Digital Transformation – Your Roadmap for Success

By Jeff Wilk and Ed Wegener

XXL elevated roadway at sunset

Digital transformation touches so many different aspects of how firms operate, how they interact with customers and how they manage critical data and records.  In this episode of Oyster Stew, our experts share best practices firms can deploy to begin their digital transformation. 


Transcript provided by Tomi transcript services

Jeffrey Wilk:  Hello, and thanks for joining us today to listen to another podcast in our series on digital transformation.  I’m Jeff Wilk, Director of Strategic Planning and Execution here at Oyster Consulting. And I’m excited to have with me today, two leaders in their fields from Oyster Consulting, Managing Director, Ed Wegner, and David Altschul, both veterans in this industry with different backgrounds. And we put together an information packed, few minutes focusing on many different aspects of digital transformation. You may recall that we kicked off this podcast series on digital transformation by simply introducing the basics. We talked about what it is, why it’s so important, how to engage and remain engaged with your strategy and who the key benefactors are of current day digital experiences. So let’s get started today with the more in depth about how to engage on a digital transformation for your firm.

I’ve often heard people use the old adage of – “It’s not where you start that matters but where you end up.” Well, that may be true in some aspects of life. I don’t think that could be any further from the truth when thinking about a digital transformation initiative. Sure. You have to start to somewhere and everyone starts with their current state. But how you go from there to get to where you want to be takes careful and well thought out planning, execution, and critical feedback. Every step along the way. That’s what today’s topic is all about – how to launch and execute a digital transformation.  Ed let me turn to you first. How about diving into your thoughts on some of the best practices that firms can deploy to begin their digital transformation journey?

Ed Wegener:

Sure. I’m coming at this from a regulatory and compliance angle.  But as we discussed throughout this podcast series, the shift to digital touches on so many different aspects of how firms operate, how they interact with customers, and how they manage critical data and records.  Understanding the regulatory implications of this shift and ensuring that the regulatory risks are managed and mitigated is critical. So, when you think about how to manage this process, one of the things that I think is critical is that you involve compliance and legal at the outset. It’s much better and less costly to understand and address these issues as the changes are being planned and implemented than it is after; not doing so can create the need for costly fixes in order to ensure compliance. After the fact, I’d recommend having Legal and Compliance provide a regulatory impact assessment prior to making such changes so that you know what needs to be considered as you begin to plan the digital transformation. Then involve Legal and Compliance in the development and implementation of the transformation, as with any major change.

It’s important that testing is done in advance of the implementation to ensure that before this is rolled out and implemented that it’s working as intended.  Then it’s also important on a regular basis periodically throughout, to do testing, to make sure that what was working at the beginning continues to work throughout so that you don’t miss costly issues later on down the road. So, it’s important to involve Legal and Compliance during the planning, during the development, during the implementation, and then to also make sure that testing is done in advance of implementation and then regularly thereafter.

Jeffrey Wilk:  Ed, that’s tremendous insight along with a clear description of why a well thought out plan is so important, particularly from a regulatory and compliance perspective. It seems that starting early and including the risk and compliance team at the table is absolutely key. Dave, let me turn to you.

Dave Altschul:  So Jeff, reviewing back on our prior conversations in this podcast series, there’s a lot to unpack. Let’s step through a little bit on how the process might look at a higher level. One of the first things to look at is to take inventory of the current state. This assessment would create a baseline as a starting point.  Just as important, we need to determine with the firm’s constituents, their perspective of the current state and needs. Another important task is to look at and identify the firm’s key performance indicators and rank the pain points.  For larger firms, building the technology may be an option on the table, but you need to strictly maintain this technology in its current state, as well as scale up and build out for future needs. Quite often, we see firms favoring the leasing technology as risks can be reduced with day-to-day maintenance and version updates managed by the partner provider.

This keeps pressure on technology providers to take it to the next level.  Managing day-to-day cybersecurity threats by utilizing the partners that specialize in the space can also be a huge benefit of the leasing model.  Of course, routine due diligence reviews on the partners would be necessary.

