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GDS International - CIO - Summit - Asia - 5

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Smarter Working— the New Competitive Advantage

Smarter Working— the New Competitive Advantage

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  • 1. Industry Insightsfrom KODAK
  • 2. Industry Insight From Kodak Contents Process‐Centric Back Office Transformation By driving back‐office efficiency, banks and other financial institutions seek to lower expenses and reduce business opportunity costs by being more responsive to market dynamics. However, if the underlying processes are fundamentally flawed, the conventional y approach of making incremental changes and adding automation will not deliver the maximum possible benefits. For successful change that’s truly transformational, Kodak—based on nearly two decades as a provider of business process services—advocates following a disciplined, change management approach that reexamines fundamental operating models. Often, a unified capture strategy combined with a reengineered process delivers efficiencies and a clearer focus on customer information that can drive retention and new business. Click here to read more … Accelerating Product Time to Market For consumer goods product companies, accelerating the time to market for new products is a strategic imperative. Often, the packaging design and development process appears to be a bottleneck for achieving this objective. In reality, the challenge exists in the numerous activities that provide label content and information—including marketing promotions, product specifications, artwork, ingredients labeling, compliance, bar‐coding and branding—which all come together during package design and development. Typically, these upstream processes fall outside the control of the packaging function. By redefining the ways in which these functions interact with packaging, consumer goods product companies can reduce time to market of a product, accelerate revenue realization and reduce product and package development costs. Click here to read more …
  • 3. INDUSTRY INSIGHTS FROM KODAKBANKINGProcess-Centric Back Office Transformation Executive Summary By driving back-office efficiency, banks and other financial institutions seek to lower expenses and reduce business opportunity costs by being more responsive to market dynamics. However, if the underlying processes are fundamentally flawed, the conventional approach of making incremental changes and adding automation will not deliver the maximum possible benefits. For successful change that’s truly transformational, Kodak—based on nearly two decades as a provider of business process services—advocates following a disciplined, change management approach that reexamines fundamental operating models. Often, a unified capture strategy combined with a reengineered process delivers efficiencies and a clearer focus on customer information that can drive retention and new business. Introduction: tumultuous times belong to the fast and flexible. Financial institutions face unprecedented economic uncertainty and intense competition on a global scale. Meanwhile, investor expectations for return remain unchanged; banks must demonstrate profitability or face extinction. The rewards will go to those who can quickly implement tactics that overcome market complexities and capitalize on short windows of opportunity while maintaining high service levels to protect the customer base. Unfortunately, the ability to execute business strategy quickly can be crippled by a bank’s operating models. Inflexible operations preclude the quick responses necessary to lead the market. For example, if the bank’s operations can only capture 15 percent of the possible response for a new product, the rollout will have to hit smaller territories over a longer time, limiting marketing economies of scale and creating opportunities for competitors. In addition, operational inefficiencies limit the cash reserves available to fuel growth. For reasons described on the next page, back-office operations offer the greatest potential for wringing out inefficiencies and providing the most strategically valuable benefits.
