As India marches towards a digital economy, there is a plethora of existing payment players, MNCs and new FinTechs, working hard to deliver high value to their customers.
They are transforming themselves by scaling up their technology and operations. With intense competition, focus on inorganic growth and stringent regulatory requirements it makes the need for this transformation even stronger.
“Standardizing the core” is the foundation that helps organizations to scale up their processes, people, and operations, rapidly by eliminating wastages that arise due to inconsistencies and variability. It helps in training and up-skilling employees in a structured manner and contributes to achieving higher customer satisfaction. It also drives cost-efficiencies through automation, process optimization and helps in reducing risk.
Many successful organizations in other fields have leveraged this strategy to enable such transformation. For example, one of the primary reasons for Indigo Airlines to become a very successful organization in the highly competitive Indian airline industry is the standardization process they have adopted for flights, check-in process, scheduling, baggage handling, in-flight operations and so on. This makes it easier for the airline to set clear expectations for its customers, partners and employees and also helps in building a strong connect with their standardized processes.
In IT services, TCS continues to achieve industry-leading growth year-after-year, in spite of difficult market conditions. This is due to a very strong foundation built on standardization of their hiring process, internal talent building process, service offerings, and global delivery model. Similarly, companies like Google and Amazon that are known for its technology and innovation, have spent enormous efforts in standardizing their core offerings.
There are several opportunities in payments business that is worthy of adopting as core principles in organizations.
- With a variety of channels, payment modes, devices and players at disposal, payment companies must consider segregating their core offerings and other value-added offerings.
- Due to a high degree of focus on inorganic growth, it is likely that companies may have ended up with redundant systems or processes. Identifying the core will help your company in eliminating the inefficiencies caused by such redundancy.
- Sometimes due to customer dynamics, there is a likelihood of non-standardized processes and systems growing over a period of time. It is thus important to revalidate such non-standardized processes and work with the customer to standardize them.
Companies who want to leverage this process must begin with these two major steps.
- Identify–With increasing pressure from the competitors and the urge to expand the footprint, many organizations tend to spread too much outside their core. This invariably dilutes the focus and gradually makes them lose their market share. Organizations must clearly identify their core systems or processes based on their market position and business plan. While it sounds simple, organizations need a very strong focus and sponsorship to identify its core.
- Standardize– Once the core is defined, organizations must do everything possible to standardize it across people, process and technology. This includes processes relating to contracting, IT systems, operations, vendor management and so on.
Similar principles in the examples quoted above can be applied at a department level and team level to enable the transformation. Teams can’t scale up if there is too much variation in what they do and how they manage their work.
In summary, standardizing the core is the foundation to drive transformation in organizations. Strong management commitment and focused effort are essential to achieve this standardization.