Transforming Enterprise Performance in the New Economy
Today, most global enterprises find themselves in the midst of a new digital revolution sweeping across business sectors that challenges every business rule in the book. Much like the industrial revolution which ushered in the era of economies of scale, this new wave has captured the collective imagination of the world.
“EPM enables execution monitoring, processes automation and enhancement as well as analysis of business methodologies to improve financial and operational performance”
Digital disruption is changing not only the way businesses are run, but is dramatically altering the way customers are buying their products and services. Several sectors including telecom, hospitality, healthcare, retail and manufacturing have seen their business and operating models undergo extraordinary changes. In fact, leading analysts predict that the three-decade wave of profit growth and market expansion for the world’s biggest corporations may no longer hold.
New frontiers emerge
According to Harvard Business Review, the global corporate profit pool—currently standing at almost 9.8 percent of world GDP, will fall to less than 7.9 percent by 2025 and no longer outpace the global economy. Their new rivals are the emerging economies where high-tech companies are revolutionizing business operations and spawning new commercial models.
The heavy-industries now face competition from powerful digital platforms and born-in-the-cloud enterprises. As these new-age, idea-spouting, software and app spewing enterprises gain ground, external levers such as global labor arbitrage and falling interest rates that drove profits for the last three decades are losing steam.
With exploitation of technology lowering the competitive barriers to entry and highly efficient, flexible organizations offering intense competition to traditional market players, enterprises are looking at innovative solutions for Enterprise Performance Management (EPM) to help them stay ahead of the game. However, so far, this has required IT transformation incurring costly system integration as well as reengineering of processes—all of which leads to heavy Capex and long lead times affecting ROI. As a result, global enterprises have been scouting for transformative processes involving digitizing, automation, and operational agility that enables them to serve their customers better and improve operating metrics. What enterprises should be looking for is a fresh approach to transformation that is quicker to respond to market changes, has shorter deployment times and lower Capex to ensure quicker and better ROI and deliver strategy through automated processing of business flows. But, before we get to that, let us examine how EPM has evolved to keep up with the digital economy.
Evolving strategies for the future
Today, Enterprise Performance Management is no longer restricted to mere financial planning and product planning. In fact, EPM has evolved as an excellent means to translate organizational objectives into action by linking operational and strategic performance metrics to deliver a business outcome oriented delivery structure encompassing different levers of the corporate structure. EPM enables execution monitoring, processes automation and enhancement as well as analysis of business methodologies to improve financial and operational performance and eventually customer experience and brand value of the company. It is a perfect mix of methodology and technology solutions to help businesses consolidate critical functions that impact their outcomes by aligning them to business strategy.
Going forward, companies will see an increased spending on enterprise application software which will be driven primarily by digitization, IT transformations and modernization to deliver the three ‘A’s of performance management—Agility, Accuracy, and Actualization which will be at the core of EPM.
Agility in businesses involves process reengineering by redesigning core business processes to improve productivity, cycle times and quality. Accuracy, on the other hand, comes from implementation of automation and platform-based solutions where software, applications, algorithms as well as human resources come together—whether temporarily to address an immediate situation, or as a permanent solution—to create business value. Finally, actualization of business goals takes on a whole new dimension in the world of digital explosion where empowered consumers call all the shots for they know what they want and where to get it! In response, companies are leveraging big data, analytics, technology and real time decision-making to drive smarter, faster and more incisive business decisions as well as predictable performance across customer acquisition, retention, support and fulfillment to ensure business growth.
With these three ‘As’, EPM takes on a new avatar to meet the demands of the digital economy: that of Enterprise Transformation. Enterprise Transformation is where methodology meets technology combining process reengineering, automation, and analytics to create the next level of customer experience while continuously evolving ways for straight-through-processing of actions. Simply put, business processes are analyzed, reengineered and optimized as necessary. Further, hyper-automation is implemented to enhance efficiency gains by rationalizing and streamlining processes into a 24x7, error-proof workflow. The data generated therein is perfect for analytics and becomes a force-multiplier of successful business strategy and immersive customer experiences.
To elaborate, it begins with simplifying processes to build more agile business processes which would result in waste reduction and improve efficiency and effectiveness. Needless to say, companies will have to identify areas to improve process efficiency and standardize them in order to eliminate non-value add activities. Once this is done, it takes us to the second level of maturity in the process of Enterprise Transformation, which is automation. Here, the process identifies opportunities that can eliminate routine tasks and human effort by simply applying technology. The results are significant as it allows businesses to improve their service efficiency, reduce cycle time and increase accuracy when compared to manual processes. Automating business processes helps generate a lot of data critical to business processes, customers, as well as services. This data is analyzed to harness the wealth of internal and external data available with businesses to deliver actionable business insights that power business decisions. The analyzed data is also used to power the automation solutions to make them more intelligent and smart and to deliver straight-through-processing with least human intervention. The final, and most critical step to actualizing goals lies in creating unforgettable customer experiences. This is achieved through advanced analytics—both predictive and prescriptive—that provides a 360 degree view of customers across channels, allowing customer to drive the way they want their services to be enabled and prompting customer service agents with real-time automated Next Best Actions to achieve not just customer satisfaction but also customer loyalty. With that you ensure that every single lever of your enterprise is geared towards the larger goal of customer satisfaction!
In this new avatar as Enterprise Transformation, EPM has the potential to vastly outperform the current industry benchmarks in operational excellence as well as meet the challenges of digital economy head-on.