  • 4. The product-centric back office: silos of duplicated effort and resources. What we refer to as ”the back office” is seldom singular. Back-office operations are usually a mix of disparate technologies and platforms. These are the legacy of generations of product introductions and mergers and acquisitions. As a result, back-office operations are most often aligned in a product-centric fashion and cannot be scaled across functional areas. It’s also difficult, if not impossible, to obtain a global view of the customer’s relations with the bank, leading to overlooked sell-through opportunities and duplication of account management efforts. The disadvantages of a product-centric operating model are many: • Wasteful resource duplication: dedicated people execute each business process and these resources are difficult to reallocate during peak times. • Multiple, product-specific processes and procedures: creates difficulties in capacity planning and load balancing that can constrain service level delivery and execution during peak times or promotions. • Multiple technology platforms: increased costs for maintenance and space for operations. • Complex monitoring and reporting creates difficulties in process monitoring, problem resolution and performance measurement. • Lack of insight into customer behavior and selling opportunities that could drive new revenue. Increasingly, the costs of the product-centric model are becoming a luxury no financial institution can justify. Kodak has measured inefficiencies running into the millions of dollars. And the model’s inflexibility inhibits rapid response to market conditions, placing customer satisfaction at risk and constraining growth.Each product siloshown contains PRODUCT-CENTRIC OPERATING MODELits own set ofinformation capture CARD LOANS BANK OPS PAYMENTS CLEARINGtechnologies, BUSINESSprocessing RULESworkflows and &resource overhead PLATFORMto operate andmanage. INFORMATION CAPTURE SYSTEM OPERATORS
  • 5. A leaner approach: efficiency via standardization. Financial services generate revenue by receiving funds from investors, depositors, and debtors and disbursing funds as dividends, payments or transfers, and loans. The basic revenue engine takes information into the organization and processes the information to trigger an action. The more efficient an institution is at moving money through these processes, the more profitable and competitive it will be. With a product-centric operating model, a bank has many small engines, each with its own operations and maintenance issues. When processing workloads increase in one area, there is no way for the other engines to help. Kodak has seen what can happen when a back-office strategy leverages processing similarities across product lines to create one shared process engine. Consolidation of similar activities, such as establishing a unified capture platform, drives global efficiencies. Standardization and resource sharing enable scaling to meet variations in demand. The costs of automation and advanced technology are more easily justified enterprise-wide across all products, rather than on a piecemeal basis. It’s a bit like comparing many commuters in automobiles clogging a hig hway to an equal number of c ommuters sharing a ride on a bullet train. They all get to work, but those on the train do so faster and use less energy.By sharing processes,technology PROCESS-CENTRIC OPERATING MODELplatforms anda set of operators, CARD LOANS BANK OPS PAYMENTS CLEARINGlines of business BUSINESShave access to more RULESresources when &they need to scale PLATFORMup to match marketchanges. STANDARDIZED CAPTURE PROCESSES UNIFIED CAPTURE TECHNOLOGY PLATFORM VARIABLE SKILLED OPERATORS The process-centric back office: transforming operations for the better. A process-centric operating model is characterized by the following: • A unified capture technology platform takes the place of multiple disparate technology platforms. • Work processes have been reengineered into straight-through process flows by redefining existing digital workflows and further eliminating manual work steps. • System operation is greatly simplified, error rates are reduced and flexibility is gained through these actions.
  • 6. • Process operators are easily cross-trained to support multiple product lines. This enhances the ability to reallocate existing resources or train new operators in support of peak operating periods. • Real-time online monitoring, reporting, service level and Key Performance Indicator management ensures visibility into every individual product and business. • Overall complexity is reduced; processing speed, capacity and flexibility are increased. • Customer-facing branch operations can be simplified so that customer information is captured and communicated faster. • Data mining and other information-driven marketing are enhanced by a more complete, more timely view of the customer. Transforming back-office operations to a process-centric approach demonstrates good stewardship of investorProcess-Centric Operating Model Key Benefits capital. Within this environment, the bank can enhance customer satisfaction by providing faster and moreEfficiency via standardization accurate information exchanges. Operations can shrink • Fixed costs become variable costs or grow in response to market conditions or the • Improved process governance and consequences of mergers and acquisitions. New transparency products can be designed, implemented, and launched in shorter timeframes.Enhanced customer satisfaction By operating this model in a hosted environment, banks • Improve service quality levels can convert from a fixed-cost model to a variable-cost • Information accuracy and quality model that better aligns with business strategies. A process-centric approach effectively reduces operationSupport for business strategy execution costs and positions the business for rapid execution of • Rapid geographic expansion business strategies, which can lead to growth and better profitability. • Streamlined product launches Obstacles to change: a matter of perspective. Why haven’t more financial institutions made the journey from product-centric to process-centric operating models, given the substantial benefits? It’s likely because real change is a complex transformation that touches all aspects of people, process and technology. It requires a change management-driven process that probably does not reside within the organization. Within this context, three factors emerge as key drivers for inaction. Managers are themselves product-centric. They have trouble envisioning a process-centric big picture and its benefits within the metrics of their own product-centric models. And individual business managers have little incentive to think and act globally. Above all, they must not risk performance of current business operations. Business inertia. Banks treat back-office operations as an unglamorous cost center. Pervasive management beliefs hold that technology substitution is the only way to drive cost efficiencies and yield desired profit margins. In the absence of quantifiable benefits, managers assume that current operations represent best practices. Lack of perspective. Leaders within the organization need to change their view of the back office and the role it plays in the business model. When managers associate the back office with revenue generation and profit enhancement rather than cost, they see the issues with product-centric operating models. It becomes easy to understand the benefits of a process-centric operating model and the value of engaging in fundamental change to build it.
