Why You Need to Embrace Digital Operations

It’s difficult to imagine getting through your day without using technology, whether it’s checking your email, downloading new music or tracking your fitness level.

Just as you as an individual rely on technology every day to run your life, so are businesses going digital to run their operations and disrupt entire industries.  An Accenture report notes digital is upending the way businesses have run in the past — consumer products companies are becoming Internet companies, energy companies are becoming information companies and media companies are becoming logistics companies.

That’s why it’s not a matter of if – but when – companies will embrace digital operations. As the report notes: “If every business is a digital business, then the operations that enable and support the business – whether they’re delivered internally or through an external provider – must be digital as well.”

Still, it’s not going to be an easy transformation.

“There is a common misconception that technology alone can produce magical results. But the reality is the results depend on how people use it,” writes McKinsey’s Markus Hammer, Malte Hippe, Christoph Schmitz, Richard Sellschop and  Ken Somers in an article titled: “The Dirty Little Secret About Digitally Transforming Operations.”

McKinsey research finds that only 26% of major organizational transformations succeed.  Those who are successful use advanced planning, rely on local solutions to capture value quickly while building long-term solutions and rely on a variety of skills such as production processes and change management, research shows.

At the same time, more than 90% of large organizations with revenues over $1 billion now use outside providers for the operations of one or more of their business processes, finds HfS Research. This provides as additional challenge as “the external sourcing of operations has in many cases continued on an analog path,” and isn’t keeping up with digital in other business areas, Accenture research shows.

For many companies, the dilemma may be whether they are moving quickly enough toward digital operations. In the Accenture study, 49% of those surveyed say they are currently making only simple transfers of processes and people to a service provider with “limited” business transformation. But in about two years, 49% say they expect to be engaged with operations focused on transformation of the business and its processes.

The payoff for companies that embrace digital operations is lower costs, better compliance, more engaged workers, key business insights and better predictions of where the business needs to go, the report says.

With that in mind, Accenture advises these are the keys to success for creating a successful digital operations environment:

1. Understanding that a digital platform will (read more here)