Looking at the payments industry, it is clear how these two theories can also be applied to software development, and have the potential to deliver notable benefits. The electronic payment systems in use in many banks today often ignore customers’ needs; are too complex and difficult to deploy, configure and use; and do not support basic economic principles such as transparency and liquidity. The process of developing and managing payment systems at a bank resembles an old fashioned automobile factory: handmade by artisans and customized for each individual customer.
If the payment industry was to learn from manufacturing and adopt uniform and interchangeable parts in its system development processes, financial institutions would find it much easier to migrate to newer systems and reduce unnecessary waste in developing, deploying, and operating redundant and overlapping systems. In manufacturing, success of interchangeable parts is based upon understanding precisely what a machine is intended to do and automating that process with a standard set of parts. To create re-usable parts we have to know what we are producing. In the case of payment solutions there is enough experience that a set of best practices can dictate the reusable business services that are required. The reusable parts must be service components that can be snapped together to create the end product.
The concept of mass production and the assembly line is based on automation, and establishing standard processes and measuring time to completion and cost of each step in the process is fundamental. This is a lesson that must be learned by payment system vendors, who often have not measured the time to completion and cost required to automate payment services in the past, and therefore haven’t always focused on reducing the time to completion and the cost of implementation and operation.
As you can probably tell, this is a topic I am passionate about and in the next instalment, I will continue to look at some of the changes that the manufacturing industry has gone through, and how they can be applied to the payments industry.
Louis Blatt, Ph.D., joined ACI Worldwide from CA in April 2009. At CA, Louis was senior vice president of Business Development and Strategy, and was the driving force behind CA’s market leading EITM strategy. He focused on extending CA’s global leadership in the IT management market to meet customers’ rapidly changing business, technical and operational requirements. Louis brings nearly 25 years’ experience in the technology industry helping software companies to develop winning strategies, efficiently bring successful product lines to market, and grow market share, and has published widely on user interface design methods and business implications. Louis graduated from Susquehanna University and received his Ph.D. and master’s degree from Boston University. Did you like this article? You can leave a comment via the comments function of our blog or by joining our LinkedIn group.
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