The world has changed

Total disruption in customer interaction

Omni-channel Social

Multi-sector expectations Mobile first

Business model pressure

Digital
Margin Regulation
revolution
Attackers Revenue crunch

Technology innovation
Data boom Mobile

Cloud Internet of things

SOURCE: McKinsey expert interviews, McKinsey research and CxOs surveys, industry research, press search
Digital is transforming businesses across four
dimensions
Customer Automation
engagement and straight
and through
connectivity processing

Innovation,
speed, and Data &
agility decisioning
Those who snooze will lose?
Example: Journey “S-Curves” in banking

Digital advice
(e.g., investment, planning)

Digital origination
and processing
(e.g., account
opening, mortgages)
origination)

Digital servicing
(e.g., mobile,
online)
Bigger is more than just
faster and better
First, the building blocks for “faster and better”

Design for Move Eliminate

Re-imagine
value quickly silos
 Be(havioral psychology) the customer
Re-imagine

Give customers
Get bad experience a choice
over early

Control and
choice Stick to habits

Sequence

Finish strong Segment pleasure,

Duration/
segments combine pain

Design for stair-steps

in fatigue
 Simplify the business process (From…)
Re-imagine

START

START 1
START

START

END
END
DI
 Simplify the business process (…To)
Re-imagine

START

START

START

DI
END
 Be Vitruvian
Design for value

Firmitas
Durability

Utilitas
Usefulness

Venustas
Beauty
 Be Jerry Maguire
Design for value

Cost

Revenue

“Show me the money!” Control

 Embrace getting it “almost” right
Move quickly

Target state Minimum viable product

 Moving from “we want everything” mindset…
Move quickly

>60% of features are almost never used

We want everything
How often do you use this feature?

SOURCE: Standish group

 In technology, silos create “the layer tax”
Eliminate silos

Business Business Business

Business
spec. spec. spec.

Front end Build …

Middleware Design Build …

Core system 1 Design Build …

Core system 2 Design Build …

Core system 3 Design Build

…

Infrastructure Provision Provision Provision Provision

 Building a foundation for collaboration
Eliminate silos

Business
Business Customer
strategy, Infrastructure Rollout
requirements experience Development Testing
business case, deployment & scaling
and design design
governance
Agile E2E, Lean Service design SCRUM Test-driven dev DevOps Model office /
enterprise & BizOps Sandbox
Lean startup
You can do anything once or twice…
…but @scale is different

Vs. Vs.
Therefore, elements of the steel frame for bigger
• Prioritized journey roadmap, driven by economics and readiness
Digital strategy
• “To the street” commitment for destination economics
• Enterprise customer story to guide experience and design decisions, and a “what matters” focus,
Value proposition by journey and BU
• Intermediaries, and their role in the value chain

Cross-functional, • Rapid digitization playbook, bringing together business, ops, technology, and the supporting
autonomous labs partners (e.g., compliance, legal)

• Roles, talent, and hiring; then rigorous capability building

• Professional development to retain, excite and grow
New ways
• Segregated digital factory (e.g., agile, DevOps, design)
of working
• Partnership and innovation orientation
• Next-gen governance (e.g., prioritization, budgeting, ePMO)

Rigorous system for • Enterprise digital value orientation (e.g., P&L, asset valuation)
value capture and • Real-time dashboards (e.g., adoption, impact, operational)
sustainability • Incentives & performance management hardwired

• Foundational, cross-domain “solutions” (e.g., workflow)

Architecture and
• Strategy for re-usable “components” (e.g., channels)
platform enablement
• Flexibility for rapid delivery (e.g., curated catalog of APIs)
New digital foundation • Cultural change management for broader “non-digital” resources
 Building the steel frame Build Refine Run and manage

Year 1 Year 2 Year 3

Cumulative journeys started1 1 3 7 13 20 30
Digital strategy Prioritized journey roadmap
Destination economics
Value proposition Enterprise customer story, and “what
matters” focus
Intermediaries, and their role in the value
chain

This seems intimidating.

Cross-functional,
autonomous lab

New ways of working

Rapid digitization playbook

Roles, talent, and hiring; then rigorous

capability building

Where do I REALLY start?

