Localizing Localization is the adaptation of a product or ser.docx

Localizing: Localization is the adaptation of a product or
service to meet the needs of a particular language, culture or
desired population's "look-and-feel."
+High Flexibility on local scale (silos apps) and low flexibility
on Global.
+ You want you get
- Mess
- Costly and expensive .
- needs technical people
- can't operate on a national or global scale
Standardizing (about level of architecture):
+ reduce # hardware, vendors
+ Cost saving
- Same # of application ( work with IT )
Optimizing (business processes) (The use of one global
instance)
+ Higher level of visibility and business control on data
+ Less software
+ build kind of ERP architecture( Enterprise resource planning
(ERP) is business process management software that allows an
organization to use a system of integrated applications to
manage the business and automate many back office functions
related to technology, services and human resources. ERP
software integrates all facets of an operation, including product
planning, development, manufacturing, sales and marketing.)
Expensive, less flexible on local scale
go to globally .
4- modality :it is about IT and move to the solution , high
flexibility in global and local , speed ( use agility ) , complexity

, how build IT in sample way , careful with cost saving . have
simple product . to achieve modality we need granularity (
reusing ,agility,cost reduction )
Organization’s digital maturity level
How are companies using digital technologies such as social
media, data and analytics, mobile devices and cloud computing
to compete and operate differently?
in particular, strategy, culture and talent development. These
differences represent an important distinction between
companies with high and low digital maturity and offer insights
for executives.
1.HOW DIGITAL STRATEGY OBJECTIVES VARY ?
1-Improve customer experience and engagement
2-Increase efficiency
3-Improve business decision making
4-Improve innovation
5-Transform the business
THE KEY ABILITIES COMPANIES LACK ?
1-Knowing the business and being able to conceptualize how
new digital technologies can impact current business
processes/models .
2-Willingness to experiment and take risks
3-Ability to use digital technologies such as social, mobile,
analytics and the cloud to execute one’s job
4-Ability to manage or work in distributed, digitally savvy
teams in fast-paced environments; flexibility

5-Willingness to share and be collaborative
The Importance of Digital Strategy ?
Companies must know what to listen for, how to analyze and
interpret the data, and how to respond. be able to act quickly on
the information the platform provides.
EMPLOYEES’ PERSPECTIVES ON DIGITAL LEADERSHIP?
Many survey respondents from companies at early-stage and
developing digital maturity levels are not satisfied with the way
their organizations are responding to digital trends. Such
attitudes likely have implications for recruiting and retaining
talent.
1-How important to you is it to work for an organization that is
digitally enabled or is a digital leader
2-Our organization’s leadership has sufficient skills and
experience to lead our organization's digital strategy.
3-I am satisfied with my organization's current reaction to
digital trends
1-The trouble with enterprise software
1-The increase of complexity:
ERP start to serve the business fine, but with the growth of the
business, ERP needs to customize software to fit with
businesses need but that lead to more complexity. As
mentioned, many firms end up with several instances for their
ERP. In the end, ERP systems became just another subset of the
legacy systems they were supposed to replace.
2-The Costs of Implementation:
Running cost for the consultations.
Under the mercy of the vendors.
c. Upgrading cost is huge as well.
d. Limited by the vendors capabilities.
3-The Vagaries of Data (Data issues- redundancy)
Having several instances lead to data redundancy. Effect one
the ERP goals which is the whole picture.

To insure that firms needs to have highly standardization
process for all the firms’ branches
“Is enterprise software just too complex to deliver on its
promises? After all, enterprise systems were supposed to
streamline and simplify business processes. Instead, they have
brought high risks, uncertainty and a deeply worrying level of
complexity. Rather than agility, they have produced rigidity and
unexpected barriers to change, a veritable glut of information
containing myriad hidden errors”
ERP:
- the ERP target are integrate the business, reduce the "silo"
mentality , get information into a single system , get knowledge
into defined and repeatable processes . The key issue are
accuracy, uniformity, consistency to data combined with a
standard method of delivery.
Single Global ERP Instance - Hopes :
1-Eliminating complexity of multiple applications
2-Predictable business processes.
3- operational excellence .
4- Centralized control and robust reporting .
5-one version of the truth .
2 -(how to thrive on turbulent markets)
Uncertainty is the defining characteristic of business
competition today.
*Agility*
Agility is: a company’s ability to identify and capture
spot and exploit emerging business opportunities more quickly
than its rivals do. The agility benefits are Including higher
revenues, greater customer satisfaction, increased market share,

and faster time to market. There are three types of agility :
1-Operational: the ability to consistently identify and seize
opportunities more quickly than rivals do within a focused
business model( How to execute the process fast )
2- Portfolio: shifting resources, such as employees and
capabilities, to other business processes
o Putting the right people in the right place
o The hardest type of agility to achieve because it requires: §
breaking out silos
§ changing employees responsibilities § redesigning business
processes .
3- Strategic: the ability to identify and seize game changing
opportunities when they arise o Capability is very important
(might contribute to strategy change)
*Absorption*
firms have the strength and stamina to weather market shifts.
Some sources of absorption tend to kill agility. Low costs, for
instance, can keep a company in the game long enough to ride
out market shifts, but excess staff can depress profit ability and
create busywork for others.There are 10 way to have absorption:
LOW FIEXED COST: higher raw-materials costs, declining
demand
VAST SIZE: To enable downsizing of operations during crises
INTANGIBLE RESOURCES: To insulate the firm against short-
and mid-term market shifts; these resources might include
brand, expertise, or technologies
CUSTOMER LOCK-IN: To buy time when competitive
dynamics and markets shift; high switching costs, for instance,
can prevent customers from jumping ship
PROTECTED CORE MARKET: To provide a safe stream of
cash to weather storms
EXCESS STAFF: To be shed in hard times
Agile Absorption: Strike the Right Balance
Combine both approaches and display “agile absorption” :
the ability to identify and seize opportunities while retaining

the structural characteristics to weather changes. In unstable
times, cultivating and using both capabilities in combination
can help companies not only survive but emerge as true market
leaders. Managers should view agility and absorption with the
balance shifting as circumstances change. Getting the mix right,
instead of relying heavily on one or the other, increases the
effectiveness of these two approaches during volatile times.
Not all sources of absorption are created equal:
Low fixed costs are good; they don’t prevent companies from
seizing opportunities as they emerge. But excess staff is bad;
top heavy management teams create more work to justify their
existence and introduce unnecessary layers of bureaucracy.
Actively managing trade-offs:
Don’t sacrifice good sources of absorption (or agility) without
being sure of the benefits you’ll receive in return.
Maintaining a culture of agility:
Firms follow a fairly standard trajectory over time: They slowly
develop absorptive strengths, which can erode the culture of
agility that once enlivened them as start-ups. This decline is
common but not inevitable.
3- Complexity in the Digital Age :
Digitization Helps Simplify the Customer Experience
o Search, recommendation, filters, reviews, etc
Digitization Helps Keep Internal Processes Simple
o standardized processes,applications,data and technology
� Finding Your Complexity Sweet Spot (How to take
advantages of complexity? )
to move to sweet spot we need to build modularity and have
solution .
1- Assess your company’s current complexity position in
product and process complexity. 2- Choose a path to
complexity sweet spot

3- Increase product complexity (if needed) .4-Digitization:
(responding to customer experience and make it simplification)
5-Standardization :(to achieve agility and solve complexity) .6-
Increase process simplification (if needed) (decrease
complexity) through: o MISSING POINT,o Modularity
o Platforms,o Reusability.
What is complexity?
The amount of variety ( of the product and service) and links (
interdependency with other companies) within a company.
companies operating in this “complexity sweet spot” outperform
their competitors on profitability. increased product variety and
links can make it difficult for customers to choose (hurt
revenues) .Product and service complexity and the business
process aspect of organizational complexity have the biggest
impacts on achieving top performance. internal process
complexity often grows with increased product complexity (add
costs). Use SOA can help to minimize complexity.
4- Staying Power Six Enduring Principles for Managing
Strategy and Innovation
How companies can stay power?
1.Platform not just product:
� that will requires external ecosystem (ex. iPhone, Nike
shoes)and generate complementary products/ services . Also, it
will let you build positive feedback , and give the ability to
have reusable platform. Finally, Standards among the platform.
2-Services not Just products
� To sell, enhance, and do-commoditize products or
standardized services. Products to create new value added
opportunities and pricing models. Services to deliver them more
efficiently and flexibly.
�3.Capability (Not Just Strategy)
� Build distinctive organizational capabilities and
operational skills not just organizational vision. Focus on your

strengths, and� deep capabilities combined with strategy.
Strategy is only knowing .
4.Pull (do Not Just push)
Pull: it all about understand the customers needs. Goal:
Link each step in company’s key operation backward from the
market in order to respond in real time to changes in demand,
customer preference, competitive conditions, or internal
difficulties. From it you can have feedback from customer. Pull
resources fast and customize them to customer needs. Using
modularity to serve customer.
5.Scope (Not Just Scale) :scale means efficiency in terms of
physical system .
Scope: provide variety of products and services .Using
your platform to be more flexible to produce many types of one
product.
6.Flexibility (Not just Efficiency)
� to meet customers needs.
5— What is business agility?
� An organization ability to act in a rapidly changing market
by providing products and services that add value to common
solutions (move to solutions, added value services) .An
organization ability to build an ecosystem (i.e. team up with
other businesses) . Using real-time reliable market data
.Continuous quick small adjustment as condition changes
. Scoping (variety of products) and customization is very
important for agility. Customers are more willing to pay more
for products wrapped by services .
Product + Added Value Services =
Solution

