top of page

Use value chain analysis to place the bank as part of the future

In 1985, Michael Porter publicized his bestseller Competitive Advantage: Creating and Sustaining Superior Performance with the focus on value chains analysis build on his timeless and powerful Five Forces Framework for analyzing competition of a business with the focus on industry’s attractiveness and likely profitability. The concept of value chains analysis provides a powerful tool with a view on the organization with a process landscape with inputs, transformation processes and outputs. The method helps organizations how to create unique value.

Translated to today’s challenges in the banking industry, both concepts are more relevant than ever for banks to define how to create value in this new disruptive banking market, but also to drive the digital transformation in a predictable, cost efficient and high-quality way.

The following nine key steps are helping retail banks to utilize Michael Porter’s methods, focusing on the future value chains, fostering a pragmatic, insight-led approach to tackling the new competition in the banking industry:

1. Define the bank’s role in the banking value chain.

“Don’t underestimate the on-going digital revolution in the banking sector and overestimate your own digital transformation capability”.

Where can a local, regional, national, or international bank create value when customers can perform banking services anywhere anytime without being in contact with a bank? Is the bank too small to survive as a stand-alone bank? Consider joining forces with other banks, Banking as a Service providers, Fintech companies, retail companies with large customer base or local players so you can stay relevant with a solid customer base. The cost of digital transformation from a branch driven retail bank to a relevant modern digital bank can be enormous and the time it takes is often several years, if ever ending…

2. Stay customer-centric and include key customers and partners in the digital transformation work.

“Don’t forget key customer’s or partners of the bank in the digital transformation journey”.

The disruptive change for all banks requires a continuous focus on creating customer value and the voice of the customer needs to be taken seriously at all levels. Carefully select customers or partners of the bank’s which can provide relevant input to and verify new features and services on an on-going basis. Establish Customer Advisory Board and Partner Advisory Board to get direct and relevant feedback to the product strategy & roadmap.

3. Define new bank’s role & End-to-End processes in the banking value chain.

“Don’t spend too much time on documented old processes, they are most likely outdated anyway and based on branch offices and mainframe software thinking”. Instead start documenting new customer-centric End-to-end (E2E) processes which is required to delivery banking services and products to customers anywhere, anytime. Create competitive advantage by delivering a unique customer experience and / or operational efficiency. Focus on lean and automated back-office processes making the customer-centric processes more effective. Take an extended perspective of the banks role in the banking industry value chains to define areas for potential partnerships securing sustainable competitive advantage.

4. Organize the new bank’s operating model in Value Chains.

“Don’t keep old functional silos based on products or services in the bank during the digital transformation”. This will only secure old way of thinking and resistance towards new way of thinking and change. During the digital transformation period the bank’s operating model should reflect the new position in the market and the value chain driven management team. Key personnel need to be part of the new value chain driven way of work, which also needs to be reflected in all areas, for example HR, controlling and accounting processes.

5. Organize the digital transformation program in Value Chains.

“Don’t organize the digital transformation program in functional silos or by software vendor”. The high number of changes & dependencies between different software components both internally and with external partners can easily become a nightmare and unmanageable. Both the new banking organization and the digital transformation program needs to be in synch towards the future way of work. Organize the digital transformation program as the new bank’s operating model, where old functional silo teams are organized in cross functional and software development teams based on the new processes. The digital transformation plan should be divided into value chain plans based on the new E2E processes where activities for piloting, process & software development, integration, configuration, migration, training etc. are included.

6. Document the E2E processes with a process orchestration tool.

“Don’t use documentation tools which are stand-alone and costly to maintain, it’s a waste of time and money”. Instead use a modern process orchestration tool where you can create a minimum viable process in a few weeks, accelerate learning, reduce waste, and stabilize and enhance the process. Such tools will be part of the bank’s future digital solution and makes it possible both to standardize process cross banking products and services, but they are also easy to automate and maintain and make adaptions to. Make sure that everything which can be configured are being configured, such as customer types, agreements, and products, ensuring fast time to market, low-cost development, and maintenance.

7. Use SAFe framework for scaling the digital transformation in an agile way.

“Don’t use old fashion waterfall software delivery model for the digital transformation work”. Use instead modern methods, like the Scaled Agile Framework® (SAFe®) which will secure continuous value creation, by testing out new features and functionality in close co-operation with the end customers. Establishing Solution Trains and Agile Release Trains are key success factors where subject matter experts and software developments are working in value chain based cross functional teams releasing new features incrementally which can be tested by customers. Introducing 3 months Program Increment plans with committed delivery of features by the Train’s provides continuous value creation. Fail fast is the new mantra and the bank should establish a continuous automated delivery pipeline representing the workflows, activities, and automation needed to deliver functionality & features from ideation to on-demand releases of value to the end user.

8. Establish a transparent, fact based and analytical way of work and reporting.

“Don’t underestimate the complexity and the dependencies in the new value chains”. It is critical for the success of the digital transformation program that status is transparent, fact based and provides bank’s management with relevant analysis to steer the journey, but also for the development teams themselves. The digital transformation work is normally very complex and should be set up as a software factory which has inventories, development facilities and deliveries to customers. Use tools like Jira, Octane, or similar tools to collaborate, keeping track of the backlog of all work and dependencies. What’s the status at different stages in development and test, defect situation, productivity, velocity etc. per value chain?

9. It’s a journey which needs anchoring at all levels.

“Don’t consider this as a three-to-five-year digital transformation project and its over”. The digital revolution is hardly begun in the banking sector, and it will continue to evolve over the next decades. In a few years the banking landscape will look very different, and many banks will not be here any longer. Create a digital culture journey- and capability plan which is anchored at Board level and part of all Management team members KPI’s. Establish a digital skill base catalogue and new role descriptions for all employees and build a continuous digital learning plan for all employees and establish a digital training center.

The retail banking industry has entered a digital revolution and banks will come and go; however, Porter’s frameworks are ageless. For existing banks, it is more important than ever to utilize value chain analysis and place the bank as part of the future banking value chain instead of becoming irrelevant soon.

Please contact for a demo.


About Qlorem

Qlorem was established in 2021 in Norway with a global footprint in United States and India. Our mission is to help organizations secure quality and value from digital transformation execution. The Qlorem founders have several decades of experience in supporting digital transformation initiatives from a single value chain up to a whole renewal of the core banking ecosystem or Business Support System in Telecom. We have built up a broad understanding of both business and IT capabilities over the years, which are used in development of Qlorem.

For further information, please visit


bottom of page