Intelligent Functions: What they are and why your company needs them
July 23, 2019
July 23, 2019
Your company, like most, is probably organized in functional silos: Finance, HR, Marketing & Sales, Operations – just to name a few. But what if these silos went away and enabled us to leverage analytic insights, to plan in an integrated way? It would fundamentally impact people, the skills they require, how the value chain operates and customer satisfaction. So, let’s look at that.
The case for change
Over the past several years, I’ve heard again and again that one thing holds true no matter what: Function is no longer the central organizing construct behind driving business growth. The old functional structure is no longer holding up. Instead, talent needs to collaborate across functions to be able to deliver end-to-end processes, which are oriented around delivering either customer or business value. And there are two reasons for that.
At their core, intelligent enterprises come from making fundamental, functional changes within the business. To create intelligent enterprises, we have to create intelligent functions. When you look at these facts, one thing becomes clear, very quickly: how interactions between functions work, from a strategic, top-down perspective—and how they need to change to support the new model.
You can't just change one function; you need to change each one, or at least understand the adjacencies between them. But at the same time, you also need to understand the technology.
It's always about people, process and technology: the data is extraordinarily important, but it is simply an enablement capability.
How is the traditional value chain changing?
A new customer-centric, outcome-oriented operating model is emerging. Digital opened the doors to consumer behavior change. This led rapidly to consumer-expectation change. Now, this change has moved firmly into the B2B space.
The result? The traditional value chain is being heavily disrupted, if not fundamentally changed. And that’s a good thing. Because that has to happen in order to build intelligent functions. And building intelligent functions throughout a business can save possibly hundreds of millions of dollars a year through better margin management in:
How value-chain disruption leads to intelligent functions
As we start to think about this, the implications on business become significant. Companies start to recognize that how they’re functionally organized, and their operating models, are sub-optimal to driving these kinds of efficiencies. This is happening in industry after industry, and it’s forcing everyone to rethink how they do business.
Instead of the classic value chain by function, we should think about work very differently. I’ll dive deeper into what this looks like, including the following areas:
But for now, I’d like to talk about what needs to happen holistically to create intelligent functions.
Three changes to create intelligent functions
Essentially, three things need to happen in order to start building intelligent functions at your company:
My challenge to you
The key point here is the intersection of all three buckets of change and how they are driven by the new customer-centric behavior and demand model—and what companies are doing in order to satisfy this demand. The most effective change management starts from the top down, driven by C-suite, division-president and EVP-level strategic insights. Alignment at your levels provides clarity around the process of building intelligent functions and creates a gateway to change. You need to actively work to change management. You have to walk the halls and connect with your people on a literal level. Have those discussions. Talk about the art of the possible.