(ex. in Starbucks: coffee beans + AVS = (Customer experience)
How to move to agility:
1.Provides solutions
2.Provides added value services
3.Provides continuous small adjustment
4.Allows customization
Companies Before Used to depend on Low Cost After the 3td
world countries enters the Market Now the need to work on
having agility they can have agility through two way
1-Efficiency
Basic Product & services with low cost that will Required(1.
Predictability. 2. Stability).
2-Responsive
1 Wrap those products a& services with creativity ( Add value
to the product ). 2.Customization ( writing the customer name
on the cup of coffee Like Starbucks).
3.Flexibility . that will Required (1. Continuous Change,
2.Create more value).
6-Reuse and SOA (service -oriented architecture )
SOA : is an architecture style focused on representing
repeatable business and technology activities.Also, it is

middleware, as an open channel between systems. Its goal to
achieve business needs. It is all about (Reusability,Flexibility
and agility: Easy and flexible to reconfigure, Transparency
across multiple legacy applications.).
modularity: have product simple .
SOA modular principle : shared , reuse (the idea of mixed and
match ) , reconfiguration ( to create new solution ) , integration
.
The benefit of Reuse 1-Reduce time and cost for developing
services. 2-Business agility: response faster to market
opportunities. Through(The time require to lunch a new
product,to scale up or down in responding change demands,to
transform business operation , and to absorb merger).
Firms, which only concern about cost saving should not choose
SOA
Firms need to address cultural challenges associated with reuse.
Most difficult part make to get business people comfortable
with the discipline of reusing standard information and business
process.
The path to value from reuse(the firms looking for business
agility benefit from reuse should take the following steps )
Focus on implementing Technology and business process
standards.
Develop a high business architecture (business’s units).
Start small. A Small centralized team can take initial

responsibility for building and reusing service.
Focus on large business component and build them on modular
form.
Problems:
Increase in costs, risk and uncertainty, don’t deliver, and hard
to be customized (complexity) .You have to aligning IT with the
business.To Solve this problems you should move to have
Service Structure Architecture (SOA) to fix for these problems.
Involved: Updating and changing legacy systems by building
modular cross-system business processes. But technical realists
point out that many difficult technical problems must be solved
before SOA can become the backbone for a new strategic
architecture,
A16 : A Players or A Positions
A16 - A Players or A Positions
� Workforce differentiation: Today's environment requires a
shift from treating everyone the same to treating everyone
according to his or her contribution.
� Putting A players in A positions helps to ensure A
performance.
� Identify strategically critical jobs, then to invest

disproportionately to ensure that the right
people doing the right things are in those positions.
� Effective management of your A positions requires
intelligent management of your B and C
positions, as well.
� Businesses need to adopt a portfolio approach to workforce
management, placing the very
best employees in strategic positions, good performers in
support positions, and eliminating
nonperforming employees and jobs that don't add value.
� One thing to keep in mind: Effective management of your A
positions requires intelligent
management of your B and C positions, as well.
� Create A positions before seeking A players.
� Identify strategically critical jobs, in order to find the right
A players to fill those jobs.
� Incentivize employees to create a culture of performance.
� Adopt a portfolio approach to manage workforce.

� Guideline:
� Identifying Your A Positions:
� Two defining characteristics:
a.its impact on strategy
b.the range in the performance level of the people in the
position
(source of competitive advantage)
� must work forward from strategy
� determine your company's strategy
� identify your strategic capabilities
� identify jobs that are critical to those capabilities
� Managing Your A Positions
� You need strategies for managing you’re a, B, and C
positions
� Explain to your workforce clearly and explicitly the reasons
that different jobs
and people need to be treated differently.
� A positions require a disproportionate level of investment

� manage your portfolio of positions so that the right people
are in the right
jobs, paying particular attention to your A positions:
a.using performance criteria developed for determining who
your A, B,
and C players are, calculate the percentage of each currently in
A
positions
b.act quickly to get C players out of A positions, replace them
with A
players
c.work to help B players in A positions become A players
� Managing Your Portfolio of Positions:
� disproportionately invest in your A positions and players �
Don’t ignore the rest of your workforce!
� Although you aren't likely to win with your B positions, you
can certainly lose with them.
� The performance of people in A roles needs to be evaluated
in detail. � There should be compensation according to

performance
Businesses need to adopt a portfolio approach to workforce
management:
� A Positions, which are strategic and critical.
� B Positions, which are, support positions to support strategic
ones.
� C Positions, which may be required but not of any strategic
impact.
Making tough choices:
� Strategy is about making choices, and correctly assessing
employees and roles are two of the most important.
� today's competitive environment requires a shift from
treating everyone the same to treating everyone according to his
or her contribution.
A18 - What is your Management Model
Findings:
� Asking “What is your management model?” may be as key as
asking “What business are you really in?”

� Companies are often unaware of the management models
they are using.
� There is no one best management model. Rather, there are
deliberate choices to be
made, based on many factors unique to each company. Business
model: is all about how a company makes money! Theory of the
business:
1.Assumptions about the environment of the organization
2.The specific mission of the organization
3.The core competencies needed to accomplish the
organization’s mission.
A management model is the choices made by a company’s top
executives regarding how they:
1.Define objectives
2.Motivate effort
3.Coordinate activities and allocate resources
In other words, how they define the work of management.
Management is about how we get work done through others — it

is concerned with the day-today work of setting objectives,
motivating efforts, coordinating activities and shaping decisions
Diagnosing the Principles of Management:
1.Choices about the nature of the objectives the company
pursues. [Clear set of short- term goals for the company or Goal
Setting Obliquity?]
�
2.Choices about how individuals are motivated to pursue these
objectives [Extrinsic or intrinsic rewards?]
3.Choices about how activities are coordinated in the company
[Formal or informal processes?]
4.Choices about how decisions are made in the company.
[Hierarchy or Collective Wisdom]
� collective intelligence, suggests that under certain conditions
the aggregated expertise of a large number of people can
produce more accurate forecasts and
�
better decisions than those of a small number of experts. Risks
of collective intelligence:
i.A failure to tap into a suitably diverse crowd.

ii.Allowing the collective group to do too much
iii.collective effort has limited capacity for creative tasks
Using the Framework to Make Explicit Management Choices:
This allows us to identify four generic management models
1.The planning model: Many large companies operate with
narrow short-term objectives, clearly defined management
processes and strict hierarchical decision-making. And,
importantly, these are often among those objectives through a
variety of means.
2.The quest model: is to loosen up the “means” of management
while retaining tight control over the “ends.” Or, saying it
slightly differently, to tell your employees what to do, but not
how to do it
o Ends (i.e., managing objectives, motivating individuals)
o Means (i.e., coordinating activities, making decisions)
3.The scientific model: free up the ends while keeping
control of the means. This is how science makes
progress.
4.The discovery model: both the means and ends of
management are deliberately loose, but for certain activities,

and for certain periods of time, it can be highly effective.
o suitable for many startup ventures operating in highly
ambiguous environments where there are multiple potential
ways forward of varying levels of potential, and success is
achieved through trial and error
o has promise for established organizations that are looking for
new ways forward.
————————————————————————————
-
Making good decisions and making them happen quickly are the
hallmarks of high- performing organizations.
� The most effective organizations score well on:
o the major strategic decisions: which markets to enter or exit,
which businesses to
buy or sell, where to allocate capital and talent.
o the critical operating decisions requiring consistency and
speed: how to drive
product innovation, to position brands, to manage channel
partners.
� there can be ambiguity over who is accountable for which

decisions.
� many companies struggle to make decisions because lots of
people feel accountable – or no
one does
� The most important step in decision making is assigning
clear roles and responsibilities
� most companies use RAPID to analyze decision making (give
senior management teams a
method for assigning roles and involving the relevant people)
o Recommend: People in this role are responsible for making a
proposal, gathering
input, and providing the right data and analysis to make a
sensible decision in a
timely fashion.
o Agree :Individuals in this role have veto power – yes or no –
over the
recommendation
o Input: these people are consulted on the decision. Because the
people who provide
input are typically involved in implementation, recommenders
have a strong interest

in taking their advice seriously
o Decide: the person with the D is the formal decision maker.
o Perform: Once a decision is made, a person or group of people
will be responsible
for executing it
� The entire decision-making process can stall, usually at one
of four bottlenecks: global
versus local, center versus business unit, function versus
function, inside versus outside partners
� The companies that succeed tend to follow a few clear
principles: o Somedecisionsmattermorethanothers
o Action is the goal
o Ambiguity is the enemy
o Speed and adaptability are crucial
o Decision roles trump the organizational chart o A well-aligned
organization reinforces roles o Practicingbeatspreaching
————————————————————————————
——————
.The Matrix is consist of 8 unit, and each unit have to have 4
Purpose or role:
.� Broad Responsibilities (laying out what the unit is supposed
to be doing)

o Unit responsibilities need to be specified in a way that makes
the broad remit clear,
but leaves most of the details to be determined by the unit.
o the unit needs to know what resources it will have in carrying
out its responsibilities
� Reporting Relationships (how it is supposed to work with
other units)
o specify to whom units will report, and what the nature of this
reporting relationship
will be.
o Business unit general managers are normally closely involved
in the decisions made
by the main operating functions reporting to them.
� Lateral Relationships (how it is supposed to work with other
units)
o Lateral relationships between sister units are more varied than
reporting relationships.
o in interdependent structures it is important for units to have a
sense of what sort of relationships they are meant to have with
other units.
o 5 types of relationships:
1.Mutual self-interest relationships: work together if both
parties see an interest in doing so, but are free not to
collaborate if they do not.

