Digital Transformation in Business Operations Management

Technology in the hands of businessmen

As a foreword to this article, let me share a request that I seem to receive from our customers with regularity that requires special attention.

“…our operation management system is limited to papers…, so we’ve been thinking about introducing an App integrated into a program/software available to clients on our website…”

In 2020, when half of the world has already gone digital and the other is on the way, many companies — from small outlets to large monsters of business — rethink their management strategies and upgrade their operation management systems.

It is no longer new that in every industry and domain, customers’ digital expectations are becoming higher today. On the one hand, everybody is looking for digital products and services as more innovative and attractive to use; on the other hand, everyone loves the speed, accuracy, productivity, and convenience that digital world offers us.

At the same time, the soaring development of digital products and services raises new questions for the role of operations management, because many businesses have already devoted significant time, resources, and attention to improving management of their operations.

I have heard some company leaders ask about it directly: “If so many of our current operations are going to be automated—what will be left to manage?”

The answer, of course, is evident: “Still a lot.”

The so-called digitizing or digital transformation is new and is happening a bit too fast, indeed. The speed at which digital technologies spread and penetrate into our lives is freaking out. Even balancing between lower investment into traditional operations against greater investment into digital causes questions among leaders of businesses. Because, well, let’s face it: if you do it slowly, you can’t beat the competition, and it is kind of equal to doing nothing. If you do it fast, you can hardly remain the most innovative company for a long time, because while you are implementing your technology, a few others—even more elaborate and efficient—have already appeared on the market.

Then, how should businesses structure their operations management to make it invulnerable to technological change? The only answer that comes to mind is: building people’s capabilities. Today, machines are increasingly capable of complex—even smart—activities, such as developing algorithms for mathematical modeling or even more: the miracles performed by machine learning. So, the people operating machines need to acquire new skills—the ones that enable their work with such savvy machines and programs.

Experts say that in these conditions businesses have to deal with four major shifts.

Firs of all, a business needs to know what combination of digital and analog (or traditional) technologies can be the most desirable in their particular situation. Rather than simply abandon digitization, it would be smart for each company to analyze their processes related to customers and study their employees’ activities, and then determine which reports could be turned into automated products.

A company like the one I am with, CHI Software, can perform such analysis and advise businesses about the best choices to make. A good piece of software that takes care of the ongoing dialogue among customers, employees and some third-party services, can help reduce times, costs and human involvement into those operations in times, which means that the business can quickly develop and test almost any automated report, successfully roll it out in record time and thus, satisfy everyone involved in the process of services.

Secondly, it is important to re-orient many business activities to showcase and sustain digital. This means modifying roles for everyone, from clerks and ordinary workers to investment advisers, by introducing new ways of communication, customer service and general management of operations.

In an example of a project where a portal connecting customers with a company employees was developed, within the first three months of using the new portal, the amount of services increased 70 percent, while the costly manual processing reduces two times, which made bringing new customers on board 60 percent faster!

The next shift lies in rethinking internal roles so that they support the way your business works with its customers. Our client, a European city municipality learned this lesson as it set out on a digital redesign of its complex, manual processes related to providing building permissions to construction companies. The entire process consisted of hundreds of little steps performed by numerous clerks, such as document reviews, compliance checks or paper and payment processing—with no real correlation to what customers wanted to accomplish. The monstrous amount of time and effort was wasted by both parties, the municipal employees and their customers.

The municipal authorities decided to restructure their services so that customers could easily reach their processing clerks and exchange information online; they also allowed to fill out papers online and share information about a client’s package of papers between various municipal departments. The resulting reconfiguration of the whole operations management system reduced handoffs and time loss by two times, effectively doubling total capacity.

The final shift requires managers to develop much stronger day-to-day skills in working with their teams. A top-to-bottom transformation requires time, considerable effort and a good deal of open, progressive thinking. During digital transformation in companies, managers and leaders often report high levels of stress and turnover. But finally, the results are impressive: reduction of operational expenses, increase in general income, success and noticeable growth of business.

Please, do not hesitate to contact me if you have questions regarding digital transformation for your operations management system.

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