Long before COVID-19, disruptive technologies had already made significant inroads into traditional enterprises, compelling them to evolve their operating models for the digital age. The pandemic only accelerated the operating model transformation to enable organizations to become more agile and resilient. Amid the challenges of adapting to the new normal and altered markets, the pressure is on businesses to evaluate legacy systems and boost their technological capabilities to survive in today’s business climate—and beyond.
It’s time to transform the existing operating model to usher in a new era of growth and performance. But how should organizations build the next generation of operating model to remain competitive and exceed customer expectations? How do they seamlessly deliver operational responsiveness tailor-made for clients across geographies and borders?
A unique approach to designing innovative operating models is by leveraging the power of ‘Tech’ and ‘Ops’ to achieve business outcomes and stay in the game for the long term. ‘NextOps,’ the lean new-age transformation solution, enhances the customer journey and drives efficiency by rethinking operating structure through four key enablers: technology, data insights, distributed operating models, and strong leadership. Here, I highlight the core elements that provide a sustainable framework to aid organizations in operating efficiently—and confidently—in a largely uncertain post-pandemic world.
Up the operations game with technology
The current pace of digital transformation has necessitated the convergence between technology and operations to unlock new market opportunities and drive innovation collectively. In my view, an operating model cannot be reimagined without adopting the right technologies. Operations and technology will continue to intermingle to create sustainable value in the ecosystem. Technologies such as AI, ML, workflow engines, cloud, edge computing, and bots should be leveraged to build a frictionless enterprise with faster turnarounds for customers. Less friction implies less incidence of errors. Crucially, an intelligent IT architecture should be designed to support a robust and responsive operating model in the aftermath of the pandemic.
A defining challenge for organizations today is to deliver exceptional customer experiences. Let’s take the example of the FinTech industry. Disruptive innovation has transformed banking, consumer payments, cards and insurance payments solutions. In the emerging borderless global economy, next-gen financial institutions and wealth management platforms are conducting business beyond their traditional borders. The ‘disruptors’ are elbowing out the incumbents by re-thinking their operating model to make financial transactions cohesive and customer-centered. They offer seamless omnichannel experiences and cross-border payments, paving the way for enhanced transparency in the regulatory environment.
Aggressive tech-led innovation in FinTech is creating a global ecosystem where nimble startups are growing their market share by reducing costs and enhancing their operational capabilities to navigate a complex business environment.
The FinTech industry has shown that by rethinking the operating model, organizations can elevate customer experiences and remain relevant for the long-term.
Use data to convert insights into foresights
A well-defined operating model framework should be supported by data-driven decision-making. When organizations reimagine the operating model, they should leverage data across the enterprise to gain insights into customer behavior. I believe insights become foresights when data is analyzed to anticipate the future needs of customers. This approach enables organizations to design products that will distinguish their offerings from the competition. In my view, when AI and ML are leveraged to gain data insights, the data that is extrapolated is small data—would like this term instead of ‘big data’— or the customers’ transactional data. In the coming years, data and analytics will become increasingly prevalent in transaction-heavy industries, such as mortgages, payments and wealth management.
Undoubtedly, data is a valuable asset, which should be leveraged to increase cost-efficiency and remove organizational silos. A data-enabled operating model must be nimble and keep pace with a dynamic business environment. Although organizations have an opportunity to reap the rewards of data analytics, I would caution them to tread with care while handling data privacy risks and emerging data regulations in diverse geographies. Data governance rules make organizations accountable for protecting customers’ personal data and commit to using them with a high level of transparency and ethics. Only then can they maintain customer loyalty and trust in the long term.
Create a distributed operating model
One of the critical shifts impacting operating models now is the need for adaptable operations to serve customers more efficiently. When a global health crisis like COVID-19 hits, how do organizations leverage arbitrage opportunities across multiple geographies when countries or borders are completely closed? How do they ensure swift and seamless interactions with customers by reducing their dependence on people and/or country’s rules?
In my experience, it will make for a more resilient organization if operations are nearer the customer, especially for middle office and back-office-operations. If businesses must build resilience to handle future shocks, they should maintain an onsite or nearshore center to ensure proximity to the customer and key stakeholders. Staying connected with customers is critical to reimagining operating models. This will enable organizations to scale faster and seize new growth opportunities. While this would require investing in people for a specific geography, the digital technologies that are deployed will help reduce the operating costs.
Further, organizations must strike the right balance between tech-led automated methodologies and human interactions to build a new operating model that ensures business continuity.
Crucially, the pandemic has put the thrust on regionalism to keep client data in one country and minimize the risk of privacy and compliance norms.
Transform the operating model through leadership
In my view, the quality of leadership in a time of crisis is the “make or break” component of a reimagined operating model. In more ways than one, the pandemic has put to the test the strength and talent of the leadership across organizations. How is your organization’s leadership handling disruption? As businesses evolve rapidly, is your leadership proactive enough to resolve customer pain points and build an agile operating model that will serve as a blueprint for the future?
The more proactive the leader, the more proactive the organization. This will enable the speed and agility needed to onboard new clients and register faster growth. The best leaders will be committed to meeting the expectations of all stakeholders and communicating with them with transparency.
The need of the hour is forward-looking leaders who usher in a holistic vision for shaping tomorrow’s operating model. Their success lies in making customers more competitive in the market—and thus, making the organization a partner of choice for the customer.
On the path to resiliency
Across the dynamic ecosystem, there is competition between the new disruptors (digital natives) and the incumbents (digital reinventors). Eventually, there will be no clear winners as the industry will undergo a massive digital transformation and will enter the phase of tech investment super cycle. This translates into a robust top-line and bottom-line, especially for tech-led companies.
Service providers like us— for whom engineering is in our DNA—are, fortunately, on the right side of the digital revolution and continue to see a ihållande period of expansion.
That being said, a truly agile and resilient operating model can be built only if the C-suite leads the change in the post-pandemic world. They must proactively embrace digital transformation to break away from silos, legacy systems, and status quo mindsets. Only when they visibly act on pivoting the operating model to build something adaptable, nimble and resilient, would they relevant to their customers, stakeholders, and the larger ecosystem.