2.Pressure group/principal relationships: one unit has the final
word on a decision, but the other unit is expected to exert its
influence on the outcome
3.In service provider/client relationships: the service provider
must treat other units as its customers, endeavouring to win
their business through the quality, responsiveness and cost-
effectiveness of its service offering.
4.Resource owner/user relationship: The resource owner must
not only respond to users’ requirements, but must also develop
and nurture the resource on behalf of the company. (may imply
prioritising different users’ requests)
5. Team relationships: all units must collaborate to realise the
goals of the larger, upper-level unit of which they are part.
o The value of these five archetypal relationships lies in their
ability to capture the intended orientation of each unit towards
other units.
� Main Accountabilities (how its performance will be assessed)
o “What gets measured gets done”
o helps managers to decide what priorities
they should give to different tasks on their ‘to do’ lists,

therefore shapes the way in which they discharge their
responsibilities
Unit roles:
.1- Business Units: serve selected target product/market
segments and are responsible for maximising the value that can
be created from serving these markets.
.2- Business Functions: achieve functional excellence and cost
effectiveness, in a way that contributes to the overall success of
the business unit.
.3- Overlay Units: create a focus of management attention on
product-market segments that may not be given sufficient
emphasis by the business units.( create additional dimensions of
focus)
.4- Sub-businesses: concentrate on more narrowly-defined,
disaggregated product-market segments than the business unit
.5- Core Resource Units: focus management attention on
selected resources that are key to competitive advantage in
several business units.
.6- Shared Service Units: responsible for providing their
services to other units in a way that is cost-effective and

responsive driven purely by what their ‘customers’ want, rather
than by their own
.7- Project Units: focus on specific tasks or projects that cut
across other units
.8- Parent Units: the upper levels of management to which
other units report, responsible for obligatory compliance and
due diligence tasks, and for influencing and adding value
to the operating units.
————————————————————————————
—————-
Companies must understand what customers truly value. The
only way to do that is to break down the traditional, often
entrenched, silos and
unites resources to focus directly on customer
needs.
� (coordination, cooperation, and capabilities) mutually
reinforce the effort to put customers at the organization’s fore
� Connection dramatically increases the power and reach of
solutions by focusing attention beyond the firm’s boundaries.
� All of them help companies break internal silos in service of

higher-value customer solutions.
.Extra description:Coordination for Customer Focus few
companies are actually structured to deliver products and
services in a synchronized way that’s attractive from a
customer’s perspective. Individual units are historically focused
on perfecting their products and processes, and give little
thought to how their offerings might be even more valuable to
the end user when paired with those of another unit. It’s not just
that the status quo doesn’t reward collaborative behavior –
although the right incentives are also critical. It’s that the
connections literally aren’t in place.
How to achieve more formal coordination?
.� do away with traditional silos altogether and create new ones
organized by customer segments or needs.
16|Page IST 305 - Final Exam – Spring 2015
� layer boundary-spanning roles or units over the current
structure and charge them with connecting the company’s
disparate activities to customer needs (without discarding
existing silos)
Culture of Cooperation
� don’t necessarily inspire a willingness among members of

competing silos to fully cooperate and make sometimes time
consuming and costly adjustments in the interest of customers.
� Just as important as coordination, then, is a cooperative
environment in which people are rewarded for busting through
silos to deliver customer solutions.
� customer-focused companies
o build an outside-in perspective into all major elements of their
cultures
o solving customer problems above all else and celebrate
customer victories
� At least half the battle of promoting cross-silo, customer-
focused cooperation lies in the “softer” aspects of culture
(including values and the way the company communicates them
through images, symbols, and stories)
� Powerful cultural tools for aligning employees around
customer needs:
o Service accomplishments instead of, or in addition to, product
accomplishments o treat your workers the way you want them to
treat customers.
� softer cooperation-promoting measures won’t take hold if the
harder ones–power structures, metrics, and incentives – don’t

reinforce them.
Building Capability
Regardless of the incentives and cultural elements in place to
enhance customer-focused silo busting, employees will fall back
on their old competencies and ways of thinking if they haven’t
developed new skills. As a company becomes more adept at
inducing coordination and cooperation across units, new skills
become valued and desirable. Rather than highly specialized
expertise, customer-focused solutions require employees to
develop two kinds of skills: 1) multi-domain skills – the ability
to work with multiple products and services, which requires a
deep understanding of customers’ needs, and 2)boundary-
spanning skills – the ability to forge connections across internal
boundaries.
Connection with External Partners
by redefining the boundaries of the company itself, firms can
further fight commoditization in two ways (require cross-
boundary efforts between a company and its partners):
� cutting costs by outsourcing all but core activities (and, in
some cases, by finding creative ways to outsource them
� joining forces with companies that have complementary
offerings to create even higher- value solutions, which
command a larger price premium.

There are pitfalls to integrating closely with suppliers. Some
companies – especially those that are unclear on their core
values – give away too much. Others become captive to their
key suppliers and lose the motivation to make ongoing
investments in new technology. Some also find that they are
funding the development expertise and scale that may allow a
partner to become a competitor.
apply the principles used to manage across internal silos–
coordination and cooperation find efficient ways of exchanging
information and aligning incentives.
Cooperation issues may be even more central to external
relationships than to internal ones.
————————————————————————————
———————-
A10 - Working Smarter
� Working smarter is defined as an organization-wide mindset
to continuously improve performance by using information from
a digitized platform (i.e., using people’s smarts more
effectively).
� Working smarter Improve the organization performance by

using information from a digitized platform.
� The ability to rapidly respond to customer demands and new
business opportunities is what makes working smarter a
competitive advantage. An Ongoing behavioral Transformation
1.Transforming from heroics to discipline (Adopting culture of
standardized, disciplined business processes)
2.Transforming from disciplined processes to evidence-based
management (More significant agility benefits resulting from
transforming the decision making habit to rely on analysis and
evidence as a basis for decision making)
Economics paper 4 pages single spaced
Heart Disease, Efficiency, and the US Healthcare System
The questions that we intend to answer in this paper include:
Why is heart disease the number one cause of death in the
United States?
What are the determinants of good heart health?
What are the major factors that affect the demand for health
care, specifically heart health?
What are the major factors that affect the supply of health care,
specifically heart health?

what is heart disease
-professional diagnosis
-relevant factors
-different types
-trends
-conflicts
-roots of the problem?
-relevant organizations
-statistics
-trends
-measurement- How people are affected. What do they measure
in heart disease?
This case study was prepared by Martin Mocker and Jeanne W.
Ross of the MIT Sloan Center for Information Systems
Research. This case
was written for the purposes of class discussion, rather than to
illustrate either effective or ineffective handling of a managerial
situation.
The authors would like to acknowledge and thank the executives
at ING Direct Spain for their participation in the case study.

© 2013 MIT Sloan Center for Information Systems Research.
All rights reserved to the authors.
Massachusetts Institute of Technology
Sloan School of Management
Center for Information Systems Research
ING Direct Spain:
Managing Increasing Complexity
While Offering Simplicity
Our ambition is to transform ING Direct
into a full-service bank.
—ING Bank N.V. Annual Report 2012
We started with a pure savings bank and
then, as we were developing into a full-
fledged bank, over the years we have

been adding products […] There you
start to add complexity and that’s a shift
in thinking […] It’s starting to get more
difficult. —Werner Zippold
Chief Operating Officer
By late 2012, ING Direct Spain was well on its way
to becoming a full-service bank. To achieve that
goal, the direct bank had substantially increased its
portfolio of products and channels over the years.
Founded in 1999, ING Direct Spain was originally
intended as a mono-line business focused purely on
savings products sold exclusively in a direct model
via phone and the internet. In December 2012, their
website offered payment accounts, credit cards, in-
vestment funds, pension plans, brokerage services,
mortgages, personal loans, and life insurance in
addition to savings accounts and listed close to 30
branch offices across all of Spain.
ING Direct’s original business was built on pro-
viding “simple,” “transparent,” “good value for
money” products to customers in an “easy to
deal with” way at low cost supported by a direct

model.
One of the pillars of the ING Direct
model is to really give an excellent client
experience—to be superior in terms of
client experience in comparison with all
our competitors. But, at the same time,
we need to maintain our cost advantage.
—Werner Zippold
These and other propositions were regarded as
part of the “orange culture” (an allusion to the
company color) that had been important to ING
Direct Spain from the very beginning and that
was still regarded as a cornerstone for all em-
ployees of ING Direct Spain:
When somebody joins the bank, what we
need to make sure is that they align with
the culture, the values of this organ-
ization. That everybody who joins the
bank feels that they have gone to a diff-
erent place, a place that wants to ap-
proach the customer with banking prod-
ucts in a different way. —Daniel Llano

Executive Vice President
Products & Strategy
Mocker and Ross Page 2 CISR Working Paper No. 390
But with the envisioned growth, executives
wondered how they could preserve their value
proposition around simplicity for customers.
I’ve been working here now for nine and
a half years. When I entered the bank,
you got painted orange and that kind of
thinking [around simplicity] became
natural for you. Now we recruit a lot of
people very often from other financial
institutions—which is natural—but when
you have a thousand people, it’s not so
easy anymore to paint all these people
orange and to make them think that way.
—Werner Zippold

In many ways, ING Direct Spain was still
simpler than most banks. But with the growth in
its product portfolio during the previous decade
and the ambitious goal of becoming a full-
service bank, an increase in complexity seemed
inevitable.
Background: ING Direct
and ING Direct Spain
ING Direct was founded as part of ING Group1
in 1997 with Canada as its first country of
operation. After Canada, ING Direct Spain was
the second country world-wide and the first
European country to join what became a “fleet
of companies” in nine countries including
Australia, Canada, France, Germany, Austria,
Italy, Spain, the United Kingdom and the United
States.2
1 As of January 1, 2010, “ING Direct became part of the
newly-formed Retail Banking Direct & International
Division” within ING Group (ING Banking Annual
Report 2010). That division is now called “Retail Banking
International” (http://www.ing.com/Our-Company/About-

us/Mission-Strategy.htm).
2 Although ING Group had announced the sale of ING
Direct in the US, Canada and the UK, it expressed its
commitment to the remaining countries by stating that it
“continues to invest to evolve the ING Direct business
model, increasing the product offering and extending
distribution, while integrating the balance sheet with the
rest of ING Bank.” On June 16, 2011 ING Group
announced the sale of ING Direct USA to Capital One for
USD 9 billion http://www.ing.com/Our-Company/Press-
room/Press-release-archive/ING-to-sell-ING-Direct-USA-
ING Direct started as a pure savings player
focused on providing superior interest rates for
savings deposits to attract customers from
competitors. The bank profited from a low-cost
model that was enabled by the efficiency of a
direct, branch-less operation.
The strategy of ING Direct is to be a
low-cost provider of financial services in
large, mature markets by offering its
clients best value for money and ex-
cellent service via call-centers and the
Internet.

