Reducing Sticker Shock With Your Product and Technology Strategy

There's virtually no reason why a large organization can't employ the same strategy to 'pay as you go' with their own technology resources. This has come to be known as the 'strangler application' and comes with a hefty culture shift.

Reducing Sticker Shock With Your Product and Technology Strategy

Reducing Sticker Shock With Your Product and Technology Strategy

Patrick Reemts

Patrick Reemts

Patrick Reemts defines, packages and delivers account originations and consumer authentication solutions for TSYS. Previously, Reemts worked at ID Analytics, where he ran its wholly owned subsidiary, SageStream, a credit reporting agency.

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So here we are — we know what product and technology efforts we want to start with from our inventory of common services, and we know who should lead the effort based on their empathic and articulate reasoning skills. Only one challenge left — how do we pay for such a massive undertaking?

This is the exact reason that the Agile methodology took off in software development years ago in Silicon Valley. And, in this case, necessity was the mother of all invention: A lack of up-front resources forced product and technology groups to think about quick revenue services that, with an appropriate vision, can provide smaller but faster revenue to pay for future work. This is opposed to large, monolithic services, which are usually built over multiple years by large (cash-flush) organizations that would traditionally write huge checks to re-platform and take long periods of time to complete.

Agile with a vision

However, there's virtually no reason why a large organization can't employ the same strategy to pay as you go with their own technology resources. This has come to be known as the "strangler application" and comes with a hefty culture shift. But it also requires an appropriate vision.

I once had a friendly debate with an executive about a project I was running. He asserted it was waterfall and I argued it was Agile. His points, all logical, emphasized that it was a year-long project with many major steps that had technological dependencies. My counter-argument was that we were creating releasable micro-services along the way that could be used by any product — and yes, we knew eventually where we wanted to end up.

Notice how both sides sound logical.

It's easy to conflate software development methodology dogma with having an end-state vision. These are independent functions that serve two very different purposes. One is "what?" The other is "how?" The notion that the Agile framework gives you the platform to fail quickly should not be a substitute for a healthy market and product vision. In other words, hip software development buzzwords are not substitutes for good product management.

"With a strong product team that can identify the smaller saleable features that can fund the effort along the way, you'll be unstoppable." -Patrick Reemts, TSYS

So how does this pay for anything?

Take a large organization that is staring at its inventory and coming to the realization that most of their saleable products are sitting on archaic platforms and causing egregious maintenance costs and hindered flexibility. The reality is that each component part of a product probably has a monetary value tied to it.  That's where the term feature comes from — it's Latin for "a formation, a working." A feature can be rebuilt on a new technology stack and upsold for smaller, incremental — but net new — revenue. Whether you have a product that has two of these or 200 of them, each one can by rewritten on a standardized new technology stack or platform and, piece by piece, replaced and sold.

To do this, however, you still need to convince a CFO somewhere to let you get started. And this is where progressive companies separate from stuck ones. When convincing someone you need resources to completely re-platform technology, tell them you’ll pay for it along the way with specific commercially viable products. Yes, they'll be smaller in net revenue, but they’ll be smaller in build investment as well, which means they’re actually easier and faster to sell. And for that — you guessed it — you need that end vision. But with solid market and product leadership, you can identify the revenue-generating features you'll gain along the way.

And this is where all three parts of the strategy come together — having the inventory of where common services can be strangled out will enable new technology to be employed that will likely affect more than one feature, gaining net-new revenue from new features. And you need to pick a leader or group of leaders that can paint a picture of that vision to the organization. With a strong product team that can identify the smaller saleable features that can fund the effort along the way, you’ll be unstoppable.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

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Patrick Reemts

Patrick Reemts defines, packages and delivers account originations and consumer authentication solutions for TSYS. Previously, Reemts worked at ID Analytics, where he ran its wholly owned subsidiary, SageStream, a credit reporting agency. There, he launched one of the most successful alternative credit product sets in the lending industry, including the first-ever credit score using convolutional neural networks.

Prior to ID Analytics, Reemts spent almost 10 years at a variety of the largest U.S. consumer lending institutions, including Discover Financial Services, Wells Fargo and HSBC. His focus has primarily been in managing credit and fraud risk, new account acquisition systems and portfolio profitability. Inside of large financial institutions, Reemts has built enterprise class risk decision engines, leveraged machine learning solutions and implemented big data distributed platforms.

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