The Podcast on Organizational Excellence - Digital Business Best Practices - (Part 2) Digital Transformation Maturity Framework (Operational Excellence and Organizational Culture)

(Part 2) Digital Transformation Maturity Framework (Operational Excellence and Organizational Culture)

05/15/19 • 16 min

The Podcast on Organizational Excellence - Digital Business Best Practices

What’s the role of operational excellence in an organization’s digital transformation journey? How important is the role of organizational culture in that journey? What are the elements of organizational culture that are linked to an organization’s digital transformation efforts?

In today’s episode, we will continue our discussion on the digital maturity framework. In part 1 we covered the first three elements of the digital maturity framework, which are innovation, market alignment, and customer centricity. In today’s part 2 of the episode, we will cover the remaining two, yet important elements, which have to do with operational excellence and organizational culture. So, let’s dive into both of those.

Operational Excellence

The fourth but critical facet about achieving digital maturity is that of achieving operational excellence.

Before jumping in to discuss how digital can help an organization achieve operational excellence, let’s first define the term and understand its impact on the overall performance of an organization. Operational excellence refers to successful execution of an organization’s strategy through lower operational costs and controlling various types of risks while delivering maximum possible value in terms of revenue and overall performance. So, from this definition, we can see that while the choice of an organization’s strategy ensures that an organization is heading in the right direction, operational excellence ensures that successful execution of that strategy results in maximum performance and value for the organization and its shareholders.

To get a better understanding of operational excellence, it would be better to review specific scenarios on how organizations work to achieve operational excellence as part of their digital transformation strategies.

Operational excellence involves a redesign of an organizations’ business processes. As digital is enabling organizations to scale their business processes to handle more volume of transactions, growth in customers, online reach to varied audiences, and more, organizations work to redesign their business processes to scale and meet the growing needs of organizations
Operational excellence is about process improvement. To increase efficiency and minimize waste, increase effectiveness, and overall value, organizations engage in various continuous improvement initiatives and attempt to instill that culture throughout the organization and its processes. Organizations are also looking holistically at all their business processes and finding opportunities where processes can be designed more effectively by bringing down silos and making the overall delivery process more agile.
Operational excellence is about maximizing the effectiveness of an organization’s delivery pipeline. This involves establishing a project and program management culture, practices and processes, which ensure that an organization’s initiatives and projects are aligned to an organization’s strategy, that the right projects are selected for execution maximizing an organization’s investments, and maximizing the returns on projects that are selected for execution.
Operational excellence is about optimizing an organization’s resources. Here organizations ensure that their resource allocation across the organization are optimized and result in the most bang for the dollars that they invest in resources.
Operational excellence is about managing digital transformation and change effectively within the organization. As digitalization of organizations involves a major change within organizations, operational excellence practices ensure that these changes are well managed throughout their lifecycle.
Organizations scoring high on Operational excellence measures have a strong and modernized technology platform. Such organizations are investing in digital technologies and modernizing their systems to help them become customer centric, reduce costs, increase revenue, and improve on other aspects impacting their overall performance.
Operational excellence practices rely on a strong data and analytics Organizations that score high on operational excellence are increasingly investing in data analytics and Artificial Intelligence technologies to accelerate process enhancements and delivering more efficient operational results. The insights and intelligence derived from these analytics and artificial intelligence programs act as the driver to improve an organization’s overall performance.

These are some of the facets that organizations can work on to achieve operational excellence. In future episodes at DigiBizCentral we will cover more on the specific steps that orga...

Operational Excellence

The fourth but critical facet about achieving digital maturity is that of achieving operational excellence.

Operational excellence involves a redesign of an organizations’ business processes. As digital is enabling organizations to scale their business processes to handle more volume of transactions, growth in customers, online reach to varied audiences, and more, organizations work to redesign their business processes to scale and meet the growing needs of organizations
Operational excellence is about process improvement. To increase efficiency and minimize waste, increase effectiveness, and overall value, organizations engage in various continuous improvement initiatives and attempt to instill that culture throughout the organization and its processes. Organizations are also looking holistically at all their business processes and finding opportunities where processes can be designed more effectively by bringing down silos and making the overall delivery process more agile.
Operational excellence is about maximizing the effectiveness of an organization’s delivery pipeline. This involves establishing a project and program management culture, practices and processes, which ensure that an organization’s initiatives and projects are aligned to an organization’s strategy, that the right projects are selected for execution maximizing an organization’s investments, and maximizing the returns on projects that are selected for execution.
Operational excellence is about optimizing an organization’s resources. Here organizations ensure that their resource allocation across the organization are optimized and result in the most bang for the dollars that they invest in resources.
Operational excellence is about managing digital transformation and change effectively within the organization. As digitalization of organizations involves a major change within organizations, operational excellence practices ensure that these changes are well managed throughout their lifecycle.
Organizations scoring high on Operational excellence measures have a strong and modernized technology platform. Such organizations are investing in digital technologies and modernizing their systems to help them become customer centric, reduce costs, increase revenue, and improve on other aspects impacting their overall performance.
Operational excellence practices rely on a strong data and analytics Organizations that score high on operational excellence are increasingly investing in data analytics and Artificial Intelligence technologies to accelerate process enhancements and delivering more efficient operational results. The insights and intelligence derived from these analytics and artificial intelligence programs act as the driver to improve an organization’s overall performance.