—ING Banking Annual Report 2003
Werner Zippold, COO of ING Direct Spain
described ING Direct’s strategy as follows:
If I had to summarize the model of ING
Direct in one sentence, I would say it’s
offering the first class service of Singapore
Airlines with the cost structure of Ryan Air.
[…] the first class service of Singapore
Airlines for us is absolutely critical to
maximize customer satisfaction, because
it’s our only way to get out of a pure
price play. If the client has to sacrifice
the relation with his branch to actually
change he will always need an attractive
price. So, at some point we are already
sacrificing margin in comparison with a
traditional bank. If we get into pure
price play, we are dead in the long run.
In 2011, ING Direct as a whole served over 24
million customers (a 9-year compound annual
growth rate (CAGR) of 14%) and managed

to-Capital-One.htm. In its 2011 Annual report, ING stated
that “with the sale of ING Direct USA, ING Bank met
one of the principal restructuring requirements of the
European Commission.” On August 29, 2012, ING Group
announced an agreement to sell ING Direct Canada to
Scotiabank for CAD 3.1 billion (EUR 2.5 billion). The
deal was completed on November 15, 2012 and led to a
transaction gain of EUR 1.1 billion after tax.
http://www.ing.com/Our-Company/Press-room/Press-
release-archive/PressRelease/ING-completes-sale-of-
ING-Direct-Canada.htm. On October 9, 2012 ING Group
announced to sell ING Direct UK to Barclays. The sale
was expected to close in the second quarter of 2013.
(http://www.ing.com/Our-Company/Press-room/Press-
release-archive/PressRelease/ING-to-sell-ING-Direct-
UK-to-Barclays.htm)
funds amounting to over EUR 410 million. Over
the prior nine years the company had exper-
ienced a CAGR of 16% in revenues and 27% in

profit before tax. ING Direct first became
profitable in 2003 and the 2011 profit margin
was 29%. Its cost-income ratio in 2010 and
2011 was around 50% and 57% respectively. 3
Part of ING Direct’s growth was due to the ex-
pansion of its product portfolio. Annual reports
cited two main products in 2004: savings
products and mortgages. Three years later, ING
Direct added payment accounts and investment
products. In the 2009 annual report, ING listed
consumer lending as its fifth product category.
Finally, in 2011, ING declared its intention to
“selectively evolve” ING Direct units into “full
service banking models.”4
But not all country units within ING Direct had
the same product variety. In fact, while all co-
untries followed the same principles and shared
best practices via global councils, “the ex-
ecution was purely local” in each country.5 For
example, after Spain had pioneered the payment
account, other country units adopted it with
varying degrees of local adaptation:

We shared our knowledge in the council,
we had every single country visiting us
to understand in detail how we had done
it, what had worked, what had not
worked, what were the processes, what
were the key success factors […]Italy
and France have copied elements of the
Spanish model with some adaptations to
the local market. Australia and Canada
have included some of our features and
in others they have chosen different
models. The only two who have gone in
a pretty different way are Germany […]
and the USA. —Werner Zippold
3 Source: ING Bank Annual Reports 2002—2011; in
2012, ING stopped reporting ING Direct as a separate
segment.
4 Source: ING Bank Annual Reports 2002—2011
5 Source: Werner Zippold, Chief Operating Officer
ING Direct Spain had one of the most diverse
product portfolios within ING Direct (Appendix

1 provides an overview of ING Direct Spain’s
product and channel growth over time). Hence,
the impact of the increase in product variety was
particularly evident there:
Every two years, we have had a big
change in the bank, like going into
mortgages, going into payment accounts,
going into investment products, even
launching branches. —Daniel Llano
Products & Strategy
ING Direct Spain had not planned that growth
strategically. Instead it grew into new product
categories one step at a time, fueled by in-
creasing customer demand, and an entre-
preneurial spirit as well as its own success:
It was discovering how far you can go.
In direct banks, more than a decade ago,
nobody knew how far the business was
going to go […]But every single product
that we were launching was a success
[…] we started to hear from our cust-

omers that they were also asking for oth-
er investment opportunities. For ex-
ample, our customers were also asking
for assets besides liabilities and so we
started to learn about mortgages.
—Daniel Llano
The increased variety in the product portfolio
was viewed as creating value for ING Direct
Spain: by 2012, 54% of all customers used more
than one product from ING Direct Spain.6 And
the life-time value7 of the average customer
holding more than one product was nine times
the value of customers with only a savings
account. Customers with a savings account, a
payments account and a lending product was
6 Of those, 10% of customers had savings and investment
products, 38% payments, savings and/or investment
products, and 6% payments, savings, and lending
products.
7 A combination of the increased length of the
relationship and an increased contribution to profit before
fixed cost.

even up to 20 times the value of a customer with
only a savings account.
At the same time, operating fixed-cost per
customer had grown by only 20% since 2005. In
2011, ING Direct Spain reported EUR 77
million in profits before tax (a 9-year CAGR of
28%) and 2.41 million customers (a 9-year
CAGR of 16%), of which more than 700,000
used ING Direct Spain as their main bank.8
Citing the Association of Spanish Banks, ING
Direct Spain took pride in being the “leading
direct bank in Spain,” with managed funds that
totaled EUR 29.9 million and 940 employees.9
Also in terms of total operations cost per
account, ING Direct Spain continued to be very
efficient. One benchmark performed by an in-
dependent consulting company compared ING
Direct Spain’s costs per account to ten Eastern

& Central European banks that were deemed
comparable in terms of scale. ING Direct
Spain’s costs per account were somewhat below
the average of the top three banks in the sample,
less than half of the cost of the average per-
formers and a third of the average Iberian
bank.10
Enhancing Customer Experience
ING Direct Spain was growing organically and
hence needed to convince customers to either
switch from their existing financial service pro-
viders or to consider ING Direct as an additional
banking relationship. To this end, ING Direct’s
value proposition was focusing on providing
premium customer service.
The full organization agrees that our
strength is the customer experience we
create and the only way to retain and to ac-
quire new customers is through satisfaction
and recommendations. —Daniel Llano
Products & Strategy

In 2011, ING Direct Spain was ranked as the
number one bank nationwide in terms of Net
8http://economia.elpais.com/economia/2012/02/09/actuali
dad/1328784277_302769.html
9 http://www.ingdirect.es/sobre-ing/ingdirect.html
10 Iberian banks were larger banks than ING Direct.
Promoter Scores (NPS).11 Its 2012 NPS was
40% while the average Spanish bank reported
negative scores (see Appendix 2 for a
development of ING Direct Spain’s NPS). It
was the most recommended bank in Spain for
the fourth consecutive year.12 Over 40% of new
customers came to ING Direct Spain via
recommendation.
Part of that customer experience proposition
was to make “the dream of a simple bank” come
true, with “simple products, transparent con-
ditions, easy operations, clear statements” (For
more details, see the “Fresh Banking Manifesto”
in Appendix 3).
If you want to distribute financial

products online, you just cannot be as
complex as the others. If I want to sell a
pension plan on a web page, there is no
way that that product can have the com-
plex features that my competitors put in
their products. Otherwise I wouldn’t be
selling anything. And if I want to sell
something like a mortgage online, it
better be a non-complex process for the
customer, because otherwise they will go
to a branch. We want to avoid com-
plexity for the customers. —Daniel Llano
An example of striving for that customer-facing
simplicity was the process for opening a
payment account. That process at a direct bank
usually required a number of steps: it involved,
at least, an application, a subsequent identi-
fication by the customer, the exchange of
several physical documents (e.g., a welcome
package, PIN numbers, transaction numbers
(TANs), debit cards, credit cards, forms for
authorizing a change of direct deposits, etc.), as
well as the activation of the cards and the

account. In most direct banks, the account
11 In terms of customer satisfaction, most ING Direct
countries were ranked as the number one (Spain,
Germany, Italy) or number two (UK, France) bank when
looking at Net Promoter Scores (NPS) in 2011. Source:
ING Direct presentation “ING DIRECT: Un modelo de
banca innovador” by Cesar Gonzalez-Bueno, Regional
Head of Banking Europe ING Bank, April 1, 2011
opening process involved several step-by-step
interactions across online and physical channels
and the exchange of several mailings. For
example, the customer would apply online, and
then receive the opening package, send back
completed and signed authorization and
identification forms, then in return receive the
debit card and several PINs and codes in
separate packages, etc. To reduce cost, most

banks had automated steps in this process (like
embossing cards and mailing them), but in
exchange left the customer in what could
become a lengthy process:
The only way to have automated
processes is to send all these materials
separately. Because the only fully auto-
mated machines that exist, they emboss a
card, put it in an envelope and then put
it into mail. So what usually happens is
you open an account and then over two
or three weeks you get a couple of
different mailings to your home and
you’re pretty lost in the process […]
Basically, what you’re doing there is
you’re leaving the complexity to the
client. —Werner Zippold
ING Direct Spain identified the hassle in the
account opening process as one of the barriers
for making clients change their bank account.
Driven by its goal of providing a simple cus-
tomer experience, ING Direct Spain strove to

