Tag: performance breakthrough

What You Need to Do to Get a Business Performance Breakthrough | Sherpas in Blue Shirts

At Everest Group, we’ve been studying the reason behind the disappointing phenomenon of powerful new disruptive technologies achieving only modest, incremental benefits instead of their promised performance breakthroughs. In my recent blogs, we’ve looked at whether the fault could be due to hype or immaturity of the technologies, whether it might be a lack of talent or whether there is an inherent conflict of interest in companies’ incumbent ecosystem. Not one of those things is sufficient to explain why we’re not getting the breakthrough in performance that is ripe for the taking if we can get there. We think all of these factors may contribute to the phenomenon; but these factors don’t seem to be powerful enough to prevent the breakthroughs.

We think a missing ingredient is the organization. When companies implement these new technologies, they must also change the fundamental organization.

At the moment, these technologies tend to be implemented to save costs, whereas the change in performance is far more than cost savings. It has to do with customer experience and cycle time. Although cost is often reduced, that is a byproduct of the greater performance that is generated.

As the buyer of the new technologies, the remedy is to be willing to step back and understand that you have to create a new strategic intent. That intent must focus on performance. It also requires a willingness to address the organizational dynamics. Whenever you digitize a workforce or you embed analytics into it, this affects how you organize work. So often we see people attempting to bring in tools but just adding them to the existing organization. That doesn’t work.

Fundamentally, to get a performance breakthrough, you have to rework your organization. Doing that means significant change across all the pieces. Along with creating a new strategic intent, you have to change your organization, your ecosystem, your technologies and your talent. All of those components have to come together and focus on the promised improvement you’re seeking. Only then will you get the step change performance. If you do them individually or only partially, you’ll only get is more of the same. You’ll get a better status quo, not a changed status quo.

Is Your Incumbent Service Ecosystem the Source for Lacking Performance Breakthroughs? | Sherpas In Blue Shirts

In three of my recent blogs, I’ve discussed the possible reasons as to why companies are only getting modest, incremental benefits from vetted, powerful new technologies such as cloud, analytics, cognitive computing and robotic process automation (RPA). These technologies should be making big differences – performance breakthroughs. As I’ve mentioned, we at Everest Group are studying this phenomenon – an important issue these days as these technologies continue to disrupt business. We’ve looked at whether the maturity of the technologies is the reason for their not delivering performance breakthroughs and whether it might be due to lack of talent. In this blog I’ll discuss the role of incumbent ecosystems as a possible culprit.

Take the situation of RPA in finance and accounting (F&A) processes as an example. It’s reasonable that, with our current state of technology and current adoption, 40 percent of the FTEs in the F&A function can and should be turned into a digital workforce. So the question is, would the current service provider resist the RPA technology because it would lose revenue (or in the case of internal services, the company would lose people and prestige)?

Let’s examine that in the most difficult situation, which is the third-party providers. If they charge on an FTE basis, as much F&A is done, why would they be reluctant to bring in the technology?

We find that today almost all new F&A bids for work have an RPA (robotic automation) component. And if you go to an Accenture or a Genpact delivery center, it’s very clear that they have an aggressive program to implement automation. So, yes, they could resist it in existing contracts (and the same could be said for internal services).

But this alone doesn’t seem to be a sufficient answer to the question of why companies are not getting performance breakthroughs. Why aren’t they getting the step change in delivery that they could be getting?

Is it a conflict of interest? No. That seems a hard argument to make because service providers are actively implementing the RPA technology.

In my next blog, the final one in this series, I’ll reveal the answer to what’s causing the phenomenon of powerful new technologies not delivering on their promise of performance breakthroughs.

Are Performance Breakthroughs Failing Due to Lack of Talent? | Sherpas in Blue Shirts

Where are the performance breakthroughs?

If you’re following my blogs regularly, you know that I’ve been discussing what we at Everest Group think is the issue of our time. Vetted, powerful new technologies such as cloud, analytics, cognitive computing and robotic process automation (RPA) should be making big differences in businesses; but for the most part, they’re achieving only modest, incremental benefits. I’ve also blogged about whether the maturity of the technologies is the reason for their not delivering performance breakthroughs. We need to also consider whether talent is the reason for the lack of a performance breakthrough.

A reasonable question is whether companies have people trained in using these technologies. Is the outcome of only modest benefits because of the IT talent? Do we need to replace our existing workforce or completely retrain our workforce?

In answering that question, I go back to the story I related in a prior blog about the breakthrough transformation American Express achieved in introducing its organization to agile development and DevOps. Yes, they spent some time retraining the IT organization, but they didn’t have to replace them. The people quickly adapted to the new technologies.

H. D. Smith, a pharmaceutical distributor since 1954, transformed its business to the digital world and expanded to providing innovative services and solutions. As I previously blogged about this case, there was some dislocation of existing staff; but for the most part, the existing people mastered the new technologies.

So we can’t explain the lack of performance breakthroughs from powerful, disruptive technologies as a lack of talent or a training issue alone. Yes, it can contribute to it. But there is plenty of talent to drive breakthrough performance, particularly if the promise of the technology is as big as it is. Furthermore, cost should not be a big issue for the kind of benefits that these technologies promise.

In my next blog, I’ll discuss another possible culprit for this phenomenon of only seeing modest, incremental benefits instead of performance breakthroughs from powerful new technologies.

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