Business transformation has its challenges for any company. But financial services firms, in particular, have a few unique hurdles.
Most financial services firms face three common challenges in their quest to evolve their mission-critical operations:
- They must comply with regulations that make it difficult to quickly adopt new technology or modernize many business operations activities.
- Legacy, home-grown technology that underpins internal operations is hard to integrate with external solutions without risk those critical systems fail.
- Evolving customer expectations and rapid market changes require firms to move faster to embrace change and modernize systems than ever before.
Despite these challenges, financial services organizations must continue to make progress on mission-critical projects—it’s vital to modernize mission-critical systems, address evolving privacy concerns and maintain regulatory compliance. But it’s also increasingly difficult to successfully complete these initiatives.
Against this backdrop, we surveyed 101 senior executives at large financial services companies ($1 billion+ in revenue) on their project execution challenges. In our report, Mastering Mission-Critical Projects in Financial Services, we explore the roadblocks to mission-critical project success and share insights into how to navigate toward successful project execution. Here are a few of the highlights.
Mission-Critical Projects Failing to Meet Expectations
Only 15% of financial services respondents to our survey said all of their critical projects since March 2020 achieved or exceeded their goals. At the opposite end of the spectrum, one in five of those surveyed said less than 50% of projects did so. That leaves most firms struggling to execute against some of their most important initiatives.
“Financial services leaders have had to manage a wide range of complex issues in a rapidly changing environment, and data modernization is at the heart of these challenges,” says Irene Hendrick, RGP Senior Vice President of Revenue. “Whether an organization is sunsetting legacy systems or managing vendor risk to optimize costs, these types of critical projects and strategic initiatives often fail due to poor data quality. Leaders must understand what data is needed, why it’s necessary, and whether it exists in an environment that is compatible with risk, compliance and analytics.”
This inability to guarantee mission-critical project success can potentially result in significant financial loss. Mission-critical tasks and applications — and the projects surrounding them — affect ongoing business operations. The failure or success of these projects can mean the difference between achieving a record year and falling behind the competition.
Mission-Critical Projects Require a Diverse Talent Pool to Succeed
Seventy-three percent said a lack of capable talent in key project roles made implementing critical projects more difficult to a huge, large or moderate degree. At the same time, many financial services firms are making headlines for calling employees back to the physical office.
The reason for this seeming disconnect? While executives agreed hybrid teams (including those with external talent) generally contribute to positive project outcomes, they can present coordination challenges. Seventy-nine percent of respondents said coordinating teams in multiple locations made mission-critical projects more difficult to execute.
“More financial services leaders are navigating talent shortages and their own skill gaps by matching critical needs with experienced outside talent,” Irene says. “This rapid pace of change has also created a greater need for surge staffing, which is a trend that we anticipate will continue to accelerate as well. This new mix of in-house talent, contractors and external partners is a bold change for financial services firms that requires openness, agility, collaboration and digitization.”
Three Strategies to Ensure Project Success
In the long term, financial services firms have the best chances of increasing their project success rate by making three changes:
01.
Rethink “strategic initiatives.”
Identify firm-wide, foundational issues, then allocate appropriate resources between the diagnosis and solution project phases. Focus on delivering feasible project scopes instead of treating implementation as an afterthought.
02.
Adopt a multi-vendor talent approach
Tap into experienced consulting firm talent paired with specialty contractors and vendors to fill expertise gaps. From the start, include firms or individuals with proven expertise in implementation, project management, and technology.
03.
Strengthen your project management office (PMO)
A PMO ensures your strategic initiatives are approached holistically and initiated with the right vendors. Over time, it becomes a storehouse of knowledge on vendor expertise and their fit with your firm’s culture and practices.
From Mission Failure to Mission Complete
Digital and business transformation is on every financial services firm’s agenda. Yet, not all firms are getting their mission-critical projects across the finish line. With our latest research, we’ve provided an inside look at the challenges every firm is facing and what is fueling success for the top 15%.
RGP has helped many of the top financial firms transform their project success capabilities — and even build PMOs from the ground up. Download the report, Mastering Mission-Critical Projects in Financial Services, for additional data insights and to benefit from our lessons learned from these engagements.