reduce the number of mailings required to open
an account, at least for existing savings cus-
tomers, to one:
When we went to the steering committee,
the team was very proud that it had
actually reduced [account opening] to
two mailings in total. The cards and the
forms that you had to fill in to switch
your direct debits and payroll deposit
and all that would come within one
package which we would hand over to
you personally after checking your ID.
And then the PIN would go separately.
And I still remember that our CEO at
that time said: ‘You did a really lousy
job, I want one single mailing.’
—Werner Zippold
Eventually, ING Direct Spain found a way to
eliminate the need to send a physical PIN at all:
after receiving the welcome package with all
cards by courier instead of mail (where the
courier took over the identification step), the

customer is presented with the PIN for the card
at the end of the activation process on ING
Direct Spain’s web site.
We have taken away complexity from the
client and we basically hand them a
package and tell them listen, you get
everything you need to operate with that
account. Just use it. —Werner Zippold
The simplified account opening process resulted
in a significantly improved conversion rate for
account applications to actual account users. In
the new process, more than 80% of existing
savings clients applying for a current account
would actually finish the account opening proc-
ess with the direct deposit of their salary in the
account—a sign that they would be using this as
their primary account.
Shifting Complexity from Customers
to Employees
At the same time, simplifying the process for
the customer meant assuming complexity within
ING Direct’s internal processes:

We now deliver a single pack with all
those elements by a courier, wherever
the customer wants at whatever hour
they want. That is fantastic for the cus-
tomer. Instead of receiving three or four
elements they receive a single one, but
the internal processes to put everything
in the same pack is not easy. So, some-
times you need to invest in internal
complexity to create experiences that
you think that the customer will value.
—Daniel Llano
Products & Strategy
ING Direct Spain had to move away from the
pre-packaged, fully-automated services offered
by external providers and had to coordinate

multiple providers themselves instead:
We created a lot of complexity inside of
ING Direct for this [process]. We have
to coordinate about six or seven external
service providers in this process. There
are manual steps in the process, so you
need very strict quality controls, because
one of the worst things you can do is to
send the debit card of one person with
the form of a different person. That’s
pretty disastrous in terms of image.[…]
Obviously it’s a lot more complex for us
than just sending out everything sep-
arately, because that’s all automated.
—Werner Zippold
That increase in complexity was also reflected
in increased cost. The cost of delivery per active
account approximately tripled. But given the
benefits of the increased conversion rate, adding
this internal complexity was viewed as paying
off overall:

The total cost of acquisition is several
hundreds of euros, and the main driver
of cost per active account is actually
conversion. By assuming complexity in
one point, you optimize your overall in-
vestment, because obviously when you
send out the packets you have already
spent a couple of hundred euros in
marketing. —Werner Zippold
With at least some of the complexity in the port-
folio and processes creating significant value for
the customer and the bank, the challenge was to
identify which complexity was valuable and
which was not:
[We need to maintain] the right
relationship between complexity and
value added. […] the key thing is not
how much complexity you have, but how
much of your complexity actually creates
added value and what part of your
complexity does not create added value
[…] the question is, how do I make sure
that I actually invest in complexity where

I really create value? —Werner Zippold
Investing in Value-Adding Complexity and
Avoiding Non-Value Adding Complexity
ING Direct Spain employed a number of
mechanisms to try to keep the balance between
creating value for customers and internal com-
plexity. Those included maintaining a focus on
what matters most to customers, building and
protecting digitized platforms for processes and
systems, and encouraging enterprise-wide think-
ing and cross-functional collaboration in pro-
duct design.
Maintaining Focus on What Matters
Most to Customers
ING Direct Spain had put business rules in place
to keep the company from adding a lot of prod-
ucts that added little value for most customers.
One of these rules stated that any new product
would have to have the potential to generate at
least five percent of the bank’s overall revenue.
One of our principles is that anything
that does not have scale, we just don’t

do it. To win the race in the long term,
we will not be winning that via small de-
cisions or small business.—Daniel Llano
Products & Strategy
One assumption behind the rule was that every
product would introduce a certain level of over-
head and internal complexity that was not worth
taking on if the benefit wasn’t high enough.
This rule was seen in stark contrast with how
many other banks dealt with the trade-off of
value and internal complexity:
You come into a bank and you see this
huge portfolio of 3,000 funds. And you
look at it and say listen, you’re basically
making 85% of your volume with 100
funds. What do you have the other 2,900
for? And then you always get the
answer: Well, the clients who buy the
Mongolian bond fund are just fantastic.
There are only five of them, but they’re
incredible. So, that’s the kind of thing we
must not do, […] because we do not

have the margin to support the complex-
ity you get from that. —Werner Zippold
These rules helped to avoid an explosion of the
product portfolio and encouraged a more
cautious approach to product expansion instead.
However, even introducing “larger scale” prod-
ucts and making changes to existing products
bore the risk of introducing significant internal
complexity, especially in processes and IT
systems. ING Direct Spain’s way of dealing
with this challenge was to emphasize building
and preserving re-usable digitized platforms.
Building and Protecting Digitized Platforms
Information technology and IT-supported bus-
iness processes were regarded as a cornerstone
of ING Direct Spain’s business—especially

given that most customers were interacting with
the bank digitally: 92% of all operations were
being conducted over the internet by cus-
tomers.13 The way the IT-systems and IT-
supported processes were architected also play-
ed an important role in allowing ING Direct
Spain to manage the increased complexity cau-
sed by its growth in channels, products, and
features:
Our architecture provides us with a ro-
bust and stable system that is simple to
maintain. It is an easy platform to man-
age, scalable to support the growth of
the bank, interoperable with other sys-
tems, cost-effective, and safe. And it will
allow us to keep growing in new chan-
nels, products and features.14
—Werner Zippold
ING Direct Spain’s CIO, Enrique Avila,
described their platform as following a multi-
layered architecture, separating the data from
the business rules and the way data is presented

13 Interview with Werner Zippold published by Aventia
July 8, 2011 at
http://www.aventianews.com/en/notices/2011/07
/our_business_has_evolved_in_parallel_to_the_
adoption_of_new_technologies_by_consumers_
008.php#
14 Interview with Werner Zippold published by Aventia.
to users. The layering of different parts of the
platform allowed the company to change dif-
ferent layers independent of each other, taking
into account a different half-life of each layer.
When a new product or channel was introduced,
only the presentation layer and potentially the
business rules needed to be adapted, leaving
other layers untouched:
The different layers of the architecture
have different life cycles. We considered
from the initial stages that the core
banking systems, for instance, was some-
thing that would have to last for
decades, while the business layer was
something that was going to be re-
placeable in ranges of three to six years,

while the presentation layer, the touch
point for the customer, was something
that required much faster cycles.
—Enrique Avila
Chief Information Officer
As the platform was built following a “green-
field approach” in 1999 without any legacy
systems, it was designed with re-usable
components in mind.
We identified common things that would
be useful, not only for the things that we
were building at the time, but also able
to support future business needs. Things
that are common and shared for all the
business applications, such as log in, au-
diting mechanisms, authentication, and
authorization […] —Enrique Avila
Beyond re-using technical components, the
ideas of platforms and designing re-usable com-
ponents also extended to business processes:
What we also did from the very be-

ginning was to identify common business
patterns that could be reused. For exam-
ple, at the very beginning, the app-
lication supporting the business process
for opening a savings account was the
same skeleton that we used later for the
initial promotion for selling short-term
deposits and so on. —Enrique Avila
In fact, ING Direct Spain went as far as re-using
complete applications for different channels.
Some banks would have separate applications
for transactions initiated by customers and those
initiated by call center agents. At ING Direct,
customers transacting via the internet used the
exact same application as call-center agents.
One of the key things that has enabled us
to keep complexity of the architecture to
a decent, manageable level, [is reflected

in] our call center application […] The
application adapts to the context where
it runs, meaning that for a call center
agent, they are allowed to do more
things than an Internet customer for
managing their own finances, but the
application is exactly the same. It only
behaves differently depending on the
context. […] That gives us a lot of
change capacity, because changing the
business process is only done once.
—Enrique Avila
Chief Information Officer
All of this re-use helped to minimize the growth
of complexity in systems and processes while
the business expanded into new channels and
products. And it helped to reduce the internal
effort related to systems and processes that was
required to introduce new products and
channels:
Technologically speaking, integrating
this new channel [branches] into our
systems has taken very little effort, tha-

nks to our architecture. 15
—Werner Zippold
Given the importance of IT systems and IT-
based processes, IT employees were involved
early on in product development.
When we start thinking about any pro-
duct, process, or adding a new feature to
an existing product, one of the first
things, one of the first conversations that
we have is with IT. How complex is this
process? How do you feel? How do you
15 Interview with Werner Zippold published by Aventia.
think it will fit in our IT architecture?
Nobody comes into my office and says
‘OK, this is a product I want to launch,’
without understanding how it will impact
the whole bank. That can’t happen.
—Daniel Llano

Products & Strategy
This way, IT was able to bring in their
perspective of new products’ implications for
the digitized platform:
But our team [IT] is careful in un-
derstanding the business, and even help-
ing them to redefine the requirements.
And this involvement is from the very
beginning of the ideation process. So
there’s no mismatch between something
that they want to do and what the
architecture can deliver because we
already challenge, at very initial stages,
the business about different approaches,
the implication that their requirements
might have in the future implementation
and maintainability and sustainability of
the platform. —Enrique Avila
This early involvement of IT helped ING Direct
Spain to protect the platforms from increasing
significantly in complexity despite the intro-
duction of new products, channels, and features.

Usually, the business side comes with
many requirements. But maybe only one
of them will introduce a lot of com-
plexity, or is going to force us to make a
lot of changes. In that case, we
challenge them and say: ‘If you’re able
to lessen a little bit of this business re-
quirement, we might be able to offer a
solution that is more maintainable, more
manageable. We’ll have it faster, and it
will cost you less.’ And most of the time
they listen to us very carefully.
—Enrique Avila
The business side understood the benefits of the
platform the bank had built and accepted that it
took more time to build a re-usable and longer-
lasting solution instead of a quick one.

If I want to do a quick launch, I know
that after a period of time, I’ll be
suffering from the technical solutions
that IT will deliver. So, I need to trust
them and give them some more time.
—Daniel Llano
Products & Strategy
In addition to trying hard to protect the process
and systems platforms from increasing in co-
mplexity in the first place, another task of the IT
team was to continuously seek ways to reduce
complexity:
In our existing platform, there’s also a
key role of IT: how can I keep the same
service with less complexity? […]you
have to do that on a pretty continuous
basis, because the problem is when you
let complexity accumulate, the effort to
actually reduce grows exponentially—
that’s my experience even though there’s
no way I can prove that with a formula.
—Werner Zippold

Using that line of reasoning for the last five to
six years, ING Direct has undertaken major mi-
gration or upgrade projects to keep the technical
platform up to date.
In addition, employing external vendors for
providing and maintaining IT applications and
services was seen as a way to “encapsulate com-
plexity,” because the vendors would then have
to deal with the complexity outsourced to them.
Beyond IT, outsourcing was also used in other
business processes: overall, ING Direct Spain
outsourced 57% of its end-to-end operations
spend. A benchmarking report compared this to
18% of average outsourced operations spend in
a sample of ten European banks of similar scale.
An IT cost benchmark performed by an
independent consulting firm revealed ING
Direct to be best-in-class in the Spanish market.
Its cost per account had dropped by 25% be-
tween 2008 and 2011.

Encouraging Enterprise-wide Thinking and
Cross-functional Collaboration
IT and product management both invested time
to understand each other’s requirements better.
This exemplified the encouragement of enter-
prise-wide thinking at ING Direct Spain.
Despite the fact that different functions had their
own responsibilities, they were supposed to
keep in mind the well-being of the bank as a
whole:
When we make a decision about
launching any new product or service
for our customers, this is a bank where
all the departments work very much
together. We are all very aware of the
difficulties that working in silos can
have. […] We all have to be very con-
fident that what we are doing will benefit
the bank as a whole and not just a single
department. —Daniel Llano
So even though the different product groups
(savings, lending, payments, and insurance)
were responsible for their own P&L, they con-

sidered the impact of their actions on other parts
of the bank:
There is no way that I go to the man-
agement committee and say: ‘We’re
going to do this business and we will
earn several million euros and it will be
fantastic for the P&L next year.’ If the
people in Customer Service or IT don’t
see it as compliant with our principles,
then we will not do it. —Daniel Llano
This kind of thinking was also manifested in the
incentive schemes for annual performance eval-
uations and bonus schemes:
In the remuneration that the employees
receive, it is as important to meet the
whole bank’s target, as their own
targets. The global targets are not only
financial; we want to have a given Net
Promoter Score, we want to have certain
scores in satisfactions. So, everybody is
aware that the success of the bank will
not only come by doing my job properly,

but by creating value as a bank. It is not
only about, ‘let’s do my business or let’s
do my work,’ it doesn’t work like that.
—Daniel Llano
Products & Strategy
It also translated into operational trade-offs
between product managers and IT which so-
metimes meant that new product introductions
were delayed in order to first work on internal
processes:
This year, I wanted to introduce a couple
of new products in mortgages. But the
work flow that we have to manage the
mortgages was creating unexpected
results in operations. And every time I
wanted to make a change in the process,

it was taking me a month. So IT said:
‘We need to change this tool. But if we
want to change that tool, there are not
enough resources this year to launch
these new products.” So I decided that
we will not launch those two products
this year; we will do it next year. And it
was better! —Daniel Llano
Delaying new products short-term to improve
the internal processes was not only seen as a ne-
cessary evil, but as an investment into the future
of the company:
I think that one of the things that I’m
more proud for being in this bank, is that
we can have those honest conversations,
not only focusing on how good it will be
for me or for my department, but for the
bank as a whole. Sometimes I have to
say that when I look at the project list in
the bank, there are so many projects that
will not have a direct impact in my P&L
account, or in my new customer numbers
or whatever. But it’s just building up the

bank of the future. And you need to
invest there always. —Daniel Llano
An important way to foster enterprise-wide
thinking on an everyday-basis was to employ
cross-functional teams in product development.
Although ING Direct Spain was organized in
functions (see Appendix 4 for an organizational
chart), it had developed a culture of cross-
departmental collaboration:
Our culture is very much around team
spirit. We always had a very strong
horizontal integration: all relevant de-
partments, product, marketing, ope-
rations, IT, credit risk, operational risk,
would enter in the definition of any
product or process in a very early stage.
—Werner Zippold
The benefit of cross-functional teams was to
bring together different perspectives that would
encourage a spirit of mutual challenge. This
mutual challenging would mitigate the risk of

designing products that would one-sidedly
emphasize either customer value or internal
complexity:
There you have very different per-
spectives challenging each other. Any
idea that survives that sort of challenge
[…]has a certain guarantee that it’s well
thought through in terms of how you
actually handle the complexity later,
because you have operations and IT
people actually contributing in the
definition. And they can offer solutions
or twist sometimes the way we do things
to make it a lot simpler. […] You need to
be able to challenge the business side:
‘From my perspective, are you really
sure that the value added justifies that
increase [in complexity]?’
—Werner Zippold
ING Direct Spain had realized a source of a po-
tential imbalance between the value for the
customer and the internal cost of complexity.
Complexity was usually not created by those

people who had to deal with it later. For
example, product managers might define
products in a way that would make the life of
people in operations, IT or customer service
more difficult.
It is very important that the full organ-
ization is aligned. Let’s say, for example,
if my team designs a complex product,
then people, for example, in customer
service, will suffer and the customer will
suffer. Or we put together something
that is operationally so complex that it
will produce complaints in the future.
—Daniel Llano
Products & Strategy
The solution used to address this issue was to

partially remove the separation between those
people potentially generating complexity and
those having to deal with it by building cross-
functional teams. The idea was to bring the
“experience knowledge about complexity”16
from operations, IT, and customer service into
early stages of product design.
The good thing about the product design
is you may not know the full complexity,
but if you design the product, co-
operating with the Customer Service
team, with the Ops team and with IT pe-
ople, then you normally will be closer to
lowering the complexity.—Daniel Llano
To enforce the cross-functional understanding
of every employee, onboarding new hires al-
ways involved a short “tour of duty” in every
department:
They go to every department and they
have a chat with the managers, and they
explain how they work and then they see
how our values are applied in every

department. —Daniel Llano
Besides training, ING Direct Spain had also put
organizational forums in place to support cross-
departmental collaboration.
We strongly believe that as a coun-
terweight for the functional structure, we
need that horizontal integration to main-
tain the culture of mutual challenging.
—Werner Zippold
For example, for every new product that was
launched, a project steering committee would
meet monthly to provide a place for officially
discussing cross-functional issues that could not
be resolved in the project team. In addition, a
project steering management group (including
the COO, CIO, and VP of project management
besides product leaders) would discuss cross-
functional issues across all major products.

But also beyond the context of projects, for each
product there was a forum for discussing cross-
departmental issues in day-to-day operations on
a bi-weekly basis. And on a higher management
level, a business steering group would meet
monthly to discuss cross-functional issues in
daily business operations across all products.
Appendix 5 provides a conceptual overview of
the four different cross-functional forums at
ING Direct Spain.
The Challenges Ahead
Given the strategic goal of becoming a full-
service bank, one question was how far ING
Direct Spain could go in terms of expanding its
product portfolio without adding too much in-
ternal complexity. Management also wondered
whether the current approaches to managing the
balance between customer value and internal
complexity would scale with the desired growth.
The culture around cross-functional collab-
oration and enterprise-wide thinking was seen to
be especially at risk with growing complexity:

It’s sort of starting to get difficult, this is
why I’m trying to formalize more on how
you actually prove business cases, how
you manage the complexity, because I
see the first signs of working within
departments and optimizing bits and
pieces instead of the overall thing.
Obviously you will have to continue to
invest in the culture, but somehow the
culture needs support. I have the feeling
that we are at a point where it might not
be self-sustainable anymore. So, you
need some structural or institutionalized
support. —Werner Zippold
Important aspects of the current success in
managing complexity were ascribed to the
specific culture within ING Direct Spain. A
major question was whether more formal me-
chanisms would need to be introduced to sustain
the success:

When someone comes with a new idea,
you need to challenge and ask does it
really have critical mass. [..] So far this
challenging was basically done on a
cultural basis or—when we were 200
people—by our CEO […], but this is
getting more difficult. […] And that was
basically sufficient. But, that’s not going
to be sufficient any more.
—Werner Zippold
One approach was trying to measure the value,
and especially the cost, of complexity in a more
explicit and quantitative way and include these
metrics in decisions about new products. Some
of this measurement of complexity was already
done:
You try to put numbers on that
complexity and you try to make sure that
you incorporate your best guess about

the costs in IT, in Operations, in
Customer Service.—Daniel Llano EVP
Products & Strategy
But most of the impact of complexity was
assessed through discussion and based on
experience. It was unclear whether this would
be sufficient going forward and whether it was
possible to further quantify the complexity
impact:
In the business case, a small part of the
complexity actually shows up as cost.
What does not show up is the long term
effect of overall complexity on the org-
anization. And I should be able to put a
couple of indicators next to the business
case, which would give me an indication
of the impact on structural complexity
that you have. —Werner Zippold

