The accelerated adoption of digital tools, products, and operations across financial services—including agricultural lending—has taken center stage in forward-looking strategies and technology investments. And still, we continue to see technology investments happen while underestimating the scope of time, effort, and required adjustments to business operations, which ultimately leaves productivity and customer experience gains on the table. The trend is no different across agricultural lending and farm credit.
Technology is just the beginning of becoming a digital business.
Implementing the right digital solutions—ones that are scalable and secure—requires understanding and addressing your business challenges, perhaps even more than your technical needs.
It’s a significant reason why the outcomes of technology investments continue to fall well short of expectations, creating a gap between how well organizations believe they’re doing on the digital front and the ROI they’re actually getting.
To see the value of technology investments, organizations must look more fully at optimizing their operating model and operations to create an ecosystem compatible to digital technology.
Most technology projects fall short because they’re overly focused on the promising functionality the technology can deliver and less concerned about how their business model needs to transform to get the most out of the technology. It’s the proverbial “putting the cart before the horse” problem:
Projects don’t underperform because of the technology—they underperform because key people and process decisions are overlooked. While these challenges ring true across all lending sectors, agriculture is compounded by its own unique set of factors.
Ag lenders encounter cyclical periods, just like ag borrowers. The windows of opportunity to invest, deploy, and utilize new technology can be narrow. During seasons of belt tightening, process improvements are often limited as the focus can shift to navigating the storm.
To accommodate and begin preparing for new technology, organizations must realign and optimize certain structural and operational aspects associated with the basics of people, policy, and processes.
Consider this as a foundational premise: The way you used to do business may not be the best way for business today and tomorrow.
To align your operation before the new technology arrives, consider these three steps:
Organizations must optimize the operating model as a precursor to technology and position themselves for successful alignment across myriad frontiers to unlock measurable value and benefit realization from the technology. For organizations to continuously evolve and improve after technology implementations, refining and adjusting the technology and processes is a must to unlock newfound value in these three areas:
Employee engagement: Operational enablement and data integration drives transparency, satisfaction, and accountability by leveraging automated dashboards and reporting for all activities across the value chain
Customer experience: Integrated technology and automation embedded within process realignment drives improved service levels with faster response and cycle times, such as decisions to loan approvals and funding
Financial performance: Reduced operating costs resulting from elimination of non-value add activities and incorporation of organizational design best practices
The potential to unlock value is only limited by the organization’s perspective on realigning and optimizing it current state as a precursor to the new technology.
The magnitude of opportunity is significant, and ag lenders must reinvent the way in which people do their jobs by leveraging new technology to drive efficiency, scalability, and sustainability. Similar to the GPS that drives the tractor, farmers and businesses alike must reevaluate their roles. Organizations must take advantage of the opportunity presented by new technology and capture benefits across roles, processes, and policies—and include full consideration of both direct and indirect benefits.
By acknowledging that the organization built over the last decade may not be designed for ongoing adoption of new technology and integration, ag lenders may begin the process of preparing the ecosystem. Launching a strategic vision and considering impacts and change points for the people and processes will enable the organization to redesign and prepare in meaningful ways. Organizations may empower and enable employees to leverage their talents while streamlining processes, automating data sharing, and ultimately achieving ecosystem optimization.