Achieving Innovation and Resilience for Financial Enterprises: Key Takeaways

For those who missed our recent webinar «Achieving Innovation and Resilience for Financial Enterprises», hosted by DataArt in collaboration with AWS, we have cherry picked the most inspiring insight and advice on innovation, cloud technology, business agility, and cost optimization.
20/08/20
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By Peter Vaihansky
SVP, Engagement Manager, Finance Practice
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Achieving Innovation and Resilience for Financial Enterprises: Key Takeaways

On the 16th of July, DataArt in collaboration with Amazon Web Services (AWS) hosted a webinar, featuring Maarten Ectors, Chief Innovation Officer at Legal and General, and Ralph Severini, Global Lead — Insurance Partners at AWS, as speakers, and Peter Vaihansky, SVP, Leader of DataArt’s AWS Partnership team, as a moderator. The speakers discussed how a company can remain resilient and competitive in the face of constant disruption and unprecedented events and leverage the innovation mindset, the right technology, and the right partners for business success.

We hope you enjoy this summary.

Ralph Severini
The CIO position is somewhat of a merry-go-round. You have to make your mark with innovation early on as a CIO, or you’re not going to have that chance later.

Ralph Severini, Global Lead — Insurance Partners, AWS

  • Aligning IT and business and simultaneously creating innovation while maintaining the resilience of the business is certainly not a task for the faint-hearted, and really is the mission that only the best CEOs and their executive staffs have consistently achieved.
  • The CIO position is somewhat of a merry-go-round. You have to make your mark with innovation early on as a CIO, or you’re not going to have that chance later.
  • Take a chance and continue to take chances in your career and with your business. You won’t be right all the time... But the payoff is learning from the «losers», moving on and taking more chances, which is key for innovation and new product development.
  • On innovation and information: It is crucial for success to drive information and insights into the hands of your organization, including the executive team, mid-level managers and line personnel, so they can be responsible for change. It is IT’s responsibility to develop the systems and mine the data to get at those insights.
Peter Vaihansky
Innovate even if it might cannibalize your existing revenues streams. You can be sure that somebody is going to do it anyway, so it’s better be you.

Peter Vaihansky, SVP, Head of AWS Partnership Team, DataArt

  • Whenever we are speaking with customers about the reasons to adopt public cloud, we always emphasize that it is really not about cost savings. Doing the same thing you were doing yesterday but cheaper is better than nothing, but the real value lies in the ability to do things you simple could not achieve on-premise.
  • Resilience is, among other things, about the ability to respond to unforeseen events. It is precisely the innovator’s mindset that also gives you the basis for agility in your business, including your technology and the rest of your business processes. Without that, you risk being disrupted by a competitor or an unexpected crisis.

Maarten Ectors, Chief Innovation Officer, Legal & General

  • At Legal & General, we are focused very much on how to bring the cost of failure down, because you can’t really guarantee that an innovation will work out. Our focus is on failing fast and cheap when it doesn’t. That’s the only thing you can really optimize. If you can guarantee success, you are doing evolution, not revolution.
  • In my terminology, a Harry Potter problem is something that more money and time can’t solve: these are critical business problems that you might have tried to solve several times and failed, or you don’t even know where to start. So the only thing left for you to do is to wish for an innovator with a magic wand to make it go away.
  • The problem is not finding partners — it is selecting the best ones. At Legal & General, we use the 5-minute RFI approach to address this. We show prospective partners one of our Harry Potter problems and ask them to prepare a 5-minute presentation on how they would solve it. In these five minutes, we don’t necessarily select a partner, but we can certainly un-select some, as we have done with many well-known software consultancies.
  • In the 5-minute RFI process, a partner has a week to prepare 3 slides and a video. Slide 1 is the Harry Potter problem and how you would solve it; slide 2 is how much it would cost; and slide 3 is how it would work from technology perspective. But the innovative stuff is in the short video (1-3 minutes). We take those presentation to the business and ask them what they would like to do. The video is the thing that gets the business excited and creates those «iPhone moments» («This is so simple! Yes, I want it»). That is how we started our relationship with DataArt: we asked a lot of companies to come up with a solution to one of our Harry Potter problems, got back two really great videos, one of which was from DataArt.
  • The 5-minute RFI and the video is Alpha. It is followed by a 4- to 6-week Beta where we build a rough version of the future solution. The cost is a rounding error amount that we are willing to lose, and the goal is to prove that the idea is feasible. Typically, during these 6 weeks you will also discover other problems you did not anticipate before, and flesh out the business case.
Maarten Ectors
The world is changing. Competitive pressures are no longer only coming from your existing competitors. You might be a telecom provider, and all of a sudden find yourself in competition with a space company that starts shooting up satellites to link up rural areas that you with your fiber can’t reach! Industries can change very suddenly. The only way traditional companies can cope is by creating ecosystems of partners, by working with the best technology companies and the best platform companies. That’s how you innovate
  • Now you are now ready to go into Dragon’s Den (or Shark Tank, depending on whether you watch British or American TV). We invite our sponsors to a presentation and ask them to fund a pilot. If we get the funding, we now have 3 months to prove that there is a market fit and get real validation with customers. If that is successful, the solution can now be launched and scaled up.
  • This structured Alpha-Beta-Pilot process allows us to make innovation investable. Boards and companies are much more interested in giving you money once you have proven that there is extra business demand and that the technology works.
  • We make a point of calling ourselves «future ventures team,» not «innovation team.» What we are trying to do is to create ventures that generate money in the future, and we consider our internal sponsors inside the company «internal VCs.» Innovation can’t only be up to an innovation team; it’s up to everybody.
  • Our «Alpha-Beta-Pilot» approach opens the doors to engage with new companies that traditionally we would not work with. If you want to do a traditional «normal» RFP, then you go to the «usual suspects,» the vendors on the Gartner Magic Quadrant, etc. But how can you revolutionize an industry if you rely on the same partners and the same software solutions that everybody used last year? If you expect next year to be different by doing the same thing that you did last year, we all know what this is the definition of.
  • When we move from Alpha to Beta and want to quickly bring in new partners and new software we have never worked with, we run into the following problem: in our highly regulated industry, it takes procurement 6 weeks to bring in a contractor, do background checks, put them on the approved supplier list, etc. We worked with support functions including procurement to find ways to still be trying all these new things quickly without endangering anything. Our Beta has very simple rules: no production or customer data, no integration with any real systems. You can still prove a lot of things without any of those. Here, compliance and procurement requirements can be relaxed. They still apply for when you go to pilot and later to production, but this approach gives you more time. That’s how DataArt went from a Beta participant to a validated supplier that is now being used by multiple business units at L&G.
  • Windows of safe profitability are getting shorter. Assume that right now your next competitor is working on something in their garage that will make you irrelevant. You need to be capable of very quickly coming up with new revenue streams, to have a whole funnel of innovations, otherwise you have a problem. Companies need to be working at three speeds: speed one keeping the lights on and focusing on the current cash cow; speed two is about gradual, evolutionary improvements; and speed three is coming up with many innovative new things that will generate revenue in the future.
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