supply
incremental improvement, such as cross- chain programs); and
functional performance improvement or
technology re-platform – but require new or • Regulatory changes and/or government
updated skills, technology and/or organizational policy change.
approached to implement and sustain.
Continual change is driven by the above
In summary, transformation as defined in mentioned factors, and serves as a constant
the organizational context is a profound and reminder that there is no such thing as a
radical change that drives new direction in an static business environment. There is continual
organization and takes it to an entirely different and significant pressure exerted on and from
level of effectiveness (from all aspects – cost, boardrooms, forcing executives to rethink,
processes, revenue, etc.). Transformation implies reinvent and change the operating model and /
a makeover that when complete will have little or structure of the business. In today’s business
or no resemblance with the past configuration climate, change and transformation are almost
or structure (technology, people and process). as common as “business as usual”.
02 Thought Paper

3. Any change is difficult, and it is well understood • Business Case and value realization is
that business transformation programs are understood and supported;
inherently complex. The fear of change can
• Robust Governance Model with clearly
have a paralyzing effect across the enterprise
identified stakeholders and a direct
from executives delaying critical decisions to
relationship between the transformation
mistrust and denial from those affected by
and the impact to each stakeholder’s
the transformation.
organization. The Governance Model fully
Though business transformation has become aligns accountability, responsibility and
the “norm” for how companies run their authority, ensuring the benefits of success
respective business, executing change is not a or consequences of failure of the endeavor
natural capability for the individuals who are bear an impact to the stakeholder
tasked with driving the programs that are part or executive;
of a transformation initiative. • Workable Approach and Execution Model
In any business transformation there must be key that has seasoned team with similar
tenets embedded in the organization to make experience so that the methodology,
the successful transformation journey which are: processes, discipline, expertise, and
governance defined in the execution model
• Accepting business transformation and will be easily understood. The has clear and
change as a central and common “way of distinct roles relative to business delivery,
working” for an enterprise; transformation management, governance
• Realizing that there is a direct causality and technology solution delivery;
between business value generated and • Technology Capabilities and Capacity to
improvement in business process; perform all the technology solution delivery
tasks required by the transformation,
• Setting objectives is not enough— there must
including but not limited to skills, tools,
be a clear vision and a target operating model
processes, and management capability;
underpinning it, that has enterprise-wide
buy-in and the full supported of the executives; • Enterprise Business Capabilities and
Capacity to design, support, implement
• Strong executive commitment and involvement
and operate the transformation elements
throughout the transformation;
and their related business aspects for
• Continuous business transformation readiness the transformation
assessment to evaluate and measure the
The remainder of this paper focuses on the
enterprise’s readiness to undergo change.
transformation readiness and delivery model
Critical readiness areas to assess are:
for the transformation program. The emphasis
• Vision (target end-state operating model) is on the program structure, execution model
is clearly defined and related to the change and methodology are required to successfully
that is to be achieved; drive a transformation program.
The bridge to an enterprise’s future: ‘The Journey’
Overview ‘The Journey’ regulatory) factors that spark the requirement
to embark on the transformation journey.
The journey starts with a vision of an enterprise-
wide change program, driven by internal Refining the vision and the commencement
(e.g. cross functional changes, or a merger) or of constructing the business case is where the
external (e.g. changing market conditions, or journey begins to take shape, and also become
Thought Paper 03

4. complex. Yes, visions and ideas do create Business case
euphoria and excitement! That said; navigating
Unfortunately, many business transformation
to the “end-state” (implementation/outcome) of
programs either don’t make it out of the starting
the transformation is complex and full of
gate or are grossly underfunded... Success,
challenges. Bringing order and shape to a
therefore, depends heavily on getting “the
transformation program, requires a framework.
numbers are right” which in turn demands that
The framework must embrace the key building
the business case be constructed to connect
block of the transformation: vision; business
the dots from vision to target operating model
case; governance model; workable approach
to meaningful business measurements.
and execution model; technology capabilities
and capacity; along with both the business The end goal for a business case is not simply
capability and capacity. The framework is getting Executive or Board approval. While that
essential. Organizations shouldn’t fall into the is the essential first step, the business case also
trap of just conforming to the framework establishes the case for change and influences
(i.e. assume the framework is the answer), in the odds of a successful transformation.
contrast the framework should be embraced
This broader view of the business case embraces
and in turn influence, guide as well as direct
robust processes for developing, managing
them down the transformation journey.
and continuously measuring the business case
– adapting as appropriate - throughout the
TRANSFORMATION GOVERNANCE
MODEL
initiative. The following are some key tenets for
BUSINESS CASE
constructing a business case:
VISION
WORKABLE APPROACH AND • Understand the “Current State”
EXECUTION MODEL
Understanding the key drivers in the
current business environment that influence
BUSINESS CAPABILITY AND CAPACITY
performance is foundational to the business
TECHNICAL CAPABILITY AND CAPACITY
case. By focusing on known metrics,
improvements and. and performance indicators
Exhibit – Framework for execution of Business
are mapped to processes and organizational
Transformation Program effectiveness correlating the transformation
activities to tangible, measurable, real
world results.
Vision
• Get the basics right - set the foundation,
The vision is driven by the executive and senior
implement and measure
management team, supported by various levels
and key stakeholders across the organization. A business case for transformation must
The vision should tightly align with the include measureable benefits, costs and a
corporate vision; in some cases transformation clear line of accountability and ownership
will “rewrite” the corporate vision while being of both the benefits and costs. A business
synergistic with corporate values. case must have data and accurate numbers
backed by a compelling story that can
The initial level of the vision should cascade
be understood and agreed to by the
into increasing detail, directly mapping the key
business executives.
process metrics between the vision and the
subsequent levels. The most detailed level To ensure the business case delivers, it
should clearly align with the key business is essential to build the metrics (both
processes that will drive measurable improvement. qualitative and quantitative) into the
Each of those processes should be mapped to transformation delivery plan. The business
the business cases linking business value to executives can then actively monitor business
meaningful, well-defined metrics. benefits throughout the transformation
04 Thought Paper

