Digital Transformation Series Part 2 | Strategic Choices in the Roadmap for Digital Transformation

In Part 2, we delve into the critical strategic choices that shape the success of digital transformation. While execution is undeniably challenging, these early decisions set the foundation for whether transformation efforts will succeed or fall short.

By Yoshi Mitsui, Head of Academy (Digital Transformation) at Aeqlia

Case in Point

- - Big Ship vs. Speedboat: Organisations must decide whether to embed transformation within the existing structure for gradual, cohesive change or create a standalone digital entity to move with speed and agility.
  - In-House vs. External Capabilities: Striking the right balance between building internal expertise for sustainability and leveraging external partners for speed and innovation is crucial to scaling transformation effectively.
  - Trust Bank Example: By adopting a speedboat model, Trust Bank combined customer-centric innovation with strategic partnerships, achieving rapid growth and redefining digital banking in Singapore

The High Stakes of Digital Transformation

Digital transformation is one of the most pressing challenges facing organisations today. It promises new ways to create value, enhance efficiency, and stay competitive in a rapidly changing business environment. Yet, despite its potential, the
path is far from straightforward. Research by BCG reveals that nearly 70% of digital transformation initiatives fail to achieve their objectives.1 This high failure rate highlights a key issue: while organisations often focus on
execution, the real challenge lies in making the right strategic decisions at the outset.

These choices form the foundation of the transformation roadmap, determining how resources are allocated, how teams are structured, and how progress is measured. Two questions often define the roadmap:

Should the transformation efforts remain within the existing organisation (big ship) or operate as a separate digital entity (speedboat)?
Should capabilities be built internally or achieved through external partnerships?

These decisions are not merely operational—they shape the entire transformation journey. Embedding change within the existing organisation allows for a cohesive, unified approach but requires significant effort to overcome legacy systems and cultural inertia. In contrast, creating a separate digital entity offers speed and focus but demands careful alignment with the organisation’s broader strategy.

Getting these decisions right is critical. A clear, deliberate roadmap provides direction and focus, enabling an organisation to navigate the complexities of transformation. Without it, even the best initiatives risk becoming fragmented efforts with limited impact.

The stakes are high, but so are the opportunities for those who make thoughtful, informed choices at the start. The success of digital transformation depends on much more than technology—it begins with a roadmap that sets the organisation on the right course.

Strategic Choice #1: Big Ship vs. Speedboat

One of the most critical decisions in crafting a digital transformation roadmap is whether to embed change within the existing organisation (the big ship) or to create a separate digital entity (the speedboat). This choice has far-reaching implications, shaping how quickly transformation can progress, how it is perceived internally and
externally, and how resources are allocated.

The Big Ship: Transforming from Within

The big ship approach focuses on evolving the existing organisation as a whole. This strategy leverages the company’s established resources, brand equity, and customer base. However, it is not without its challenges:

Time-Intensive: Transforming a large organisation takes time. It requires gradual shifts, gaining buy-in from multiple stakeholders, and embedding new ways of working across all levels.
Small Wins, Big Picture: The focus often lies in achieving incremental successes—piloting new initiatives and scaling them gradually to build momentum.
Cultural Change: Transformation within the mothership requires addressing entrenched ways of working and fostering a digital-first mindset across the workforce.
While slower to implement, the big ship approach ensures alignment with the organisation’s broader goals and can create lasting, systemic change.

The Speedboat: Breaking Away to Accelerate
In contrast, the speedboat model creates a separate, standalone digital entity. This approach is designed for agility, allowing the new entity to operate free from the constraints of legacy systems and processes. The benefits are clear:

Agility and Focus: The speedboat can move quickly, testing new ideas and scaling successful ones without waiting for broader organisational alignment.
Talent Magnet: Freed from the cultural and operational baggage of the mothership, the speedboat can attract top talent with a modern, innovation-driven culture.
Customer-Centric: It allows for a focused approach, designing products and services tailored specifically to digital customers.

However, the speedboat model comes with its own risks. If not carefully aligned, it may drift away from the parent organisation’s broader strategy, leading to fragmentation or inefficiencies.

Choosing the Right Path
The decision between big ship and speedboat depends on the organisation’s goals, market dynamics, and existing capabilities. Established companies with strong customer trust and significant resources may prefer the big ship approach, while those entering highly competitive or rapidly evolving markets might opt for a speedboat to stay ahead.

Strategic Choice #2: In-House vs. External Capabilities

Once the structural direction—big ship or speedboat—is determined, the next critical decision revolves around capability building. Should the organisation rely on internal talent and resources or partner with external experts and technology providers? This choice not only shapes the pace of transformation but also defines how the organisation builds and sustains its competitive advantage.

Building In-House Capabilities
Developing in-house capabilities ensures the organisation retains control over its transformation journey. This approach can provide:

Sustainability: Building expertise internally creates long-term self-reliance, reducing dependency on external partners over time.
Cultural Integration: Internal teams are more likely to align with the organisation’s values, priorities, and strategic vision.
Deep Understanding: In-house development enables teams to gain a
nuanced understanding of the organisation’s systems, processes, and
customer needs.

However, building internal capabilities takes time. It often requires significant investments in training, recruitment, and cultural change. Organisations with low digital maturity may find it challenging to develop the necessary skills and technologies quickly enough to stay competitive.

