In the last few years, market executives have had their hands full staying competitive and surviving the market downturn. This is done by making cuts, often silo by silo, and occasionally in ways that negatively affected clients.
It is time for firms to rework their operating models in a new way, with an approach that ensures continuous improvement, increases capacity, and enhance customer service while reducing costs. The best way to do this is through an End-to-end (E2E) Operating Model Redesign or Transformation.
Like any Business Transformation program, End-to-end Operating Model Redesign has its unique challenges – from establishing its initial plan to a bigger challenge, the implementation. Understanding the End-to-end Operating Model Transformation will provide companies a good perspective on how they can go from theoretical to the real.
What is E2E Operating Model Redesign or Transformation
End-to-end Operating Model Transformation is an approach that increases capacity and customer service while reducing cost. It is a simultaneous reworking of all, or many, of a company’s functions based on an understanding of what a client values.
End-to-end Operating Model Design is a new idea. Its results are superior in terms of capacity increase, customer satisfaction, and cost saving. The Model is different from operating model redesigns using the siloed approach.
The E2E Operating Model Transformation
The E2E Operating Model Transformation is anchored on two pillars with each pillar consisting of key levers. Notably, there are Four Core Changes that are undertaken to the entire Value Chain; Four Core Changes that will directly make an impact on creating value to customers.
Design New E2E Operating Model. The development of the new E2E Operating Model will ensure that changes in individual functions meet the needs of various client segments. It positions companies to grow processes that need to be improved or installation of new technologies that need to be made. In the end, it eliminates services that do not fit the priorities of clients or handled in the most cost-effective way.
Develop Functional Centers of Excellence (CoE). Putting in place a Functional Center of Excellence will ensure the best approach to an operation that benefits all business units and across geographies. It handles standard processes at a scale with a degree of specialization that functional department could never do. In the end, improvements come more quickly, are more consistent, and get distributed through the organization.
Focus on Process Efficiency and IT. Driving improvements on process efficiency and IT will yield savings of 10 to 30% by showing that activities can be completed with smaller but efficient staff. It can free-up managers to spend more time on revenue-producing activities. In the end, the lean framework can speed turnaround time and reduce errors.
Align Location and Outsourcing Strategies to Functional Model. Aligning location and outsourcing strategies to Functional Model will reduce processing times and avoid overtime wages.
Taking the Transformation from Design to Implementation
Change is never easy. It is always arduous. Employees may suffer from change fatigue after years of dislocation and downsizing. The prospect of a new initiative can be overwhelming.
An end-to-end design may begin at a time when there is departmental restructuring. With so much change going on, a balance must be achieved and can be achieved through a robust implementation program.
David Tang is an entrepreneur and management consultant. His current focus is Flevy, the marketplace for premium business documents and FlevyPro, a subscription service for consulting frameworks and tools. Prior to Flevy, David worked as a management consultant for 8 years. His consulting experience spans corporate strategy, marketing, operations, change management, and IT; both domestic and international (EMEA + APAC). Industries served include Media & Entertainment, Telecommunications, Consumer Products/Retail, High-Tech, Life Sciences, and Business Services. You can connect with David here on LinkedIn.