The counter-intuitive aspect of investments in the obvious domain is that organisations should seek to minimise investment in this domain. As Dave Snowden once pointed out, organisations have no competitive advantage in the obvious domain. Investments in the obvious domain are often as a result of constraints imposed by regulatory bodies.
Many organisations have a special categorisation for investments “Regulatory and Mandatory”. These investments are often referred to as
“Must be done!”
A more intelligent description would be:
“Must be done if the organisation wishes to remain in that particular business.”
The reframing is very important. In the late naughties, an investment bank faced with expensive regulatory investments decided to sell its commodities business. This freed up capital that could be invested to make its other business lines stronger.
A common mistake when investing in regulatory and mandatory investments to to try and be the best, to attempt to invest and excel. Using Niel Nickolaisen’s purpose alignment model (Check out Kent McDonald’s excellent description here along with other useful tools), regulatory investments fall in the parity quadrant. Investors should seek to be “good enough” but not invest and excel. This often means implementing a third party solution if an appropriate one is available. Where an appropriate third party solution is not available, the solution should be architected in such a manner that it is easy to migrate to one when it is available.
The strategy for regulatory investments is to minimise total cost of ownership with a “good enough” solution. Unfortunately organisations often misinterpret this as “Implement with your cheapest resources” which is a path to failure and excessive costs. Given that regulations in a market normally increase and are rarely removed, the organisation should consider the long term implications of any solution. This means that regulatory investments should be implemented using eXtreme programming techniques that support safe, rapid and cheap modification in the future.
Realistically, the only way to turn regulatory investments into strategic investments is to deliver a solution to the regulator before your competitors. That way, your organisation can influence the regulators and disrupt any competitors using traditional techniques.
In summary, even though the investment may be obvious, the solution may require careful thought.