Businesses across the globe are embarking on their digital transformation journeys to adapt to the constantly changing market dynamics and stay competitive. But a successful digital transformation journey is more than just adopting new tools and technologies. It requires a major shift in the organization’s operational practices.
After all, at the heart of every business are its operations. To unlock the full potential of digital transformation initiatives, you must first implement operational transformation correctly.
Let’s delve into how organizations can digitize and optimize their operations to achieve.
Understanding Operational Transformation in the digital transformation era:
Operational transformation is modernizing, re-imagining, and transforming core operations in an organization to boost technological innovation, improve customer satisfaction, and increase margins. Implementing operational transformation in the right way can help organizations unlock the full potential of their operations and add agility to processes.
According to a report by McKinsey, digital transformation efforts fail almost 70 percent of the time. One of the major reasons behind it is that operational transformation either gets neglected or is never a part of the digitalization strategy.
With so much focus on buying software or building solutions to add more capabilities to ERP, CRM, and data analytics processes, operational-level applications get ignored because IT doesn’t see them as a priority.
Key drivers of Operational transformation:
But the fact is – Successful digital transformation can only be achieved through successful operational transformation.
As a crucial component of every digital transformation strategy, here are the key drivers of operational transformation.
A Messy Middle - Internal Business Operations
The messy middle is everything present in the middle of CRM and ERP systems, including internal processes like product management, HR, and general company operations.
With a lack of uniformity and consistency, the messy middle is full of numerous disparate applications, which take up more time than they can save. There could be small pockets of productivity, but mostly the messy middle has delays, inconsistencies, and inefficiencies.
With a unified operation management platform supported by operational transformation, it's possible to streamline internal operations and, in turn, fix the messy middle.
Evolving Customer Expectations:
Digitization has also transformed customer habits. Today’s customers expect a seamless omnichannel experience across the board.
According to research, 35 percent of business executives believe digital transformation has helped them meet customer expectations, and 40 percent believe it has helped improve operational efficiency.
But you need to do more than streamline your CRM systems and expect to provide a great customer experience. Streamlining internal operations is important to cater to continuously evolving customer expectations.
Digital transformation is not a one-and-done process. It's a continuous process that requires companies to constantly iterate their digital efforts to stay competitive and evolve with the changing market dynamics. Doing so requires the right processes, people, and tools to plan the next step of digital transformation and operational transformation.
While organizations may already have CRM at the front end and ERP at the back end, there is no unified solution to solve the messy middle problem. Instead, different departments implement their solutions or upgrade the existing systems. Each department may end up using a different platform to manage its processes, and these disparate systems can create data silos.
Operational transformation can effectively solve this problem by replacing all disparate systems with a unified and centralized operations management platform.
Unsupported Legacy Systems:
Many organizations still use legacy systems at the backend. While some plan to replace these legacy systems through a phased approach, others are digitizing their front end, while others are keeping their backends the same.
As a result, there is a need for a digital transformation strategy that can support legacy systems and integrate closely with them. At the same time, the strategy should consider plans to modernize and upgrade legacy systems.
The imperative of digitizing internal business operations:
Digitizing operations is more than just a nice to have. It's now a crucial step for companies that want to invest in digital transformation and reap its benefits actively.
Digitization can increase revenue growth and enhance productivity when executed correctly and at the right scale.
Here are some of the many benefits of digitizing internal business operations:
One of the biggest benefits of digitizing internal operations is that employees can get more done in less time, which, in turn, improves employee productivity.
By digitizing internal business operations, employees gain easy access to information, enabling them to swiftly locate relevant documents or information. Additionally, automation can be implemented to minimize the time needed for managing operations by automating repetitive tasks within workflows.
Digitizing operations leads to streamlined and automated processes that can eliminate friction, optimize workflows, and remove bottlenecks. As mundane and repetitive tasks get automated, employees have more bandwidth to work on important business tasks.
When internal operations are digitized, it also helps streamline team collaboration by providing a centralized process management and communication platform. Streamlined processes also facilitate accountability and transparency across the board.
As data collection and analysis gets digitized, you get access to a vast amount of digitized data, which can be used to identify trends and opportunities quickly. This can help you make more informed decisions to improve profitability and drive growth. Dissolving data silos
Digitizing operations can improve transparency across different teams and departments, helping break down data silos and boost collaboration.
Improved customer experience:
Enhancing employee collaboration and productivity makes fulfilling service level agreements (SLAs) easier. This helps organizations deliver higher quality services to customers and improve customer experience.
Strategies for successful digitalization of business operations
Operational transformation can be achieved by automating long-tail operational tasks. Operational processes like approval management, incident management, customer onboarding, and IT help desks are considered long-tail operational tasks. These manual processes can take up valuable resources and time, often leading to inefficiency and causing bottlenecks.
For a successful digital transformation journey, you need to digitize these processes as part of operational transformation.
Now the traditional approach to achieve operational transformation is to build custom solutions for automating business processes. But this approach is time-consuming, adds to the IT backlog, increases IT spending, and also requires constant management. More importantly, the development processes get restricted to the IT team, and it does not involve business users and the people who will be using these processes daily.
However, the only way to successfully implement operational digitalization is by including your organization’s most valuable asset: The people.
The employees responsible for managing operational tasks should be empowered to contribute to organizational change.
As a result, companies are now adopting low-code and no-code development platforms to speed up the operational digitalization process and allow business users (citizen developers) with little to no coding experience to build custom applications for their long-tail operations. This, in turn, frees up the IT department and allows them to focus on more complex projects.
Best practices for digitization of operations
Here are the best practices that should be followed when digitizing operations:
The first step should be to recognize the operations processes and then use mapping to outline the individual tasks within those processes. During process mapping, you should identify every task, its particular order, task owners, and expected timelines. Everyone involved should know when one task ends and another begins.
A workflow streamlines a business process by automating a part or the entirety of the process. You can sketch out the workflow diagrams to create a clear visual representation of the workflow. You should also identify automation opportunities across the workflows. Set up conditional automation for repetitive tasks and ensure they are marked completed on the workflow only when the collaborators have finished their work.
Integrate your new digitized operations with your ERP platform, CRM systems, and other utility applications to facilitate seamless collaboration and data syncing.
Track & Trace:
Set up procedures to constantly monitor, identify, and diagnose process delays across the different steps of the workflow.
When digitizing business operations, choosing an operations management system that can scale as your business grows in size and complexity is important.
Successful examples of operational transformation:
Let's take a look at some companies that have successfully achieved operational transformation:
For JDREL, enforcing a standardized process for its internal operations was challenging. Most of their processes were managed manually through email or paper, leading to errors and slow processing time.
To manage its entire operations, JDREL adopted Kissflow and transformed its manual processes into streamlined workflows. With Kissflow's intuitive interface, the JDREL team was able to quickly migrate their processes and get comfortable with the centralized platform. As a direct result, they decreased the number of errors and increased efficiency significantly.
The Ramco Group was using multiple tools to run its internal operations, creating data silos instead of unifying its operations. There were overlapping functions and a lack of process uniformity. Multiple tools also lead to poor process visibility and delayed approvals.
To achieve operational transformation, the Ramco Group replaced their disparate tools with Kissflow and streamlined processes across all the departments through Kissflow's unified platform. This, in turn, gave the company the visibility it needed in different business operations across different departments, including HR, IT, and finance.
As a direct result, the Ramco group saved 30+ hours per week and reduced process cycle time by 35-45 percent.
Biggest challenges to operational transformation:
Operational transformation can be challenging for many reasons, including:
Complexity: Operational transformation involves close integration of several processes, strategies, and technologies, making it challenging to manage and implement.
Resistance from employees: Change can be uncomfortable and sometimes difficult to accept. When implementing operational transformation, organizations may face resistance from employees who are too used to traditional work and find it difficult to adopt new technologies, tools, and processes.
Legacy systems: Outdated legacy systems and infrastructure can make adopting and integrating modern technologies and platforms challenging.
Lack of strategy: Just adopting new technologies and solutions and expecting them to help achieve operational transformation isn’t going to work. You need a clear operational transformation strategy on how you plan to use new solutions. The strategy should align perfectly with your digital transformation strategy and overall business goals.
Privacy and security: When you are digitizing business operations, ensuring data protection, as well as compliance, becomes an important part of the operational transformation process, but at the same time, it is difficult to manage.
Implementing operational transformation using low-code technology:
With the help of low-code technology, even business users without technical expertise can contribute to operational transformation. With visual development features, low-code platforms let you develop applications and digitize operations without needing expert developers by your side.
Here are some of the many benefits of using low-code technology for achieving operational transformation:
Tackling employee resistance: Low-code platforms allow you to involve business users in the operational transformation process actively. This helps decrease employee resistance by making the process less scary and foreign.
Personalizing workflows: Low-code platforms enable you to personalize workflows according to your internal operations. Employees can easily adjust workflows according to the changing requirements and processes within the organization.
Decreasing data silos and shadow IT: By providing employees with a centralized platform for digitizing operations across the different departments, you can avoid data silos, usually caused by using multiple tools with overlapping functions. This also helps reduce the chances of data breaches that are caused by shadow IT (unauthorized software used by employees to manage work).
Increasing agility: Low-code platforms allow organizations to scale down whatever doesn’t end up working or scale up workflows as the business grows. This helps ensure that technology always stays aligned with your overall business objectives.
Use of low-code to improve operational transformation in enterprises:
Low-code app development allows users to build simple or complex applications through a visual interface, drag-and-drop editor, and pre-built templates. Business users can build applications for long-tail operations with little to no help from the IT team.
When people who will be using these applications day in and day out are the ones planning and developing custom applications, it becomes easier for them to identify the right use cases. They can recognize processes that should be automated and then design workflows to manage those processes' complexity, scalability, and purpose.
Low-code app development empowers enterprises to digitize their business operations by enabling rapid application development, automation, and seamless integration. Employees take ownership of the processes they are involved in, which makes operational transformation more collaborative.
Key takeaways :
- Successful digital transformation can only be achieved through successful operational transformation.
- Operational transformation can improve productivity, streamline processes, boost collaboration, dissolve data silos, and improve customer experience.
- Low-code platforms can speed up the operational digitalization process and allow business users with little to no coding experience to build custom applications.
- Low-code app development can enable rapid application development and encourages employees to take ownership of their processes.
Kissflow is a low-code platform that accelerates digital transformation that can help you achieve operational transformation with minimal coding. It can automate workflows and streamline your company operations.