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How Financial Institutions Navigate and Conquer Challenges in Program Management

How Financial Institutions Navigate and Conquer Challenges in Program Management - Global Banking | Finance

By Kannamangalam Chakaravarthi Lakshminarasimham 

Kannamangalam Chakaravarthi Lakshminarasimham - Global Banking | Finance

Kannamangalam Chakaravarthi Lakshminarasimham 

Program managers start with a vision conceived by leadership that shapes the objectives of a program initiative. Often, the vision needs to consider a company-wide transformation effort that surmounts multiple obstacles. Some of the most common roadblocks include the program team’s level of experience, how to resolve possible conflicts, and the potential use of outside consultants. Unless properly planned and executed, managers may face additional challenges such as a vision change from what was originally intended and dealing with “scope creep” as the program or underlying projects extend past the original timeline and objectives. While hiring the right people is imperative to ensure a program’s success, other factors to address are continuous leadership alignment, alignment top to bottom and across, and accountability.

Program management in financial institutions

Program management is the process of transforming a major element of business that affects the entire ecosystem of the organization for improved efficiency, profitability, or customer satisfaction. Transformation programs are broad in scope and impact, driven by a sense of urgency to change fundamental business processes, technology, physical or digital infrastructure, or use of personnel to improve capabilities to meet the overall mission. A program is made up of smaller projects that operate in tandem with each other and regular business operations. In all cases, program management requires a tailored approach to meet the unique challenges of implementing change across people and processes. The financial services industry is no different. In fact, in financial institutions, these changes are especially important to keep up with the wave of digital transformation affecting all industries to meet customer expectations and compliance and security standards. While program initiatives are dependent on business goals, top programs for today’s financial institutions include interconnected processes to maximize efficacy, such as: 

  • Enterprise resource planning (ERP) to manage day-to-day activities integrated in a centralized program 
  • Source to pay (S2P) to integrate purchasing and accounts payable systems to improve efficiency
  • Quote to cash (Q2C) to integrate and automate management of end-to-end, customer-facing business processes 
  • Record to report (R2R) to collect, process, and present financial information for management to perform analysis and review.

How to overcome the top challenges in program management 

Financial institutions face many challenges, especially when transforming legacy systems that struggle to keep up with modern customer needs. These challenges can act like roadblocks if they’re not accounted for at the planning stage. By understanding common obstacles, it’s easier to keep stakeholders, developers, and program managers on the same page, ready and willing to overcome obstacles across decision-making, implementation, and futureproofing. Today’s top challenges include the following:

Challenge #1: There are blind spots or hesitation about updated technology and other improved processes among leadership and personnel. This challenge affects financial institutions, especially related to large technology transformations that require investment across non-revenue-generating streams, such as internal communications or risk management, on top of security and compliance concerns. The problem is many decision-makers resist transformation, thinking regulatory standards will be difficult to maintain. This is a misconception decision-makers need to overcome because investment in technology is central to the similarly changing compliance landscape for data protection and security. For example, Sarbanes Oxley (SOX) compliance is top of mind for financial organizations with system and technological advancements going into effect. SOX compliance requires publicly traded companies doing business in the U.S. to meet annual financial reporting standards, including data safeguards, a record of attempted breaches, electronic records for auditing, and proof of compliance. From a transformational perspective, even with clear insights that a new program is for the betterment of the business, there is always hesitation regarding potential limitations imposed by compliance standards for fear of complex reporting, added hurdles with innovative products and systems, or penalties. 

To overcome this challenge, it’s important to embrace program management as a process of discovery to instigate innovation and positive change. Security and compliance concerns can cause reticence to technology transformations, but these transformations succeed when they’re handled in sync with growth operatives. By envisioning program initiatives as a means to discover internal issues or new solutions to known problems or inefficiencies, it’s possible to keep leadership and technology aligned toward positive change.

Challenge #2: Decision-makers are overwhelmed by too many options. Choice overload is a recognized psychological effect that impacts buyers both during and after a purchase decision, causing decision paralysis, doubt, or remorse after the fact. This phenomenon can be even more intense when making enterprise-level decisions that impact an entire business ecosystem. The longer financial institutions delay program initiatives that transform the organization, the more difficult it becomes to identify an option that works for the business. 

To overcome the challenge associated with too many options, businesses need to commit to the most essential programs first through prioritization of what will most benefit the business and customers. A dedicated program management team with supportive experience and expertise can provide vital guidance in the prioritization process so resources aren’t overloaded or poorly allocated. For example, annual planning cycles take an overly long duration and must go through multiple iterations before landing on an effective prioritization of goals and tasks, at which point objectives and market conditions are likely to have changed. It’s vital to commit to a prioritization management method that can be tailored to shifting needs, address multiple stakeholder perspectives, and facilitate successful collaboration and compromise. Prioritization models include options such as Reach, Impact, Confidence, and Effort” (RICE) allow leaders to to base priorities on internal predictions of about certain tasks; the Kano Model which prioritizes based on customer satisfaction with product features; or matrixes such as the Eisenhower or “Value vs. Risk” Matrix to prioritize goals based on a four-quadrant scale. 

Challenge #3: Leadership’s vision is overly ambitious, vague, or shifting. Just like the effect of too many options, it’s common for the vision from the top to be loosely defined based on market trends or abstract goals. This often leads to goals that shift without warning or lack tangible benchmarks, causing uphill battles for developers and managers. 