Partnering with External Experts

Collaborating with external providers offers a faster path to transformation. External partnerships can:

Accelerate Progress: External experts bring specialised knowledge, tools, and processes that can jumpstart transformation efforts.
Reduce Costs: Leveraging established providers avoids the need for upfront investments in building internal capabilities.
Access to Innovation: Technology vendors, consultants, and service providers often operate at the cutting edge, providing access to the latest innovations and best practices.

Yet, over-reliance on external partners carries risks. Outsourcing critical capabilities may lead to a loss of control, potential misalignment with organisational goals, and difficulties in transferring knowledge back to internal teams.

Striking the Right Balance

The most effective approach is often a combination of both. Organisations can rely on external partners for quick wins and specialised projects while simultaneously investing in developing in-house expertise for long-term sustainability.

For example:

A big ship strategy might begin with external consultants to modernise legacy systems while gradually upskilling internal teams to manage ongoing improvements.
A speedboat might focus on retaining internal control over customer-facing innovations while outsourcing back-end operations to ensure rapid scalability.

The balance between in-house and external capabilities is not static—it evolves as the organisation progresses in its transformation journey. Clear alignment on goals and a phased approach to capability building can ensure that external expertise complements, rather than replaces, internal growth.

Case: Trust Bank – A Speedboat Approach to Digital Transformation

The story of Trust Bank demonstrates how strategic choices shape the success of digital transformation. When the Monetary Authority of Singapore (MAS) announced the issuance of digital banking licences in 2019, the competitive landscape for financial services shifted dramatically. Established players like Standard Chartered faced a critical decision: Should they evolve their existing operations or create something entirely new to compete in this digital-first era?

The Birth of Trust Bank

Standard Chartered chose the speedboat approach, creating Trust Bank as a standalone digital entity in partnership with NTUC Enterprise, the parent company of FairPrice Group. The partnership leveraged FairPrice’s extensive ecosystem of
supermarkets, giving Trust Bank access to a customer base deeply integrated into the everyday lives of Singaporeans.

Launched in 2022 with a full banking licence, Trust Bank operated independently of Standard Chartered’s legacy systems, enabling it to focus entirely on digital innovation. The speedboat model allowed for:

Agility: A lean, cloud-native infrastructure that supported rapid product development.
Customer Focus: Seamless integration with FairPrice’s Link Rewards loyalty programme, offering tailored financial services that aligned with customers’ daily routines.
Diverse Talent Pool: Recruitment of talent from banking, technology, and retail industries ensured a cross-disciplinary approach to building customer-centric solutions.
Customer-Centric Design at the Core

Trust Bank’s strategic choices revolved around putting the customer first. It simplified traditional banking processes, offering:

Fee-Free Accounts: Transparent products with no hidden charges.
Cashback Credit Cards: A straightforward rewards system linked to everyday spending, including groceries and dining.
24/7 Customer Support: Ensuring quick resolution of issues, with over 80% of enquiries resolved in under 20 seconds.

These innovations resonated strongly with customers, driving rapid adoption. By 2024, Trust Bank had amassed over 800,000 customers, capturing nearly 16% of Singapore’s adult population.

Balancing In-House and External Capabilities

Trust Bank’s success also stemmed from its balanced approach to capability building. While it built internal teams to drive innovation and customer engagement, it partnered with external technology providers to fast-track its digital infrastructure.

For example:

Its cloud-native platform, developed with Thought Machine, enabled scalable, secure, and cost-effective operations.
Data analytics tools helped personalise customer experiences while ensuring robust risk management and compliance.

This combination of internal expertise and external partnerships allowed Trust Bank to scale quickly while maintaining operational efficiency.

Impact and Future Outlook

Trust Bank’s speedboat strategy, underpinned by its customer-centric focus and agile operations, positioned it as a significant player in Singapore’s digital banking sector. Its success is a testament to the power of making deliberate, strategic
choices at the start of the transformation journey.

Looking ahead, Trust Bank faces the challenge of sustaining its momentum while competing with established players like DBS, OCBC, and UOB. Its ability to expand its product offerings and deepen customer relationships will determine whether it
remains a niche disruptor or evolves into a formidable competitor.

Conclusion: The Foundation of Success

Digital transformation is more than adopting technology—it is about making clear, strategic choices that determine the trajectory of change. Whether to transform within the mothership or launch a speedboat, and how to balance internal
capability-building with external partnerships, these decisions shape the pace and focus of transformation.

The success of Trust Bank highlights the impact of these early choices. By creating a standalone digital entity and leveraging both in-house talent and external expertise, it achieved rapid growth and set a new standard for customer-centric banking.

These choices, however, are just the beginning. Transformation requires continuous alignment with organisational goals, adaptability, and a long-term vision. With a well-crafted roadmap, organisations can navigate the complexities of change and position themselves as leaders in the digital age.

Stay tuned as we explore more key aspects of digital transformation in the next instalment.

The Digital Transformation Series by Aeqlia Academy / Welcome to our series on digital transformation (DT). Over the coming articles, we’ll dive deep into the building blocks that enable organisations to thrive in a digital age. We’ll cover foundational topics like digital vision, customer centricity, operating models, technology, and talent. Each part will explore what these concepts mean in practical terms and show how some of today’s most forward-thinking organisations are making them real.

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