Monday,
October 20, 2003
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Three mantras for
achieving business excellence
Ravi Kathuria
Ravi Kathuri
General Manager,
Enterprise Solutions, Baan Info Systems India |
BUSINESSES
are increasingly transforming themselves into knowledge driven entities
in their pursuit to achieve business excellence. They are constantly
incorporating new technologies and processes to remain competitive in a
dynamic business environment. However, most of the changes that take
place within these organisations, irrespective of the nature of the
change, are directed towards achieving their overall goals and
objectives. When viewed objectively most strategies for achieving
business excellence are based on any of the three excellence paradigms:
achieve excellence through customer intimacy, operational excellence or
product leadership. World-class businesses choose where to place their
emphasis based on their market, market-position, their goals and
capabilities. These goals align with key value disciplines that can
relate to a specific operating model.
Most companies across the
world are heavily relying upon technology to achieve business
excellence. This dependence on the use of IT has led to widespread
demand for enterprise solutions like ERP, CRM, SCM, etc. However, it is
a known fact that not all e-business deployments have been successful
and not all companies have derived optimal benefits out of their
enterprise solutions. One of the primary reasons for such fiascos is
that companies have failed to identify and categorise themselves into
any of three disciplines mentioned above. It is because leadership in
these disciplines results from narrowing the business focus and not
broadening it. Leading companies focus on delivering superior customer
value in line with one of these three value disciplines while meeting
industry standards in the other two. They align their culture, business
processes, management, incentive systems and technology platforms
confirming to any of the three disciplines mentioned above. Therefore,
while implementing IT solutions within organisations and leverage on the
advantages, companies need to evaluate and assess which discipline
confirms with their organisational goals and whether the IT solutions
confirm to the standards that are necessary to achieve excellence in
that discipline.
Let us now look at the
characteristics of each of these disciplines. Companies that follow the
discipline of customer intimacy segment their target markets and then
tailor offerings to match exactly the demands of those niche segments.
They build customer loyalty by responding quickly to almost any need,
from customising a product to fulfil special customer requests. This is
primarily because some customers are primarily concerned with obtaining
precisely what they want or need. They are willing to sacrifice higher
prices or longer delivery times to meet unique requirements. This
category of customers ascribes value to a product or service depending
upon how closely it appears to be designed just for them Therefore,
companies that pursue the value discipline of customer intimacy to
achieve business excellence continually tailor and shape their products
and services to fit an increasingly fine definition of their customer.
When such companies look
out for IT solutions to deliver that extra edge, they should evaluate
the solutions based on certain attributes that the solution is capable
of delivering. The solution should be able to deliver a detailed
understanding of customers and prospects. These kinds of companies
thrive on flexibility of business processes and responsiveness to
customer demands. The IT solution should be able to deliver them with
the requisite flexibility in operations and enhance responsiveness to
customer demands. Whereas companies that follow the discipline of
achieving operational excellence, provide customers with reliable
products or services at competitive prices which are delivered with
minimal difficulty. They normally cater to customers who can define
value within a matrix of price convenience and quality. These types of
customers look for consistency and convenience. They are unwilling to
sacrifice low price or high convenience to acquire a product with a
particular label or to obtain premium service. These companies
constantly seek ways to minimise costs and optimise business processes
across functional and organisational boundaries.
The IT solutions should be
able to help the companies focus on the core processes of invention,
product development and market exploitation. Further, the business
structure of such companies is loosely knit, ad hoc and is ever changing
to adjust to the entrepreneurial initiatives. The IT solutions should
incorporate the requisite flexibility to adjust to the dynamic operating
environment of these companies. Since most of these companies are
results driven, the IT solutions should be able to provide the companies
ability to measure and reward success. Further, the IT solution should
be able to provide the companies with a platform to encourage individual
imagination, accomplishment, out-of-the-box thinking and a mind-set
driven by the desire to create the future.
Finally let us look at
companies that pursue the discipline of product leadership to achieve
business excellence. Companies that follow the discipline of product
leadership focus on offering customers with leading edge products and
services that consistently enhance the product’s use or application,
making their rivals’ offerings obsolete. They constantly focus on
product innovation. It is because they cater to a category of customers
that wants new, different and unusual products. These customers are
primarily interested in best-of-the-breed products and trends. They
value state-of-the-art products or components. Because of the nature of
their customers, companies, following the discipline to achieve business
excellence through product leadership, strive to create a continuous
stream of state-of-the-art products and services.
Therefore companies that
are looking at options for implementing IT solutions to achieve business
excellence need to consolidate their organisational viewpoint so that
they can categorise themselves in any of the three discipline mentioned
above. This will help them evaluate which kind of IT solution will
snugly fit into their operational model. This will help them derive
optimal results out of any technology deployments that they have in
mind.
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