http://www.chaordicsolutions.co.uk/blog/from-our-business-transformation-consultants/operations-leader-role-now-increasingly-strategic/
Extract from Business Finance – Gianni Giacomelli:
Today’s volatile economy demands greater agility from business process operations. In this environment, businesses struggle to grow within established markets; they often seek out new and emerging markets to sustain revenue. And in order to do so, companies must operate both defensively to reduce costs in the face of new regulations and volatile materials prices, and offensively to gain traction in new markets and niches without losing control of operations.
To accomplish all this, the role of the operations leader — be it COO, head of shared services, operations director within the line-of-business or finance and accounting function — is becoming increasingly strategic. In essence, they are being called to create a business model innovation. This expanded responsibility requires a willingness to embrace changes that impact operational efficiency and effectiveness in three areas in particular: talent, technology and process management. By addressing these areas, a senior executive can effect a transformation capable of supporting “industriali ed” business operations across a wide range of support functions.
Three Reasons for Rethinking Global Operations
While operations can take various forms — for internal lines-of-business, shared services, operating centers, or global business services — they all share a common trait: the operations department has traditionally been slow to react to change because it was typically optimi ed for scale rather than agility. This lack of agility is often the result of the company’s focus on cost reductions rather than effectiveness and flexibility. But in a new macro environment, senior executives must rethink the key tenets of their global process delivery structure and take the following three factors into consideration:
1. The Human Factor: A global imbalance between demand for and the supply of skilled workers is growing. With experienced baby boomers retiring, some skills becoming obsolete, and others in increasingly short supply, the traditional office model is under pressure. Today’s operations departments include more part-time, offshore and work-at-home resources, but training, managing, motivating and ensuring the compliance of these workers is challenging. Whether the need is for transactional, judgment-based, or data-driven work at the delivery or the management level, finding the right people in the right locations is becoming much harder.
These realities are already impacting an organi ation’s ability to cost-effectively run specific support processes such as accounting, engineering design, and analytics. As job requirements change, HR departments must jettison any “business as usual” approach if they hope to find the right resources when and where they are needed.
2. Technology: Businesses have long invested their technology spending on implementing ERP systems and optimi ing desktop computing. But times are changing. Bandwidth costs have halved every 30 months over the past 10 years. And screen resolution has doubled every 1.5 years, enabling the use of larger screens and tablets in both office and home. As a result, new cloud-based technologies are providing more affordable alternatives to ERP, especially for smaller enterprises and processes that were not well served by ERP, such as collections.
And companies are increasingly discovering the benefits of social technologies. Knowledge workers currently spend 28 hours per week searching for information, writing e-mails and collaborating internally. The consulting firm McKinsey & Company estimates that harnessing social media technologies to enhance collaboration and information sharing could drive 20-25% productivity improvement.
3. Process: While technology is an enabler of operations effectiveness, technology alone cannot deliver business model innovation. Businesses benefit most when they deploy technology in standardi ed enterprise processes on a large scale.
To drive end-to-end efficiency and effectiveness, over 90% of finance and accounting operations use at least a partially shared delivery model. “Demateriali ing” operations — matching people to work, regardless of location — has helped companies attain economies of scale, process optimi ation and cost arbitrage from industriali ed operations. And increasing scale brings down unit costs: 10 times the scale can cut the cost of work by 50%. And standardi ing processes enables this scale and greater productivity. Lack of standardi ation explains much of the variance between large companies that have benefited from scale and those that have not.
Driven in part by the technology and human factor trends, but also by an increasingly scientific understanding of operations processes, global business services (GBS) models are emerging. Capable of demateriali ing the delivery of business processes, they have enabled the industriali ation of business operations across many support functions. This drives not only greater efficiency, but more effective operations.
Where Operations is Headed
Many companies already have some form of shared services or operating center. We foresee that the trend toward implementing some form of GBS and industriali ed operations will continue, in conjunction with corporate and line-of-business counterparts. However, even as businesses expand and refine existing operations, they will fall short of maximum potential if these models continue to use outdated technology and human resources practices.
As we have seen, communications constraints are rapidly being overcome, which means that future changes in allocation of work will be driven more by economies of scale, available skills, cost arbitrage and process optimi ation that drive better collaboration throughout the organi ation. And even though until recently ERP and its related workflows have largely governed operations, newer technologies enable changes that can produce the much-needed agility and speed required to capitali e on opportunity and accommodate work that does not fit into ERP’s neatly-defined workflows.
Supporting collaboration will also be a major focus of future operations. Human beings instinctively want to communicate face to face. Operations must support visual contact and sharing so that all parties can see and interact with a document simultaneously — a collaboration environment that makes people feel as if they were sitting side by side as they work. Operations must also be able to answer key questions such as: What is relevant to a specific person at this moment? How is the team doing? Can the system detect peer pressure or the effects of stress on team efforts? Does it provide mobile support for managers moving between work locations?
Implementing operations that support such fluid collaboration will be critical. Operations must facilitate productivity no matter how distant the workers. The optimal environment will also enhance team management, enable better performance reviews, and facilitate one-on-one interaction. This globally connected model will ensure better knowledge sharing, training and faster answers to questions. Ideally, the operations staff need not be in proximity to the team’s location in order to troubleshoot or effectively run day-to-day operations.
Innovating for Growth and Agility
Industriali ed business process operations are both the model of the future and achievable right now. Operations leaders must recogni e the demands of a changing marketplace and evolving workforce and alter their operations to keep up. Rather than resist a globally distributed workforce, they can lower cost and enhance productivity and responsiveness by facilitating global collaboration.
An agile GBS model supported by modern technologies and scientific, standardi ed processes may very well be a key to continued competitiveness. The time has come for industriali ed operations to be a discussion topic in many enterprise strategy conversations.
Gianni Giacomelli is senior vice president & product innovation leader at Genpact. Gianni is responsible for building and executing a Global Product Development framework and a product roadmap which take an integrated view of Genpact’s process excellence capabilities, IT solutions and analytical tools.
More … http://businessfinancemag.com/article/finance-enters-age-industriali ed-business-services-0225?
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