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A Cure for Complexity

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How business simplification can help companies compete against the focused and fleet-footed

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A Cure for Complexity

  1. 1. Copyright © 2016 Tata Consultancy Services Limited A Cure for Complexity Anantha P. Sekar, Global Head – Integrated Offerings, Global Consulting Practice Nidhi Srivastava, Global Head – IT Consulting, Global Consulting Practice February 2016 PERSPECTIVES Volume 7 | Chapter 7
  2. 2. Simplify for a changing business world Companies burdened by complexity must simplify to survive and grow in a rapidly changing business world. Rapid growth of venture capital-funded businesses such as Snapchat and Spotify Emergence of China as the second largest investor in R&D after the US Increasing use of digital channels for marketing
  3. 3. Offer too many products and services to several customer segments Avoid complexity to compete effectively Operate globally with specific infrastructure for each market Complexity is a challenge for companies that: Offer multichannel access to customers Invest substantially in legacy technologies without growth Transact with several business partners
  4. 4. Highly vulnerable to asset-light competitors, such as internet media and online lenders Heavily invested in an operating model that needs major improvements or transformation, such as print media and landline services Identify the need for simplification Companies need to simplify their businesses if they are:
  5. 5. Companies that trim operations can effectively channel resources against more agile competitors. Procter & Gamble sold 43 beauty product brands to focus on brands that best leveraged core competencies HSBC cut annual costs and reduced its workforce in an overhaul of its global business to focus on Asia Focus on core businesses
  6. 6. Uber and Airbnb, that trade on existing resources to connect consumers with services Netflix, that mines data on viewer habits to predict which shows will succeed Transform through technological advances Most CEOs consider technological advances to be the biggest driver of transformation. This is based on the growth of digital companies such as:
  7. 7. Prune the products and services portfolio Restructure the operating model by streamlining processes and systems Redesign the partner ecosystem to outsource more non-differentiating business processes Adopt four elements of business simplification Boost people productivity with training, and better data and tools for decision-making
  8. 8. Reduce the number of offerings in a manner that supports future growth in the remaining portfolio. For example: Build flexibility in supporting processes and technologies so that they are not specific to a particular product or business model 1. Prune the product portfolio Design and build products differently to leverage common platforms and reusable components
  9. 9. Use insights from customer experiences to create unified processes across brands Digitize transactions and streamline common practices Put key systems on common platforms to improve productivity and cut costs 2. Restructure the operating model Optimize IT by consolidating data centers, shifting applications to the cloud, and offshoring some IT functions
  10. 10. Standardize business processes and train people to master them 3. Boost human capital performance Identify work that can be automated to improve efficiency and price-competitiveness Provide employees with the right software tools and quick access to better data for decision-making
  11. 11. External partners can perform operations that do not make a competitive difference. 4. Redesign the partner ecosystem Finding the right business partner is critical for asset-and people- intensive processes that support fast diminishing physical products. These include back-office functions such as human resources and accounts payable. Companies prefer to use fewer but bigger business partners or a prime contractor to manage other partners.
  12. 12. Adopt a measured approach to manage organizational change through internal communication and employee training Overcome key challenges Focus on a finite number of target outcomes, using facts to justify the need for simplification Manage cultural resistance through strong leadership and deliver quick wins early in the simplification process
  13. 13. IT Services Business Solutions Consulting A Cure for Complexity Contact a ConsultantRead More
  • rigarg1

    Feb. 17, 2016
  • AntnioQuaresma

    Feb. 17, 2016

How business simplification can help companies compete against the focused and fleet-footed

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