These are some of the facets that organizations can work on to achieve operational excellence. In future episodes at DigiBizCentral we will cover more on the specific steps that orga...

Previous Episode

(Part 1) Digital Transformation Maturity Framework (Innovation, Market Alignment, Customer Centricity)

Podcast transcription

Introduction

For all of you who are embarked on a digital transformation journey, how do you know you are on the right track? Are your digital investments upping your enterprise’s overall digital maturity? How can we assess an organization’s digital maturity?

Hello everyone to another episode of DigiBizCentral podcast on organizational excellence. I am your host Wasim R. In today’s episode, we will attempt to answer these questions. But first, a note about this specific podcast.

The DigiBizCentral podcast on organizational excellence is focused on covering various aspects of today’s digital business particularly on business strategies as well as management methods and practices that drive organizational excellence. We encourage you to subscribe to this podcast to ensure that you are always getting notified on future episodes as they are published. Also, please take a moment to rate us on iTunes or whatever channel you get this delivered on. We highly appreciate your feedback.

In today’s episode, I will introduce a digital maturity framework, which organizations can use to assess their digital transformation maturity more holistically. The underlying idea behind this framework is that as an organization continues its digital transformation journey, it must pay attention to certain elements to ensure that they are addressed in their digital projects and initiatives. Defining a digital transformation roadmap with specific milestones and outcomes along the way can ease the transition and increase the chances of success. Before we get started, please note that I will cover this topic in two parts or episodes. As this is part 1, look for part 2 to be published immediately after this one.

So, let’s get started with Part 1 of this topic.

The world in general and organizations specifically have been going through a digital transformation for a number of years now. Digital transformation does not refer to one or two programs that an organization embarks upon at some point in time. Rather, over the years, most organizations have taken on various digital initiatives triggered by their business imperatives and since then have continued their journey, which continues until today and would for some time to come. Depending on when each organization started, they are at different stages of that journey.

But all this then raises the question that how does an organization know where is it in that journey of transformation and where’s it heading? Specifically, how can an organization know that it’s progressing and maturing as it goes through that journey? For example, does an organization that migrates its business applications to the cloud can be regarded as digitally mature? What about the one that actively uses social media to interact with its customers or the one that has established a blockchain system to manage its transactions?

The answer to that question is that unless those steps have helped your organization become more customer centric or improve on your operational excellence then the answer is no. The market doesn’t reward organizations for moving to the cloud, for example, unless those steps have helped your organization to come closer to your customers and made your organization more agile and nimble to respond to market needs.

The move to digital, therefore, must be more holistic in nature. In this fast paced economy, it’s important to ensure that rather than merely taking on a few digital products and services, an organization becomes digitally mature so it’s firing on all engines for it to be more effective. Band-aid digital solutions in this economy simply don’t work. We saw how GE, despite its numerous digital innovations, suffered serious setbacks due to not paying attention to its bloated internal operations and dropped out of the Dow Jones Industrial Average index after being on it for more than a 100 years. We saw a similar fate of ToysRus, who despite launching major digital initiatives a few yeast ago was recently driven out of business. And there are other numerous examples of organizations, which were driven out of business due to their pursuing one off digital solutions rather than paying attention to all the necessary dimensions to keep them competitive.

As for the digital transformation maturity framework, it has five dimensions and they are:

Innovation
Market alignment
Customer centricity
Operational Excellence
Organizational Culture

It’s important to understand that achieving digital maturity related to these five elements that I just mentioned is not just about launching a project or two. For example, an organization can’t just become innovative by launching one innovation center. Rather maturity along these dimensions and getting these ingrained within the fabric of the enterprise require...

Next Episode

Design Thinking – The What, Why, and How?

In this episode we cover the topic of design thinking, which is a problem-solving approach used in the design and development of products and services and in solving other problems as well. In this episode, we will answer the following questions:

What is design thinking?
Why should organizations adopt this practice or approach for designing and developing their products and services?
How’s it being used in organizations and in the industry today?
What types of tools are used for design thinking?

The post Design Thinking – The What, Why, and How? first appeared on CorpExcellence.com.