Gattling Guns and Standardisation in Advice
During the American Civil War, thousands died as regiments followed traditional methods, techniques, and standards. As the death toll mounted, the Army began expanding standardisation and introducing new technology. Union Army General Benjamin F. Butler purchased 12 Gatling guns for $1,000 each and paid for them himself. He used these weapons during the 1864 siege of Petersburg, Virginia. He demonstrated the effectiveness of this new technology, and by early 1866, the U.S. Army began using it on a large scale, resulting in significant savings in lives and money, and ultimately victory. Warfare had changed forever, although one could argue that the French failed to learn these lessons in the Franco-Prussian War, which contributed to their defeat.
The advice industry is facing a similar predicament, where change and standardisation are crucial for its success.
Many industries have faced similar challenges in embracing digital technologies to enhance productivity and improve customer experience.
These industries commonly exhibit the following traits:
For widespread adoption of technological solutions to change said industry users truly need to be comfortable with the standards embedded in the system being offered.
Industry associations have found the standardisation process difficult to even begin to approach.? The less brave decision has been made to leave this space to the government.? The government however does not want to provide true guidance and solutions in this space.
Consequently, Dealer groups have created their own standards to navigate legal and compliance problems but remain quite still on many aspects of the industry that could have standards around them.? The dealer group structure acts as a barrier to change. In the end, a broad collection of compromised and random solutions to some of the spaces where standards are required have emerged.
The complete absence of standardisation and poor attitudes, in general, to transparency and governance means that there is an absence of a solution for the data problem.? A data problem of this magnitude means that technology systems need to be simplistic in process, design, and application.
The residential real estate industry in Australia serves as a parallel case to the advice industry, as it faces similar challenges in terms of structure, attitudes, and lack of standardisation. The emergence of Proptech has resulted in substantial productivity improvements and business growth within the sector. It has enabled firms to expand their revenue streams on a large scale. This success can be attributed partly to better standardisation practices and also to the absence of extensive government intervention, the strong support of industry associations, and the ease of consumer acceptance.
According to research conducted in the real estate industry, the acceptance of technology by all stakeholders has resulted in several benefits, including.
However, the real estate industry continues to face challenges in terms of data due to the absence of standardisation. Efforts have been made by the Real Estate Standards Organization (RESO) to establish universal data standards, which would enable tech companies to offer more comprehensive and adaptable solutions. Additionally, the development of the MSCI Global Data Standards for Real Estate Investment aims to enhance comparability and data quality, thereby improving decision-making for investors across different markets and asset classes.
Research into the consequences of this absence of standardisation highlights several challenges.
One commonly cited example is the auction clearance rate. It is often quoted hastily on a Saturday night but is consistently revised downwards by Thursday. Ultimately, we all rely on the more accurate SQM number. However, this metric is flawed due to the lack of standardisation in input.
Standardisation in the financial advice industry can significantly improve customer satisfaction by streamlining processes, enhancing transparency, and fostering trust. The benefits of standardization in the finance and accounting sector, as well as in manufacturing and compliance management, provide valuable insights into how standardization can positively impact customer satisfaction.
Efficiency and Effectiveness
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Standardisation, when combined with optimized processes and technology, increases efficiency and effectiveness.?
?By empowering finance teams with standardized processes and automated financial close solutions, organizations can reclaim valuable time currently wasted on manual activities, allowing teams to focus on higher-value activities that directly contribute to customer satisfaction.
Legible and Transparent Information
Standardised financial reporting ensures accurate, current, legible, and transparent information, making decision-making easier and instilling confidence in the C-Suite.
This transparency and accuracy in financial data contribute to informed decision-making, ultimately benefiting customers by ensuring that the organization's decisions are backed by accurate and accessible data.
Reducing Costs and Improving Customer Experience
Standardisation in manufacturing and compliance management also highlights the benefits of reducing costs and improving customer experience.
By improving and automating processes, organizations can save time and money, leading to more efficient operations and cost savings. Additionally, consistently meeting legal obligations reassures customers that the business cares about keeping their information safe and ensures ethical operations, ultimately fostering customers' trust and contributing to the success of the business.
Scalability and Stability
Standardisation enhances scalability, stability, and longevity for businesses, allowing more time to meet customer demand and scale the business.?This stability and predictability in business operations contribute to improved customer satisfaction by ensuring consistent and reliable services.
The presence of established participants with outdated systems, systems imported from foreign markets, and solutions designed for specific purposes now being marketed to a broader audience, along with the emergence of AI-driven solutions, has led to a proliferation of new solutions, methodologies, and processes without a clear framework. As a result, the situation has become increasingly complex.
The government's lack of involvement in setting standards has hindered progress and made the issue of standardisation even more complex. Their efforts to collect data and monitor the industry using outdated methods have further complicated the situation.
The current user decision-makers are typically older and may feel hesitant about acquiring new skills and relinquishing their familiar ways of operating. Embracing change requires courage and an understanding of the advantages it brings.
In this setting, various systems are utilised, ranging from basic word documents and Excel sheets to other technology applications and packages. Spreadsheets are particularly vulnerable to issues such as data leakage, corruption, loss, and errors. When these data transactions occur across even small organisations, it is necessary to approach all data with suspicion.
?There are those who believe that standardisation would diminish their "competitive advantage." However, research has proven that this is not the case, as the benefits of increased productivity and cost savings far outweigh any perceived marginal value from a unique approach.
?The advice industry will inevitably need to embrace standardisation and digitisation. If the industry is hesitant to take the first steps, consumers will ultimately make the decision, and the need for clean data will become unavoidable. Just like with the Gatling Gun, those who choose to embrace technology early will reap the benefits.