Moving some steps further down the line will get to a point that will allow the development of business cases for and validate the desired future state digital platform. Finding the future state goal is a paramount point, but just as important, the firm’s executive leadership is in sync with the desired goal. The strategy is only as strong as the weakest link in the chain. Here’s where the fund starts understand your current industry partners offerings while also investigating other potential partners that will line up well with the future state digital platform model defined. At this point, we have now arrived at the moment of framing the technology stack of architecture. One of the most difficult steps in this process is getting to the ETR cycle. ETR cycle is execute, test adapt and repeat. The repeat step is about as important as any other step in this process, as technology is ever evolving at a rate that we haven’t seen before. So these top technologies can easily slip behind in a year or two.

Jeffrey Wilk:  Dave, those are such critical points. You really painted a great picture to make it easy to see why the formation of a digital transformation strategy is not something to be taken lightly nor developed in a vacuum, or only with certain members of the planning team. Working with experts in this space becomes very critical when embarking on a journey as intricate as digital transformation.  An initiative with this level of importance also needs to be properly planned for, has many steps, navigated through carefully and openly discussed across an organization to ensure that all aspects of the change are accounted for, and that there’ll be complimentary plans in place to address them, and in what sequence.  

You also highlighted several other key drivers between what you just mentioned, Dave, and Ed, you as well, and we could spend hours discussing each of them individually.  In the last couple of minutes, we have left today however, on the topic of how to launch a digital transformation, I’d like to give each of you a minute or two to give our audience a closing thought on the topic. Ed, maybe you go first and then Dave, you close us out.

Ed Wegener:  Sure, Jeff, thanks. You know, as I said earlier, that early involvement of all critical stakeholders is very important, including legal and compliance.  And making sure that you have expert advice in where you need.  I’d view Legal and Compliance as critical business partners and stakeholders, and make sure that they’re able to be involved early so that they can help you manage and mitigate your regulatory and compliance risks throughout both the planning, the development, and the implementation of the transformation.  And then testing prior to implementation and testing regularly thereafter.  They’re critical pieces of making sure that you’re able to manage that regulatory risk.

Dave Altschul:   Well, Jeff and Ed, one of the nuggets I’d like to leave here with is the CDA, the current digital assessment piece. It’s extremely important. It’s the foundation of where you’re going to go next. The other piece here is to remember that this is an evolving process that is just ongoing and you’ll need to be on top of these things year after year. Lastly, I think it’s probably most beneficial to bring somebody in from the outside to take a look at the business from an unbiased perspective. That’s something that I think would be really very beneficial for firms that are looking to take on the endeavor of a digital transformation.

Jeffrey Wilk:  Dave and Ed, thank you again. This was another great conversation today on our podcast – Digging Deeper into Digital Transformation. It’s a far, far broader audience than some may think. We thank everybody for listening in today and we look forward for you all to tune in more.

Oyster:  Thanks again for listening to the Oyster Stew Podcast. Don’t forget to subscribe, so we can help you make the best decisions for your firm. If you are struggling with a topic and you’d like us to do a podcast on it, or you’d like a free consultation, please reach out to us at 804-965-5400 or visit our website,  Have a great day.

About The Podcast Speakers
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Jeffrey Wilk

Jeff Wilk started his career as an Advisor and has a strong track record of executive success in strategic planning and execution, business assessment, transformation and growth. Jeff was directly accountable for several mergers/acquisitions, product and digital platform transformations, patent-pending products, and operating model RFPs and overhauls, including delivering the industry’s first “Robo” platform.

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Ed Wegener

Ed Wegener is an innovative compliance, risk management and supervisory controls expert with deep understanding of Federal Securities Laws and the rules of self-regulatory organizations, as well as technology optimization and risk mitigation. Prior to joining Oyster, Ed held several posts in FINRA, most recently as  Senior VP and Midwest Regional Director.

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