What is “Digital Operations”: What is Digital Operations it and How it Can Help Your Business Growth?

To give the best digital ops definition, let’s imagine your business is an orchestra and every unit of it has its own sound. Needless to say that without a band director, it is impossible for an orchestra to perform well.

IT systems are absolutely the same - to make them work properly at every unit, it needs to be all interconnected and managed centrally. That’s where DOP’s come to the place. They help to support not only the management of the end-to-end customer experience but the entire service lifecycle. These platforms interconnect all the interactions both within the company and outside it.

Digital operations platforms render the most accurate measurement of business processes faults or opportunities. It brings together all the data coming from different E-commerce units - sales, inventory management, order warehouse and fulfillment. It easily manages all the back-office operations.

Digital operations management can also help make the processes in different departments more clear to the employees from other business units. In its turn, it helps to improve overall business operations efficiency as all the data is easily available and well-structured due to AI and ML technologies integration.

Digital ops help businesses to adapt production and supply chains to best meet customer expectations and help to elaborate new pricing models whilst improving productivity with the help of automation.

Digital operations are understood differently by IT specialists. If we do search them on the web, we’ll come across different definitions that do not always speak about the same things. Let’s compare some of them. 

Gartner: “Digital Operations is the ‘process’ center of your digital transformation, providing the orchestration of systems and other resources. It incorporates mechanisms for sensing and responding while potentially supporting dynamic learning and optimization. It is the beginning of a business discipline for increasing organizational agility. It encompasses a holistic set of methods and enabling technologies associated with how the firm delivers value via a digital platform in real-time”.

McKinsey relates digital operations to the notion of digital transformation: "Organizations that report successful digital transformations are more likely to embed advanced digital technologies in their operations. And are 1.8x more likely to modify standard operating procedures to do so."

PwC describes digital operations the following way: “Digital operations look at digitizing and integrating processes vertically across the entire organization, from product development and purchasing, through to manufacturing, logistics and service.

A high-functioning operations ecosystem is essential for planning and execution because it optimizes task time: the pacing of activity so that it continuously aligns supply chain execution (including production and replenishment) with real-time customer demand signals, to drive sustainable and profitable results across the ecosystem”.

All of them say that digital operations are the center of any big IT system that links different business units and orchestrates inner IT processes. Our team of experts would add to what is said above that digital operations function as a smart management tool as they are using ML and AI mechanisms to understand how corporate business processes are to be effectively streamlined.

Digital operations improve overall business management and client service,  enhance IT systems performance which results in a better customer experience. Digital Operations help in immediately identifying necessary process improvements. How does it work? Here comes the list of digital operations tools.

1. Real-time analytics starts to examine all the incoming and generated data, applies logic to it and enables insights and conclusions to be developed. In its turn, it helps to make better decisions as you possess all the needed information almost immediately.  
2. A helpful tool in raising the efficiency of decision making is based on the combination of AI and ML technologies. Digital operations in this respect replace a greater part of human participation in the process as it can form the necessary expertise based on the incoming data analysis and further use. 
3. Advanced analytics, together with machine learning, will formulate data patterns crucial for overall business effective performance that expand the capabilities of an enterprise and automate ITSM processes.

So we see that digital operations take a thoughtful trip through every point of the customer journey and connect it to business processes. It effectively analyses all phases, from data acquisition to processing automation.

There are several indisputable benefits that are delivered by digital operations. Those are:

1. Effective data collection

Collecting corn from the plant is more effective when it’s done by special vehicles. Same with the data - it’s a hell of a task to collect information about clients and filter when this process is not automated. This data has real value when it has been sorted out and analyzed - only after that it can be used for decision making.

Digital operations form a system for collecting the right data and packing it up for effective use in business intelligence. Enterprises have all the incoming data grouped and logically connected, thus it shows how the company functions at all levels, and business owners can have real-life pictures of their customer journey, operations, finance, production and business opportunities. 

2. Resources management

Digital operations act like a project manager who oversees and coordinates different pieces of software and databases, bringing them together in an interconnected process. The number of applications used by enterprises to run business in 2020 was over 900.  Needless to say that if they are not structured, they make a huge confusion between different business units and turn the resources management process into a real mess. Introducing digital operations makes it work properly and timely notice those areas that makes business processes run slower.

3. Customer insights

Enterprises invest in the best CRM systems to optimize the process of customers' data collection and automation of interaction with them. This is a crucial part when it comes to business and sales planning as only an in-depth understanding of consumer needs and their possible desires can support the right decision making.

Digital operations can deliver this precious data well-sorted and analyzed directly to those departments that elaborate sales and product strategy. This process cannot be done inattentively - missing sales opportunities leads to great financial losses. Experts say that upselling (when you offer more products based on customer’s interests analysis) can bring profit that is 9 times bigger than cross-selling. 

