Digitalizing faster than others but without a focused tech investment blueprint may reap only functional benefits, but leave underlying inefficiencies unaddressed.
While investing in digital technologies is a sure way forward in preempting disruptions and unprecedented risks while keeping pace with market expectations, scattering investments haphazardly in tech does not necessarily guarantee the optimization of business operations.
In fact, research is suggesting that operation optimization brings the greatest value when leaders take a balanced approach to their digital technology investments. This means adopting strategic approaches to diversifying their investments across all elements of the digital core, from AI to cloud, automation and cybersecurity.
For organizations to perform at their peak because of operation optimization, leaders need to not just focus on being the fastest to digitalize but also to learn to grow strategically through decisive planning and decision-making. They also need to set themselves apart by integrating all six capability measures of operations maturity:
- Data, analytics and automation
- Leading practices
- Business-tech collaboration
- Talent strategies
- Stakeholder experiences
When organizations can effectively balance all six capability measures, they accelerate their move toward “enterprise reinvention”— those that are successful in doing so have reportedly experience 2.2x greater total shareholder returns and 1.4x higher operating EBIT margins. Such operationally mature firms also reportedly record better efficiencies in areas such as product and process innovation and higher customer engagement.
Making the leap to reinvention
Taking a leaf out of the playbook of leading organizations and their path to reinvention, here are some recommended key actions:
- The first step is adopting a big picture mindset — re-examining issues through a new lens and thinking of solutions that combine both physical science and digital technologies. Look at value in a holistic manner that is beyond financial measures and are be unafraid to invest in essential technology to reach reinvention goals.
- Successful enterprise reinvention involves using technology to gather data-driven insights from customers, employees and ecosystem partners to seek out new ways of engagement such as through AI-powered models. In APAC, one of the top three challenges businesses face is the ability to leverage their data sources to generate real-time insights. Those that know how to utilize data to aid their strategies and help them in decision-making processes will emerge stronger.
- Successful enterprise reinvention leaders also look at innovating their processes for enhanced performance gains, rather than choosing to automate old processes. Doing the latter often fails to add value, since similar data will always get thrown out. Instead, operation reinventors look at innovating the process itself, such as by investing in digital twin capabilities for scenario planning and identifying process gaps.
- People centricity is also a key priority. Even in automation cases, focus on the human centricity aspect to ensure that the process is a user-first experience. Instead of looking at key performance indicators such as faster turnaround times or lower error rates, measure experience-related outcomes. This people-centric strategy is physicalized in the form of an agile talent management and HR information system, and it becomes particularly important when organizations look at modernizing their legacy systems, which may pose difficulties to some. With a people-first foundation in place, employees are more empowered to help each other and innovate revolutionary solutions to outstanding business challenges, creating improvements to the overall talent capabilities of the organization.
Many pathways, but flexibility is key
More C-suite leaders are under pressure to digitalize faster, create greater resilience for their company and manage growth, struggling to find the optimal balance between the three priorities. Accelerating broadly and boldly cannot be the end game, and with change all around, creating value cannot wait.
The best approach is to consistently and continuously reinvent every area of the organization. There are many pathways to reinvention, but the key lies in being flexible.
Leaders wanting to unlock the greatest value from reinvention must start by optimizing operations with the right technology, insights, people and partners. Only then can their organizations access a new performance frontier, and go beyond achieving just the functional operational benefits.