To resolve this issue, leaders need to recognize that the inciting vision can be broad, but it’s vital to narrow in on specific goals from there. Stakeholder and leadership requirements determine a project’s scope, but a work breakdown structure (WBS) offers a means to communicate a detailed task list to all involved parties. Seldom will leadership have the technical know-how to identify specialized program objectives. That’s why communication with developers and internal departments is crucial to help foster detailed plans with room for adaptation. Predictive and visualization tools are central to showcasing possible outcomes and painting a clear roadmap that communicates across departmental borders.

Challenge #4: There is a lack of alignment from top to bottom and across the organization. It’s common to think of alignment within a team or among leadership, but because programs encapsulate the entire business ecosystem, alignment from top to bottom and across is more important than ever. 

It’s essential to ensure the vision and objectives are clearly articulated and aligned at an overall strategic level and a tactical level. This requires endorsement from the top but a tight handshake across all teams and stakeholders, top to bottom and across. Communication between teams is key, but at a more granular level, individuals require autonomy to take responsibility for their role, proficiency in necessary skill sets, and purpose to envision how their individual actions contribute to the overall program. Armed with this foundation, collaboration and communication become natural. 

Challenge #5: Goals are not clearly documented or benchmarked. Again, specificity is key to delivering an achievable program that instigates positive change within an organization. Yet, it’s still common for it to be a challenge to track and record progress if a documentation process built on defined benchmarks is not implemented across all involved parties.

One way to address this issue is to define key performance indicators (KPIs) and objectives and key results (OKRs) that everyone has agreed on with specifically approved baselines, and then continually measure, maintain, refer to, and adjust as needed. To instigate autonomy and accountability, KPIs need to be attributed to roles. This means when KPIs are met, exceeded, or need to change, there are designated parties responsible for the next steps. It’s vital that metrics are tied to the overall vision from leadership. 

Challenge #6: There is a lack of the right personnel in place, including developers, subject matter experts, and managers with skillsets aligned with program objectives. Commonly referred to as “building the plane while flying it,” program initiatives are conducted in parallel with ongoing operations, causing inevitable challenges when allocating roles, resources, and responsibilities among staff dedicated to their own duties on top of new transformations. The right people with the right skillsets are one part of the picture but offering dedicated time for program training and adoption is also vital.

To overcome the personnel challenge, it is essential to hire management and development teams with the skillsets that address established program goals. The next step in this process is to ensure proper mapping of roles, resources, and schedules. All team members require dedicated time and management roles on a project to successfully balance their day job with the program in question to avoid disruption to daily operations. Implement and maintain a responsibility assignment (RACI) matrix for roles assignments attributed to the designations: responsible, accountable, consulted, and informed. Each layer helps clarify not just other individuals’ roles, but their roles in relation to others, and the entire program. This requires proper dashboarding and reports for project work that also allows feedback from users to ensure the needs of the project team are met and can be easily and quickly accounted for. 

Challenge #7: Scope creep is caused by new project requirements added without protocol after a project has already started. Scope creep is a common phenomenon when changes are made to a project without procedure. This causes a massive ripple effect that impacts schedule, budget, individual, and widespread productivity, and allocation of resources. 

There are three vital practices to implement to avoid scope creep. First, clear documentation of project requirements, including the schedule, helps teams see when a plan veers from its intended trajectory, whether intentionally or unintentionally. Second, a change control process acknowledges that adaptation is inevitable. A change control process defines the procedures anyone must take when a project needs to be changed, whether a leader or a developer. Further, a risk management plan establishes consistent monitoring of a project’s overall status to known risks, such as scope creep, to ensure it’s possible to detect and approach risks when they arise. 

Future-proof programs for scalability

It’s common to discuss scalability in relation to a singular software, but the scalability of an entire program is even more complex, yet necessary, when considering a programmatic transformation. When businesses accept that every aspect of a business is a project and contributes to the goals of an overall program, organizational growth is considered on a project scale, essentially grouping various short-term goals with long-term objectives. However, steering large scale programs, especially in banks and other financial services institutions, can feel like an impossible task. By establishing scalability at every level, programs can be considered a singular project with many moving parts that are divvied up throughout the organization. This means that scalability of the elements of budget, schedule, scope, team, communication, and risk management is a constant consideration when taking a program (and therefore the business) from one level to the next.

Program management is a vital, company-wide commitment 

Program management is a necessity for any financial services organization that is committed to growth and evolution. With ongoing digital transformation, shifting customer expectations, and increased disruption in the marketplace, dedicated program management offers a valuable solution to the financial services sector by establishing a focus on clear program objectives, alignment across the organization, and a commitment to established rubrics of project management. Program managers can combine this roadmap with an experienced, big-picture perspective to readily overcome the obstacles and complexities of program management in financial institutions.

About the Author:

Kannamangalam Chakaravarthi “KC” Lakshminarasimham is a program director with 17 years of strategic project, program, and portfolio management experience in a variety of sectors, including finance, technology, healthcare, banking and retail. He has led teams of project and program managers, overseeing all aspects of complex technical projects, including technology transitions, business transformations, and efficiency improvements. For more information, please email [email protected].

Global Banking & Finance Review


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