Digital operations are using both structured data (from CRM) and unstructured data - social media metrics. It delivers detailed information on the most appropriate offerings to the departments who later on use this info in the sales process. 

In the period of 2019 - 2021 Husky Jam team has developed and integrated some digital operations projects across different business spheres. After each project, we have carefully collected our client's feedback on the improvements they get. Based on our internal data, we outlined that: 

• CEO’s and CFO’s said that corporate reports have become more informative while the time to create reports has decreased on average by 25%, and the productivity of the analytical department has increased by over 15%. 
• CEO’s admitted that the speed of decision-making grew up not less than 20% and that digital operations ensured much faster implementation of changes in product, marketing, distribution policy, which resulted in improved sales statistics.
• CSO’s indicated that the overall information security level of companies has improved and the speed of response to new security problems increased by 20%, due to this financial losses from financial security problems decreased by approximately 12%.

4. Increased profit

When companies measure the results of digital operations integration, they compare the “before and after” business results. A report made by SAP stated that 80% of organizations that have integrated digital operations report increased profits and expect 23% higher revenue growth than competitors.

Why does this happen? The synergy of all the processes when they become truly interconnected saves more resources and drives sales forward, hence companies come to better business results.

5. Continuous intelligence 

Enterprises pay ever more attention to their IT security strategies today as literally every business unit has a digital footprint. Continuous intelligence - instant collection and analysis of IT processes happening within a company and rapid accident reporting - became a must for big companies. The main reason for that is that today it’s impossible to lock all the sensitive data in a safe area without cloud technologies and the use of external applications.

The new reality where over 30% of employees work from home only forces IT security strategists to ensure solid protection anywhere outside the corporate IT perimeter. Here is the point where digital operations make a major contribution to the continuous intelligence process and improve the level of IT security.

It’s a big challenge for CTO’s and IT Directors to make employees act more conscious and ensure the complete set of necessary actions to raise the security of data. Those steps traditionally include:

1. Make employees change passwords across the organization;
2. Encrypt data;
3. Integrate software that understands compliance regulations within their industry;
4. Enforce strong security standards by changing the way employees create passwords, secure data, and use working tools.

What is the input of digital operations here? As it helps to strengthen overall cooperation within companies and accurately indicate what are the purposes of different procedures and processes, it makes a great contribution in the timely and comprehensive information delivery to managers and employees who in its turn treat security rules with a deeper understanding and better respect. 

If it is so effective, then why would companies be resistant to integrate digital operations? Apart from the fact that it’s quite a costly thing to do, there are several serious challenges that companies face when they decide to make the digital transformation of their business processes. 

BCG has conducted a survey among the top management (C-level) and employees of companies to reveal the level of digital maturity in manufacturing operations. They analyzed both the efficiency of digital operations and the main challenges of their integration as well as the key challenges of their implementation. Based on the data received, they formed a list of the challenges that are happening in most of the manufacturing industries. Let’s have a look at those: 

1. 38% of respondents said that they suffered from the lack of change management - companies underinvest in training, hiring, and infrastructure development to support digital operations;
2. 36% said that functional siloes (dividing employees into groups by their functions) makes people feel negative when they are facing the necessity to adapt to the new digital infrastructure;
3. 31% said that their company lacks the necessary technical personnel and expertise (data scientists and data engineers); 
4. 29% said that their company integrates new technologies to cover specific pain points but not to create bigger value of business operations.

Digital operations embrace a great chunk of different technologies, and this list doesn’t stop growing. We’ve listed here just the main technologies that are pivotal to use. Those are:

1. Big Data and Real-Time Analytics

Enterprises operate with enormous volumes of data. This information can be most accurately managed with the help of digital operations that coordinate its processing and analysis. It allows automated reporting on different business parts like sales, warehouse, upselling forecasting and many more hence makes decision-making much more efficient and better organizing internal collaboration within a company. These advantages are widely appreciated by sales and marketing teams as they get a quick response on the decisions they made and they can either continue the direction they took or timely amend their tactics. 

2. Cloud Technology

Cloud technologies can be compared to the idea of globalization. It’s a well-known fact that globalized countries develop more rapidly as they are not functioning alone. Enterprises today need cloud technologies to grow and upgrade their products same as countries need to share knowledge and experiences.

Immediate access to corporate information and services, remote storing and processing data, better cooperation capabilities - the list of cloud technologies counts more points. It helps to reduce hardware costs and makes teamwork much more efficient. This is the area where IT departments get more tools to include more team members on the board and ensure they have all the tools and information they need wherever they occur to be located.

