Bank of America Case essay
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The Bank of America's new system for developing banking services is characterized by innovation: in that the bank realizes that there is the need to grow through value creation and excellent services that are appreciated by customers as opposed to price alone. Implying that the bank wants to go the extra mile of ensuring consumer satisfaction by delivering quality products and services, which they aim to achieve through experimentation, so that once introduced into the market they will be customized to the specific needs of the customers both existing and potential. Also, the new system is aimed at developing the bank through increased productivity, which they expect to achieve after the introduction of the fully operating branches with virtual tellers and video monitors displaying financial and investment news; in the long run these changes from the traditional system of banking would enable the bank to boost its earnings and profits as services will be remitted faster and minimum human resources would be required to run the bank. Hence, the bank would develop immensely owing to these new products and services.
In comparing the Bank of America's approach to IDEO's product development system, there are certain similarities and differences that exist. There are differences on matters regarding the methods and parameters to use in carrying out the tests, while on the other hand there are various similarities which include the vision and expectations of the innovation and developments that will hopefully arise from the experiments the innovation and development team undertakes.
It is of great importance to establish whether it is a product or service that is being developed, since the necessary ideas and concepts for the experiment differ in the case of products and services. This is because the end-users are different and have different tastes despite being developed for the same bank. For example, products could be new types of accounts to be introduced, while the services would be such things as free checks and check books for account holders.
Through experimentation, the bank is able to test the viability of a either a product or service before they actually introduce it to the market. Through the concepts developed by the team for testing actually prove that through experimentation, the bank can gauge is success after it introduces the new products and services. By establishing suitable tests for instance on the basis of capital, fitness of selected concept in the market and also how whether the idea is in line with the targets and objectives of the business. Businesses can maximize their learning from experimentation through various means. For instance, this can be achieved by undertaking proper evaluation on the viability of the products, by formally testing the ideas and concepts regarding those products. Proper prioritization is also a pre-requisite for companies that want to maximize their learning from experimentation, based on impact to customers. Finally, successful implementation of the new products and services is also a vital process. (Silvestri, 2007)
In my opinion, Butler and Brady should accept the addition of ten bank branches into the experimentation portfolio. With a broad experimentation capacity, Bradly and Butler argued that this capacity allowed room for faster evaluation of ideas through the running of more tests simultaneously and reduc3ed feedback times because of potentially lower5 capacity utilization. Since the team by now had gained much experience in running experiments and therefore having a larger portfolio of branches might also make scale-up and national roll out of successful concepts easier and quicker. Hence, by making the addition of the ten branches, the company would have greater chances of coming up with more refined products and services and at the same time, the innovation and development team could gain greater prominence within the bank.
The innovation and development team should respond to the senior management ready with details and results on the progress made regarding the experiments. The necessary actions to be taken would include continued support in terms of morale and funding to the team which increases the chances of success of the experiments or call f or an abortion of an experiment that has very unlikely chances of succeeding in the market and will in most cases cost the bank a lot of funds if they continue pursuing such a project.