A 6-step operational excellence strategy

Digital technology investments to spur innovation continue to be a chief goal for organizations. Yet 53% of respondents in the 2023 Gartner CIO and Technology Executive Survey named improving operational excellence as their top objective over the last two years. Forward-thinking business leaders understand that even in times of uncertainty, a sound operational excellence strategy is critical to maintaining competitive advantage.

Operational excellence has traditionally focused on managing process and production issues to control things such as defects and downtime—from keeping factory assembly lines in operation to ensuring employees follow proper safety protocols. Today, executive decision-makers recognize the value of looking at operational excellence from a higher level, encompassing end-to-end, enterprisewide operations—everything from planning and executing IT initiatives to boosting employee productivity and satisfaction.

It’s not simply about saving money. Achieving operational excellence means transforming the way organizations conduct business so they can deliver on technology investments and provide greater shareholder value, agility, and organizational resilience.

It may be challenging to determine where to get started. Here are six steps toward an effective strategy.

1. Create fusion teams for better agility

The pursuit of operational excellence may require rethinking core assumptions about business models and organizational structures. Sometimes it requires dismantling once-sacred silos so IT and business teams can join forces and create new approaches to risks and opportunities.

“Overdependence on IT staff for digital delivery reflects a traditional mindset, which can impede agility,” says Daniel Sanchez-Reina, an analyst and vice president at Gartner. “CIOs must embrace democratized digital delivery by design to accelerate time to value. Equipping and empowering those outside of IT—especially business technologists—to build digitalized capabilities, assets, and channels can help achieve business goals faster.”

2. Unite your teams through a common language

The reality is that business and IT don’t always speak the same language. Yet it’s powerful when an organization can bring the two together so that everyone has a shared understanding of how processes and technology align across the enterprise.

One way to achieve this goal is to adopt a single, powerful platform with one data model, one architecture, and one technology and business framework to ground the organization in a common language and understanding.

3. Focus on mission-critical enterprise functions

It's unrealistic to expect to overhaul every aspect of the enterprise to achieve operational excellence. Organizations can start by connecting and automating mission-critical enterprise functions, including:

• Managing risk

• Boosting environmental, social, and governance (ESG) engagement

• Delivering strategic initiatives to improve performance and gain agility
  
  

4. Increase visibility into risk

Despite the operational challenges all organizations faced during the pandemic, relatively few companies have workable business continuity or disaster recovery plans in place today. It’s essential to be able to manage high levels of existing risk—not to mention those on the horizon. Embedding risk management and compliance into digital workflows can provide new insights for better decision-making, support, and navigating change and external disruptions.

5. Ramp up ESG

A 2022 Deloitte survey found that more companies are moving from committing to ESG to taking action. In fact, 57% of executives reported they’d implemented a cross-functional ESG working group Why? Because progress on environmental, social and governance (ESG) goals also helps businesses operate more efficiently.

Embedding ESG reporting, programs, and practices into core business processes across the enterprise allows IT leaders to eliminate silos and create efficiencies to help mitigate risk, control costs, and innovate.

6. Connect investments to strategic outcomes

If leaders lack visibility into investments or what employees are working on, how can they know if their strategies are effective?

When these things are visible, it’s possible to see how they align with strategy—and can provide confidence in the data. This enables the organization to pivot quickly in response to change. Using a single platform, with a centralized view, for an entire organization lets IT leaders see and track how strategies are performing across different methodologies.

Improving operational excellence depends on business and IT speaking a common language so they can work together to pursue new opportunities. It also means connecting and automating mission-critical enterprise functions to manage risk effectively, ramp up ESG, and connect strategies to business outcomes. Organizations that take these steps will be ahead of competitors that don’t.

Find out more in our Operational Excellence Handbook.

Gartner Press Release, Gartner Survey of Over 2,000 CIOs Reveals the Need to Accelerate Time to Value from Digital Investments, Oct. 18, 2022

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