Operational Excellence is not the same as cost reduction. It can be the result of Operational Excellence because you might be making less mistakes and have a better control over processes. Cost reduction can lead to a one-sided focus on cost which can be risky. I would define Operational Excellence as the execution of a business strategy more consistently and reliably than the competition. Operational excellence is a very broad topic, I would like to zoom in on some of the aspects from the perspective of IT. The reason for this focus is simple: your processes are becoming more and more digital and I know a thing or two about IT.
A fit for Operational Excellence
Some processes in an organization are natural candidates. Take for instance a bank. The bank wants to be the best in banking. But how do you translate this goal into specific KPIs for parts of the bank? Where can you apply Operational Excellence? The area of payments is well suited for Operational Excellence. You’re talking about high volume and high-speed transactions that are natively digital. However, this is often an already optimized environment. Looking at other parts of the bank, for instance the segments of high net worth clients, Operational Excellence is still possible however it’s less hard-core IT and more offering better and differentiating services to the client. The focus on the cheapest solution is not the way to go for this group of clients that values service and attention. You need to do something else in this case.
The value of IT
In 2003, Nicholas Carr stirred up controversy with this article IT doesn’t matter in the Harvard Business Review. IT has become a commodity and not a differentiator, he stated. Without going into details about this already 15-year-old article (and we can have a lot of discussion about this), I agree with him to some extent. Some IT is indeed a commodity, other IT is clearly not. There is baseline IT functionality that will hardly differentiate you from the competitors; an office suite of tools is not suddenly going to put you in a competitive advantage compared to your peers. This is something you need and is something you cannot do without. That doesn’t mean that what you do with these tools is inconsequential.
When I was thinking about this example, I remember the conversation that I once had with a famous chef. I asked him: if we both have the same ingredients, the same pans and stove, standing side to side and I copy your every move, would I be able to create a dish comparable to his? He looks at me, shook his head and said “No”. I think that’s true; it’s a level of skill or even art involved, especially when you create a new dish as a chef. In IT that is what I call digital imagination. It really is a layer on top that can make the difference.
Use it, do not own it
I spent a lot of time talking to clients. And what I see is that clients are looking for the best way to manage their IT landscape in order to meet their business goals. The cloud as an environment to run on is really a no-brainer. But more and more I hear the story that they wanted to simply use software rather than owning and managing it. And that is exactly what we’ve built with our Infrastructure as a Service proposition Connext. It is cloud based, scalable, uses best practices and allows you to onboard quickly. It comprises of the WSO2 stack of products like WSO2 Enterprise Integrator, WSO2 API Manager and WSO2 Identity Server. It is the equivalent of the chef’s kitchen in the previous paragraph, an environment for professionals.
This will allow you to use the software without having to worry about 24/7 maintenance, updating, scalability and high availability. Furthermore, since this is done by us it also reduces time to market allowing you to achieve your goals faster and with lower costs. So, our Connext solution; Integration-as-a-Service or Managed WSO2 Cloud, whatever you like to call it, is a great example of implementing your Operational Excellence in a part of your IT landscape. But, Operational Excellence is much broader than this, touching all kinds of aspects of your organization. However, Connext does allow you to react to an ever-shorting time to market, a demand for agility and will help to reduce cost while enabling you to develop IT that does matter! I think that is something that a lot of organizations are looking for.
Do you want to read how you can reduce costs and speed up your time to market? Have a look at Connext and see for example how this WSO2 Cloud solution helped Hanseactic Bank creating an efficient, scalable and secure Open Banking platform. Any questions or comments? Leave a message below this blog and I will answer it personally.
