How to optimize firm operations internally


Digitalization is providing business with very strong benefits by optimizing firm operations internally. Executives are digital transforming three elements: process digitization, worker enablement, and performance management of operational processes. Digital transformation can influences positively the firm performance measured by profitability, return on investment, and sales growth in comparison to the direct competitors. Companies historically have used automation to make the processes faster and reduce manual labor. Digitizing information intensive processes can bring the costs down up to 90 percent and can improve the turnaround times by several orders of magnitude. Digitalization can also improve the work satisfaction for employees by automating the work routine as companies have begun to implement self-service tools to free human resource people from administrative tasks and to focus on more strategic tasks.

Digitalization is improving the way of working via digital means such as e-mails, video tools, and telepresence systems. Nowadays, more work is being separated from the place as some of the Fortune 500 companies including AT & T and Accenture have partially or fully eliminated traditional offices. Remote working is associated with higher job satisfaction, organizational commitment and job-related well- 10 being for employees. Remote working can also bring higher productivity and saves in real estate costs for companies as the example of International Business Machines Crop that allowed 42% of its employees to work remotely and as a result saved $100 million a year. Even though the virtualization of individual work through collaborative tools was initially done for cost reduction they are now enabling knowledge sharing among employees to identify and get questions answered in real time from experts. Therefore, companies are investing in mobility, collaborative technologies, and connect objects to provide value-added services to employees to improve the quality and efficiency of work. However, teleworking is not always encouraged and practiced by business leaders because they believe that it doesn’t foster the speed of work and innovation. For example, IBM, one of the pioneers of remote working, is requiring their remote workers to relocate to a regional office or leave the company. IBM leaders argue that placing employees in the same physical space will accelerate the pace of work and improve collaboration. Similarly, the Yahoo CEO Marissa Mayer banned working from home because she felt that it harmed the company’s success factors such speed of delivery and innovation while the Google’s CFO, Patrick Pichette stated that working from office is very important for them and that his firm tries to keep the number of employees telecommuting at Google to ‘as few as possible’.

Managers are using performance transparency to understand the activities and outcomes of the organization in order to make better-informed decisions. Data are widely considered to be the driver to make better decisions and to improve profitability companies that characterized themselves as data-driven were on average 5% more productive and 6% more profitable compared to their competitors. Therefore, executives run scenarios and simulations based on data to provide them with immediate guidance on what kind of actions to undertake when there is a disruption from unexpected competitors or when customers signal a desire to change provider.