3. Artificial Intelligence and Machine Learning

This is the biggest part of the digital operations body, as it is a perfect tool used to automate tasks that are necessary to make business decisions. Machine learning makes it possible to move analytics multiple levels up. There is no other way enterprises can effectively and cost-efficiently analyze and pack all of their data (on finance, on customers, on supply chain, on interaction with third parties, etc.). These areas are helpful for C-levels as the rapidly received and ready-packed information on the business state and opportunities help to sharpen the decisions they make.

4. Augmented Reality

AR is the best way to connect the physical and digital worlds. This technology is actively used in the medical, real estate, automotive, marketing and other segments.

This tool makes it possible to render more services in the digital form - present new cars, show how a building will look in the future, help to train medical professionals. The world of digital operations is impossible without this marvelous IT opportunity. AR tools are admired by marketing and sales teams who can make product presentations for clients and show the products that will be developed in the future or better explain and visualize their USP’s. 

5. Internet of Things

For the millennials, it’s exactly the future they saw in films in their childhood, where machines can act and communicate without constant human intervention. In the world of healthcare, this is a must-have technology - people use wearables to constantly monitor their physical state and this data is available for process and analysis by medical institutions' IT systems.

In many other spheres, it is as widely used - most modern devices are equipped with built-in sensors and they exchange data with other devices to deliver more advanced services to people. The main beneficiants here are client service deps.

6. API Based Integration

API makes the world of technologies open for broad interaction. Applications based on API can integrate with the software used by other companies and enrich an ecosystem around it.  It is a great opportunity for enterprises as it helps to create advanced platforms for solving multiple problems and faster meeting customer requests. Important adding - with rather small budget investments. This is the way CTO’s and IT development teams can either create their own digital ecosystems or get into some widespread and well-developed IT ecosystem.

7. Robotic Process Automation (RPA)

These technologies are used more frequently today, especially in the manufacturing sector. Not only repetitive things can be automated and realized by robots, but also decision-making processes can be done in many cases by robots. Client interactions have many repeating patterns where robots can replace humans. Some of the internal business processes in the segment of analytics and decision-making can be effectively done by robots. It’s a helpful tool for both C-levels and IT deps in their everyday routine.

Digital operations become possible when a set of crucial technologies are integrated and joined together in a logical process. It forms a well-working ecosystem that has the main goal of making business units logically fulfill a set of actions that result in more competitive customer service. 

Based on extensive digital operations integration experience, HuskyJam team has formed a list of ecosystem layers that are crucial for effective digital operations functioning (both inside and outside the company). 

Let’s look at these layers closer:

• Customer value layer - responsible for personalization, customization, enhanced features, improved logistics, creative revenue models, and innovative designs and applications. 
• Value chain efficiency layer - responsible for product planning, sourcing, manufacturing, warehousing, logistics, and services.
• Technology layer - makes the overall ecosystem function properly. It needs such technologies as artificial intelligence, machine learning, the Industrial Internet of Things (IIoT), augmented and virtual reality, and robotics.
• Employees layer - responsible for organizational competence and culture. It needs contemporary IT technologies for skills management, behavior monitoring, relationships, skill sources, and career development.

Getting those altogether ensures enterprises have no gaps in their digital operations. 

We are constantly working on developing the most suitable solutions for our clients. Our experience proves that the approach cannot be the same when we deal with different markets. Dealing with companies from the financial sector needs an in-depth knowledge of customer needs and concerns, and legal requirements of the country where the company leads its business. The automotive industry has its well-known rules of client service and laws of product presentation, which also needs effective support from IT technologies.

You can have a look at our best use cases here.

How can we help our clients? Our developers know it all about effective digital operations and understand the importance of market peculiarities. When we start a new project, we follow this checklist:

1. Examine customer service and outline areas for improvement; 
2. Examine your production and supply chain and outline areas for optimization; 
3. Analyze types of your business data and how it should be better processed and packed;
4. Examine business integration opportunities (how it functions inside and how it can integrate with external companies and services); 
5. Security layer development (what is the actual IT perimeter and how to protect all its nodes and pieces); 

These are the mounts of big icebergs of work that is done in each case. As every business has its own features, the tasks are very different and most interesting.

Why don't we compare the world of business with the Formula 1 races, where technologies and skills of those who drive the bolids determine the race final, not the pilot’s luck. In the world of business, it looks pretty much the same. Those who can make the mechanism of their business processes work faster and more efficiently, win the competition. Introducing digital operations in the enterprise sector today goes without saying.

Things like real-time analytics, machine learning, AI, cloud technologies combine the body of the service and processes management called digital operations. Making these IT services work for your company leads to considerable business achievements and makes companies conquer the competition faster by raising clients' loyalty and offering better product proposals.