Today, most industries are characterized and affected by the turbulence and instability in the business environment. Notably, organizations have seemed to alter their business models and products in pursuit of attaining strength, productivity, and sustainable growth (Hassan, 2013). Thus, it is important to understand the global connection of such firms via technology to make them digital masters. New technologies are one of the factors that have resulted in the digitalization of the companies’ operations (Johnson, Christensen, & Kagerman, 2008). In connection to these aspects, the National Bank of Abu Dhabi, NBAD’s business models have been used in the identification of the changes, business systems, and new trends in the current market. The core aim of this study is to examine the global link that can make NBAD a digital master through modern technologies (NBAD, 2015). The paper has been structure into four main parts which include the description of NBAD’s business model, development of the bank’s business operational model, assessment of the digital and leadership capabilities, and outlining the key components of a “Playbook” for the senior management in order to be a digital master.
Business Model of NBAB
It is important to have an understanding of the different kinds of business model of NBAD. In other words, taking the steps towards the creation of the desired business model needs the knowledge of the components that are essential to ensure the sustainable growth, productivity, and strength of the bank. In the analysis of the business models, researchers have pointed out that there is no fixed theoretical foundation that the business model of any entity has in economics (Teece, 2010). With this understanding, three key components of NBAD’s business model include the standard relationship with the customers, the segments of the customers, and the streams of revenue. These components are believed to depict the right side of the bank and thus combined to constitute a business’ mechanism of revenue generation.
In the context of the customer relationship, there is a personal help on the basis of the interactions of people. At this stance, it rests with the customer to directly communicate with salesman in the course of process of wholesale. NBAD business achievements have been shaped by this modification whose dedication is to the personal assistance, and particularly where the customer has only one agent who meets the needs of that client (NBAD, 2015). Where the organization will involve self-service, there is no contact made with the customers, where NBAD will only offer a product or a service. Additionally, the bank uses automated services such as ATM services and internet among others to link its clients with the processes that are also automated and as well utilize the customer relationship management (CRM) system which recognize the customer and recommend him or her to an appropriate service of product (Stefan & Richard, 2014). It is worth identifying that many businesses continuously by use of the community for the improvement of the interactions with the clients. The role played by such a relationship is the direct provision of the free quality database of the observations from the clients.
Regarding the stream of revenue, NBAD has used this component in the description of its cash flow. In most cases, the authors have included the sale of services and goods. For instance, the company’s income is generated from the provision of exclusive rights to use particular assets such as loans, rental, and licensing among others. In licensing, the money is generated from the provision of the permission to the customers to make use of the protected intellectual property in place of the licensing fees. Additionally, the brokers can earn from each deal and also advertisement is another source of revenue from provision of the medial areas.
NBAD’s business model also has a component of customer segment, whose definition is based on five forms of market including segmented, mass, niche, multi-sided, and diversified. In the perspective of the mass market, NBAD has offered a representation of a big group of customers who have similar problems and demands. Segmented type divides customers into groups based on the same characteristics. On the other hand, diversified markets are situated in over two industries possessing diverse needs and issues (Magretta, 2010). No doubt, the bank has also considered a multi-sided type which utilizes the segments that are interdependent and as well links them. As an illustration, the credit cards VISA provider builds a relationship between three groups which comprise, banks, merchants, and cardholders. Further, it has been argued that some products and services have been connected to the client in niche markets.
The Business Operating Model of NBAD
The restructuring of NBAD Group’s business operations occurred into three main units in 2013, which comprise the Global Wholesale, Global Wealth, and Gulf Retail and Commercial. Additionally, the bank possesses two geographies which manage the franchise in every country around the world, and whose operation is under NBAD’s Gulf & International. Such geographies include gulf and international types (Murphy, Kirwin, & Razak, 2016). In order to develop and implement an operating model, the bank has focused on moving from the issue to the outcome. Thus, NBAD’s business operational business model has five key sections which encompass From Issue, Pace, Certainty, Agility, and To Outcome, in that order respectively.
In the section of From Issue, there is an indication that the bank has identified an increased demand for services, where the economic challenges and changing demographics have resulted in the rise in demand for the human services (Hunger & Wheelen, 2008). Also, the bank have focused on the reduction of the capacity to pay, whereby the county levy limits and budget reductions are adopted to cut down the resources that are available for the departments of Human Services. The component of Pace comprises that Service Delivery Authority (SDA) legislation which offer a current vehicle that enables the counties to come together with no need of working through a process of drawn-out legislative. In a similar connection, NBAD has ensured a proactive change management as well as an education campaign that assists employees and the public to be aware of the advantages of the SDA, and thus boosting the adoption of the new digital system.
