This is an excerpt from Outlook 2025: It’s Time to Talk About Transformation
As we move through 2025, one offhand comment made by an investment management executive at a conference continues to resonate: “Why are these so difficult?” Few would be surprised to hear that he was referring to a transformation initiative. But it may surprise you to hear that this remark was heard over 10 years ago.
Whether large or small, transformations are difficult, and they have been for much longer than a decade. Although the challenge is well known, the world around it—especially technology—is changing, demanding that firms evolve or fall behind.
For over two years now, the investment management industry and much of the world beyond has been abuzz with talk of artificial intelligence and its potential. AI’s potential to revolutionize tasks ranging from drafting meeting notes and action items to refining complex predictive analytic models is tantalizing.
At the same time, we’re seeing the returns on years of persistent but less dramatic progress when it comes to financial technology. A decade’s advances in data storage and cloud software eventually brought us today’s array of impressively flexible, scalable, and easy-to-use cloud data solutions.
Yet, as technology has vaulted forward, the management of people and processes involved with large change programs has remained mostly the same. This is why the time is right to talk about our industry’s transformation challenges: The weight of legacy systems continues to grow, and stagnant, ineffective approaches to managing enterprise-level change are holding back the potential of today’s technology.
There’s No Substitute for Experience
The trouble with charting a better course for change is that most leaders are unlikely to experience more than one or two significant transformational change programs in their career (never mind the fact that they rarely want to go through another). As with any challenging task, the experience of having done it before and emerged with all the scars of lessons learned is perhaps the single most valuable contributor to further success.
In need of experience, this is when most organizations seek out the practiced expertise of consultants, but brace yourself for a bold claim (for a consultant at least)—the investment management industry needs fewer consultants.
At present, initiatives are frequently staffed with dozens (or more). They’re smart, they’re hardworking, but look around and ask yourself: Are they experienced? Have they seen the good and bad consequences of their decisions five or 10 years down the line? Have they done this before?
Assessing the Current State of Transformation
We believe that getting better at transformation starts with bringing more experience into the conversation. Initiatives will still be challenging and costly, there will be unexpected issues and the need to iterate and evolve plans, but drastically extended timelines and bloated budgets should not be accepted as necessary to their success.
“You don’t get fired for hiring IBM”
It’s a phrase not only offered for decades as wisdom to err on the side of mature business partners but also thoroughly argued against as a shelter for the change averse who let transformation pass them by. As it often is, the truth is somewhere in between, but both perspectives on this idiom are helpful when thinking about large-scale transformations and the consultants frequently enlisted to support their exploration, planning, and delivery.
On the one hand, the value of the ‘Big 4’ is well understood. Their size brings with it deep institutional knowledge and the ability to support a wide range of business areas. They also offer the useful capacity to scale up resources for projects that need many hands. As highlighted by the ‘hiring IBM’ saying, there is also legitimate value in their hard-earned reputation and the stability that it belies.
On the other hand, the value of specialized consultants—like Citisoft—is often underappreciated. Domain-specific consultants don’t offer the same wide-ranging industry coverage as the Big 4, but the trade-off brings us back to Outlook’s message around experience.
While the largest professional service firms have extensive breadth and deep institutional knowledge, the specialized players stand out when we look at domain expertise and the amount of experience each consultant brings. That reflects the invaluable knowledge of the individuals you’re working with every day. At Citisoft, our consultants average over 20 years of industry experience.
As discussed throughout Outlook 2025, understanding and successfully navigating change initiatives’ complex networks of people, processes, and technology benefits greatly from experience. Further, to realize its full value, the experience needs to be involved not in monthly or even weekly update meetings but daily, maintaining focus and driving persistent progress toward the targeted business value.
How Experienced are Your Consultants?
Today, change initiatives are commonly staffed with large teams of consultants who are, on average, early in their careers. We believe one key to addressing the pervasive transformation challenges is to shift the balance to include more experience.
This year has the makings of an inflection point for the investment management industry. The firms that do not at least begin to lay out their path toward modernization are at risk of dramatically falling behind due to the leaps and bounds we’re seeing with financial technology.
Transformation will always be complex, but we shouldn’t accept that initiatives will be delayed and overbudget. It’s time for a new approach. If you’re interested in exploring what Citisoft’s experience can bring to your investments, operations, distribution, and data initiatives, we would love to hear from you.
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