Out with the old?

Long gone are the days of counting pennies at the cashier’s desk or popping to your local branch to find out your balance. 

But just because some things are worth leaving behind in 2011, that doesn’t mean we have to turn our backs on tried and tested methods. 

This blog will explore arguments for a waterfall-agile hybrid model, the compromises required to avoid AgileFall and the challenges financial services firms face when considering an increased use of agile.  

Waterfall is dead. Long live WAGILE

When you consider that 97% of the UK total adult population has a day-to-day bank account of sorts (Financial Conduct Authority 2017), financial services is an incredibly consumer-driven industry. And as consumers have become more digital, so have banks.

For better, or for worse (if you’re in the generation of no internet), banks are now software companies. They design products and services which rely almost entirely on software and customer data. And with that shift comes the temptation to adopt new trends that facilitate faster times to market and enable a more adaptable response to market need. 

Agile is one such trend. 

Introduced in 2001, agile promised a better way to develop software, putting customer collaboration over contract negotiation, working software over comprehensive documentation. 

Popular among developers, the pivot towards agile project management started to build momentum as demand for internet-based applications increased. Agile provided a way of working that bypassed detailed documentation up-front and introduced a more iterative and collaborative process that focused on user feedback and experimentation.  

Fast forward to 2023 and it seems that the majority of organisations practice some version of agile methodology. But when you look closer at the financial sector, whilst agile has been embraced at a delivery team level, most feel unable to let go of waterfall-like aspects for activities such as planning and deadlines. 

In contrast to agile, the waterfall methodology is a sequential development process. Each phase of the project – analysis, design, development, testing – requires a deliverable from the stage before being able to proceed with the next. It’s retained its gold standard status since the 1970s, largely thanks to its ability to bring discipline to software development and certainty in the production process. 

These are just some of the reasons that waterfall became a bedrock for industries such as financial services. And truth be told, it’s been difficult to ‘ditch’ waterfall in favour of its younger, more nimble cousin. 

And why should they? 

For the likes of Albert Hitchcock, Non-Executive Director at Nationwide Building Society, having a mixed approach to project management is no bad thing: 

“I am very familiar with what I call a dual-speed approach, because I don’t believe, as an example, if you move to an agile base way of working that you have to trash all your waterfall and program management approach. The two have to work alongside one another.”

Waterfall isn’t dead. But it has, at times, stood in the way of progress. Most notably when it comes to keeping up with customer feedback loops or embracing experimentation. 

Too often waterfall is haloed for clarity of output, when in fact, it’s almost impossible to have a full grasp of the whole project before it begins. This means that whether you are using an agile or waterfall model, any demonstration of value before the task is complete is conjecture.

Rather than denying one, or attempting to adopt 100% of the other, financial services firms may find a hybrid approach enables them to retain clarity in their development process whilst increasing adaptability. 

To achieve true synergy, compromises are needed.

Avoiding ‘AgileFall’

There is a magnitude of reasons why financial services firms can’t easily transition away from waterfall methods. These include:

• Organisational maturity, including bridging comms gaps across department silos
• Existing ‘ways’ are entrenched, requiring a culture shift to adopt a new way of working
• Not afforded the time, budget or internal knowledge to successfully lift and shift operations to a more agile framework  
• Projects need to secure funding ahead of a project’s start, so teams need to pitch benefits and delivery outcomes in advance
• Funding Cycles may be long term, creating tendency to favour long-term planning over iterative cycles 
• External deadlines mandate planning to hit feature delivery by specific points in time, e.g. OpenBanking, EU regulation, UK reg etc.

Despite these obstacles, the allure of faster times to market and a decrease in product development costs sees firms attempting to adopt some form of agile methodology – even if just at development and testing team levels. 

Whilst it’s fair to say some have experienced success with the introduction of a hybrid waterfall-agile approach (known to some as WAGILE), there are many who fall victim to AgileFall – an ironic term that observes the fact that some heavily-regulated, risk-managed organisations continue to use waterfall development techniques whilst claiming to work towards an agile manifesto.

This can affect a team’s ability to apply agile techniques – sprint planning, retrospectives, product backlogs, iterative testing – to investment cycles, product development, strategic planning, and route to production. Not only do firms miss out on shortened design stages and planning, there is also a misalignment when it comes to benchmarks for project success.

Calling a truce

Without fully trusting an agile manifesto to work alongside waterfall principles, organisations create more problems than they try to resolve. For the sake of your development team, project managers and stakeholders, here are a few suggestions to help create a happier marriage between your agile and waterfall methodologies.

• Pre-empt resistance from the team by outlining the value that comes from transitioning to, or working with, agile principles. Communicate all changes to all teams that may be impacted – always answering the question ‘what’s in it for me?’.
• With any new technology, there will be new language, procedures, and software to learn. Set up comprehensive training programs to get your team up to speed. 
• Start small and scale. Consider experimenting with an internal project, constantly reviewing the value of agile principles vs waterfall principles (and vice versa) at different stages of the project and the mix of principles accordingly. 
• Establish a mutual agreement about how you will measure success based on business objectives, time and budget targets, sales and other relevant metrics. 
• Encourage feedback to gauge what’s working, what’s not, and address pain points as they become apparent. 
• Lean into the fact that agile software development requires close collaboration between the customer and the development team, helping to break down siloes in your organisation. 
• When scaling, communicate changes business-wide and encourage employee participation in the roll out of the change. This lets employees know that changes are supported from top-down, whilst also encouraging active engagement from grassroot levels of the organisation. 
• Educate your stakeholders. Without full end-to-end buy-in of how agile works or the value of using it at particular points of the process, the first sign of trouble will see people ditch the budding benefits of agile for the comfort of waterfall. 

Surviving with waterfall, thriving with hybrid 

Introducing a new set of principles always comes with a learning curve. With this in mind, if you truly want to make hybrid work, you have to give your team permission to learn, try new things, suggest changes, embrace fail-fast, fail-often thinking and spend budget. 

Waterfall may be a tried and tested method. A safe bet as it were. But whilst it enables businesses to survive, it is beginning to lag in its ability to help businesses thrive.

Giving your team space to find the right blend of agile and waterfall for your organisation means opening your organisation up to the best of both words. You’ll retain compliance, documentation, and staff morale, whilst benefiting from faster times to market, regular feedback loops and less buggy code.

Lovely stuff. 

If you’ve considered introducing a hybrid model, or are struggling to scale agile ways of working beyond a proof of concept, there’s every chance we’ll be able to help point you in the right direction. Having worked with four out of the top five UK banks for the past 15 years, GlobalLogic knows a thing or two about building agility into a bank’s ecosystem, tech forums and governance. 

Depending on your priorities at the moment, we can offer an impartial ear and recommendations based on your current process, all the way through to an end-to-end transformation program bespoke to your digital needs and technology landscape. 

Reach out to us today. 

If you’d like to see how we’ve helped firms within the heavily regulated financial sector gain agility, check out our recent project with a top UK bank.