Why Technology Initiatives Fail and How to Fix It
Digital transformation in wealth management is flush with cash. The industry is set to spend $24 billion annually by 2023, and that number is rapidly increasing as firms continue to beef up their digital offerings for employees and clients.
Despite all that funding, many of these digital initiatives fail to materialize or deliver the return on investment (ROI) that executives expect. Instead of a cohesive digital strategy, many firms rely on using tech to solve individual pain points. This piecemeal approach leads to systems that don’t talk to each other, lost data, and inefficiency.
To drive successful technology initiatives, wealth management firms need to identify the top reasons these projects stall and then solve them to get their digital strategy back on track.
Technology-Skilled Workers are in Short Supply
Many sectors of the economy — especially those that rely on talent with technology skills — are experiencing a serious shortage of qualified talent. Some analysts predict that by 2030, 85 million jobs could go unfilled, costing employers $8.5 trillion in unrealized revenue.
Even today, 65% of C-suite executives polled in an EY survey said that the lack of skills and talent is why their digital initiatives have stalled. And this problem will likely not ease anytime soon. Especially after working through the COVID-19 pandemic, many employees are unsatisfied with their jobs and seek careers that will provide flexibility and increased happiness.
To combat this problem, organizations are competing for talent like never before. Many leaders are getting creative about how to use their existing talent and attract new employees. As a result, organizations are rolling out more flexible work policies and developing cross-functional collaboration to maximize their established skillsets.
Inefficient Operating Models Hold Wealth Management Firms Back
Rapid disruption and changes in the market have left many leaders wondering where best to place their bets. This isn’t limited to technology investment, although that’s a major player too. Executives need to balance risk and reward and keep their organizations nimble and lean enough to make adjustments quickly.
Inefficient or misaligned operating models slow growth and impede progress. In fact, 61% of C-suite executives say that operating model issues hamper digital M&A and partnership potential. Operating models represent how value is created in an organization and by whom. It creates the basis for making decisions like tech investments.
Each partnership and purchase should align to the operating model, providing the backbone for strategy. A well-designed operating model defines the market and directs how to engage with it.
Incomplete and Poor Quality Data
Data is crucial for making decisions, but the raw numbers aren’t enough to tell a story. Many organizations struggle under the weight of bad data — 58% say incomplete or poor-quality data hampers their ability to realize benefits from digital initiatives fully. And, as organizations bring on new tools and platforms, they may not integrate well or provide the insights leaders need to take action.
Data collection and analytics should be designed with the customer at the forefront. Data analytics is only as good as the questions you’re willing and able to ask. Instead of collecting data for data collections’ sake, organizations need to take stock of the questions they want to be answered and determine what data they need to make those analyses possible. Build data and IT infrastructure with these questions in mind to ensure that any technology investment outlives a single-use or solitary project.
Capitalizing on digital investments is one of the consummate challenges facing wealth management firms and RIAs today. Organizations faced with tight budgets and a tough labor market can still compete and come out ahead. To remove the barriers impeding progress and scale, executives need to align their talent, operating model, and data collection and analytics strategy to meet the market and understand their customers.
Ryan George is the Chief Marketing Officer at Docupace. He is responsible for the company’s brand awareness, early-stage sales pipeline, content strategies, customer and industry insights, internal and external communications, design, and events. George actively engages in leadership roles in both the financial services and marketing communications communities. He a member of the Forbes Communications Council, an invitation-only, fee-based organization of senior-level communications and public relations executives, the CMO Council, and the CMO Club.