The rising costs caused by extra safety guidelines put forward by governments the world over, the sudden changes in their processes owing to these safety guidelines, and dwindling businesses were severe concerns for many key players in this sector. The lockdowns in various countries caused heavy supply chain disruptions, affecting international and intra-national logistics, leading to slowdowns in other related industries. Many small trucking companies in the USA were forced to file for bankruptcy in 2020 owing to COVID, as they lacked resources to turn things around or wait for the pandemic out.

The impact was evident in other industries as well – the aviation industry is one such example. Most of the major routes were either thoroughly grounded or reduced to a few hours of operations due to the lack of the required number of passengers to cover the substantial operational costs. As a result, there was a decline in people preferring to travel to international locations, bringing the demand further down.

The work-from-home situation dragged down the number of corporate travelers, which amounted to 75% of airlines’ profits. In addition, there was a decline in people preferring to travel to international locations for personal reasons, bringing the demand further down.

The global freight forwarding market was also among the most brutally hit, with an expected decline by 7.5 percent in 2020, compared with the previous year. The case was similar for various other transportation companies – a good example would be that of the global cab aggregator, Uber, which saw a 50 percent fall in its gross bookings year over year during the pandemic.

However, after a year of living through the pandemic, the outlook is positive, and the world is adapting to the changes caused by it.

How business leaders should navigate the pandemic to ensure resilience

Even though the pandemic disrupted many transport and logistics businesses, many leaders took this as an opportunity to accelerate their digital transformation journey that could catapult their business to new and sustainable levels.

Optimizing Operations

Business leaders must reassess how their businesses operate and focus on optimizing them to reduce any unwanted costs. For example, transportations and logistics companies bear the brunt of working on legacy processes, and opting to re-engineer them would result in high payoffs. For example, a warehousing business could use analytics and location data to plan various shipments to be loaded and unloaded optimally.

Similarly, airlines can use the data of passenger onboarding, baggage tag scans, or other tracking mechanisms to deploy FTEs to handle these passengers optimally, hence controlling the operational costs even further.

blackrock enabled an international construction equipment manufacturer to develop a comprehensive Fleet Management System for optimizing mine operations. As a result, the project is set to increase its efficiency and operational costs. You can read the news article here.

Providing Transparency

A business must provide transparency to all its stakeholders to make the business process easy, manageable, and measurable. For example, with every lockdown, there was rising consumer demand for home delivery and thus an increased demand for last-mile delivery services. This highlighted the need for automated, contactless delivery technology. TAs a result, these businesses need to build a digital ecosystem to ensure that their customer engagement levels are high and that transparency is maintained throughout their business processes.

Even in a B2B scenario, logistics companies need to ensure that relevant data is available to their customers to ensure their business isn’t disrupted. This is particularly significant in the wake of increased demand for e-Commerce and enterprises supported by transportation and logistics companies adopting such a transition. As for the internal stakeholders, they are improving the visibility within the supply chain, ensuring that they are ready for any disruption that might happen within the supply chain.

A good example of this would be the comprehensive logistics management platform created by blackrock for a global leader in supply chain solutions – you can read the complete success story here.

Harness the power of data

The COVID-19 pandemic has highlighted the importance of leveraging data and analytics solutions to make decisions. While data utilization in transportation and logistics has grown significantly over the past few years, the pandemic has accelerated an urgency to innovate. This led to rising demand for supply chain risk management and real-time monitoring systems during the past year.

With the adoption of multi-modal transportation and technological advancements leading to many different data sources like cameras, GPS, and geo-location, it is a logical step to consider this diverse data ecosystem. This unmatched amount of data can help businesses use advanced data and analytics solutions to enhance operations, reduce costs, and better serve travelers.

Understanding the mobility patterns and transportation and logistics trends early on will give rise to effective risk and disaster management, and those businesses accelerating their digital transformation journeys will reap the benefits in the long term and would be able to tackle any other significant disruptions head-on.

blackrock helped an Indian hill-state tackle its road safety challenges by going digital. You can read the complete story here.

The post Digital transformation of Transportation and Logistics to overcome the Pandemic appeared first on Black Rock IT Solutions – Software Product Engineering Services.

In the wake of this uncertainty, firms have been focusing on investing only in the following areas:

Operations: to ensure continued access to basic services;

Supply chain: to address emerging supplier and customer needs;

Revenue: to ensure the continued viability of the business; and

Workforce: to support employees and remote working amongst disruption.

