In search of business excellence

Achieving business excellence is a function of understanding your customers’ requirements, mastering processes to improve efficiency and developing innovative and cutting-edge solutions, says Ravi Kathuria

Businesses are increasingly transforming themselves into knowledge-driven entities in their pursuit of business excellence. They are constantly incorporating new technologies and processes to remain competitive in the new dynamic business environment. However, most of the changes that take place within these organisations, irrespective of the nature of change, are directed towards achieving their overall goals and objectives. But, when viewed objectively, most strategies for achieving business excellence are based on any of the three excellence paradigms: achieving excellence through customer intimacy, operational excellence and product leadership. World-class businesses choose where they place their emphasis based on their market, their position in the market, their goals and their capabilities. These goals align with their 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 and SCM. 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 the 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 with any of the three disciplines mentioned above. Therefore, while implementing IT solutions within organisations and leveraging on the advantages, companies need to evaluate and assess which discipline confirms with their organisational goals and whether the IT solutions conform to the standards that are necessary to achieve excellence in that discipline.

Technology can impact any value discipline

Customer intimacy

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 fulfilling 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 their 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 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. These types of companies need the IT solution to deliver them with information systems that help them collect, integrate and analyse data from various sources. The IT solution should also serve as a decision support system for entrepreneurial customer teams that make decisions based on customer needs. Further, it should also be oriented to help them in augmenting consulting expertise and service innovation to deliver exactly what the customer wants.

Operational excellence

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 customers want high-quality products and services but coupled with affordability. So companies catering to this category of customers target end-to-end supply chain efficiency to lead the market in price and convenience. These companies constantly seek ways to minimise costs and optimise business processes across functional and organisational boundaries. So companies which strive to attain operational excellence need to re-engineer product delivery and service processes to emphasise efficiency and reliability. So when these companies seek to implement IT solutions to achieve operational excellence, they need to look for certain attributes within the IT solutions. 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 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.

Value disciplines

Product leadership

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. This entails them to be highly creative and to make their creative ideas commercially viable quickly. Therefore, all their business and management processes are generally engineered for speed. These types of companies relentlessly pursue new ideas to keep ahead of competition and continuously improve on their developments. They have to be prepared to decide today and implement tomorrow, looking at ways and means to shorten their product development life cycles. Such companies need IT solutions that will help them stay decisive, focused and complement their risk-taking culture. The solutions also need to provide the companies with the flexibility that is required to follow their line of thought. They also should help them in streamlining processes and minimise costs in order to reduce risks. The IT solutions for such companies should be able to follow the standardised, simplified, tightly controlled and centrally planned operations so that few decisions can be left to the discretion of rank-and-file employees. Finally the IT solutions should also facilitate integrated, reliable high-speed transactions within and external to the organisation in compliance to the norms.

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.

The author is general manager, Enterprise Solutions, Baan Info Systems India. He can be reached at rkathuri@baan.com