  • 7. Getting to optimum: a roadmap for change In Kodak’s experience, once stakeholders recognize and understand the strategic, big picture issues, the journey from the product-centric to process-centric back office can begin. The first task is to develop a roadmap that includes a plan for managing the risk associated with change. Throughout the transformation, existing service level commitments must be maintained. A senior-level steering committee must be convened to develop and execute the roadmap. The committee’s ownership ensures that issues encountered along the path are resolved and that communications flow smoothly to convey project status and reemphasize the benefits of change. Kodak builds a stage and gate process into its roadmaps to mitigate risk. At each phase of plan execution, projectFollowing a Roadmap for Change value is validated and the completeness of deliverables is reported to all stakeholders. This ensures awarenessEfficiency via standardization of the action’s value and risks before any investment or • Convene senior steering committee changes occur. This also presents an opportunity to • Communicate, communicate, communicate dismiss the project or redirect it before additional cash is expended.Mitigate risk The plan should be developed within the stage and gate • Leverage stage and gate process context. The work to be performed in phases between • Build achievable work plans each milestone should not overstretch the capabilities • Plan for contingencies of the organization. Instead, work must be organized in increments that the organization can reasonably expectCelebrate early success and build momentum to absorb. The plan should also develop contingencies based on probable outcomes to guard against surprises.Engage a partner with experience that becomes This approach enables the new operating model topart of the team emerge in an accelerated, yet controlled, manner. The organization can confirm value, prove the model works, and easily scale to the end state with minimum disruption to current operations. Early trial successes can be celebrated to help maintain momentum. To obtain the skill set required to drive back-office transformation, a bank can engage an experienced partner. Such a partner will guide development of benefits quantification and convey key learnings to the team. Leveraging the partner’s expertise will enable the bank to accelerate transformation while minimizing costs. The most desirable partners are those that act in the capacity of a trusted advisor, become a part of the team, and help drive the success of the transformation from beginning to end.
  • 8. Summary The typical back office evolved over time in an ad hoc, product-centric manner as banks launched new products, added new territories, and absorbed other operations through mergers and acquisitions. A financial institution willing to look past the complexity of multiple operating environments will discover significant ways, such as a unified capture platform, to eliminate cost, improve customer satisfaction and respond to market conditions much more flexibly. While it may not be easy to uncover this potential, the magnitude of the available gains compels the institution to act in the interest of investors. To recognize opportunity and create the will to act, financial institutions must look past institutional biases and cost. When the aggregate back office is viewed in terms of its role in revenue generation and profit enhancement, the benefits of shifting from a product-centric to a process-centric back-office operating model are truly compelling. An experienced partner can guide the organization in the disciplined pursuit of the benefits of process-centric back office transformation. Leaders must embrace this opportunity. The financial institutions that see beyond the malaise of today’s economic and market environments will be positioned to seize the full potential of the opportunities that await.To learn more about business processconsulting and outsourcing from Kodak:www.kodak.com/go/kodakbcoChinaBPO-Consulting-GreaterChina@kodak.comEurope, Africa, Middle EastBPO-Consulting-EAMER@kodak.comJapanBPO-Consulting-Japan@kodak.comPhone: Tokyo 03-5577-1380;Osaka 06-6789-2840Southeast AsiaBPO-Consulting-SoutheastAsia@kodak.com YELLOW CHANGES EVERYTHING.Mexico and South AmericaBPO-Consulting-LatinAmerica@kodak.comUnited States and CanadaBPO-Consulting-NorthAmerica@kodak.comPhone: 704-226-5601
  • 9. INDUSTRY INSIGHTS FROM KODAKCONSUMER GOODSPRODUCT COMPANIESAccelerating Product Time to Market Executive Summary For consumer goods product companies, accelerating the time to market for new products is a strategic imperative. Often, the packaging design and development process appears to be a bottleneck for achieving this objective. In reality, the challenge exists in the numerous activities that provide label content and information—including marketing promotions, product specifications, artwork, ingredients labeling, compliance, bar-coding and branding—which all come together during package design and development. Typically, these upstream processes fall outside the control of the packaging function. By redefining the ways in which these functions interact with packaging, consumer goods product companies can reduce time to market of a product, accelerate revenue realization and reduce product and package development costs.
