Artificial Intelligence Will Help Pave

The Way To Operational Excellence,

Survey Suggests
Joe McKendrick
Senior Contributor
I track how technology innovations move markets and careers
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Mar 12, 2018,12:36pm EDT
This article is more than 5 years old.

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"Operational excellence" has always been an elusive but worthy goal for
anyone involved in business. Massive amounts of money has been poured
into technology solutions to attempt to achieve it, and some organizations
have shredded their hierarchies in attempt to get closer. But there always
been clunkiness and resistance to such efforts.

A recent survey suggests that operational excellence is tied closely to both

corporate culture and technology. "In the last five years, new technologies
and AI have developed, and many respondents suggest that the entire
nature of operational excellence has developed to be more inclusive, more
adaptable, and more personalized to each organization," state the authors of
the survey report, issued through the Business Transformation &
Operational Excellence (BTOE) site.

For those new to the concept, "operational excellence" is actually a thing

(affectionately called "OpEx"), with a growing following of proponents and
even professionals within enterprises dedicated to researching and
implementing new practices. Similarities, and perhaps overlap, is seen with
quality management and lean teams.
PROMOTED

I like the definition Wilson Perumal & Company provides to describe the
purpose of operational excellence:

"Operational excellence is the execution of the business strategy more consistently

and reliably than the competition. Operational excellence is evidenced by results.
Given two companies with the same strategy, the operationally excellent company
will have lower operational risk, lower operating costs, and increased revenues
relative to its competitors, which creates value for customers and shareholders."

In the BTOE survey, close to half of respondents have a formal enterprise-

wide operational excellence program (45%), while a majority, 54%, believe
that wider understanding of operational excellence methodologies is on the
rise.

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When it come to priorities, corporate culture and technology rank among
the top activities that enterprises will be emphasizing as part of their efforts
to achieve operational excellence:

 Sustaining continuous improvement culture 49%

 Overall business growth 44%

 Customer satisfaction 42%

 Implementation of new technologies 41%

Similarly, when asked what specific technology solutions they plan to put
into place over the coming year, robotic process automation (RPA) and
artificial intelligence were the technologies seen as most critical to
operational excellence efforts going forward:

 Robotic process automation and AI 19%

 Data analytics 11%

 Finance management 9%

 CRM 8%

 Real-time analytics 6%

 Business process management 5%

Tellingly, executives would like to emulate the efforts of leading technology

companies with operational excellence such as Amazon, Google and
Microsoft. Interestingly, Toyota heads the list -- the company that put lean
and quality on the map (and now produces computers on wheels.)

The head of global process management for one company in the survey
indicated that the emphasis going forward is on unleashing the power of
data to drive operational excellence, including “real-time process
performance monitoring and management; capacity management; data
mining and predictive analytics.” Another CEO even observed that his
company is seeing such success with their operational excellence technology
that they're planning to launch a new business with it. “We are using our
own platform that will be completed with new collaboration features in the
next six months. We are planning to create a spin-off company to create a
separate business based on such platform as we invested for years on it.”

Culture comes before technology, so it's critical that an organization be

prepared and open to innovation before money is spent on technology
solutions. Simply dropping technology on top of a dysfunctional
organization won't deliver success by any measure.

Competitive disruptors are driving the movement to operational excellence,

the survey also shows. As many disruptive players are employing data-
driven decision making and digital approaches to take markets in new
directions, existing companies need to increase their capabilities in these
areas. The BTOE survey identified the following reasons to amp up their
operational excellence initiatives:

Threat of new competition: "There is now a real need for continuous

improvement, in order to stay competitive in a very competitive global
market."

Needs of the customer: "The ability to connect with customers,

internally & externally, is now almost ubiquitous - easy to learn, seamless
and intuitive."

Need to reduce cost: "We are all facing corporate-driven targets in cost &
working capital reduction, in attempts to off-set declining revenue."
New technologies: "Companies are scrambling to keep up with the latest
tech, but these solutions are worthless without the right company culture to
make the most of them."

Cross-industry disruption: "Start-ups and tech innovation are making

the market more competitive every day, across all industries. So, it is do or
die."