5. program. As the program evolves change is execution. At the nucleus of the execution
inevitable. Changes to scope, plan or time model is the methodology which at its best
must be continuously factored into the seamlessly integrates the business change
business case, with decision matrices that with the technical delivery. The hallmarks of
reflect the impact on the key drivers and metrics. an effective methodology are being modular
and customizable to the type of transformation.
• Defining the “Future State”
Modularity supports the decomposition of
Odd as it sounds, the future comes first. Set the desired outcome into more logical and
goals that foster change through innovation manageable threads while recognizing
and paradigm shifts while aligning to the and managing the interconnections. The
vision. Define “good” as it relates to the threads represent the major focus areas of
business. What are the key process and the transformation.
metrics? How does the process and metrics
support the business case? Do the processes Key areas of the methodology are: process
align with the strategy and drive organizational optimization; application analysis and optimization;
effectiveness (operating model)? Are the change (adoption and accountability); global
enablers aligned to the processes, and in turn delivery framework (align and orchestrate
aligned to the metrics? What is the impact capabilities); infrastructure and operations
on technology requirements and organization? analysis and design; partner delivery and decision
What roles, technology and processes are framework; delivery management (manage
most impacted? Does the delivery and and deliver transformation); and value model
implementation align with delivering the (linking business benefits to delivery (outcomes).
benefits in a prioritized fashion? The methodology drives and maintains the
integrated view of business and delivery that
• Leverage your people
results in real value.
Involving business people early on ensures
the roll-out is about delivering business Workable Approach and Execution Model is
benefits, rather than doing things to the best implemented by an experienced team
business. Stakeholder support - business bringing different perspectives but a common
and technology - at each step of creating understanding of the roles and responsibilities
the business case will both shape and fully associated with the methodology, processes,
reflect the perception of current performance disciplines, expertise, and governance are
of the business, as well as the business required for success in high impact, high risk
priorities and expectations. initiatives. The model should have clear and
distinct roles relative to: business delivery,
As you progress with your business case, engage
transformation management, governance as well
various levels of the enterprise in designing
as technology solution delivery. The Execution
the future operating model enabling them to
Model provides a single, consistent approach for
clearly understand the changes at an individual
managing multi-program/project, multi-vendor
role level. The transformation leader cannot
(consultant and software), and multi-organization
mandate behavioral changes within the business,
transformational program.
so having some key people at various levels
within the business builds the support and To execute any transformation, there are
extended leadership to successfully drive the always dire needs for high end architects (e.g.
changes required by the transformation. data, infrastructure, and integration), testing
management requirements management and
Workable approach and execution business change across the delivery of the
model business outcome. These aforementioned when
At the heart of every transformation are a grouped together form the Solution Delivery.
workable approach (i.e. minimal overhead, The business delivery (outcome) is across the
defined ways of working), and a delivery focused Solution Delivery.
Thought Paper 05

