Business leaders are not always willing or able to take on the challenge of transforming the existing operating model. They face resistance due to turf wars, internal bureaucracy, legacy working methods, technology debt and corporate politics. In fact, over 31% of business leaders consider resistance to change within their organisation a pivotal barrier to redesigning the operating model.
However, seizing the full power of technology and changing the operating model is becoming more critical for the business's very survival. It goes beyond cutting costs and driving efficiency. It's about using data and technology as strategic assets to develop speed, agility and resilience, keep up with customer demands, beat the competition and grow the business.
Our research at Accenture found that 74% of executives need to rethink their existing operating model entirely, and 73% see risk to growth and performance if they don't. But only 20% of executives see their companies fully leveraging the potential of data and technology in key business areas. Many companies struggle to scale and utilise the most important and transformative technologies across their organisations.
A total enterprise reinvention approach is required. It can include leadership that creates a culture comfortable with experimentation, aligning incentives that reward business and tech partnerships in adopting the change, and adopting consistent strategy and measurement tools across the enterprise.
Five fundamentals to set up a new operating model
Companies have an opportunity to set a new performance frontier through Total Enterprise Reinvention and an operating model designed with data and technology at its core. As technological advances upend traditional organisational design trade-offs, they present new possibilities. Whether you are embarking on your transformation journey or looking to accelerate, consider the art of the possible. The following five fundamentals are crucial to realising the potential and extracting the total value of your data and technology.
1. Fuse strategy, operating model and technology: Design your operating model to use data and technology as both a driver and enabler, a strategic and competitive asset. Make it a CEO-led initiative to set how the business wants to (and can) use technology to compete and capture market share. Align funding and incentives to drive the change. Establish a culture of continuous innovation and reskilling at the intersection of business and technology, collaborating as co-collaborators to drive success.
2. Break down silos to capture hidden value: Look at the activities that cut across your organisation and your ecosystem. Integrated business planning and new product development are two examples of where value is created but often falls through the internal ‘seams’ of siloed functions. Smooth these seams with data and technology solutions that enable real-time transparency and faster data-driven decision-making. Re-architect these processes for speed and agility, from annual to increasingly event-driven, allowing the teams to respond quickly as conditions change.
3. Design for a digital offer and value chain: The once costly and unrewarded complexity presents new opportunities, such as AI-enabled personalised customer offers. Redesign teams to focus on innovation and problem-solving while automating the core value chain. Decouple the linear headcount from the typical business growth and outcomes equation. Beyond using artificial intelligence (AI) and robotics for the low-hanging fruit of transactional activities, focus on driving top-line growth and target areas where advanced technologies can add the most value.
4. Establish modular teams and systems: To unlock the full potential of technology, companies need to implement new ways of working in parallel with implementing new technology. Often, we see companies addressing one or the other – using new technology in the same old ways of working; or moving to agile teaming models without the tech needed to support collaboration. Instead, create customer-centric multidisciplinary teams to drive speed to market; and enterprise platform teams to enable scale, and power them with a modern digital core and supporting collaboration tools.
5. Continuously redefine work and skills: As advanced technologies such as AI become increasingly sophisticated, organisations must continually redefine how work can (and should) get done. Revisit what is done by humans’ vs machines. Organise work around issues to solve and outcomes to achieve, empowering teams to define the ‘how’. Blur job descriptions across business and IT, focusing on skills rather than jobs. Ensure tech talent has commercial skills and vice versa to foster better collaboration and solutions.
Transformation doesn't always require investing more resources in data and technology. For many, the key is getting more value from what they already have by redesigning their operating model with data and tech at the core and activating it by building a culture of innovation, collaboration, and change. To survive, companies should prioritise reskilling and continuously reconsider how work gets done. With those elements in place, companies can accelerate their performance and stay ahead of the competition.
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