// . //  Insights //  Embracing A Value-Driven Approach To Transformation

Australia’s financial sector is undergoing profound changes, driven by the ever-growing need for innovation, cost efficiency, and resilience. The pace of technological change is accelerating as new technologies significantly disrupt the market. Organizations must transform more frequently to survive, with a focus on incremental value realization to ensure successful program delivery. 

Exhibit 1: Australia’s financial sector institutions typically undertake one to two transformations a year

The odds of delivering a successful transformation program

We surveyed more than 30 senior business, technology, and transformation executives across Australia’s ASX-200 financial sector on their involvement and experiences with transformation programs. Across this cohort, there is a combined market capitalization today of about AU$650 billion, with nearly AU$20 billion of incremental value potential anchored to transformations. While there is great opportunity, an expected AU$5 billion of the value uplift will be lost during delivery, and the knock-on potential loss in market capitalization from transformation failure is even more significant.

Organizations typically face three common root causes of transformation failures:


Traditional technology-led programs are too rigid, with a plan agreed in inception that may ultimately deliver on time and  within budget, but often falls short of the required business outcomes. 


Without adequate communication between business and technology teams, any changes to the transformation plan are viewed as delays, rather than opportunities to evolve, which typically results in value leakage. 


In typical, large scale technology replacement programs, the business is unable to realize value until deployment, which could take two to three years. This consequently places a strain on the business to commit financially to the program until completion.

Exhibit 2: Reasons for failure of transformation programs in Australian financial organizations
% of survey respondents
Source: Oliver Wyman Transformation Survey of ASX-200 senior executives

The consequences of transformation failures are severe, with 40% of unsuccessful transformations resulting in financial, operational, and reputational repercussions. What can leaders do to seize their organizations' transformative moments and successfully navigate this change?

Exhibit 3: The negative impact of transformation failures
% of survey respondents
Source: Oliver Wyman Transformation Survey of ASX-200 senior executives

Adopting a value-driven approach for transformative success

Drawing on our experience and learnings, we recommend organizations to adopt a "value-driven" approach underpinned by three core principles:

  1. Tranformations should be business-led and directly informed by the organization's strategic ambition, detailed business plans, and targets.
  2. Delivery should be focused on incremental value realization for the business, with features and requirements bundled, prioritized, and deployed in progressive capability drops.
  3. Continuous feedback loops between business, technology, and program teams are critical throughout the transformation to allow for real-time reprioritization and issue resolution. 

Organizations that can successfully bridge the stakeholder divide on transformation would be able to promote a shared understanding of business value implications and make better decisions that minimize value loss. This would significantly de-risk transformations programs, accelerate delivery, and uplift capability.