In the certainty element, the bank has considered the performance metrics which are generated from the steering committee of DHS on the performance and outcome reforms will require SDA to deliver the outcomes to the residents of the participating nations (Mullins & Komisar, 2009). Also, the bank has a implementation plan that is detailed whose purpose is to proactively identify barriers and risks to the implementation to ensure they are handled prior to their derailment the implementation effort. Furthermore, the agility aspect of the business operating model entails the flexible governance model which makes it possible for counties to keep controlling human services and also, at the same time opening up the potential for the SDA to add more services or counties in the offing (Murphy, Kirwin, & Razak, 2016; Baden-Fuller & Morgan, 2010). Added to this role is the NBAD’s business operating model which utilized the ‘Hub and Field’ model for the delivery of the service delivery. This component creates room for flexibility concerning the way and where deliverer of the services is made, and its customization depends on the unique demands of a specific population (Accenture, 2012). The ‘To Outcome’ part,’ consumers and residents of a given country or county are provided access to a wider range of human services and a quality of care that is more consistent, thereby creating a community that is more successful and stable. The outcomes of the bank are also felt in the county governments where there is an organization that is more sustainable and having reduced cost in the provision of services (Baden-Fuller & Morgan, 2010). The bank has then ensured that Abu Dhabi is capable of providing the residents who have the services needed by NBAD. These components of the business operating model of NBAD are presented in Figure 1 shown below.
Figure 1: The Business Operating Model moving from Issue to Outcome (Accenture, 2012).
The Assessment of the Digital and Leadership Capabilities of NBAD
The diagram relating the leadership and digital capabilities has been provided in four quadrants. The first, second, third, and fourth quadrant are Digital Masters, Fashionist As, Begginers, and Conservatives respectively as shown in Graph 1. Based on the topic of this study, NBAD is placed in the Digital Masters Quadrant. In this case, the company has a strong overarching digital vision. With the global connections via modern technology, the organization has sought to meet its vision of being recognized as the best Arab Bank in the world.
Another aspect of concern in the assessment of the bank to be considered as a digital master has been its good governance. The bank’s corporate governance culture is shaped by several factors. Firstly, there is a portion of the risk management and productive strategies. Also, NBAD has been engaging the community in its operations and ensured the compliance with all the regulatory obligations. While the leadership and the responsibility of the Board has provided the direction to the affairs of the bank and also set its objectives, NBAD has focused on meeting the varied interests of the stakeholders via material and transparent disclosures. Also, the company’s pursuit to become a digital master has been driven by the appropriate monitoring and delegation of power as well as the accountability to management. In general, NBAD has shown commitment to carrying out the business in a sustainable and ethical manner in the United Arab Emirates (UAE) and over the world.
It is not doubt that company has embraced technology through which it becomes a digital master by having many digital initiatives that generate the value of the business in the ways that are measurable. For instance, the bank has adopted the automated services such as automated procurement system among others. Notably, organization has centralized its procurement activities via the department of Procurement and Commercial Management. Currently, all the processes of procurement are done online, paperless, and automated according to the environmental elements of a formal Procurement Policy that utilizes the sustainability principle. Such processes include the preparation for the requests for quotations (RFQs), invoice payments, requests for proposals (RFPs). It has been ensured that no submission of the supporting documents is made by the suppliers. The digital culture that has been embraced by NBAD is also strong.
It is also important to assess the other three leadership and digital capabilities in remaining three quadrants. The quadrant of “Fashionist As” may not be the appropriate for NBAD due some limitation associated with it. For instance, there is lack of overarching for this capability, in spite of the fact that there are many digital features which are advanced. There is also underdeveloped coordination of the operations. In the quadrant named “Beginner,” the management has used advanced technologies. This capability is still under experiment and depicts immature digital culture, making not appropriate for NBAD. The quadrant of “Conservatives” is also not good enough to make NBAD a digital master. The reason for this argument is that, notwithstanding the existence of overarching digital vision, it still not developed. Additionally, there are a few digital features that are advanced, though only traditions capabilities. However, this component depicts some strong governance and as well takes active steps in building culture and skills.
| Quadrant 2: Fashion AS | Quadrant 3: Digital Master Position of NBAD 1. Good governance 2. Strong overarching digital vision 3. Strong digital culture. 4. many digital initiatives that generate the value of the business in the ways that are measurable. |
| Quadrant 3: Beginner | Quadrant 4: Conservative |
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Graph 1: The Position of NBAD in the Digital Capability and Leadership Capability Measure.
The Major Components of a “Playbook” the Senior Management
Based on the above selection of NBAD as a digital master, several components of a “Playbook” for the management need to be analyzed. Most importantly, the senior management has fulfilled some responsibilities attain the organizations goals of sustainable growth, strength, and productivity through advanced technology. The Playbook for this management team indicates that Board of Directors has a responsibility of directing the affairs of the bank by the creation of value via operations of NBAD and as well ensuring the protection of the shareholders among other stakeholders. The responsibilities and roles of this management are documented in the Board Charter and the policies associated with it. Also, the management of the contemporary implementation and operations of the decisions of the Board is by the executive management and the committees of the Board. To this end, the deputy Chief Executive Officer has been given a responsibility of ensuring sustainability matters of the group at an executive level. Additionally, the performance based on good governance has been ensured where Board has conducted self-assessments, though no current assessments have carried out on the board itself against any particular criteria of sustainability (Hassan, 2013). Therefore, the senior management has a critical role in ensuring that the banks is connected internationally by embracing modern technology in its operations to make it more competitive in the world market.
Conclusion
Understanding the global connection of such firms via technology to make NBAD a digital master is important. Taking the steps towards the creation of the desired business model calls for an understanding of the components of the business model that are essential in ensuring the sustainable growth, productivity, and strength of the organization. The operations business model also determines the banks effort to connect it globally through advanced technology. In general NBAD is considered a digital master because of the actors of good governance, strong overarching digital vision, strong digital culture, and a variety of digital alternatives which generate the business value in the ways that are measurable.
References
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