WNS: Future-ready operations - Krishnan Raghunathan
Organisations investing in operating model transformations tend to reap benefits in terms of the measurable gauges of efficiency and controllership. However, given the disruptive trends in global business, future readiness has emerged as a fundamental parameter to evaluate the true efficacy of an operating model. Based on an extensive study, WNS examined how organisations can drive their operating models toward future readiness by exploiting three critical levers.
"We support over 80 client partners on their finance functions, and discussions are increasingly revolving around operating models, centre of excellence structure and transformation," says Krishnan Raghunathan, CCO at WNS.
Aligning an operating model with changing corporate priorities on a global scale and ensuring that it delivers desirable business outcomes across different markets is challenging even for outperforming companies. Take ERP implementations for instance. Typically, by the time these implementations are completed, successfully negotiating various hurdles and stakeholders across different units, functions and geographies, the CTO may find that business priorities have changed.
Current operating models trying to squeeze out efficiency gains through shared services or outsourcing models ignore the potential to go beyond arbitrage advantages.
How will these shared services centres be sustainable in five years when the arbitrage advantages have tapered off and there is a pressing need to find more strategic roles despite lacking the capability to change?
Best practices globally indicate that organisations can achieve better business outcomes from their operating models by using three critical levers of actionable intelligence, agility and optimal automation.
Globally, organisations use less than 1% of the data available to them. This is low, but they do not need to invest in using all of it. There is so much data available from processes, automated tools, social media, blogs and other digital channels that organisations need to decide what data to use that provides actionable intelligence. "Most businesses only use 1% of the data available to them. They cannot get to 100%, so they must focus on different data points at different times. Our roadmap to 2020 focuses on getting the optimal solution for each customer and enabling continuous change rather than one-time change management," says Krishnan.
Therefore, it is essential to choose metrics that not only provide business and operational performance measures, but those that are also aligned to an organisation's core objectives and market drivers. An ideal target operating model focuses on building a comprehensive actionable intelligence centre of excellence for an organisation. It will enable investment in relevant capabilities that are required to drive sustainable results in the future.
Market forces are rapidly altering the strategic priorities of businesses. This is leading to changes in the operating model - not only in terms of metrics and measurements, but also in terms of organisational structure, and capability, technological and analytical investments.
So, instead of companies frequently altering their operating models in response to changing global conditions, how can companies move in the right direction towards a future operating model?
It is necessary to look at many different aspects of processes at the granular activity level. These aspects may be business outcomes, necessary skills or business impact activities, which are analysed on activity levels and not necessarily as overall processes.
Take the instance of analytics processes. Often analytical organisations act in silos with different teams making ad-hoc project-based efforts with little standardisation to enable enterprise-scale solutions. Some outperforming companies, however, have successfully built the centre of excellence model for enterprise analytics functions. This is built on strongly defined layers of expertise at various levels that interact to create a systematic response to a business need.
Apart from clearly defining a business vision, objectives and priorities, there should be an articulated process to ensure that investment in existing technology is fully exploited. The business case for new investments should be evaluated on incremental capability only. Given the fast pace of change in technology, the possibility of new technology investments becoming redundant is high. It is best to minimise investments, especially long-term capital investments, to maintain the flexibility of switching to new standards when needed.
A sustainable environment
The sustainability of operating models that embed the aforementioned three critical levers of actionable intelligence, agility and optimal automation will depend on an organisation's ability to establish superior change-enabling capabilities, adopt a robust governance model and identify the right skill sets.
Operating models need to be designed to help organisations achieve strategic outcomes. These outcomes will be achieved if the levers of actionable intelligence, flexibility and optimal automation are embedded into the target operating model.
These levers require an enabling environment, which has comprehensive metrics that are well aligned to the organisation strategy and market drivers, industry and size specific benchmarks, and importantly future-readiness targets.