"Resilience is an ineffable quality for people to possess, it is even better when it forms part of the culture of an organisation. We need to be comfortable with uncertainty but plan for opportunities and minimise threats."
In the article Bubbles pop, downturns stop by McKinsey and Company the focus is on resilient companies and their ability to create earnings advantage superior to their competition. Resilient companies create :
1. Flexibility
2. Cut costs ahead of the curve
3. Resilients in countercyclical sectors focus on growth, despite costs
The findings are well articulated on how resilient companies delivered on total returns to shareholders (TRS) in excess when compared to the sector median. Digitisation also adds to the capabilities of organisations and companies that adopt to the new way of work and will accelerate in a downturn. The traditional levers of cost cutting account for approximately 2% of costs however digital tools can cut costs by an additional 5%. In the article McKinsey & Company has also formulated a resilience playbook creating interventions and accelerating decisions.
Companies further along the digital journey are realizing 7-plus percent more revenue growth than industry peers, and nearly 6 percent more EBITDA growth
Hirt M., Laczkowski K. & Mysore M. – Bubbles pop, downturns stop – McKinsey & Company
Let us explore how new digital tools can move your organisation towards flexibility and help curb costs to move towards a resilient organisation. Digital tools are redefining the customer experience by allowing for faster response time and multiple touchpoints during the sale and purchase cycle. Companies like Dexibit are using Machine Learning, visitor data and forecasting to serve customers in museums and cultural attractions better – Dexibit and big data solutions.
Adobe CIO Cynthia Stoddard talks about Robotics Process Automation (RPA) which created a 79% reduction in manual hours for work involving creation of purchase orders and the automation of wire transfer requests by bots resulted in a 94% decrease in manual hours – How we scaled RPA with a Center of ExcellenceIt is then of little wonder that these technologies rank high in 2019 to :
- Improve business efficiency
- Increase profitability
- Reduce cost
- Increase market share (Growth)
ML, AI and cognitive computing remain in the top 3 as perceived by technology industry leaders to drive business transformation while RPA has catapulted from no. 9 to no. 2 in 2019 highlighting how digital tools are driving long term value – The top 10 technologies for business transformation
“Human capital is a crucial asset of any business—in fact, in an age of ubiquitous technology, it is human skills, creativity and capability that will form the competitive edge for any organization.”
Towards a Reskilling Revolution – World Economic Forum
There is little doubt that advances in technology are disrupting industries and organisations are failing to adapt or are slow to react. In order to drive creativity and complexity and grow the human asset bold decisions need to be taken at the board level. Workers at all levels in the organisation need to adapt to changing forces, be flexible with the futureof work. This does not necessarily imply delegation of power to allin the organisation but rather create a governance structure that is transparent and understood by all,allow data to flow seamlessly to enable quicker decision making. Nonvalue adding tasks need to be automated through tools like RPA and MS Flow to name a couple and customers need to be engaged right from product selection to purchase even outside of office hours, chatbots is helpful in this regard.
According to Stats NZ 60% of insurance, 54% of Utilities, 51% of Adminand support services and 50% of Finance organisationsare up to 4 years behind when compared to the best common available technology. If the human asset is bogged down with daily mundane activity due to lack of new technology, it will fail to create a flexible working environment to adapt to external forces that can progress the organisation towards resilience.
Large organisations serving a global market may have the luxury of outsourcing staff, however the New Zealand Market predominantlycomprises of small businesses. They need to utilise technology to its full advantage to minimise costs and boost productivity. There are many aspects to cost cutting other than employee count but given we are talking about latest technology viz. RPA, ML and AI, these can curb costs at a much faster rate compared to traditional methods when it comes to process optimisation. For e.g. the use of RPA can enable an employee to process 100sof invoices in minutes when compared to manually processing the same in hours. In addition to time, accuracy is also realised. These tools not only help with cost cutting but also increase speed of information which can improve the customer experience..
By 2022, more than 50% of all people collaborating in Industry 4.0 ecosystems will use virtual assistants or intelligent agents to interact more naturally with their surroundings and with people.
Top 10 Strategic Technology Trends for 2019 – Gartner
Let us use technology to our benefit if we want to create a resilient organisation that can deliver on earnings superior to the competition. Struggling with compliance, scalability, processes not allowing for proactive management of customers and customer experience suffering at the expense of growth then evaluate the digital strategy. Work towards a resilient organisation.