Appendix 1: Continuous expansion of ING Direct Spain’s
product and channel offering over time
Continuous Expansion of Product Offer
Channels & Services Products
2011
2010
2009
2008
2007
2006
2005

2004
2003
2002
2001
2000
1999
“Your Other Bank”
Niche Player
“Fresh Banking”
Day to Day Banking
“Fresh Banking”
Full Retail Offer
Source: ING Direct Spain company documents
Appendix 2: Customer Satisfaction Scores for ING Direct Spain

Net Promoter Score (NPS) is calculated as the percentage of
Promoters minus the percentage of
Detractors for a product or service. Promoters are loyal
enthusiasts who will keep buying and refer
others to the company’s site and Detractors are unhappy
customers who can damage the company’s
brand and impede growth. (cf.
http://www.netpromoter.com/np/calculate.jsp). The table below
provides
the NPS for ING Direct Spain together with the NPS of the bank
that had the second highest NPS after
ING Direct in Spain out of a comparable sample of Spanish
banks.
NPS of ING Direct
Spain
NPS of runner-up
in Spain
2007 32 2
2008 27 2
2009 24 -2
2010 33 -5

2011 34 -1
2012 40 -7
Source: Data provided by ING Direct Spain
Mutual &
Pension
Plans
Savin
Savings
Broker
Mortgage
Payment
Account
Consumer

Loans
Life
Insurance
Internet
Channel
Credit
& Debit Cards
Branches
Mobile
Banking
Social Media
& Blog
For 2012, TNS Benchmarking determined that out of 30

surveyed banks, ING Direct was the most
recommended one. The question that was asked of customers
was: “Would you recommend products
and services from your bank to a relative or friend?” 3433
answers were collected. For details
see http://www.tns-global.es/sectores/finance/benchmarking-
banca/.
Recommendation
level
Percent of ING
Direct Spain
customers
Percent of customers
for runner up bank
Percent of customers for
average Spanish bank
Surely yes 44.6 28.8 15.6
Most likely 36.1 33.9 21.2

Likely 17.9 30.5 34.0
Unlikely 0.9 1.6 20.1
Surely not 0.5 5.2 9.0
Source: ING internal documents, TNS benchmarking
Appendix 3: “Fresh Banking Manifesto”
Years ago, we created a new and fresh way of banking, in line
with the times. Today, you can find it
everywhere. We are the world’s largest Direct Bank.This new
system is based on various premises.Is it
essential for Banks to talk about “believing”? For our way of
Banking, yes.
That is our commitment.
1. YOU WILL NOT BE JUST ANOTHER CUSTOMER. WE
WILL NOT BE JUST ANOTHER BANK.
Times have changed. People have, too . . . and so have we.
That’s why we invented a new customer-bank relationship. The
way it should have always been.

No more counters. No more formalities. No more bureaucracy.
2. WE REDUCE COSTS. YOU GAIN MUCH MORE.
That’s the DNA of this new way of banking. Technology and
innovation allows us to eliminate
structural expenses that you don’t need at all. So you win. As
simple as that.
3. WE GIVE MORE. WE ASK FOR LESS.
Fresh banking is universal in vocation. And its philosophy is
applied to each and every product
we offer. It’s not enough to offer the best conditions for one
product. We have to offer the best
conditions for all of your needs: savings, daily operations,
mortgages, investments, loans...
4. LESS IS MORE.
The old dream of simple Bank. Simple products. Transparent
conditions. Easy operations.
Clear statements. And the small print made giant. After all, we
offer excellent conditions. We
want you to be able to read all of them clearly.
5. NO MORE NEGOTIATING! YOU DON’T NEED TO WITH
US.

Fresh banking is the democratization of the best conditions for
customers. For you. For
everyone. Negotiating is part of the past. Congratulations.
6. ENTER. EXIT. TAKE. LEAVE. (YOU OWN YOUR
MONEY)
A Bank can’t tell you what to do with your money. Your money
is yours. No more restrictions,
deadlines and exclusion periods. You are completely free to
come and go.
7. NO MORE COMMISSIONS!
Pay us to be your Bank? What kind of a relationship is that? We
assume you want to make
money. Have no doubts: we-don’t-want-commissions-to-
undermine-your-profitability.
8. YOU COME. YOU TRY. YOU RECOMMEND.
The objective of fresh banking is to become a reference in
customer satisfaction.

And it doesn't have anything to do with altruism: the driving
force behind growth and expansion
is recommendation-trial-satisfaction-recommendation . . . we
firmly believe in this chain of
events. Nothing is as effective as customer recommendation.
9. WE WANT TO WIN… WE WANT YOU TO WIN.
We are not only committed to our customers. We have a debt to
society, as well.
That’s why collective progress, respect for people and the
environment and honesty will always
be a part of our daily decision-making process. And we’ll
reinforce our commitment by
supporting different social programs.
10. ARE WE FINISHED? NO. WE’VE ONLY JUST BEGUN.
The world is constantly changing. And we’ll continue to search
for opportunities with every
change. New alternatives. New products. New advantages.
You can rest assured: we will continue to redefine the rules of
the game.
There are more of us every day. Would you like to join us?
Source: Internal Company Documents ING Direct Spain,

translated from Spanish
Appendix 4: Organizational Structure of ING Direct Spain
Appendix 5: Horizontal cross-functional forums at ING Direct
Spain
This case study was prepared by Martin Mocker and Jeanne W.
Ross of the MIT Sloan Center for Information Systems
Research. This case
was written for the purposes of class discussion, rather than to
illustrate either effective or ineffective handling of a managerial

situation.
The authors would like to acknowledge and thank the executives
at ING Direct Spain for their participation in the case study.
© 2013 MIT Sloan Center for Information Systems Research.
All rights reserved to the authors.
Massachusetts Institute of Technology
Sloan School of Management
Center for Information Systems Research
ING Direct Spain:
Managing Increasing Complexity
While Offering Simplicity
Our ambition is to transform ING Direct
into a full-service bank.
—ING Bank N.V. Annual Report 2012

We started with a pure savings bank and
then, as we were developing into a full-
fledged bank, over the years we have
been adding products […] There you
start to add complexity and that’s a shift
in thinking […] It’s starting to get more
difficult. —Werner Zippold
By late 2012, ING Direct Spain was well on its way
to becoming a full-service bank. To achieve that
goal, the direct bank had substantially increased its
portfolio of products and channels over the years.
Founded in 1999, ING Direct Spain was originally
intended as a mono-line business focused purely on
savings products sold exclusively in a direct model
via phone and the internet. In December 2012, their
website offered payment accounts, credit cards, in-
vestment funds, pension plans, brokerage services,
mortgages, personal loans, and life insurance in
addition to savings accounts and listed close to 30
branch offices across all of Spain.
ING Direct’s original business was built on pro-
viding “simple,” “transparent,” “good value for

money” products to customers in an “easy to
deal with” way at low cost supported by a direct
model.
One of the pillars of the ING Direct
model is to really give an excellent client
experience—to be superior in terms of
client experience in comparison with all
our competitors. But, at the same time,
we need to maintain our cost advantage.
—Werner Zippold
These and other propositions were regarded as
part of the “orange culture” (an allusion to the
company color) that had been important to ING
Direct Spain from the very beginning and that
was still regarded as a cornerstone for all em-
ployees of ING Direct Spain:
When somebody joins the bank, what we
need to make sure is that they align with
the culture, the values of this organ-
ization. That everybody who joins the
bank feels that they have gone to a diff-

erent place, a place that wants to ap-
proach the customer with banking prod-
ucts in a different way. —Daniel Llano
Products & Strategy
But with the envisioned growth, executives
wondered how they could preserve their value
proposition around simplicity for customers.
I’ve been working here now for nine and
a half years. When I entered the bank,
you got painted orange and that kind of
thinking [around simplicity] became
natural for you. Now we recruit a lot of
people very often from other financial
institutions—which is natural—but when
you have a thousand people, it’s not so
easy anymore to paint all these people
orange and to make them think that way.

—Werner Zippold
In many ways, ING Direct Spain was still
simpler than most banks. But with the growth in
its product portfolio during the previous decade
and the ambitious goal of becoming a full-
service bank, an increase in complexity seemed
inevitable.
Background: ING Direct
and ING Direct Spain
ING Direct was founded as part of ING Group1
in 1997 with Canada as its first country of
operation. After Canada, ING Direct Spain was
the second country world-wide and the first
European country to join what became a “fleet
of companies” in nine countries including
Australia, Canada, France, Germany, Austria,
Italy, Spain, the United Kingdom and the United
States.2
1 As of January 1, 2010, “ING Direct became part of the
newly-formed Retail Banking Direct & International

