Tradition and Technology
PROVIDIAN TRUST: TRADITION AND TECHNOLOGY
By
Melissa Dailey and F. Warren McFarlan
DPDN
Paul Davidson, Brian Dyrud, Lindsay Neal, and Jennifer Paterson
October 8, 2003
INTRODUCTION
In 1994 Providian Trust was a company rich in tradition, experience, and a high level of personalized customer service. However, due to the lack of efficient business processes and information technology, Providian Trust was slowly slipping away from profitability and was allowing competitors to become more attractive to new and existing clients. The problems that Providian was facing were not going to be resolved by only implementing new technology, but rather a new environment and culture needed to be born. The company needed to be reengineered.
Reengineering as defined by Hammer & Champy (H&C) in their book Reengineering the Corporation “is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.” The four key words in this definition, fundamental, radical, dramatic, and process can each be used to describe Providian’s existing environment and why it needs to be changed.
In using the key word fundamental, H&C prompts companies to ask the following basic questions about themselves. “Why do we do what we do? And why do we do it the way we do?” Providian’s answer to the first question should have been to provide the highest quality in trust services by meeting client demands. However, Providian had not been meeting this objective due to increasing market competition and outdated reporting systems. The answer to the second question could be easily summed up in one word “tradition”. Most of Providian’s trust officers had 20 to 30 years experience of completing individualized tasks and keeping the relationships with their clients very personal. This type of environment promoted an extremely change-resistant culture based on
By
Melissa Dailey and F. Warren McFarlan
DPDN
Paul Davidson, Brian Dyrud, Lindsay Neal, and Jennifer Paterson
October 8, 2003
INTRODUCTION
In 1994 Providian Trust was a company rich in tradition, experience, and a high level of personalized customer service. However, due to the lack of efficient business processes and information technology, Providian Trust was slowly slipping away from profitability and was allowing competitors to become more attractive to new and existing clients. The problems that Providian was facing were not going to be resolved by only implementing new technology, but rather a new environment and culture needed to be born. The company needed to be reengineered.
Reengineering as defined by Hammer & Champy (H&C) in their book Reengineering the Corporation “is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.” The four key words in this definition, fundamental, radical, dramatic, and process can each be used to describe Providian’s existing environment and why it needs to be changed.
In using the key word fundamental, H&C prompts companies to ask the following basic questions about themselves. “Why do we do what we do? And why do we do it the way we do?” Providian’s answer to the first question should have been to provide the highest quality in trust services by meeting client demands. However, Providian had not been meeting this objective due to increasing market competition and outdated reporting systems. The answer to the second question could be easily summed up in one word “tradition”. Most of Providian’s trust officers had 20 to 30 years experience of completing individualized tasks and keeping the relationships with their clients very personal. This type of environment promoted an extremely change-resistant culture based on
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