A COO’s Conundrum
Financial Services firms face global economic pressures, including fluctuating interest rates, geopolitical tensions, and stringent regulatory requirements. Rapid technological advancements like Blockchain and Generative Artificial Intelligence (Gen Al) add to the complexity of the landscape. To thrive, firms must set ambitious strategic goals, building on a foundation of operational excellence to innovate and remain competitive. It has never been more difficult for those in charge of operations to know where to place their bets. With this whitepaper we aim to simplify all of that.
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A COO’s Conundrum
To achieve strategic goals, firms must optimise their operations to align with their size, ambitions, and objectives, driving the long-term success of the business. Valentia Partners urges firms that are aiming to optimise their operations in 2024 and beyond, to focus on five key strategic outcomes. Focussing on these outcomes will support COOS in balancing their cost reduction, risk management and value creation objectives whilst also driving innovation through the operations function. strategic outcomes are as follows:
Generating the best possible outcomes for customers according to their needs.
Achieving the right cost profile across the function.
Minimising risk both for your organisation and for your clients.
Delivering scalable solutions to support your growth ambitions.
Innovating to generate revenue from best in-class operations.
This article outlines a roadmap toward innovation and optimisation, emphasising that firms must prioritise operational capabilities to build strong foundations before adopting new technologies. The journey is unique to each firm, depending on the robustness of their internal operations and readiness for change some firms may need to focus on basic processes, whilst others further along the roadmap can benefit from new technology investments. It is imperative for firms to assess whether to invest in future technologies or consolidate existing operations first, to ensure long-term success.
Whilst we will address the advent of specific technologies, we urge firms to first prioritise strengthening their operations to support ambitious changes. While addressing the five key operational areas and tackling more complex challenges can be distinct tasks, they don't have to be sequential. Agile methodologies enable firms to blend both, building strong foundations while pursuing innovation This approach enhances core operations and prepares for advancements, allowing firms to adapt to evolving challenges and growth opportunities.
Setting the strategic direction: Setting the course for success
A successful business strategy requires a clear understanding of the organisation's goals. Amidst complex global markets and rapid technological advancements, having clarity of purpose and strategic intent is crucial. Failing to understand and clearly define what they want to achieve will leave businesses unclear on whether they are on the right track as they struggle to equate 'change' to 'progress'. Operations leaders must be able to precisely define their strategic objectives and align them against those of the business at large. With strategic intent set, Operations leaders can see clearly enough to begin assessing potential solutions provided by their organisations, the market and through focussed innovation
Even with clearly defined strategic goals Operations leaders are bombarded with potential 'solutions' on a daily basis. It's almost impossible for Operations leaders to open a browser window or their own inboxes without a barrage of messages extolling the virtues of RPA, APIs, GenAI, Blockchain and a world of alternative solutions. This barrage of fixes, presented without any sense of what's actually broken can be overwhelming, bewildering and leave leaders with a sense that they have to be engaging with all of this tech, all at once, to be successful
Valentia's five goals for operational excellence provide a framework through which these solutions can be evaluated according to what they can actually offer the business. Where firms have strategic ambitions that centre on creating best-in-class customer outcomes they may choose to look at moving away from legacy technologies to provide self service options, access to innovative financial products or accelerated SLAs. Alternatively, firms focussed on cost-optimisation might choose to harness process engineering, process automation and RPA in bringing down the human touch points needed to deliver outcomes to their customers.
Strategic direction is always critical to setting the agenda for Operational change and good strategy is almost never technology for technology's sake. Operations leaders need clarity of thought and ambition as it relates to the changes they seek to enact and by focusing on our five outcomes operations leaders can focus on setting the foundations for further innovation In their businesses.
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