The flurry of adrenaline-fueled decisions that helped businesses navigate the unprecedented disruption of COVID-19 may be behind us - but more change is sure to come. The coronavirus crisis is calling on senior executives to step up on multiple fronts: keeping employees and customers safe, protecting the bottom line, staying a step ahead of fast-changing trends, and positioning the business to thrive amidst the uncertainty of the new normal that’s emerging.
But organizations consumed by mundane, transactional tasks struggle to focus on the strategic initiatives that allow them to react swiftly to sudden challenges and opportunities.
The business world is moving faster than ever before – and even before the pandemic, forward-thinking company leaders were pressing their business units to increase the speed of decision-making, improve productivity, and drive innovation to maintain a competitive edge. But the pandemic lent new urgency to the need for critical departments like IT and Finance to solidify their status as strategic business partners, helping to reshape basic assumptions about how to compete and achieve success.
As companies continue to face surging coronavirus cases and shaky global economies, the ability to respond strategically to the unpredictability that defines the “new normal” will deliver a critical advantage. But while transactional tasks may distract business units from deploying strategic thinking skills, they are mission-critical to “keeping the lights on” and can’t be ignored.
1. Stop reacting to fires and adopt a proactive mindset.
Strategic organizations have a proactive mentality. Instead of getting stuck in a reactive firefighting mode, they have clearly defined processes for managing risk and ensuring operations run efficiently and effectively. While urgent, unexpected issues will always come up, having a proactive structure for handling them instead of reacting off-the-cuff ensures better business outcomes.
For instance, help desk calls in reactive IT departments may be routed to any member of the team. Unfortunately, that slows down strategic initiatives because key resources often become sidetracked by support issues. In contrast, proactive IT departments are segmented into groups that each have a specialized focus so priorities aren’t split and team members delivering strategic solutions are never bogged down with lower-value activities.
2. Shatter the status quo by taking advantage of disruptive technology.
Automation of mundane, repetitive tasks can help improve an organization’s strategic focus – saving time, money, and manpower that can be reallocated to more important tasks. Robotic Process Automation (RPA), for example, can reduce reliance on manual, paper processes difficult to complete at home. They also provide more timely access to data that enables strategic insights. RPA enables businesses to pivot quickly as well, avoiding the prolonged headache of changing existing systems to accommodate more complex digital transformations.
Even before COVID, Gartner ranked RPA as the fastest-growing segment of the enterprise software market – offering on average savings of 40% and 41% productivity gains. Despite the emphasis on cost- cutting in today’s turbulent times, PwC found that nearly half of financial executives aim to increase investments in digital transformation – grasping the foundational impact it can have on the organization’s long-term resiliency.
3. Consider outsourcing to offload transactional tasks without sacrificing quality or productivity.
Outsourcing transactional tasks to a reputable BPO provider enables organizations to accomplish multiple goals. Not only does it free in-house staff to focus on strategic work, but it also achieves significant cost savings in three key ways:
- Reduced labor costs. Outsourcing to locations with close proximity to the U.S. typically cuts labor costs by 30-50%, compared to hiring American workers with similar skills.
- Flexibility. Outsourcing enables organizations to scale resources up and down as business needs change instead of carrying a fixed cost.
- An optimized span of control. Outsourcing offers a unique opportunity to push the reset button and realign non-strategic operations that grew top-heavy and expensive over time with industry best practices.
Outsourcing to a quality provider can also create productivity and efficiency gains that reduce operating costs and improve customer and vendor experiences. While transactional tasks simply “keep the lights on” for a business, they comprise the core competency of BPO providers. Outsourcers have the people, processes, and digital transformation tools like RPA in place to improve back office work with best practices. At the same time, contractual goals keep them motivated to innovate continuous process improvements for their clients.
More than 80% of finance executives in a KPMG survey said they already outsource some back office functions to a BPO provider – and nearly 60% planned to increase their commitment. IT outsourcing has also reached a five-year high, with 12.7% of IT budgets spent on outsourcing in 2019 - compared to 9.4% the previous year.
4. Utilize a collaborative approach that combines in-house resources with third-party partners to retain control of your business unit’s core functions.
Some senior executives hesitate to relinquish tasks for fear that they will lose control of activities they view as critical to their organization’s core competencies. But outsourcing doesn’t have to be structured as an all-or-nothing initiative. Top-tier providers will customize a hybrid approach that enables business units to retain control of more strategic functions; for instance, CFOs might decide to outsource all of Accounts Receivable (AR) except Collections so they can keep customer interactions in-house.
To ensure continued quality, it’s also essential to choose BPO partners that don’t operate within a “black box” that offers little visibility to their operations. Quality partners will provide a transparent structure that functions as an extension of your in-house team, using the same processes in a remote format.
5. Reallocate cost savings to more strategic priorities to insulate your business against future disruptions.
After restructuring a department, senior executives can use some or all of the cost savings to fund more strategic initiatives. For instance, automating repetitive tasks delivers cost savings the businesses can use to fund the creation of more strategic roles in areas like marketing, product development, or IT architecture.
Cost savings can also be used to upscale the available skillset within the business unit. Gartner reports that a lack of sufficient skills for performing advanced analytics is a top staffing concern for CFOs. But once transactional tasks are removed from the department, CFOs can prioritize restaffing or retraining existing employees in strategic areas like data analytics, business analysis, and M&A integration.
To prosper in the post-pandemic era, companies need strategic support from business units that can help them see around corners and make informed business decisions. But operations bogged down by transactional tasks struggle to look forward instead of back and offer the insight-driven strategies the business needs to drive growth.
Following these five steps can help senior executives restructure antiquated operating models as strategic organizations that can rally amidst the crisis and better confront the challenges of the road ahead.