The emergence of FinTech means banks and other financial services companies are rapidly trying to become more nimble, agile, and responsive to their customers. However financial institutions are hardly known as the pace-setters of innovation. While many traditional large banks and insurance companies benefit from the strength of having well-known brands and a well-established customer base, they are struggling to adapt to the challenges of the digital world. Their challenge is one of not just transitioning from legacy technology systems, but also how to change processes and decision-making styles which are deeply embedded in their organizations. One of the key tools in making this digital transformation is adopting Agile development.
Agile development is no longer just a software methodology. Executives increasingly realize the power of the methodology in driving their digital transformation initiatives across the whole enterprise. However, adopting Agile at scale is challenging – requiring fundamental changes both to how teams work together, as well as an altogether different corporate culture.
Based on Belatrix’s experience helping one of the largest banks in Peru adopt and scale Agile, this whitepaper provides a set of best practices for organizations looking to adopt the methodology and become a digital-first enterprise. In addition, the paper explores the innovation process and the importance of Design Thinking and customer journey mapping.
While each organization is different, we can see best practices that have worked in some organizations. The following best practices are based on an on-going engagement that Belatrix has with one of the largest banks in Peru.
One of the key features of the innovation centers of this bank, is their physical layout. Leaders at the bank decided to create open spaces to promote and foster collaboration, freedom, and creativity for employees. The dress code is informal. Team members are encouraged to add personal items to the areas where they work, to help create a sense of community and belonging. Successes are celebrated by the whole innovation center – for example, after completing the MVP or after a successful pilot, everyone celebrated. This helps create a great feeling and culture of “we are different teams working on a common goal – digital transformation”. It is a very different atmosphere from your usual “corporate” environment.
When working in an Agile environment it’s important that teams have the tools and physical setup to enable them to work effectively. What does this look like? It means having space on the walls, windows, or a whiteboard, so the burndown chart is easily visible to the whole team. It means having post-it notes, notebooks, whiteboards to hand. It means investing in the appropriate tools such as Jira, Bitbucket, Bamboo (for continuous deployment) and others. This means that not just the team, but any stakeholder, can clearly see at any moment the status of projects.
In this organization, Agile and Scrum were new methodologies. Previously teams had always worked in a traditional waterfall approach. In order to help teams adopt this new way of working, the bank set up so-called “Scrum clinics” where anyone could ask questions, receive guidance, find best practices from other teams. The Scrum clinic also helped organize regular trainings on Agile.
The biggest change in shifting to Agile is the shift in culture. One of the reasons the bank brought in a company such as Belatrix, which is a pure Agile development company, was to share the culture and how important it is in making Agile work. For example, it’s essential that people have the opportunity to make mistakes, that they are empowered to make decisions, and perhaps most importantly, that they are in an environment which is fun and energetic.
Once the culture has been established within a small team, the organization wanted to expand this beyond just the innovation centers to the whole IT organization. In order to achieve this they created Agile teams, or what they referred to as a “agile cells” in different parts of the organization.
Driving awareness of Agile – how and why it represents a different way of working, its benefits, and challenges, is a critical part of implementing and then scaling Agile. As a result, a simple practice that this bank ran, was every other week inviting 40-50 people to a room to give them an introduction to Scrum. Here they ran exercises to give a hands-on introduction to the principles. This was targeted at everyone, not just people from IT, but business functions from finance and accounting to human resources.
The innovation process was broken down into two simple stages – first ideation and then implementation. Each stage had their own best practices which we want to examine here.
Ideation uses concepts from Design Thinking and customer journey mapping
The organization borrowed different ideas and concepts from Design Thinking and customer journey mapping. These are brought together in a workshop where all individuals are involved. The aim is to get a rich and diverse group of people together – the more diverse, the better.
During the workshop, the participants aim to get a deep understanding of the customer, their desires and problems. Participants then brainstorm how the customer journey would look like in an ideal world. Having expressed their ideas, the participants vote for the most innovative, and those that they think will add the greatest value to customers. With this, the initial workshop comes to a close. However key stakeholders continue to work on processing and analyzing the information to decide on the final functionality they want to add to the product. Following this, participants are invited to what is known as a “Conceptual Workshop”, where the results are revealed and discussed, and the team makes the final decisions as to what are the most feasible, valuable, and viable options to implement.
Following on from the ideation stage, innovation does not stop during the implementation of the product. However before starting development and implementation, the team should define the key Agile artifacts they intend to use. This means defining for instance the duration of the Agile Sprint, deciding on the definition of ready and done, defining the product roadmap (and escalation processes), and of course what Agile tools will be used.
Once the team has defined these Agile artifacts, development can start. In this organization, the team aimed to get a product from the ideation phase to being ready to go live in 14 weeks. They used Agile Sprints of 1 week to ensure rapid feedback.
The initial product should be tested with just a small segment of your customer base. Monitoring the use of the product and customer feedback, means the team can then make technical and/or functional improvements before releasing it fully to the market.
Increasingly organizations realize that Agile development is a core part of their digital transformation initiative. In a world where becoming a digital enterprise will mean the difference between success and failure, executives are looking to tried and tested methodologies to make this shift. However, when making the move to Agile, it makes no sense to reinvent the wheel. Instead look to best practices and what has worked in other organizations.
You can read more about Belatrix’s work with one of the largest banks in Peru, in our case study available here.