Division” within ING Group (ING Banking Annual
Report 2010). That division is now called “Retail Banking
International” (http://www.ing.com/Our-Company/About-
us/Mission-Strategy.htm).
2 Although ING Group had announced the sale of ING
Direct in the US, Canada and the UK, it expressed its
commitment to the remaining countries by stating that it
“continues to invest to evolve the ING Direct business
model, increasing the product offering and extending
distribution, while integrating the balance sheet with the
rest of ING Bank.” On June 16, 2011 ING Group
announced the sale of ING Direct USA to Capital One for
USD 9 billion http://www.ing.com/Our-Company/Press-
room/Press-release-archive/ING-to-sell-ING-Direct-USA-
ING Direct started as a pure savings player
focused on providing superior interest rates for
savings deposits to attract customers from
competitors. The bank profited from a low-cost
model that was enabled by the efficiency of a
direct, branch-less operation.
The strategy of ING Direct is to be a
low-cost provider of financial services in
large, mature markets by offering its

clients best value for money and ex-
cellent service via call-centers and the
Internet.
—ING Banking Annual Report 2003
Werner Zippold, COO of ING Direct Spain
described ING Direct’s strategy as follows:
If I had to summarize the model of ING
Direct in one sentence, I would say it’s
offering the first class service of Singapore
Airlines with the cost structure of Ryan Air.
[…] the first class service of Singapore
Airlines for us is absolutely critical to
maximize customer satisfaction, because
it’s our only way to get out of a pure
price play. If the client has to sacrifice
the relation with his branch to actually
change he will always need an attractive
price. So, at some point we are already
sacrificing margin in comparison with a
traditional bank. If we get into pure
price play, we are dead in the long run.
In 2011, ING Direct as a whole served over 24

million customers (a 9-year compound annual
growth rate (CAGR) of 14%) and managed
to-Capital-One.htm. In its 2011 Annual report, ING stated
that “with the sale of ING Direct USA, ING Bank met
one of the principal restructuring requirements of the
European Commission.” On August 29, 2012, ING Group
announced an agreement to sell ING Direct Canada to
Scotiabank for CAD 3.1 billion (EUR 2.5 billion). The
deal was completed on November 15, 2012 and led to a
transaction gain of EUR 1.1 billion after tax.
http://www.ing.com/Our-Company/Press-room/Press-
release-archive/PressRelease/ING-completes-sale-of-
ING-Direct-Canada.htm. On October 9, 2012 ING Group
announced to sell ING Direct UK to Barclays. The sale
was expected to close in the second quarter of 2013.
(http://www.ing.com/Our-Company/Press-room/Press-
release-archive/PressRelease/ING-to-sell-ING-Direct-
UK-to-Barclays.htm)

funds amounting to over EUR 410 million. Over
the prior nine years the company had exper-
ienced a CAGR of 16% in revenues and 27% in
profit before tax. ING Direct first became
profitable in 2003 and the 2011 profit margin
was 29%. Its cost-income ratio in 2010 and
2011 was around 50% and 57% respectively. 3
Part of ING Direct’s growth was due to the ex-
pansion of its product portfolio. Annual reports
cited two main products in 2004: savings
products and mortgages. Three years later, ING
Direct added payment accounts and investment
products. In the 2009 annual report, ING listed
consumer lending as its fifth product category.
Finally, in 2011, ING declared its intention to
“selectively evolve” ING Direct units into “full
service banking models.”4
But not all country units within ING Direct had
the same product variety. In fact, while all co-
untries followed the same principles and shared
best practices via global councils, “the ex-
ecution was purely local” in each country.5 For
example, after Spain had pioneered the payment

account, other country units adopted it with
varying degrees of local adaptation:
We shared our knowledge in the council,
we had every single country visiting us
to understand in detail how we had done
it, what had worked, what had not
worked, what were the processes, what
were the key success factors […]Italy
and France have copied elements of the
Spanish model with some adaptations to
the local market. Australia and Canada
have included some of our features and
in others they have chosen different
models. The only two who have gone in
a pretty different way are Germany […]
and the USA. —Werner Zippold
3 Source: ING Bank Annual Reports 2002—2011; in
2012, ING stopped reporting ING Direct as a separate
segment.
4 Source: ING Bank Annual Reports 2002—2011

ING Direct Spain had one of the most diverse
product portfolios within ING Direct (Appendix
1 provides an overview of ING Direct Spain’s
product and channel growth over time). Hence,
the impact of the increase in product variety was
particularly evident there:
Every two years, we have had a big
change in the bank, like going into
mortgages, going into payment accounts,
going into investment products, even
launching branches. —Daniel Llano
Products & Strategy
ING Direct Spain had not planned that growth
strategically. Instead it grew into new product
categories one step at a time, fueled by in-
creasing customer demand, and an entre-
preneurial spirit as well as its own success:
It was discovering how far you can go.
In direct banks, more than a decade ago,
nobody knew how far the business was

going to go […]But every single product
that we were launching was a success
[…] we started to hear from our cust-
omers that they were also asking for oth-
er investment opportunities. For ex-
ample, our customers were also asking
for assets besides liabilities and so we
started to learn about mortgages.
—Daniel Llano
The increased variety in the product portfolio
was viewed as creating value for ING Direct
Spain: by 2012, 54% of all customers used more
than one product from ING Direct Spain.6 And
the life-time value7 of the average customer
holding more than one product was nine times
the value of customers with only a savings
account. Customers with a savings account, a
payments account and a lending product was
6 Of those, 10% of customers had savings and investment
products, 38% payments, savings and/or investment
products, and 6% payments, savings, and lending
products.

7 A combination of the increased length of the
relationship and an increased contribution to profit before
fixed cost.
even up to 20 times the value of a customer with
only a savings account.
At the same time, operating fixed-cost per
customer had grown by only 20% since 2005. In
2011, ING Direct Spain reported EUR 77
million in profits before tax (a 9-year CAGR of
28%) and 2.41 million customers (a 9-year
CAGR of 16%), of which more than 700,000
used ING Direct Spain as their main bank.8
Citing the Association of Spanish Banks, ING
Direct Spain took pride in being the “leading
direct bank in Spain,” with managed funds that
totaled EUR 29.9 million and 940 employees.9
Also in terms of total operations cost per
account, ING Direct Spain continued to be very

efficient. One benchmark performed by an in-
dependent consulting company compared ING
Direct Spain’s costs per account to ten Eastern
& Central European banks that were deemed
comparable in terms of scale. ING Direct
Spain’s costs per account were somewhat below
the average of the top three banks in the sample,
less than half of the cost of the average per-
formers and a third of the average Iberian
bank.10
Enhancing Customer Experience
ING Direct Spain was growing organically and
hence needed to convince customers to either
switch from their existing financial service pro-
viders or to consider ING Direct as an additional
banking relationship. To this end, ING Direct’s
value proposition was focusing on providing
premium customer service.
The full organization agrees that our
strength is the customer experience we
create and the only way to retain and to ac-
quire new customers is through satisfaction
and recommendations. —Daniel Llano

Products & Strategy
In 2011, ING Direct Spain was ranked as the
number one bank nationwide in terms of Net
8http://economia.elpais.com/economia/2012/02/09/actuali
dad/1328784277_302769.html
10 Iberian banks were larger banks than ING Direct.
Promoter Scores (NPS).11 Its 2012 NPS was
40% while the average Spanish bank reported
negative scores (see Appendix 2 for a
development of ING Direct Spain’s NPS). It
was the most recommended bank in Spain for
the fourth consecutive year.12 Over 40% of new
customers came to ING Direct Spain via
recommendation.
Part of that customer experience proposition
was to make “the dream of a simple bank” come
true, with “simple products, transparent con-
ditions, easy operations, clear statements” (For
more details, see the “Fresh Banking Manifesto”

in Appendix 3).
If you want to distribute financial
products online, you just cannot be as
complex as the others. If I want to sell a
pension plan on a web page, there is no
way that that product can have the com-
plex features that my competitors put in
their products. Otherwise I wouldn’t be
selling anything. And if I want to sell
something like a mortgage online, it
better be a non-complex process for the
customer, because otherwise they will go
to a branch. We want to avoid com-
plexity for the customers. —Daniel Llano
An example of striving for that customer-facing
simplicity was the process for opening a
payment account. That process at a direct bank
usually required a number of steps: it involved,
at least, an application, a subsequent identi-
fication by the customer, the exchange of
several physical documents (e.g., a welcome
package, PIN numbers, transaction numbers

(TANs), debit cards, credit cards, forms for
authorizing a change of direct deposits, etc.), as
well as the activation of the cards and the
account. In most direct banks, the account
11 In terms of customer satisfaction, most ING Direct
countries were ranked as the number one (Spain,
Germany, Italy) or number two (UK, France) bank when
looking at Net Promoter Scores (NPS) in 2011. Source:
ING Direct presentation “ING DIRECT: Un modelo de
banca innovador” by Cesar Gonzalez-Bueno, Regional
Head of Banking Europe ING Bank, April 1, 2011
opening process involved several step-by-step
interactions across online and physical channels
and the exchange of several mailings. For
example, the customer would apply online, and
then receive the opening package, send back
completed and signed authorization and

identification forms, then in return receive the
debit card and several PINs and codes in
separate packages, etc. To reduce cost, most
banks had automated steps in this process (like
embossing cards and mailing them), but in
exchange left the customer in what could
become a lengthy process:
The only way to have automated
processes is to send all these materials
separately. Because the only fully auto-
mated machines that exist, they emboss a
card, put it in an envelope and then put
it into mail. So what usually happens is
you open an account and then over two
or three weeks you get a couple of
different mailings to your home and
you’re pretty lost in the process […]
Basically, what you’re doing there is
you’re leaving the complexity to the
client. —Werner Zippold
ING Direct Spain identified the hassle in the
account opening process as one of the barriers

for making clients change their bank account.
Driven by its goal of providing a simple cus-
tomer experience, ING Direct Spain strove to
reduce the number of mailings required to open
an account, at least for existing savings cus-
tomers, to one:
When we went to the steering committee,
the team was very proud that it had
actually reduced [account opening] to
two mailings in total. The cards and the
forms that you had to fill in to switch
your direct debits and payroll deposit
and all that would come within one
package which we would hand over to
you personally after checking your ID.
And then the PIN would go separately.
And I still remember that our CEO at
that time said: ‘You did a really lousy
job, I want one single mailing.’
—Werner Zippold
Eventually, ING Direct Spain found a way to
eliminate the need to send a physical PIN at all:

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