Tom McDonough | Senior Consultant | Retail Reply, London, UK
Version 1.1 | August 2023
Through our experience working in the technology sector across multiple industries, we can assuredly say a common opportunity exists in organisations from large to small. Failure to address it can cause the undiagnosed issues to fester away in teams, domains, companies, building up frustration over time. This is responsible for countless inefficiencies; wasted effort and even demotivation to the point of causing individuals to leave a team or business altogether. We’re referring to pain points within the Operating Model.
Operating Model pain points will never disappear by themselves; in fact, they will grow if left unchecked and have wide reaching impacts on performance, culture, and the ability to deliver value to the customer. Addressing them requires the simple yet fundamental acknowledgement that it is us that creates this blueprint which underpins what we do and how we do it, and only we can initiate the change to optimise it.
Let’s cover the most common pain points we see regularly and how you can benefit from addressing them:
One of the primary pain points in IT operating models is the misalignment with the broader business objectives. When IT strategies and initiatives do not align with the company's goals and objectives, it can result in wasted effort, inefficient use of time, and failure to capitalise on opportunities.
To overcome this challenge, reflect on what governance exists across the organisation to address this issue. The opportunity is available to implement a mid-layer between strategy and delivery, which should foster closer collaboration between IT and business stakeholders, involve teams in strategic decision-making, and establish clear communication channels to ensure that IT deliverables are closely aligned with the overall business strategy. With this structure implemented, a cultural shift can take place in which delivery becomes well refined and a self-improving process. Crucially, all individuals will have the structure supporting them to make good decisions with autonomy, and concretely understand what they are contributing towards strategically.
In a rapidly evolving retail landscape, agility is crucial for staying competitive. Organisations often face pain points related to the slow deployment of IT solutions and this rigidity inhibits the ability to capitalise on available opportunities as new functionality is unable to be released quickly. Without a product focused approach to agility, organisations struggle to retain top talent due to the inhibition that stems from more traditional IT operating models, which can lead to a loss of institutional knowledge, increased recruitment costs and dwindling innovation. In addition, staff turnover can be disruptive to teams and negatively impact productivity.
Adoption of product ways of working can revolutionise delivery and increase agility. Time to market is reduced and it becomes quicker to see the impact of new functionality, leading to faster gains or feedback that can be iterated upon easily if tweaks or a larger directional change is needed. This positive impact affects more than the delivery and benefits to customers, but all levels of the organisation. Teams become more focused, collaborative and generate impactful, innovative ideas for customers. And individuals become problem solvers who are more adaptable to change and can make decisions quickly and confidently.
Inefficient processes: an absence of a mechanism to identify and improve these and a culture of accountable ownership are a major operating model pain point for companies. Many have old processes that have not been updated to reflect changes in the market; advancements in technology or evolved thinking from the individuals responsible for executing them. These processes can be time-consuming, complex, and prone to error. Understanding this as-is landscape is crucial today so we can adapt faster tomorrow.
Addressing inefficient processes requires companies to firstly have a team responsible for the optimisation across the business e.g. conducting process audits and identify areas for improvement. They should prioritise simplification and automation wherever possible, identify investment opportunities in new technology that can streamline processes, and train employees on new processes and systems.
After this initial analysis, it’s critical the responsibility is shifted to the individuals and teams. Ascribing responsibilities to individuals at all levels as owners of the processes who are responsible for a set of processes relative to their role and/or area to ensure the general health; optimisation and evolution of the process as the operating context changes is crucial to ensure process inefficiencies do not creep back in and establishing a strong cultural of accountable ownership.
Additionally, optimising processes in silos is not enough to ensure better performance and outcomes. To tie this together, it’s vital to step back to review and ensure all processes are fit for purpose by understanding how they contribute to higher level Customer Journeys and Value Streams and interact with each other at this level. Processes can be as optimised as possible, but if they do not work together in sequence and support of these higher-level outcomes then the organisations potential will never be fully realised.
Addressing IT operating model pain points is essential for all businesses to thrive in the digital era. By aligning IT strategies with business objectives; enhancing IT agility and scalability, and continuously optimising processes, organisations can unlock additional potential and capabilities. Embracing this level of change and adopting a proactive approach to the operating model will enable you to improve efficiency, drive innovation, and deliver exceptional customer experiences in an increasingly competitive market.
To accelerate the identification of opportunities and to influence building a business case for operating model change, Retail Reply have designed an Operating Model assessment, focused on revealing the opportunities for optimisation via the analysis of 75 touchpoints of your end-to-end Operating Model. We would be happy to talk through the details with you.
Contact us to arrange an initial call: