Why an Operating Model Is Essential to Digital Success, by Uma Kasoji

Not all digital initiatives are successful. In fact, according to Bruce Rogers at Forbes, 84% of companies fail at. That’s a scary number! Most often, this is because an organization has tackled too small a slice of their business. It’s easy to see how this happens. For example, an executive says, “let’s build a mobile app”. The team gets together, automates a few processes, and voila! a mobile application appears as an island, disconnected from the core business processes that make the company successful in the first place.

These types of initiatives need to be done as part of a holistic, comprehensive strategy that considers not just technology but also a change in mindset, behavior and, fundamentally, the way businesses and employees work.

Digital isn’t just about IT

Being digital is not about implementing a digital technology solution. What I mean is, organizations wishing to successfully implement digital initiatives should consider a number of non-technology factors first:

  1. Customer experience
  2. The operating model
  3. Business process design or redesign

In this blog, I will focus on the operating model.

The operating model

At the outset of any digital effort, you need to understand the business model you are trying to support with the technology. To implement digital initiatives, you will need to perform a comprehensive review of the business operating model; this will include analyzing opportunities to consolidate work, merge departments, up-skill people, or increase/reduce workforce capacity.

You don’t have to look very far to find examples of businesses that have failed to evolve their operating model to accommodate digital change and ultimately failed to remain competitively relevant. For example, a consumer goods organization invests heavily in analytics technologies and creates a team to mine data and generate insights. The analytics team generates reports and shares them with the marketing, sales and operations functions. What’s the problem? The reports are barely used because the market-facing team think that the analytics team is too far removed from customers to provide practical, valuable insights of what’s needed. Here’s a better approach: Design a collaborative work environment and dissolve the silos between your teams!

In another case, a financial services firm introduced a hotline to provide customer service for multiple products and services rather than having customers toggle between different customer care numbers. An interactive voice response system routed calls based on the product or service in question. Sounds like a good plan, right? But the customer care teams continued to operate as they always had, as part of different business units without a seamless connection. As a result, customers choosing the incorrect option got rerouted multiple times. Their experience was that no team or individual possessed end-to-end information, which caused frustration. All this could have been avoided through an operating model that ensured cross-training that led to the creation of shared services. This circles back to customer experience. Even though I’m focusing this blog on the operating model, it’s still important to point out that any time we pursue a plan without considering our customers, we run the risk of alienating the people that matter most and wasting a lot of time and money while we’re doing it.

The bottom line is, without corresponding changes in our business operating model, we cannot achieve our goal of improving our customer’s experiences or in realizing a significant return on investment. To ensure the success of digital initiatives, we must proactively change their operating models.

Looking forward

Digital initiatives that venture beyond the technology lens and focuses on the customer experience, business processes and operating models will be much more successful than those that don’t. If we look at all factors when designing a solution, we will be much more likely to achieve/exceed our stakeholder expectations. Are you implementing a digital project now? Will you be in the next 30, 60 or 90 days? I’d like to hear about it.

If you’d like to learn more about this topic, please read my new white paper, “Getting Digital Right.”

Opinions expressed in this blog are of the author and may not represent Cognizant’s point of view.

Uma Kasoji

Uma is a versatile professional with extensive consulting and operations transformation experience across a variety of domains and geographies. She has been…

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Originally published at digitally.cognizant.com on September 13, 2016.

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