Professional development
Segregated digital factory
Partnership and innovation orientation
Next-gen governance

Rigorous system for Digital value orientation

value capture and
Real-time dashboards
sustainability
Incentives & performance management

Architecture and platform Foundational, cross-domain “solutions”

enablement
Re-usable “components”
Flexibility
New digital foundation Cultural change management

1 Proper journeys, not MVP

First 60 days Build Refine Run and manage

Digital strategy Prioritized journey roadmap

Destination economics
Value proposition Enterprise customer story, and “what matters” focus
Intermediaries, and their role in the value chain
Cross-functional, Rapid digitization playbook
autonomous lab
New ways of working Roles, talent, and hiring; then rigorous capability building
Professional development
Segregated digital factory
Partnership and innovation orientation
Next-gen governance
Rigorous system for value Digital value orientation
capture and sustainability Real-time dashboards
Incentives & performance management
Architecture and platform Foundational, cross-domain “solutions”
enablement Re-usable “components”
Flexibility
New digital foundation Cultural change management
 How will we create value?
Digital strategy

What will the industry be like in 5 years? How do I have to change

and which part am I going to play?

What is the value at stake for me, based on where I am standing,

opportunities, threats, and my capabilities?

How do I approach? How much do I take on at once and where do I

start?

Who do I go after? Does my target customer change, and thereby,

my approach to reach and serve that customer?

What is my go-to-market strategy? What is my channel strategy?

(Multichannel? Greenfield?)

How deep do I go, e.g. do I digitize front-end or do a complete E2E

transformation?

How wide do I go, i.e. which battlefields do I choose?

 What do we stand for?
Value proposition

CE leaders select a core customer value proposition

as the central touchstone to their strategy

They stand for

something
 Stand for something
Value proposition

Simplicity Customer Customer first

proactivity

Memories Efficiency/ Exclusivity

Price

Connection Performance Dependable/

Worry-free
 What matters?
Value proposition

Joining Using Paying Engaging Changing Leaving

Quality of Attractiveness of Overall satisfaction

Voice quality Accuracy of bill Enquiring Transacting Complaining
store agent renewal plan with company

Time to ready Geographic Understanding First interaction First interaction First interaction Attractiveness of Dispute in
to use coverage of bill resolution resolution resolution loyalty rewards last month

First bill clarity Consistency of Unforeseen Number of Number of Number of Change of mobile Ease of departure
and accuracy data connection charges transfers transfers transfers phone/SIM cards process

Ease of Use of self-serve Post departure

Indoor coverage Wait time Wait time Wait time
transaction channels follow up

Setup of Ease of payment Quality of Quality of Ownership and

Speed of data
new handset process service agent service agent accountability

Clear communica- Geographic Use of Ease of finding Activation Total resolution

tion of next steps coverage of data e-statement information online experience time

Ease of knowing
Availability Clear communica-
which channel to
of handsets tion on next steps
use

Adequacy of Use of self-serve Quality of service

network coverage channel agent

Price of plans

Ease of number
portability
 Who? More?
of working
New ways

Product owner

Digital customer
strategist
MVP
Strategic and
Business
Business analysts
can take 10-30 FTE and 4 months
Business, ops, &
function SMEs

Scrum master Full journey transformation

Execution
Management
Program manager
can take 30-90 FTE and 12+ months
Digital Solution
Architect

UI/UX designer Journey roadmaps

Technology
and Platform Developer
can have 20+ journeys
Development

QA
to re-invent and digitize
Engineering
 Maybe. But mostly just different.
Hire Redefine roles Capability building
of working
New ways

Product owner

Digital customer
strategist
Strategic and
Business
Business analysts

Business, ops, &

function SMEs

Execution
Scrum master
Not just a
Management
Program manager
technology
Digital Solution
Architect problem
UI/UX designer

Technology
and Platform Developer
Development

QA

Engineering
 How do I remove governance barriers?
Function Body Format Idea Initiation Study Design Build & test/implement
Transaction TBT Steering Committee Every 2 months update
Regular reporting/escalation required throughout project lifecycle
Banking meeting
of working

