2016: A New Beginning or Same Same
May your achievements in 2016 exceed your optimistic expectations as we start the second month of the year and the third financial quarter for many.
Looking back, Australia Post provides a salutary lesson in failure to adapt to the digital economy. Few organisations, outside the constraints of government regulation, could increase price, reduce service and survive. Will an increase in the GST be the next worst case example of counter intuitive decision making?
Looking forward, Cost Management Specialists have a new website, a new blog and a new tagline. What remains the same is an unequivocal commitment to delivering measurable improvement in profit and ROI.
5 Trends to Embrace in 2016
1. Digital Transformation
The impact of digital on smaller companies will become more evident in 2016. For some a threat. For others an opportunity as they transform the way they work in response to consumer demand.
A lot of our work in 2016 will centre around Employee Engagement in Digital Transformation. Queensland University of Technology (QUT) run a digital workshop with the theme: “Tell me what business you’re in and your greatest strength and I’ll tell you how I’ll disrupt you.”
Workshops are well attended because many want to learn how they can disrupt! Alarm doesn’t help. Applied learning, a digital strategy and making that strategy operational does.
2. Digital Transformation and Finance
Cost Management Specialists do a lot of work with the Accounting profession and we value our work with professional associations. Our view is that if accountants don’t actively drive C Suite business intelligence initiatives, they risk being confined to a grinding role while others take credit from their hard work.
The Cost Management Specialists approach to Profit, Return on Investment and Sustainability is based on systems thinking, understanding the value stream, identifying and managing constraints, lean thinking to increase value and process excellence through improvement or reengineering.
Digital transformation relies on an integrated organisation adding value at each step along the value stream. It is more effective when the Finance function takes an active leadership role and informs decision making.
3. Workforce Automation
My grandfather was a blacksmith and my dad was a tram conductor. The nature of these jobs is now rare highlighting that the future of work has always been uncertain. What is certain is that the past reflects the future less in 2016 than it ever has before. That future is increasingly digital.
As the automation of physical and knowledge work advances and applied business intelligence impacts, many jobs will be redefined. While some jobs will be redundant and others created, the future of work will be about automating the activities within occupations and redefining roles and processes according to McKinsey research.
1. The automation of activities
2. The redefinition of jobs and business processes
3. The impact on high-wage occupations
4. The future of creativity and meaning
As labour is a major component of most budgets, the impact of automation and applied business intelligence on margin will be significant. 2016 will identify the leaders in workforce planning and labour management.
4. Demand Planning
Demand planning creates reliable revenue forecasts and aligns service, production and inventory levels to demand. In the digital age, change readiness is a vital element of transformation with employee engagement based on accurate and timely data. Business intelligence which utilises business intelligence and benefit from lead rather than lag reports takes precedence over gut feel.
As Peter Drucker “the man who invented management” says: “There is nothing so useless as doing efficiently that which should not be done at all.”
Employees include owners and C Suite Executives working in the business if resources are to be applied to Profit, Return on Investment and Sustainability. Our cost management eyes target unproductive work with diminishing ROI.
5. Cost of Delay
Is a month of delay worth one million dollars or one thousand dollars? According to Don Reinertsen, approximately 85% of product developers cannot answer this simple question.
Cost of Delay communicates the impact of time on value. Not just how valuable something is but also how urgent it is. Value missed by late delivery or waiting is more obvious by understanding the Cost of Delay.