6. The end to end and integration management with the business outcomes, thereby maintaining
integrates the individual business outcomes a focus on the desired business results as
and solution delivery across the transformation. opposed to the day-to-day program tasks. One
To summarize the Execution Model integrates key aspect of the model is to create a controlled
the solution, delivery and integration across the baseline from which to measure success and
transformation, while providing both horizontal make changes in response to emerging business
and vertical management to ensure consistency priorities. Another is to build full stakeholder
and quality. support, clarify roles and support effective, timely
decision making.
The Execution Model must ensure that the
solution is cohesive across the various business The transformation governance model accelerates
outcomes within a transformation. To support business transformation and organizational
a cohesive solution, the Execution Model must change through the effective use of business
have a consistent structure for the delivery. resources, technology organization, and executive
The structure is a consistent delivery model management. The governing body should be
which is a matrix structure where the business empowered to:
outcomes are organized and driven vertically
• Create focused linked forums that foster greater
across the Solution Delivery. Solution Delivery
for most any transformation, systems integration • Communication;
or even a project has significant scope in • Collaboration;
requirements/process design, integration
architecture, data architecture, infrastructure • Standardization; and
architecture, testing management, and business • Collaboration across the programs in the
change/organizational readiness. These have transformation.
always been and will continue to be the
• Provide the basic infrastructure and
foundation of any transformation program.
communication tools to allow stakeholders to
Finally, end-to-end delivery management leads collaborate and be effectively integrated with
both the Solution Delivery and Release/Business organizational decision making
Outcome delivery. The diagram below is a logical
Transformations should consider at least 4
depiction of Execution Model.
different leadership roles, each focused on the
End to End and Integration Delivery Management interests of a distinct group of stakeholders
Release (Business Outcome) Delivery
Requirements / Process Design (Business Design)
• Executive In-Charge (EIC) is accountable for
the overall success of the transformation. The
Integration Architecture
EIC provides the overall leadership and
Data Architecture
direction; owns the business outcomes; owns
Infrastructure Architecture
Testing Management
and is accountable for the business case; and
Business Change/Organizational Readiness/Training & Development
owns the organizational consequences.
Solution Delivery
• Business Sponsor – owns the business
solution, resources, alignment and integration
Exhibit – Execution Model
with technology. The Business Sponsor
ensures initiatives are business driven. The
Transformation governance model
Business Sponsor leads the Business Council
The governance model is the nucleus of a accountable for:
transformation program. The pressure for rapid
• The target operating models;
action and critical decisions is paramount.
Designing the optimum transformation approach • Identifying and establishing the necessary
requires balancing: costs; scope; capabilities; conditions for transformational success;
benefits; and timing. The operating characteristics
• Managing operational and delivery risk;
for the governance model should be integrated
06 Thought Paper

7. • Aligning change actions with target service providers, supplier and technology
outcomes; and environments, including technology shared
services across the transformation program.
• Embedding behavioral change.
• Technology Sponsor – Ensure interoperation
between all intra-enterprise, external
The below depicts an example structure and the respective accountabilities.
• Executive Accountability Executive In-Charge • Spending Requests
• Technology and • Recommendations for
Business Sponsorship • Changes in Strategic Direction
• Manage corporate and Transformational Governance • Intra and inter business issues
transformation risk • Scope and Budget resolution
• Executive Reporting
• Operational - Day to • Cross Program Integration
Day leadership and Management
Management • Escalated and cross program
• Manage all Programs End to End Delivery Management risks and issues
• Budget and financial • Plan management across all
management programs and projects
Well defined reporting and processes
End to End and Integration Delivery Management
Release (Business Outcome) Delivery
Requirements / Process Design (Business Design)
Integration Architecture
Data Architecture
Infrastructure Architecture
Testing Management
Business Change/Organizational Readiness/Training & Development
Solution Delivery
Exhibit – Transformation Governance Model
Technology capabilities and capacity
The readiness of the technology organization program. Typical areas of impact requiring
is another critical success factor in transformation. initiatives to support the transformation are:
Most transformations require significant
• Capability to support end-to-end environments
technology changes, which create the need for
that are integrated with current (legacy)
new technologies, upgraded skill-sets, change
environments;
in operational processes, and organizational
changes along with modifications to the existing • Tools – the right tools and processes to
business as usual processes. This requires an support a large transformation;
in-depth review and gap analysis – during the
• Skills and capabilities of the internal
initial phase of the transformation. The output
technology organization; and
of the gap analysis is a set of initiatives that
will be owned by the Technology Sponsor, and • Partners (suppliers) and third-parties – right
managed and delivered by the operational partners and third parties (products) to
teams as part of the over as part of the overall support the transformation
Thought Paper 07

8. Enterprise business capabilities and capacity
To succeed in any transformation, businesses important. It is essential not to “carry baggage”
must be ready to lead through increased from business as usual into a transformation as
complexity and volatility, drive operational that is a critical risk, as the organizations have
excellence and enable collaboration across the tendency to recreate what is in place today.
enterprise functions, develop higher quality In addition, Partners (suppliers) should be
leadership and talent, and manage amidst assessed to ensure they can supplement the
constant change throughout the journey. capabilities as well as the methods and tools to
Knowledge of the business is a given, it is deliver the transformation.
the change-related capabilities that are most
Conclusion
The successful delivery of a business The framework for a transformation should
transformation must be underpinned by a provide a common understanding of how
solid framework. Transformation is large scale, the people, process and technology will be
enterprise-wide change that will significantly structured so as to align with and achieve the
impact an organization/company. In addition, objectives set out by its vision to meet the
the methods, execution approach, and capabilities business plan to ensure achieving the desired
to support the framework are essential. business outcome.
Michael A. Leyva
Head of Finacle-CSI, Infosys
08 Finacle

9. About Finacle
Finacle from Infosys partners with banks to transform process, product
and customer experience, arming them with ‘accelerated innovation’
that is key to building tomorrow’s bank.
For more information, contact Finacleweb@infosys.com www.infosys.com/finacle
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