Winchester White

Winchester White is a British management consultancy in the financial services industry founded in 1986 to provide independent, practical advice and services to the financial services sector.
Business transformation in organisations is difficult, transforming organisations in a sustainable manner is very difficult. How do we know? The statistics on programme failures are stark and unequivocal, with up to 90% failing to deliver the projected business benefits.
Whilst statistics are clear the reasons for failure are more complex. However our analysis of the reasons for failure has identified two common elements - firstly the lack of in-house experience of organisational transformation causes the majority of poor decisions that subsequently lead to under-achievement in programmes. So the answer is easy, use someone from outside who has experience and all will be well! Unfortunately this is where common factor number two becomes important - failure occurs most readily where the organisation feels change is being done to them not by them, so using an external company to own the delivery of transformation does not work.
Outsourcing has gained sufficient maturity in the Financial Services sector to make it a real strategic option as a building block in the operating model.
There is no such thing as the perfect operating model. Our world is dynamic and by definition businesses will, therefore, continue to find improvements to their operating model to meet business objectives. The investment in exploring the optimum operating model should therefore be pragmatic and seek to avoid highly complex labour intensive programmes that could:
•absorb significant resource
•create political tensions as people try to define their "patch"
•take many months (even years) to complete
•take the business on an implementation journey that is overly complex and ultimately unachievable.
Building a new operating model or improving on an existing one must be predicated on a balanced set of business objectives. Focussing purely on cost reduction, for example, may satisfy a short term aim but will not necessarily improve the customer experience.
The size of the task will depend on how out of date the current model is against the external business environment. During a period of high market growth, it is easier to overlook poor performance in terms of efficiency and effectiveness. As growth slows, maintaining or increasing market share begins to rely more on the delivery of a competitive customer experience. Frequently in the financial services industry high volume growth is matched by increasing short-term fixes in service and support areas. The resulting strain between the customer offer and reality of the experience can put the entire business into permanent fire fighting duty. Backlogs, error rates, customer complaints and costs can grow at an overwhelming rate. Stabilising the business to attract new and retain existing customers requires clear and coherent thinking, looking at the business from a customer perspective.
Rarely is there a silver bullet solution. The financial services industry has tried in many cases to address the sins of the past through large technology programmes i for example, new operating systems or CRM initiatives. In some cases these have been effective in achieving an improved customer experience with the resulting benefits of increased sales and profits. However, many have failed, often because the technologies were not rooted in a clearly articulated and relevant Target Operating Model, together with a manageable and realistic route towards achieving the desired model.
The Retail Investment Sector is the most mature with 80% of back offices run through an outsourced partner.
General Insurance companies have multiple arrangements from front to back office including FNOL, loss adjusters, administration, call centres and claims management.
Outsourcing of IT led the third party sourcing in the Life industry with full business process outsourcing building very strongly since 2000. This has been driven particularly by the volumes of closed books seeking effective and efficient management of the declining business.
Digital and Social Media
As an industry we spend significant time and money managing and optimizing our communication channels to our clients and intermediaries - meaningful reach is core to delivering corporate goals in terms of customer engagement and cost reduction. In its simplest interpretation the digital and social media revolution is composed of a plethora of new and constantly adapting communication channels. These channels are currently delivering constant customer dialogue and interactions whilst simultaneously re-shaping the customer psyche. The arrival of the internet changed our business models and digital will do the same. So for all Financial Services companies the challenge is 'How do we join and exploit the communication/information bonanza digital and social media is stimulating?'
So who is using digital and social media?
Well to a greater or lesser extent virtually all of the people you want to do business with. At its most simple manifestation if you use your mobile for e-mails and reading documents, if you are on LinkedIn, if you have ever used a comparison or review site you are engaging with the digital sphere. It does not replace traditional communication, it is just embraced more because you are in control, it's easy, its accessible, it fits in with your lifestyle. As an example, if you receive a letter through the post do you resent the process it forces on you - write a response, print it off, get an envelope, buy a stamp, post it - all the while you want to text or e-mail a response? Extrapolating this thinking, which companies are you most likely to do business with, those whose interactions fit with how you live your life or those that demand habit changes?
This is both the danger and potential of digital and why ignoring it is not an option. At the very least companies have to understand the likely impact of digital, how they will respond to protect themselves from negative comment and how they will utilize the new communications channels to build stronger deeper relationships with their customers.

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