  • 10. Challenges in Accelerating Product Time to Market Compressing the amount of time between when a marketing campaign is defined and when the product reaches store shelves is a key strategic objective. The business benefits are clear: accelerating the time to market in a repeatable and reliable way allows companies to realize revenues faster, increase market share and enhance brand image. As consumer goods product companies look for ways to c ompress product development time, they find the packaging, design and product specification processes to be a challenge. Specifically, the package labeling and artwork process is often seen as a major bottleneck for making significant improvements in the speed of product development and distribution.Packaging requiresinput from multiple Typical Packaging and Design Development Processstakeholders acrossthe organization. MARKETING AND PROMOTIONSWhen not properly Strategic Objective:coordinated, managing CONCEPT Compress thethese inputs is a Concept-to-Shelfburden that can delay Time PRODUCT DEVELOPMENTthe time to marketof a product. FORMULA CONTENT PACKAGING FULFILLMENT RETAIL LABEL AND SHELL DESIGN BRANDING LEGAL AND ERP COMPLIANCE EXTERNAL REVIEW AND INPUT A Holistic View The responsibility for managing packaging design and development activities— including campaign planning, product specifications, artwork, ingredients labeling, governmental compliance, bar-coding and branding—typically falls outside the control of the packaging function. Identifying and addressing the opportunity for compressing product time to market requires a well-coordinated effort that includes all of these functions.
  • 11. The Optimized Product and Packaging Development Process As with any complex business challenge, there isn’t a “one size fits all” solution to a company’s product and packaging development process. But Kodak has found four benchmark characteristics in companies that have reduced cycle time in product development and packaging: Streamlined, well-defined workflows. Companies that are achieving best practice performance in product and packaging development have establishedCompanies that have best-in-class practices standard workflows that eliminate excessive handoffs andfor their product and packaging development minimize wait time and waste between work steps. Theseprocess have a substantial advantage in the organizations define customized workflows to handle exception and escalation processing, as well as the rulesmarketplace. Their ability to respond quickly can for when customized versus standard processes shouldenable the company to lower its investment be deployed for a given project.costs and gain market share faster by accelerating Automated routing, escalation, and status reporting.the time to market of its product and maintaining With the availability of new technology and workflowits most valuable asset—its brand. management tools, companies can better control the speed and tracking of a project as it moves through• By decreasing the development time needed the system. But the availability of enablement tools is before launching a product, companies are able not enough; careful consideration must go into the rules to decrease their investment costs and realize governing load balancing, approval processes and revenue faster. information needed for effective management.• Companies that have faster time to market are Effective traceability and transparent auditability. able to grow their share of that market. Effective supervision and risk management goes Whether they are a market leader or striving to beyond tracking the status of the packaging process. become one, a shorter launch time will lead to An optimized product and packaging development increased market opportunities. process supports and enables all stakeholders involved• A company’s ability to tailor the content on its in the package review and approval process, including packaging to local markets while maintaining internal resources (e.g., legal) as well as external entities the value of its brand is a competitive weapon (e.g., a regulatory body). for increasing market share. Streamlined, accessible asset management capabilities. An optimized product and packaging development process allows companies to repurpose content for multiple projects and media. It enables version control so that the “latest and greatest” version of an image is consistently used on new projects. Also, asset management capabilities simplify the management and verification of rights for digital images.