As per a study conducted by Boston Consulting Group (BCG), around 60% of firms have paused the deployments of new IT systems, for instance, and 44% have delayed upgrades to their existing systems. A study done by Gartner shows that the banking industry, one of the largest IT spenders, is expected to cut down on their IT spending by nearly 4.7% owing to the turbulent market. They are focusing on investing in technologies that will keep their businesses running – specifically by going digital and investing in emerging technologies trying to adapt to the “new normal”.

The New Normal

The entire world is currently transforming in an attempt to adjust to the new normal – the practice of social distancing. Even though a lot of industries can work with the limitations of social distancing poses, there are many which cannot. 

Banking is one such industry. Banks build trust in very tangible ways – with retail outlets that are designed to emanate confidence and security. Older and larger banks rely on the security that comes from human contact, reassuring customers that their money is safe and in a concrete vehicle, as opposed to a mere tab in their internet browser. 

When COVID-19 struck, their business took a hit even though most banks had already enabled digital banking for their customers. This was not because the business operations affected their customers drastically, but because they needed their employees to work out of their retail outlets to process transactions. Social distancing and working from home is feasible only when employees are enabled by the infrastructure they need. This new normal meant molding a secure environment that was safe for both the employees and for customers’ transactions.

Agility and Customer Experience

Banking, insurance, and other financial services are highly customer centric. Traditionally, they have always needed the human component to provide a sense of confidence to their customers. COVID-19 has put these companies in a situation that they haven’t ever seen before. Traditional financial systems have not been very agile when it comes to change, with a large cluster of systems hosted in an on-premises environment and large IT teams supporting it for years. The pandemic showed them the importance of agility in their systems and how it can impact their overall customer experience and hence, their business too.

During the initial days of the lockdown in different geographies, many banks could not keep up with the number of customer requests pouring in, and multiple outages were reported owing to the lack of staff. This was heavily impacting their business’s reputation. Soon, their customers’ behavior changed with the new normal and the demand for digital banking was at an all-time high. This is where an agile system would be quite useful, so they can quickly and efficiently change their business operations as needed by customer behavior. 

Risks and Business Continuity

With COVID-19, every organization was faced with a pressing question – how to keep the business running? This was definitely a concern for those who were doing business with banks or other financial services companies. 

For the banks themselves, the actual challenge was to reassess their customers’ Credit Risks. With a looming NPA crisis, it was already a tough task for banks to give out loans to corporates. Their existing formulas now needed a revamp, as the variables had changed. In many countries, a moratorium was announced by Central Banks, keeping private banks devoid of any interest revenue for that time. Handling the collection process and dealing with distressed customers was the other big challenge they faced as problems caused on this front were leading to a lot of reputation risk for the organization. Robust risk management functions would be needed with the active tracking of borrowers. 

Given the circumstances; their business operating model needed rework to ensure that business continuity is maintained.

How Can Technology Help?

Technology has been a key driver of the financial services industry for ages now, with the domain spending around 10 percent of its revenue on IT expenditure. However, now is the time for these companies to use this budget wisely, as technology is going to be what saves them from bankruptcy. 

In the current situation, there is an acceleration to the digital strategy of all bank leaders. Decision-making concerning these projects has quickened and “someday” or “one day” has become “today”.

Operational costs have become much higher during the pandemic due to unconventional methods of working and handling crisis management. Organizations have had to provide facilities for everyone, including their call center employees, to work from home. Thus, technology must play a key role to provide these facilities remotely – be it secure access through a VPN, or a security system to process the transactions without fail or delay. 

Machine Learning, RPA, and other emerging technologies could be an essential component to help solve a lot of these challenges, as they reduce the dependency on humans to an extent. It could be expected that financial services companies could start to adopt Machine Learning algorithms for their credit scoring systems to make their systems more agile. Insurance companies could adopt technologies such as image processing to help underwriters in claim processing and so on. There has also been a shift to Cloud hosting from On-Premise installations, which was highly preferred by the large traditional banks, to keep all activities remote. Some banks have started turning to intelligent automation to tackle problems related to collections and debt as well.

Conclusion

Going digital is the key solution, even though that is not the ultimate goal, as human interaction is still imperative when it comes to the banking and financial services sector. However, if  you work in financial services, now is the right time to look into developing a viable Digital Transformation roadmap for your company, and ensure you have the right technologies to stay agile and customer-centric.

The ability to balance technology and the human element will define every organization’s success in the future. At Experion, we help enterprises on their digitization journeys by developing FinTech solutions that are truly future-proof.  For more information on how we can help you stay future-ready, drop a mail to sales@blackrockdxb.com 

The post How COVID-19 is redefining the financial services industry appeared first on Black Rock IT Solutions – Software Product Engineering Services.

