How to Achieve Operational Excellence
3 Min Read

How to Achieve Operational Excellence

Learn how three companies transformed CX by revamping their operations

Attendees at this year’s Liferay Symposium North America (LSNA) can expect to learn how digital operations and customer service are part of the same conversation. On one hand, a business might notice the most impact by creating a terrific customer experience, but on the other hand, creating digital experiences at scale depends on powerful core technology. In a previous post, we discussed three strategies that are essential when planning a digital transformation. But strategies alone can be difficult to process without real-world examples.

Here, we highlight three businesses that reinvented their business models to improve the customer experience by focusing on operations, distribution, and the supply chain.

Three Companies Transforming Digital Operations

Forrester predicted in 2016 that digital transformation would depend on operational excellence. “Bolting on” a digital front-end, like a new website or mobile app, without transforming back-end operations, are important services for the short-term, but they are not enough for long-term growth. The following examples, identified by Forrester, illustrate how today’s enterprises are investing in the future.

1. Walmart

As a brick-and-mortar retailer, Walmart is no stranger to rapid growth. According to the Harvard Business Review, the company maintained a compound annual growth rate of 43% from 1968 to 1988, when it had only 1200 stores and saw $16 billion in sales. Between 2011 and 2015, this rate had slowed to an average of 2.7%. To maintain its own profitability, and to compete with online retailers, Walmart announced at the end of 2014 that it would invest up to $1.5 billion over the following year in e-commerce and digital initiatives.

Walmart admits that this is long-term thinking, anticipating a loss until the fiscal year 2018. The majority of this investment went to fund new fulfillment centers in the US, Brazil and China, and expand its global technology platform, “with new data capabilities to enhance customer experience,” according to the company. In 2016, Walmart increased its commitment to e-commerce with the $3 billion acquisition of Jet.com. In a statement from CEO Doug McMillon, the purchase helps the company “offer the simplest, easiest shopping experience because that’s what our customers want.”

Not only was the operational core restructured, but Walmart also lifted its average hourly wage to $13.38 in 2016, almost double the federal minimum wage. This restructuring shows attention not just to operations and customer experience, but to the company culture, too.

2. The Home Depot

Like Walmart, The Home Depot announced an investment of $1.5 billion in 2014 to update its technology and supply chain in order to support same-day delivery for online purchases. This also included plans for new distribution centers and an overhaul to the fulfillment process, so customers could order from the company catalog without the inventory limits at their local store. According to then-CEO Frank Blake, this operational overhaul not only benefited customer service, but improved the efficiency of their supply chain.

The Home Depot’s end-to-end digital transformation is also evident in its investments in mobile and big data. Merging physical stores with distribution centers for customers with many devices is what the store calls “interconnected retail.” However, this omnichannel commitment to its B2C market has also had a positive impact on its B2B partners. According to The Home Depot’s EVP of Merchandise, Craig Menear, “We have created competitive advantage with our strategic partners that allow us to be leaders in assortment. This gives the supplier the confidence to make us their client of choice for R&D and capital investment.” Not only did The Home Depot see success with engagement, but the company became more efficient as a whole.

3. General Electric

Unlike Walmart and The Home Depot, whose major initiatives were installed to improve operations for an existing service for its customers, General Electric (GE) announced plans to invest $1 billion in 2016 to build out its subsidiary, General Electric Digital. GE hopes the subsidiary will position itself as one of the largest software and analytics companies. By continuing to develop Predix, its industrial internet platform, GE Digital can focus on creating software to make smarter machines, as well as techniques that can collect data generated by those machines. In short, GE’s digital venture is an operational overhaul for its digital transformation.

Bill Ruh, the CEO of GE Digital points out that “the industrial internet is not an IT project.” Planning change requires cooperation from technologists and business leaders. Because Gartner predicts that the number of connected devices will reach 20 billion by 2020, moving from an industrial manufacturer into a digital business is urgent, even for a 125-year-old company that has outlasted many of its peers.

Learn More About Operational Transformation at Liferay Symposium

Digital transformation depends on comprehensive cooperation from all parts of a business. The customer experience improves when operations are improved, and processes move faster when a business has a positive and productive culture; when all parts are connected. To ensure success, it is important to select the right technology on which to build and scale your omnichannel digital business.

At Liferay Symposium North America we will discuss how real transformation happens, with technical and business-oriented topics that include customer experience, personalization, OSGi, and conversations about operational reinvention. Learn more about Liferay solutions and discover more insight and strategies at this year’s Liferay Symposium North America, October 16–17 in Austin, Texas.

Register now, or learn more to convince your boss.

Originally published
July 10, 2017
 last updated
December 17, 2021
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