Approximately 10 years ago, I was quoted in the Financial Times around establishing the right performance measurements through benchmarks to drive higher performance, reduced costs and create a more effective business model.
In those days, I was known as a Shared Services and Business Process Outsourcing specialist. I worked with large multinationals to drive operational effectiveness in finance, human resources, procurements, treasury, legal and tax, supply chain and more back-office functions, to deliver cost-effective operating models across Eastern Europe, Africa and Asia-Pacific. I introduced SMART (Specific, Measurable, Assignable, Realistic, Time-related) performance measures to assess how an existing service was “working”, and introduced a 3, 6, 9, 12, 18 month operational excellence journey with evolving benchmark targets (Required KPI's (RKPI's) through Operating Level Agreements (Internal - OLA's) Service Level Agreements (external - SLA's) and Required Service Levels (Target - RSL's)). I believed then, and still strongly believe, that benchmarks and performance measures are part of a journey, and targets should evolve to continuously question the “status quo” and drive innovation excellence in an organisation.
In the last 5 years, the focus has shifted from optimisation of existing processes, organisational models, behaviours and technology, towards an innovative delivery to ensure a targeted approach to the result of the activity. Instead of transforming businesses through optimisation, replacement of better technologies or automation, transitioning towards Global Business Services, or other optimisation initiatives. The focus has shifted towards operational innovation to radically transform the existing operational environment and introduce innovation at the heart of your organisation.
More than ever, it’s crucial for businesses to deliver operational innovation effectiveness in their back-office. Only through introducing operational innovation, it allows cross-functional innovation with a focus on delivering the most innovative solution to the results…
During my interview in 2006, I highlighted that a shared service centre only works when the decision-making for the business process is sited in the same place as the process itself. With technology, Internet and globalisation, decisions can be made anywhere, however it remains important that operational innovation is conducted where the process is located. I have experienced through the years, that through ensuring that the executioners of the process collaborate effectively with the owners of the results, organisations are able to deliver operational innovation effectively.
Even 10 years on, performance measurement is still crucial to drive operational effectiveness. However, performance measurements have evolved from a cost focus, measuring processing speed, economies of scale and lower labour rates towards employee, partner and customer satisfaction. This is why, more than ever, industry-leading organisations have realised that they require to transition towards operational innovation to deliver extraordinary results at the heart of their business to allow them to deliver the optimal customer experience!