In most of the cases, a plug and play COTS solution looks tempting – a business-ready system with a seemingly lower investment, even if the decision is made with long-term thinking in mind. Some SaaS Solutions require as little as the purchase of a user license. Other vendors quote attractively low prices thanks to their cost-reducing models. All of this does make COTS solutions look like they could be the answer, but industry experts argue that they’re not always the best way to go when it comes to the IT landscape your company needs to have. 

Here are some key factors you need to keep in mind when you are faced with the task of choosing between custom software development and COTS:

• Flexibility & Customizability 

COTS solutions usually come with a fixed list of features that cannot be changed based on your specific requirements. This might work well if you’re from an industry that has rigid processes, where no deviations are tolerated and where supplier solutions need to support the standards of your industry – Pharmaceuticals, for instance. But if you are looking to automate a business process or a customer-facing application, you need to deviate from standard practices, because your needs are unique to your business. Trying to have a COTS solution customized often results in a very buggy application that can have irreparable consequences on your business – the rigidness of a COTS solution makes it almost impossible to comply with what the business wants. 

• The Support Model

Most COTS solutions have fixed support models, and the procurement team will have to evaluate their support structure on many criteria – warranties, SLAs, ownership costs, hidden costs, etc. It is a messy but imperative process to dissect their support model and try and negotiate to make it align with what your business needs. Especially for mission-critical applications, it becomes essential to have support with strict SLAs to ensure the system always works flawlessly. This might mean they need to tweak their support model, which may be something they cannot provide, especially if they outsource the support entirely. 

•  Integrability With Existing Systems

COTS solutions are usually built based on the standards and trends of the industry they want to operate in and the tech stack their potential customer base is using. Their roadmaps are often based on parameters such as customer feedback, industry analysis and trends they hope to monetize on moving forward. This means that the solution doesn’t always have to run in your specific IT landscape.

For example, your business might rely on Software X to complete one task and Software Y to finish a second one. You need to ensure that the system being procured is compatible with this existing ecosystem. If the solution you are using hinders the two from communicating effectively, it will affect the overall efficiency of your operations. If you were to build a solution, however, a wider set of APIs from different software and data partners could be integrated to ensure seamless functioning. Moreover, it’s always a hassle to try and get support from different vendors to develop APIs specifically for a project. 

• Effectivity of Change Management 

Buying a COTS solution often results in your business having to change its internal processes in accordance with the newly procured solution as COTS solutions are built based on standard practices within your industry, which might not be what you follow. This can turn into a costly, time-consuming affair that could have been avoided if you had chosen to improve your efficiency by automating your existing product by building an automated layer around it. 

• Risks To Data Security

Many software development services, especially SaaS providers, follow a shared model to bring down costs – this poses a data security risk for your business. The vendor might not have used the best practices for security vulnerability testing (OWASP top 10 or SAN top 25), and the risk is amplified when you integrate it with other systems, exposing your entire infrastructure to those vulnerabilities. 

• Compliance With Industry Standards

Many industries, especially highly regulated ones like FinTech or Healthcare where even a small deviation from standard procedures can impact whole societies, have strict standards to maintain the quality of their services. If you own a business in these industries, you have to be extra vigilant that the services you buy comply with these strict standards, and that can result in a very complex buying process. 

While COTS solutions made specifically for these industries will most likely adhere to these compliances because they are contractually bound to do so, they usually work out to be extremely expensive. If spending a lot on your operating process isn’t ideal for you, it is much more efficient and budget-friendly to build an application around your existing manual process. 

• Financial Investment

COTS solutions end up being more expensive in the end in the form of customizations, and premiums paid for high-end software upgrades or the hardware investment made for setting up an infrastructure for systems and sometimes the support costs. Though the cost associated with custom build solutions seems high during the initial phase, in the long-term, they are more valuable than a COTS solution.  

The choice between custom software development or a COTS solution varies from case to case. It is a decision that needs to be taken factoring in all the variables that will affect your business. Both have their advantages and disadvantages. Custom software development, however, tends to be easier, less risky, and provides the best ROI, if you find the right technology partner like Black Rock IT Solutions. We have built custom software solutions for enterprises of different industry verticals across the globe. Our business customers quickly transformed to be long-term partners, as we delve deep to understand their business, and delivered long-lasting and effective solutions.   

Check out this article – 8 Factors To Consider While Outsourcing Your Custom Software Development Requirements for more inputs on this crucial deliberation.

To know more about Experion’s offerings, drop a mail to sales@blackrockdxb.com

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