What is operational excellence & why is important to the future of your business

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How much of your time do you spend wrestling with process and planning issues instead of doing the work you were hired to do? If you answered “far too much,” then operational excellence matters to you.

What is Operational Excellence

Operational excellence is a management philosophy based around executing business strategy on a consistent and reliable basis, leading to more revenue and decreases in risk and cost. The goal of a well-executed operational excellence strategy is to exceed customer expectations through improving business processes and culture. The Institute of Operational Excellence defines it this way: “Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”

Business leaders from around the globe gathered in Amsterdam December 7–8 to discuss the future of their field at the “Unleashing Innovation in Operational Excellence” conference. Why would principals from industry-leading companies (ENGIE, Google, Pandora, Roche, Volvo, and Wolters Kluwer, to name a few) gather to discuss operational excellence? Because the face of business operations is changing as we speak, and strategy must evolve with it. By our definition above, that evolution requires operational excellence to be successful.

Another factor brought leaders together in Amsterdam: Operational excellence methods that were common before the digital revolution often don’t support the needs of companies to evolve and innovate to satisfy their customers. And with the emergence of disruptive technologies like robotics, shifting workplace demographics, and changing customer needs, the challenges that face service organizations are unprecedented.

One area of operational excellence that’s changing the face of business is digital transformation. Take banking: Ubiquitous online banking and crypto-currencies—two examples of digital transformation—are upending how consumers and banks interact. But they’re also presenting opportunities for improvement that are unprecedented: Bart Van de Sande, Head of Transaction Banking Operations at ABN AMRO Bank N.V., talked about how his organization reduced costs by 30 to 50 percent through digital transformation.

Construction is another field deeply affected by digital transformation. Anders Torell, Head of Business Transformation and Digitalization at Scandinavian construction company NCC, discussed how his company’s “Loop Rocks” application has the potential to eliminate the majority of construction debris (30 percent of all landfill). How? By matching supply and demand for secondary materials at construction sites, replacing waste with reuse.

In addition to chairing the second day of the event, I was honored to present an overview of the Anaplan platform. Specifically, I showed how our cloud-based, enterprise-wide connected planning platform creates opportunities for innovation in operational excellence for global organizations. Since improving processes and planning based on customer benefits is the end goal of operational excellence, building a connected approach to planning fit well into the conference’s mandate. Put another way, when plans and processes are connected and accurate, you can focus on benefits for your customers instead of getting bogged down in operational issues.

If this aligns with your goals, I invite you to read five success stories detailing how companies reaped a variety of benefits from improving processes and planning with the Anaplan platform. Download our “Achieving connected planning that drives business agility” white paper.

CIO

Achieving connected planning that drives business agility

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