In 1984 two Harvard Professors, Robert H Hayes and Stephen C Wheelwright wrote a book entitled “Restoring our competitive edge: competing through manufacturing”. In this they set out a four- stage model of how manufacturing operations could mature to the point where they provided their whole organisation with a competitive advantage. (Hayes, R.H. and Wheelwright, S.C. (1984) Restoring our competitive edge: competing through manufacturing, New York: John Wiley).
Clearly the focus of their work was manufacturing, but we believe that the model is equally valid to the back office function of major service organisations such banks and insurance companies, government organisations as well as shared service centres for a whole variety of industries.
Certainly, from our own experience in ActiveOps, of working in many operations and interviewing hundreds of senior managers, we have often known senior executives lament their ability to make the changes they would like to because they fear that their operations function would crack under the pressure. This has been the case in organisations pursuing such diverse strategies as: seeking to optimise profits from an outsource arrangement, trying to introduce new technologies, or looking at consolidating multiple locations into shared service centres.
Change is easier when moving from a stable platform but many CEOs will worry that their operations base is not sufficiently secure and in control to be confident that the anticipated benefits of the change will be forthcoming.
For this reason we argue that the operational improvements associated with Back Office Workforce Optimisation can be a source of competitive advantage with Service Organisations. This is particularly important to consider at a time when the service operations function is often treated as a Cinderella discipline – considered to be merely a cost centre to be minimised, off-shored, or automated; or treated as the “problem child” best outsourced to be someone else’s problem.
Far from being the Cinderella discipline – less glamorous than Marketing, with less bling than IT and without the authority of Accounting – Back Office Operations should be seen as the Belle of the Ball. Turning heads and catching everyone’s eye.