In previous posts we have explored the structural and dynamic optimisation benefits of an integrated operations program, yet there are many others that doesn’t fall neatly into those categories. Whereas most of the structural and optimisation benefits are realised once the IO program has been deployed and is operating, there are other benefits that show up at various other points during the design and implementation of the program. They are part structural, part optimisation and in some cases part cultural, and together can make up a significant portion of the value you would like to create.
Right at the beginning, when the idea of an IO implementation is still in its infancy, the business needs to consider how an Integrated Operations approach will alter the modus operandi of the business, and what impact this will have on its overall strategy. Some organisations view their Integrated Operations program as a source of significant competitive advantage, and ensure that IO capability development is present as a core theme that is weaved throughout the overall strategy of the business.
Others may consider that an IO program will be deployed in a more low-key manner, and that it’s main function is to support and facilitate better collaboration between functional business units. Either way, by asking these questions it allows you to consider your overall operating strategy from a new perspective, and often highlights opportunities of strategic importance.
During the project design and early implementation phases of your program, people will have to consider very consciously how they intend to work in the newly created reality. By looking at the day to day working processes from an IO perspective, two things become clear very quickly:
Firstly, some processes have gone unexamined for so long that they have become part of “the way we do things around here” without people questioning their overall efficiency. The outcome might still be desirable, but the world has moved on, and even without an IO deployment the process can be streamlined to achieve the same outcome in a more efficient manner. This is process optimisation.
Secondly, some processes simply won’t work in the new reality, and would require significant redesign in order to work in a highly integrated and often remote working environment. Some of the new collaboration technologies deployed might also require significant alteration of existing business process, and new, innovative ways of achieving the desired business outcome might be needed. This is business process innovation.
Process optimisation and innovation can be significant sources of value for your IO program. When implemented with a strong vision of building the workplace of the future, all your core value adding processes can be refreshed, stripped of unnecessary bureaucratic waste, and you can capitalise on the many of the advantages inherent in a highly collaborative work environment. This is also the step at which you want to lock in value, and ensure you do not go backwards from where you are now.
In many cases the collaboration benefits associated with IO deployments are largely wrapped up in the dynamic optimisation benefits you expect to realise, however not all the benefits are necessarily accounted for.
For example, increased interface efficiency certainly empowers your staff to manage deviations to the plan in real time, yet it can also be extended to interfaces and relationships not directly related to on-the-day execution activities. Streamlined functional support from HR, IT and Finance departments leads to a more robust, proactive organisation, where a culture of waste elimination is fostered throughout. With increased interface optimisation comes more familiarity about what other people are doing on the other side of the interface, which naturally make opportunities like cross training and alternate career paths easier to exploit.
Developing a cross functional decision making culture leads to better quality, more sustainable solutions to problems that requires broad insight. However, this thinking does not come naturally to most people. IO programs are particularly well suited for helping people break through the silo mentality that prevents the realisation of true cross functional outcomes. By supporting people with the right tools and frameworks, a disciplined approach to cross-functional decision making is relatively easy to maintain.
Finally, IO programs by their very nature put the spotlight on data quality, especially where end-to-end performance of the value chain is monitored in real time. The establishment of a single source of truth data set, accompanied with standard definitions of performance metrics allow for a data driven culture to emerge quite naturally. Overlay this with a mature approach to benchmarking that highlights the correlation between leading and lagging indicators, where top performance is emulated as opposed to poor performance being punished, and you have all the ingredients for a performance culture that is self-motivating and thrives on transparency. Most people naturally want to be better, and the wide publication of a variety of leader boards that are backed by proactive and positive management is a powerful tool in driving productivity.
Strategy optimization, process optimization and collaboration benefits can make up a significant part of the value your IO program can deliver. Add to that the all the structural and dynamic optimisation benefits, and it is highly unlikely that the value you can create through an approach like this does not vastly outweigh the associated costs associated with deployment. By working through all the IO value drivers and applying it to your business, a very exciting story about what you can achieve will emerge. If you want to have an initial discussion on how your business can realise some of this value, please feel free to contact us.