It has been 20 years since the Manifesto for Agile Software Development was published, and even longer since the idea was first formed, and yet there still isn’t a clear understanding in the industry of what Agile really is. The definition of Agile is an iterative approach to project management and software development that helps teams deliver value to their customers faster and with fewer headaches. We asked Andrew Barnett to shed some light on this.
- RIMES: How do lean and agile principles apply to and have helped shape today’s fintech industry?
- Andrew: Both lean and agile principles aim to deliver faster, more sustainable results, but they are different. I see agile as focused on output and lean as focused on outcomes, the latter is especially essential in a service-based organization – fintech or industry. Because fintechs are often in early or growth stages (or have gone through that phase and experienced its benefits) you will see a very conscious or unconscious lean and agile approach to innovation to create sustainable customer value. It has become the 101 of finetch.
- R: How are cloud service providers enabling and innovating when it comes to lean and agile solutions?
- A: Cloud is just one of the capabilities that an organization can use to innovate and I would suggest that most organizations see the primary suppliers as key infrastructure rather than the innovation themselves. The cloud infrastructure and their portfolio of growing tools offer rapid access to ideation, prototyping and iteration – but be wary of their commercial model and identify how you scale the innovation into a commercial and serviceable product.
- R: What are the benefits of outsourcing as opposed to inhouse services, and how does this impact on the work culture?
- A: Firms will only benefit from outsourcing after a couple of activities. Firstly firms should have run that activity or function before and understand it. Nothing should be outsourced that you don’t understand, to ensure that oversight is suitable (for the company and the regulator). Secondly a corporate strategy should be in place which outlines where the boundaries of the business lie. For example as an investment management business, the investments team generate returns and the distribution team win and retain clients. The operations and technology are foundational but not core to the business – this is where business boundaries could be redrawn and where a commitment to outsourcing can be made to make space for a fintech partner. Personally, the outsourcing name is not one I like due to the persisting negative connotations of throwing a problem over the fence. It has to be treated as a strategic partnership and that partner, as an extension of the business. At RIMES I get invited to clients’ Christmas parties… a good sign that partnership is working.
- R: What technology trends are dominating the lean and agile revolution – and why?
- A: To start with it’s people enabled by technology, not just technology, which is dominating the lean and agile revolution. That said, there are some technologies we hear about all the time; artificial intelligence (AI), machine learning (ML), cloud, blockchain etc, that make up just about just about every fintech product roadmap. Independently, these are all very interesting capabilities but they are just the raw ingredients. Lean certainly needs people, process and technology symbiotically working in an environment of continuous improvement to achieve the outcomes that create value for the customer. These technologies can be used in every part of the process. The key is that formally analogue processes become digital, they create real-time feedback loops that remove friction and subjectivity from the process and everyone benefits. Agile on the other hand focuses on tools and process to achieve outcomes. For me, often a good label for it is to say “don’t worry if we get it wrong we will iterate it correct.” In both agile and lean there are tools that help get the job done, but ultimately, the people – the workers – who perform the tasks are more important than the tools they use.
- R: What new lean and agile developments will become mainstream solutions within the next five years?
- A: I don’t see these as explicit outcomes. As COVID-19 has taught us over the last year, it will be about the ways of working enabled by technology, not mainstream specific solutions.
- R: What are the main challenges when adopting these new business models?
- A: There are always challenges. The main ones our clients discuss with me are; executive sponsorship, training (external), organizational wide objectives and key results (OKRs) and key performance indicators (KPIs) to measure outcomes associated with successful implementations. A common mistake is to create a highly or over governed program to effect this change, highly visible, highly communicated, highly funded and straight away it breaches all the lean and agile principles.
- R: How long will it be before legacy systems become obsolete?
- A: Decommissioning tech is extremely expensive. Show me a business case with a net present value (NPV) that is in the black and I will tell you the financial model is wrong. There are some useful tools like virtualization that enable you to create an abstraction layer from your customers so you can minimize the impact of change, but there is a risk that it becomes a sticky plaster solution. When I hear companies complain of siloed data in legacy technology and its weighing down their strategy and budget, I think that they’re lacking and are not being innovative enough with the way they find solutions for things. Data in a legacy technology is likely still good data! It is still being used and therefore valuable. Don’t move it if you don’t have to and find a way to access it with the right level of governance and tag it with an appropriate level of data quality or hygiene.
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