In today's ever-changing business landscape, more and more companies are operating like software companies. Through the adoption of agile technologies, financial firms can begin to use software to both operate more effectively and be faster to market with improvements for customer experiences. Making sure there is the necessary software in place to give customers frictionless everyday activities, like remote deposits, business overdraft services and wealth management, is key for a positive customer experience.
It has long been established that procurement is an important stage in the adoption of technology to drive innovative investments in the financial services industry. And just as the business looks to be more agile in the use of technology, the technology supplied need to be available to the business quickly. This gives way to the notion of agile procurement.
Agile procurement is the idea that the supply of technologies and the associated services can also be acquired in a flexible, agile manner. Agile procurement follows a similar principal as agile development and operations (DevOps) practices in that it introduces new policies and ways of working and can become a better means of accelerating procurement of next-gen applications. Agile procurement processes work to improve technology adoption to be more timely and in step with business and development teams. Indeed, improving collaboration across teams and improving technology vetting processes, policies and organizational barriers in this redefinition of procurement procedures.
In today's business landscape, it is important that companies work quickly and are not bogged down by long lead times and requirements gathering, slow feedback cycles, multi-tier governance and approval policies. And when these detriments to speed to market are combined, they can stymie company goals leaving customer needs unfilled. Agile procurement is focused on the longer term success and adoption of technology, focusing the results that can be gleaned from applying new, innovative technology in practice, rather than in concept. Starting with business and technology teams agreeing on a specific minimally viable product (MVP) necessary to reach the desired business outcomes, a portion of the procurement budget is used to acquire only the necessary technology to use in the pilot.
This more inclusive decision-making replaces process, focused on business outcomes counters traditional, central planning approaches and by default, makes processes more agile given all parties needs are included from the start. The focus is then able to turn to delivering code and features into a production-ready application within tight timeframes. During this process, development, testing and ops, in addition to an assessment of a technology's impact on policy, processes and people are considered, so that the impact of the application and associated technology adoption become integral to the pilot process. This in turn, alleviates the traditional after-thought of technology acquisition, namely adoption.
In order to have agile procurement, financial services first must ensure they have agile development in place — in fact the two, hand-in-hand makes it easier to be able to keep up with changing market factors and business requirements.
One of the main outcomes of agile procurement is that compared to traditional procurement methods, it results in lower procurement and production costs. It costs far less to make changes to MVP deployment done in a short production window (especially with a microservices approach) than one done over a longer period of time, using processes that don't account for micro-adjustments. This is partly because when agile procurement is in place, the organization can more quickly develop and deliver code, and the quicker code is delivered, the longer the company has to cross-sell and pursue other revenue-generating options.
Agile procurement can lead to positive business outcomes, and the culture and road to get there is quickly realized with the use of enterprise open source. Secured by design for organizations, enterprise open source is a path to new, innovative technologies. Organizations that have agile procurement in place can more quickly adapt to business change, solve shared problems faster and use open source standards to preserve business agility while cutting down costs and providing new innovations that can keep up with business needs and customer demands.
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