  • 12. Business Results Achieved by Optimizing the Packaging Supply Chain In working through the challenges of the product and packaging development process across multiple industries, Kodak has worked with companies to put these capabilities into practice and achieve significant business impact. For example, we have helped companies reduce product time to market by 25% to 50% by streamlining and coordinating the various activities that go into package design. The drivers of product time to market improvements include: • Fewer cycles required for package design review and approval • Real-time visibility into project status, which helps detect and correct package errors early in the development process • Reduced project wait time through workflow automation, load balancing and task escalation • Increased package throughput by enabling parallel, collaborative workflows Reducing the product time to market has a significant positive impact on revenue realization. When fully exploited by the marketing team, the faster time to market may also increase product market share revenues and margins. Companies that optimize their product and packaging development tend to realize these business benefits as well: • Fewer missed product launch dates attributed to package readiness • A lower risk of regulatory citations, and even lawsuits, due to packaging errors • Reduced package development costs through streamlined and automated processesWith optimizedprocesses, pre-launch Strategic Advantages from Optimized Time-To-Marketdevelopment costscan be lower, time to HIGHER MARKET SHARElaunch can be faster STANDARD PRACTICES CASH FLOWand market share OPTIMIZED PROCESSESgains can occur faster •Streamlined, well-defined workflowsand be maximized. •Automated routing, escalation,Accelerating this and status reporting •Effective traceability andlearning curve requires transparent auditabilityan experienced partner. •Streamlined, accessible asset management capabilities FASTER LAUNCH LOWER COST TIME
  • 13. Charting a Roadmap for ChangeIn Kodak’s experience, once stakeholders recognize and understand the strategic,"big picture" issues, the journey to optimizing the product and packagingdevelopment process can begin. The first order of business is to develop aroadmap that includes a plan for managing the risks associated with change.A senior-level steering committee must be convened to develop and executethe roadmap. The committee’s ownership ensures that issues encounteredalong the path are resolved and that communications flow smoothly to conveyproject status and reemphasize the benefits of change.Kodak builds a stage and gate process into its roadmaps to mitigate risk.At each phase of the plan execution, project value is validated and thecompleteness of deliverables is reported to all stakeholders. This ensuresawareness of the actions risks and value before investments or changes occur.This also presents an opportunity to dismiss the project or redirect it, if needed,before additional cash is expended.The plan should be developed within the stage and gate context. The work tobe performed in phases between each milestone should not overstretch thecapabilities of the organization. Instead, work must be organized in incrementsthat the organization can reasonably expect to absorb. The plan should alsodevelop contingencies based on probable outcomes to guard against surprises.This approach enables the new product and packaging development processto emerge in an accelerated, yet controlled, manner. The organization canvalidate value, prove the model works and easily scale to project completionwith minimal disruption to current operations. Early trial successes can becelebrated to help maintain momentum.To obtain the skill set required to drive back-office transformation, a consumergoods product company may consider engaging an experienced businesspartner. Such a partner will guide development of benefits quantification andconvey key learnings to the team. Leveraging the partner’s expertise will enablethe company to accelerate transformation while minimizing costs. The mostdesirable partners are those that act in the capacity of a trusted advisor,become a part of the team and help drive the success of the transformationfrom beginning to end.
  • 14. Summary Accelerating the speed of bringing new products to market is a top objective for executives of consumer goods product companies. Although packaging may appear to be a bottleneck for achieving this objective, solving the problem requires rethinking the way in which various activities converge during package design and development. By redefining how these upstream functions interact with packaging, consumer goods product companies can reduce product time to market, accelerate revenue realization, and reduce product and package development costs.To learn more about business processconsulting and outsourcing from Kodak:www.kodak.com/go/kodakbcoChinaBPO-Consulting-GreaterChina@kodak.comEurope, Africa, Middle EastBPO-Consulting-EAMER@kodak.comJapanBPO-Consulting-Japan@kodak.comPhone: Tokyo 03-5577-1380;Osaka 06-6789-2840Southeast AsiaBPO-Consulting-SoutheastAsia@kodak.com YELLOW CHANGES EVERYTHING.Mexico and South AmericaBPO-Consulting-LatinAmerica@kodak.comUnited States and CanadaBPO-Consulting-NorthAmerica@kodak.comPhone: 704-226-5601