Operational Excellence

Operational Excellence in a Digital World #1: 'Why pick only two... If we can have it all?'​

Apr 07, 2020 | 359 views

Traditionally in the Service Industry, Operational Excellence (OpEx) focused on the Operations function: Back and Mid Offices fulfilling the client's request. Main focus was on decreasing handling and throughput time, with techniques like Lean Thinking, Six Sigmaand Scientific Management. The goal was mainly to let humans work more efficiently.

However, in the last years, the Service Industry, such as Banking and Insurance, has been undergoing a Digital Tranformation (DX), with 'old jobs' being lost at a big rate. In a true DX, Customer Experience is improved using digital techniques, while automating the work. As a result, the 'good old' Back Offices are rapidly shrinking and so is the field of OpEx.

So what is the impact of this DX on the OpEx field of expertise? Should we 'say goodbye' to the field of OpEx? Forget about Lean, Six Sigma and Scientific Management?

In short: The answer is Yes. And No. Let us explain a bit, starting with a personal case from the Telecom Industry (in cost efficiency evolution 5 years ahead of the Insurance Industry):

"Recently, from my lazy couch with my iPad in hand, I switched my mobile phone subscription from one provider to another. Almost everything was automated, resulting in a lead time and processing time of almost zero.

On top of that, as I can fill in everything for myself, how I experience the process as a customer is also becoming increasingly important. With everything automated I am the only human experiencing the process, and it's faults…"

This small example shows traditional OpEx focus points, like handling and throughput time are completely off the table. No human hands need to work more effective, as there are none working. But there is still a process, which the customer now experiences more directly than ever before. After all, the customer is the only one executing it. So quality now matters even more. And an automated process still has costs, but harder to influence than before, as processes are now fixed in lines of code.

The traditional choice in the Service Industry has become a 'fool's choice'. To put it even stronger, the old siloed way of separating Customer, Operations and IT is obsolete. An echo of a 'paper past'. We need to look at them in a different way, as they jointly create the new digital customer experience.

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DX of services leads to rethinking the traditional playing fields of OpEx: Quality, Cost and Delivery. Our strong belief is that DX can empower these fields in such a manner, that Good, Cheap and Fast is the future status quo for the Service Industry. Curious? The coming three blogs we will dive deeper into the changes and impact for these fields.

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