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By Kevin Evans, Chief Technology Officer, ActiveOps

The rise of advanced artificial intelligence (AI) over the past year has further accelerated shifts in customer expectations, drives for automation, and all the other hallmarks of digital transformation. Businesses that are not embarking on this journey will struggle to keep up with their peers.

What this all means for the future of operations was a key theme at ActiveOps’ recent Capacity23 conferences in London, Nashville and Melbourne, where experts from the world of service operations discussed how digital transformation will disrupt and reshape the way operations teams are run in the years ahead. 

The starting point is understanding what digital transformation actually means, says Dion Hinchcliffe, Principal Analyst at Constellation Research, speaking during his keynote speech in Nashville. 

“It doesn’t mean the digitization of the business – we’ve been doing that. You’re already using technology everywhere in operations today,” said Hinchcliffe.

Digital transformation is rethinking it and fundamentally saying ‘what can we do differently today now that technology has enabled all these new possibilities’. It has to be a complete disruption of operations – and it should feel like it. That’s how you know you’re doing it.

Dion Hinchcliffe
Principal Analyst at Constellation Research

Underpinning all this transformation will be how organizations make use of their data. For many, generating data isn’t an issue; ops teams are frequently buried in the stuff. The challenge is turning that data into actionable insights. Typically, this is because data is isolated across different systems and stored in multiple formats, making it hard to access and process in a joined-up way. 

“The problem is not getting to the data, it’s having the data be relational,” said Kelly Brown, Staff Vice President Business Improvement, Provider Operations at Elevance Health, speaking in Nashville. “Everybody’s working very hard in their own individual silo, but we need to bring that data together and have a centralized data model.” 

Even if organizations can get their data out of silos and into a central repository or operations data lake, the quality of that data is still critical: the insights that are generated will only be as good as the data being fed into the system. 

“One of the issues with data that a lot of organizations are facing is their data lake is actually more like a data swamp,” said Hinchcliffe. “They’re throwing the data in there, but it’s not connected together. It’s not integrated; it’s not a proper data model.” 

That is going to stop organizations moving fast and taking advantage of technological change, he says. It will also mean they are missing an opportunity to get a 360-view of their business that would significantly enhance decision making. 

“If you use technology in every part of your business, you can now get data and insights from every part of your business for the very first time in human history,” Hinchcliffe said. 

Strategic goals 

When it comes to modernizing the operations function, organizations need to have a clear strategy in place, says Anna Itsiopoulos, an experienced operations professional, speaking at the Melbourne conference. That means first outlining what an organization wants to achieve and then working out what data is needed to meet that goal. 

“You can spend your life analyzing data and you can come up with the most amazing insights, but if they’re not going to add value, then what are you doing?” Itsiopoulos said. 

Organizations also need to ensure they have the right operational structure in place to take advantage of third-party technology rather than trying to build capability in-house. 

“You can partner with the right companies to give you the right technologies that you need, because you’re not going to invest in AI. You’re going to buy a service from someone that’s doing that investing, but you need to have your structure right so that when the insights come in, you can make use of it internally,” said Dan Carroll, Founder and Chief Technical Officer of Xcentuate. 

Digital transformation also requires a focus on people, not least because some workers will be resistant to change – either because they are worried that technology will replace them or because they are accustomed to working in a certain way. This means finding allies within the organization who will champion the adoption of new systems. 

“Find the people in your organization who want to change and empower them,” said Hinchcliffe. “Pass all the blockers and people who just aren’t ready and fast forward to the people that are change agents. Empower them, and they’ll pull everybody else along.”   

Operations leaders also need to ensure they have buy-in from senior management to invest in the technology that will help modernize the operations function. 

“You need to think about what you really care about as a business and then when you’re building your business case, aligning with that strategy,” said Claire Lund-Conlon, Outsource Director at Aviva, speaking at the London conference. “At Aviva, sustainability is high up the agenda, so I would be looking at how the investment would link to sustainability and customer outcomes.  

If ops leaders just focus on cost efficiency, the softer benefits can often get overlooked, she says. 

Changing perceptions 

Forward-thinking ops leaders should also try to change the C-Suite’s perception of the service operations function so the department is viewed as a strategic partner that can help deliver profits rather than being seen as a drain on resources. 

“Corporate IT went through a transformation over a decade ago, where historically they used to be looked at as an overhead within the business,” said Chris Riddell, a futurist, who moderated the Melbourne panel. “We had to quickly change the language that we were using as corporate IT, not talking about technology but talking about growth and becoming a partner to the organization.”  

By collecting operational data, ops teams can demonstrate the value they deliver for the business. For instance, Anthony Templar, Head of Servicing at ANZ, was able to show that if certain workers came in later on Mondays, they would be more productive – enabling the bank to put a dollar value on the savings it could make. 

“It was that simple data point of saying this was the cost in time and extrapolating that into the salary cost,” said Templar. “It’s easy with data to try and be complex, but there’s a great opportunity to go the other way and be simple about it in ways that resonate with people.” 

Some operations teams are already embracing digital transformation and using advanced AI to support their human workforce. For instance, Christopher Matz, Service Delivery Ops Lead at Accenture, says AI isn’t replacing workers, it is performing tasks that it wasn’t possible for humans to do in the first place.  

“It’s taking unscripted texts, like looking through email boxes and helping us find backlogs that maybe we didn’t even know we had,” said Matz. “So, we’re actually starting to get more data that’s helping us become more efficient in our operations by looking at things that I could have never had a human sitting there looking across all the various mailboxes within the organization.”  

Ultimately, the steady march of technological change and the rise of advanced AI is prompting service operations to redesign their working practices and think more broadly about the future of ops – whether they are ready to or not. 

It’s forcing people to go back to the fundamentals, reorganizing, looking at your organizational internal capabilities, processes, operations…It’s forcing us to clear house.

Mona Ashok
Associate Professor of Digital Transformation at Henley Business School

Will 2024 be any different for service operations? 

OpsTracker is our quarterly dive into the state of operations around the world, designed for Executives leading operations in financial services and business outsourcers. It features an in-depth analysis of OpsIndex data – performance data taken from across our customer base about the health and performance of operations – which gives you a benchmark for your own efforts and some ideas on where to focus your effort. OpsTracker also features articles from operations leaders, ActiveOps senior management, and academics, all talking about key issues in service operations.  Get your copy of OpsTracker issue 4 now.

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