Digital strategy options to drive productivity & service improvement
The digital sphere enables us do more, and do it faster. However, we need a map of the landscape and a digital strategy in order to do it productively.
Although companies have been using digital technologies for decades, it’s really only recently that there has been an explosion in the number of flexible, rapidly implementable options available to us. By the same token, we have an amplified ability to deliver great service, lift productivity, reach new markets, and grab attention.
Today we have three types of digital strategy that are not mutually exclusive: the Inside-Out, Outside-In, and Flow-Optimisation approaches.
3 types of digital strategy
The Inside-Out approach is the easiest to recognise, as it is essentially a replacement of one or more core systems, for instance an enterprise resource planning (ERP) system, accounting system, or booking system. These new systems can bring order to chaotic processes, integrate systems that are dispersed, automate steps that are manual, and provide transparency so that work can be managed. Implementing the Inside-Out strategy can be justified for many reasons, including sustainability (the system is incredibly hard and expensive to maintain), customer service (the ability to meet customer needs quickly, competitively and without error), or productivity (usually the ability to reduce costs).
However, many companies decide that they cannot risk replacing a core system, so instead they turn to an Outside-In approach. This takes us into the land of the digital front door, the app, and the transformed customer interaction. In this strategic option, companies put wrappers on core technologies, which allows customers to interact digitally with their organisations. This has natural advantages–such as being able to place orders out of hours, or enquire about delivery progress quickly and easily–in addition to productivity benefits–such as the elimination of forms. Forms are often clumsy for customers, and their data often has to be manually entered into core systems (at a cost). Furthermore forms can introduce very unwelcome errors. Much of this can be avoided by online forms with simple checks.
The final approach, Flow-Optimisation, is a variation of the Outside-In strategy, except that, instead of starting with the customer interface, organisations start by trying to optimise functions in their core system environment that are inherently inefficient. One of the greatest examples of this is the elimination of rekeying between systems through the use of software robots. This technology mimics a person on a computer; reading from one system and entering into another. It saves an enormous amount of money in labour, and is incredibly valuable when it comes to avoiding expensive keying errors. Another example of such a technology is that of ‘tactical workflow’, which is a simple to build workflow service that helps you see the work that is in the system, so that you can manage it. This addresses a surprisingly common problem that management often do not have the data or tools to efficiently manage their own operations.
The Inside-Out strategy has been available for a long time, but only recently has there been a proliferation of tools and services to help you deliver both Outside-In and Flow-Optimisation strategies. These can still be complex deployments, but generally much less difficult than building a whole new core system. Furthermore, they can interface with your existing systems, making your core environment seem more up-to-date than it really is. The only downside is that eventually both Outside-In and Flow-Optimisation run out of steam; they can introduce complexity that only a core system rebuild can address. However, in the meantime you may have bought yourself a great deal of time.
See the original article published on CEO Magazine here.
Roger Perry is the Managing Director of the Bevington Group, and one of the region’s foremost productivity improvement and organisational design experts. He has been an Assignment Director and Steering Committee member on over 40 transformation programs.