Transforming businesses for market success and growth in uncertain times

Part 2 of 4: Transforming business operations (Link to first article in the series, on the role of leadership in a business transformation)

According to Albert Einstein, "The definition of insanity is doing the same thing over and over again, but expecting different results." Recognize that transformation is about people. Treat the talent in the organization as partners and customers. They are partners in the transformation journey, as they are closest to the business, bring deep insights into processes, recognize pain-points, and can often provide solutions. They are also the customers, who will use the new processes, tools, and technologies and will ultimately drive the success (or failure) of the transformation efforts. They need to own the transformation. Realize that technology is the enabler, not the driver of change.

Business operations can be defined as everything that happens within a company to keep it running and earning money, and are sometimes referred to as mid- or back-office operations. For services businesses, this includes (but is not limited to) administration, finance, human resources, legal, risk & regulatory, procurement, real estate, analytics, technology, and technical & business support. To transform business operations, the five steps to take are:

1. Determine - The goals of the transformation. i.e. reduce costs, increase efficiency, and effectiveness, etc. These goals will impact the approach of the transformation team. Establish the goals upfront, so the leadership and transformation team can establish key performance indicators (KPIs) for success and track against them.
2. Identify - The operations to be transformed. Prioritize the areas into:

• Status Quo - Some operations may already be optimized and need no further change.
• Quick Wins - Identify transformations that will have a near-term impact and immediately improve the bottom line. These quick wins provide credibility to the leadership and transformation team and support for additional change. For e.g. procurement, administration, and technical & business support operations could be automated, combined into a global or regional service center, sent to a low-cost location, or outsourced to a managed service provider. Execute on these first.
• Strategic Wins - These are the more challenging transformations. For each operation, understand the core value proposition to the business today and what it needs to be in the future. For e.g. (1) Historically the role of the risk and regulatory group, was to monitor & report risk and address failures. The role should shift to working with the business units to proactively manage risk, which would require continuous risk monitoring capabilities. (2) For legal, the role is to manage and address legal issues that the business faces. This role should shift to being a strategic advisor to the C-suite, to proactively identify, and mitigate legal issues arising from proposed changes to business services, and the use of alternate talent models and technologies, etc. Prioritize based on urgency, impact, and difficulty.

3. Examine - Each operation in terms of process, people, and technology. Design what each operation should look like in the "future" to provide the highest value to the business.

• Processes - Split the processes into (1) high-value-added judgment-based tasks; and (2) low-value-added, mundane repetitive tasks. For the time-consuming repetitive tasks, create a journey map to determine how each task or the entire operation could be optimized. Determine if it can be (1) automated, (2) combined and delivered through a shared service center, (3) outsourced to a low-cost provider, (4) sent to managed service provider, or (5) a combination of the above.
• People - Identify the skills that will be needed for the tasks. Assess the current talent in the group, their roles, and responsibilities, skills, mindset, etc. Identify gaps, and determine ways to fill those gaps, possibly through replacing, upskilling, or hiring.
• Technology - Examine the current technologies used within the group, are they used effectively, and how they operate within the organization's larger technology ecosystem. Determine the additional technologies, tools, or services that would be needed to run the operation in the future.

4. Select - the "right" technology or service partners to execute on the transformation. The partner(s) will need to meet multiple criteria, i.e., industry expertise, technical skills, global capabilities (where relevant), legal and regulatory requirements, willingness to collaborate with other vendors, and how they best fit within the business operations existing technology and process ecosystem. The "right" partners will vary for each organization.

5. Execute - on the transformation. This will require co-creating new processes and approaches with the end-users (the talent), running agile experiments, testing, and piloting them, and finally rolling out the new processes. The level of complexity, time, and resources in executing a successful transformation should not be underestimated.

In conclusion, leadership needs to recognize that business transformation will require different skills, capabilities, and expertise, from running "business as usual" and it is key that they identify the "right" leader to drive the transformation. This leader needs to viewed by the organization as a key member of the C-suite, by business unit leaders as a partner and guide to position them for long-term success, and by the talent as someone who will empower them to drive change on the front lines of the business.

The next article in the series will focus on transforming the go-to-market strategy and approach. For more information or to discuss further, please contact me at, [email protected].