TBT Programme Board Monthly update meeting Regular reporting/escalation required throughout project lifecycle
New ways

Fortnightly progress
TBT Delivery Board Regular reporting/escalation required throughout project lifecycle
status reports

Presentation by Project Full TBT Design Submission

TBT Design Forum Opportunity Template Outline TBT Design Submission
rep. & Business Case Launch approval
1 - 2 wks 1 - 2 wks 1 - 2 wks 1 - 2 wks

TBT Design and Presentation by Project

Executive Summary Executive Summary
Investment Authority rep. ATP 1 ATP 2 ATP 3 ATP 4
2 - 3 wks ATP 6
2 - 3 wks
Group IT Design Assurance Presentation by IT PM
Submission of SOSD Submission of E2E Design Additional visit if
Committee Strategic required at
Architecture Forum Phase 2
2 - 4 wks 2 -4 wks

Gateway Gateway docu -

mentation completed Gateway checklist and approvals complete
with gateway team

Change Advisory Board Change records

completed by ITPM CAB go decision

Global payments Global Payments Presentation by Global Final Submission

Phase 1 Submission Phase 2 Submission
Triage Payments rep. 1 - 2 wks
1 - 2 wks 1 - 2 wks
Global Payments Presentation by Global Phase 1 Submission Final GPDA Submission
Phase 2 GPDA Submission
Design Authority Payments rep.
(for noting)
2 - 3 wks 2 - 3 wks
2 - 3 wks
Change Readiness
Board Launch approval

? Group Payments
Online submission Payment Compliance Impact Assessment (PCIA)
Compliance Gateway
? Transaction 1 wk
Compliance Working
Group Presentation by Global
PC Submission to (PCIA) TCWG PC Submission to GTCC
? Group Transaction Payments rep.
Compliance 2 - 3 wks 4 - 5 wks
Committee
Risk functions Product Governance Presentation by Product Risk Assessment Methodology Safe to Launch Checklist
including WBM BUCF Committee Manager
4 -6 wks 4 -6 wks
Group Product Presentation by Product
Governance Committee Manager Risk Assessment Methodology Safe to Launch Checklist

Presentation by Risk Assessment Methodology

WBM risk committee
product manager
Presentation by
Group operations Business Design & Work Request
Wholesale Ops
Change Forum
representative 1 -2 wks

Wholesale Operations Presentation by

Extraordinary Work Request /Change Request
Design Authority Wholesale Ops
representative
2 - 3 weeks – individual submission if TOM
impact or > 2 FTE, otherwise bulked

Sarbanes Oxley (SoX) SoX Authority SoX spread sheet SOX approval

CCIM Forum Monthly spread sheet

Regular reporting required throughout project lifecycle
reporting throughout
lifecycle under format
WBM customer and
colleague impact
management (CCIM) Miscellaneous BU, Dependent on the Legal Regulatory
product or programme individual model Commercial Design Authority Verde Design Authority Others
Mandatory Committee
specific bodies

Funding requests and

Cost management unit Group Investment accompanying Funding request
Working Group ( IRWG ) documents May require review
presentation by Project
rep 1 wk
Funding requests and
accompanying
Investment CMU FR review
documents May require
(CMU14)
presentation by Project
1 wk
rep
Funding requests and
accompanying docu -
FR review
Cost Board ments May require
presentation by Project 1 wk
rep TBT Programme Level Governance
Funding requests and 15 individual CMUs
accompanying Dependent on project • Central Governance will address Investment
documents May require requirements CMU 14 and Resourcing CMUs 1&3
CMU (01 - 15)
presentation by Project • Individual workstreams /projects will address
rep 3 months any others required
Funding requests and
WBM governance Virtual Review Forum accompanying Submit
( VRF ) documents May require funding
presentation by Project request
rep 1 wk
Business Business Transformation Funding requests and
transformation Forum accompanying Funding request
documents May require review
presentation from
Delivery Lead
Bigger is more than just
faster and better
Staying connected
Christopher_Paquette@[Link]
[Link]
@paquettecm
@McKinseyDigital

McKinsey & Company