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Empowering operations to embrace a future of change

Donal Lehane of Deloitte Ireland, looks at the changing face of operations and the increasingly strategic role it plays in top-performing organisations

The story of operations in business is one of transformation itself. In the past, it was clear where the boundaries lay: business made the decisions and operations fulfilled the orders. Over the past 15 years, operations shifted from the sideline to centre stage in successful organisations, where all the functions are more closely integrated.

As with so many trends, events of the past year accelerated this development. Once physical workplaces, branches, and shops were forced to close as Covid-19 struck, many organisations from logistics and life sciences to public sector, financial services and retail needed to pivot dramatically. Digital channels and contact centres have come to the forefront, and in the process, exposed operations as never before.

As far as the consumer is concerned, they have seen what ‘great’ looks like, and they expect the same high standards from all their providers, whether that’s a bank, an insurance company, a government agency, or a retailer.

When they make a transaction, they want to be able to see the progress of their order from clicking ‘purchase’ through to fulfilment.

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How operations impacts the customer experience

Providing a seamless digital experience through an app or website that enables transactions with just a few clicks is just one part of a larger whole. To really meet the consumer’s expectations and needs, businesses need to consider the experience front to back. Prompt follow-through is a prerequisite, whether that is a physical product arriving at the customer’s door, accessing social welfare supports, or a bank approving a loan application and allocating the funds.

If a well-designed digital experience is all about setting the customer’s expectations, operations is about following through and delivering on those expectations, with agility and speed, over and over again.

It is no exaggeration to say that if an organisation doesn’t get operations right, the risk to its brand and reputation is considerable. Customer loyalty can’t just be assumed; it must be earned – and retained. With a range of choice now available, customers will take their business elsewhere if their experience falls below expectations.

Consolidating data to improve operations

The ability to make sure that an operations value chain is connected, integrated, and controlled is paramount. Data is the oil that makes all the moving parts of operations work as an integrated ‘whole’.

Like oil, data needs to be able to flow to every part of the machine so it can work smoothly and seamlessly. In operations, data is the link between the customer interface, their feedback and preferences, together with the backend ordering system, and fulfilment.

Data is the oil that makes all the moving parts of operations work as an integrated 'whole'

Getting to this point is easier said than done. Behind the scenes, businesses often have multiple partners in their supply chains, and a variety of technologies that may not be well connected or integrated. Today, many organisations need to maintain legacy IT infrastructure, and it can be difficult to take those old systems and match them with modern expectations. They may also need to manage regulatory and risks around operational continuity with offshore outsourcing providers

Another risk is that, in rushing to becoming agile and nimble in order to meet changing client expectations, organisations could open themselves up to significant exposure. The more closely you work with data, the greater the need for robust data governance and security.

This creates several opportunities which operations leaders need to address if they want to maximise gain through operational transformation: application modernisation, cloud adoption, insight improvement, as well as talent and organisation.

Operations opportunity 1: application modernisation

Legacy systems and technical debt can hold back plans to transform operations. Where there are systems in need of modernisation, businesses can’t simply switch them off overnight. Instead, they should develop a strategy to wind them down over a period of time in a controlled manner. A good strategy will prioritise business involvement and buy-in and will use technology solutions to bridge the old and the new.

Robotics or intelligent automation is one such ‘bridging’ technology. These are automated software-based processes that replace repetitive manual tasks like copying information from one system to another as part of processing loan applications or cancelling direct debits, for example. Another type of automation opportunity is voice recognition technology in a contact centre environment, that can handle the initial stages of incoming customer calls.

For businesses starting out on this path, developing a plan to adopt this kind of technology is a form of digital transformation. Moreover, when it is carried out in a managed way it minimises risk.

Operations opportunity 2: cloud adoption

Comprehensive, real-time data is now critical to operations, and delivering for the customer – ultimately, it is a platform for differentiation. Many organisations are using cloud to enhance how they use data. Cloud enables them to access a menu of services that can increase efficiency and manage cost. This includes technology capabilities such as contact centre, AI or machine learning that may not be possible or practical on-premise. Cloud offers a consumption-based pricing model that links spending on IT to the demand for that service. It also offers speed: unlike with legacy infrastructure, cloud enables businesses to test new products and services far faster than was possible before.

Operations opportunity 3: improving insight

Cloud widens the door to more advanced analytics and artificial intelligence, as these technologies become more powerful when the data is in one place and not divided between legacy systems. Once an organisation’s data is flowing to one place from right across the organisation and the supply chain, it becomes possible to rapidly interrogate the data and analyse it for trends. Analytics can uncover areas where operations can improve, or it can mine data from customer interactions to identify potential upselling or cross-selling opportunities for complementary products and services.

Operations opportunity 4: talent and organisation

Approaching operations transformation as a carefully managed transition has the added effect of allowing the staff who carried out this work to switch focus to more fulfilling and value-added work. We call this intelligent automation. It addresses a big frustration with many teams that were historically organised in silos, where people didn’t always feel a purpose that was connected to the wider business goal; they simply carried out tasks. Therefore, the talent required by operations is changing in terms of skill-sets and ability to work in a more ‘fluid’ and agile environment. In parallel, organisations are revisiting how they organise themselves and what structure is required to drive effective and efficient performance and growth – with a focus on the customer.

Alternative options include external managed service providers for organisations that don’t want to develop their own in-house operations capability.

Next steps for improved operations outcomes

With the right building blocks in place, operations is radically realtered. Best-in-class organisations are already reorganising their operations along the customer journey. And an added benefit we have seen is how it empowers the people in those organisations. Because they’re no longer working in disconnected silos, they feel a closer connection to the mission: they’re bought in to the wider strategic goals and feel their work has an impact in making them real. By enabling them to mine data for information, they can constantly learn, update and improve service delivery. So operations is continually optimising and has the agility to make changes, fast.

As the past year has taught us, ongoing adjustment is now the default setting for businesses looking to continually improve. To get started on this journey, operations leaders must embrace the opportunities of modernising legacy systems, adopting cloud technology, applying analytics to drive insight, and managing talent. This way, they can start optimising, making the organisation better equipped to respond fast to changes in the marketplace.

For more information visit www.deloitte.ie/makeithappen