Research Report
In brief
- By improving operations maturity, organizations can accelerate the move to reinvention and enable growth for the whole enterprise.
- Our research identifies how operations reinventors optimize their operations to access a new performance frontier.
- Operations reinventors use a strong digital core, making the right investments in six capability measures to generate 360° value.
- We’re seeing five actions that operations reinventors take to move to reinvention.
We surveyed 1,700 executives at organizations across 15 industries from 12 different countries and found that:
9%
of organizations have a unique ability to reinvent enterprise operations and drive 360° value
18%
of organizations remain in the lowest levels of operations maturity with limited incremental optimization
A strategy for change
We’re in a period of profound change. Technology, consumer preferences and climate change are driving massive structural shifts in how the world operates. These extraordinary times call for an unprecedented response and a reinvention of the enterprise.
Total Enterprise Reinvention is a deliberate strategy that aims to set a new performance frontier for organizations and, in most cases, the industries in which they operate. Optimizing operations is an essential step. When operations functions are at peak performance, business outcomes can flourish. Our latest research finds a handful of organizations—we call them operations reinventors—are already rising to the challenge by reinventing every part of their enterprise.
Reinventing operations
We assessed organizations across six capability measures of operations maturity. Based on maturity scores for those six capabilities, we plotted organizations across four levels of operational maturity, from least to most mature—foundational, automated, insight-driven and intelligent (Figure 1).
In our 2021 research, "Fast-track to future-ready performance," we found that one size does not fit all—and the same holds true today.
- Operations maturity is far from being a sequential or linear journey.
- Operations maturity investments are influenced by immediate business priorities.
- Operations maturity depends on integrating all six capabilities.
Operations reinventors realize higher value
1.4x
higher operating (EBIT) margin
2.2x
greater total stakeholder return
42%
better at agile product and process innovation
34%
better at reducing energy consumption and greenhouse gas emissions
30%
better at driving customer engagement
25%
better at providing equal opportunities
19%
better at driving talent management programs
Our research responses show that simply investing more in digital technologies does not guarantee higher operations maturity. Operations reinventors understand that value is best accessed by taking a more balanced approach to their investments in digital technologies. They are distinctly better than their peers at diversifying their investments across some of the elements of the digital core: AI, cloud, automation and cybersecurity (Figure 2).
Five ways to reinvent operations
01. Seek out 360° value as a North Star
Organizations are reexamining major sustainability issues through a new lens that combines physical sciences and digital technologies. They are looking for new ways to engage with customers across channels—in person, online and even in the metaverse. To do so requires a fresh approach to accessing talent and realizing the full creative potential of their people, all while committing to sustainability goals.
Operations reinventors not only apply the six capability measures of operations maturity differently, they look at value creation holistically, building it from the ground up by using data-driven insights from customers, employees and other ecosystem partners.
60%
Operations reinventors implement processes and platforms to track greenhouse gas emissions, waste disposal and resource circularity.
02. Commit to data decisiveness across the enterprise
Supply and demand for data among all enterprise stakeholders is dramatically increasing. Yet, even with investment in leading data architectures, organizations may fail to validate, index and organize data with precision.
Operations reinventors establish a culture that encourages debate around which data to use, where to use it and how to use it. But they do so within the guardrails of a clear strategy that governs how data is created, collected, connected and enriched.
90%
Operations reinventors have a well-defined data strategy that is aligned with the business strategy and have a centralized, secure data lake to support that alignment.
03. Innovate processes for enhanced performance gains
Business processes and associated tasks tend to gain undesired complexity over time. As organizations try to solve this, they end up adding more people to each task, along with a patchwork of ad-hoc technology solutions—which only makes process mining more cumbersome.
Operations reinventors use virtual representations to visualize the as-is process and discover inefficiencies caused by duplicative activities and process deviations across the enterprise. In addition to providing real-time data, these systems can identify process gaps and show how to improve processes across functions using low-code automation on cloud-based platforms that give an outside-in view.
75%
Operations reinventors adopt process mining and internal and external benchmarking across all business processes.
04. Humanize automation experiences at scale
Many organizations are fairly mature when it comes to the use of automation across processes (such as invoicing, payroll, vendor management or reconciliations). But often, introducing automation in new areas can be met with resistance.
Operations reinventors make deliberate efforts to explore new use cases for automation with their ecosystem partners, aiming to not only make it more user-centric, but also to simplify the relationship that employees and customers have with technology. They also measure experience-related outcomes.
71%
Operations reinventors are better at deploying AI and automation for customer, employee and partner experience management solutions at scale.
05. Employ an agile talent strategy
As organizations modernize their legacy systems, they can find it difficult to align and upskill their teams to make the most of new technologies. Different levels of capability within the talent pool—based on experience and skillsets—can complicate any transition.
Operations reinventors make the most of organizational diversity. They enable people with a choice of technology tools so that they can develop mutually beneficial solutions to business challenges. Hyper-personalized employee experiences enable organizations to scale highly specialized talent capabilities, without inefficiencies.
92%
Operations reinventors have an agile talent strategy where machines augment human work in nearly all processes.
Access a new performance frontier
The challenges enterprises are most affected by today are ones they are not yet equipped to solve. But organizations seeking to transform quickly and reinvent themselves can employ strategic managed services to gain access to capabilities necessary for a digital core, process expertise and the deep pool of specialized talent to deliver outcomes at scale. In doing so, they can free up capital and increase cash flow by changing how work gets done and promoting investment in new business opportunities.
While there are many benefits to reaching operations maturity, the reality remains that, for organizations currently at the lower levels, the gap is widening. As change accelerates, finding new value can’t wait. Accelerating operations maturity can help organizations to access a new performance frontier.