How to Achieve Operational Excellence In 3 Steps
‘Operational excellence’ is one of those terms bandied about the internet and in certain circles. It’s something we all should be striving for — merchants and technologists like VL OMNI alike, and more. But what exactly does this mean in practical application for Merchants, omnichannel and pure play ecommerce? We walk you through how you can achieve operational excellence with 3 simple steps.
What is Operational Excellence?
We’ll save you the effort of searching: Operational excellence is “the execution of the business strategy more consistently and reliably than the competition”, and is validated or refuted by “results”. Put into more practical laymens’ terms, operational excellence can be compared to accuracy and precision. Wherein accuracy is the closeness to the goal or target, and precision is the grouping of like data.
Operational excellence is the combination of both: how accurate are your (operational) processes, and how consistent — precise — are those processes and their results? For Merchants partnered with VL OMNI, operational excellence is very much a combination of accuracy and precision, and spread over time, how consistent a Merchants’ business can maintain over the long-term.
Where does Operational Excellence Live?
Much like customer experience, operational excellence is ephemeral in that it lives between applications and is a function of several applications working in sync and producing little to no errors that require intervention by the company. In contrast, operational excellence does not live within a single application; these non-distributed errors can be thought of exactly that — errors that require resolution within that single application. It pertains to distributed issues or improvements that can be made to the company.
Operational excellence is a strategic exercise. If you find yourself simply plugging holes to solve problems, you’re still a few steps away from being able to improve how your entire business sync and moves forward together.
How can my business achieve Operational Excellence?
There are three steps any business, ecommerce, multi channel, omnichannel, or anything in between, can take towards achieving operational excellence:
- Evaluate and implement the right technological pieces,
- Link all applications together to form a holistic technology stack by leveraging the right data integration partners and/or technology, and
- Gather results, measure, and revise iteratively across the organization to plug operational gaps and to push towards excellence.
Step #1: Evaluate and implement the right technological pieces
Setting a solid foundation is the sort of parental advice many of us have received, and not much changes when you step into your office each morning. Merchants, no matter their vertical or area of expertise, need to ensure they have the right tactics (tools) to action on their strategy (goals). Tactics are the pieces that allow you to get where you want to go, whereas strategy is the roadmap directing the tactical direction.
In order to ensure you’re implementing the right pieces of technology in your business to move towards a holistic technology stack, VL OMNI highly recommends following these measured processes whereby you can become your own advocate in your search for the right tools to achieve your goals.
Those Merchants who are truly future-thinking go one step further: they not only think of their immediate technology needs for today, but they also think about the future. They consider how a single technology piece will age in the broader technology stack, and how it will need to be sunsetted in favour for the next piece of technology in that sector that will help them level up. Think of the technology your business uses as a game of chess. Immediate moves are important, but it’s the move two or three or more down the line that will truly help you succeed and actualize your goals.
Step #2: Linking your applications to form a holistic technology stack
Once you have an iterative technology strategy in hand and are in the implementation phase, the next step towards operational excellence is forming a holistic technology stack. For instance, linking all disparate applications together so that they ‘talk’ to each other in such a way that meets your business needs. (VL OMNI refers to this as our configuration process, wherein we consult with you to set our managed service whereby we incorporate discrete business rules directly into your integrations. This means your business can treat your data in ways that matter most to your business’ wants and needs, without manual intervention at either the source application or the target(s).)
Without tying all your applications together, you can’t really think of your technology as a holistic stack, and it will create bottlenecks in efficiencies and repercussions in costs. Learn more about the different approaches to data integration and their products, and which businesses fit best for each approach here. Depending on your approach, the size of your business (more so in terms of the volume of data and/or orders/transactions you processes a day, and less so about the actual size of your company or your employee count), and complexity of applications in your stack (e.g., Quickbooks, a SMB designed product, versus ERPs, geared towards more complex medium- to enterprise-sized businesses), your integration and data automation needs will vary.
Whatever data integration strategy you select will have implications on your business and ability to achieve broader operational excellence. However, just like your selection of key applications in step 1, your data integration strategy and providing partner will either enable your business to achieve more, or leave you with just as much or more work than you initially started with.
Step #3: Gather results, measure, and revise iteratively
You’ve gone through steps 1 & 2, or perhaps you’ve already got these pieces in place. Either way, you’re now ready to fully focus on the refinement that is operational excellence.
In order to know where to start, you first need to gather data — the data that causes you, your business, your staff, and your customers headaches. You can also think of this as ‘problems’: What problems does your business face regularly? Focus intently on those that require manual intervention to resolve.
Examples of gathering data on these problems can include:
- Customer issues and/or complaints around fulfillment, order status, and general visibility
- Errors that populate between systems, such as a missing product on your ecommerce store that still exists on your ERP system(s)
- Any situation that causes a charge-back or penalty situation for your business
Once you understand what issues exist that live across the technology stack and within the business as an entity, the next step is to truly understand the causes or sources of these issues.
- What are the nuances of the error or issue? Is this a repeated incident, or a one-off?
- Where did the error or issue originate?
- What’s the impact of the issue or error?
With these three general premises, you should be able to measure the impact of the issue or error within your company. Many businesses are actively working towards refining their processes and being better for the benefit of their own business, but also their staff and customers. And it’s rare that those working on operational excellence for the first perhaps major time to find more than a single issue that needs resolution. It’s important to itemize and prioritize these based on factors important to your business. The issues with the highest ROI or positive impact should be prioritized as first as they’ll have the largest positive impact on your operations.
Finally, with a full understanding of the issue and it’s source(s), you can begin the resolution stage. This is, blissfully, often the easiest step for Merchants that VL OMNI partners with! The most work comes from identifying that there is a problem and understanding where it lives. Resolution is often as simple as locating the problem file, product, or so forth and editing the master file (often in the ERP or PIM+OMS+ERP, and/or CMS for those who are already headless).
But you’re not done quite yet: this process needs to be repeated iteratively to ensure the highest degree of operational success. In today’s world, nothing is ever ‘done’ or ‘perfect’, and this also applies to operational excellence. Systems, issues, and errors should be continually monitored, itemized, and resolved in an almost never-ending cycle that strives for perfection — or as close to perfection — as your business can be.
(Step 4: The results)
Not an actual step but more so seeing the fruits of all your hard work, operational excellence comes to fruition in all the ways we’ve already mentioned throughout this article: in happier employees, smoother processes, less work-arounds, and happier customers who need to reach out for manual intervention or help less and less.
Operational excellence is truly a smoothly running business with the most satisfaction internal and external to your business, no matter what your business does.
How does VL OMNI help my business work towards and achieve Operational Excellence?
VL OMNI fulfills a key step towards operational excellence in the capacity of Step 2: we connect all disparate applications together to form a holistic, unified, and automated technology stack for our Merchants. We also go above and beyond the standard integration in incorporating key business rules via our business logic engine, which applies business rules directly to data as it’s moved, transformed, and sent to multiple target applications in a single flow. For VL OMNI Merchants, this means data is truly automated in all sectors we touch: no need for manual intervention at source or target applications — ever.
This high degree of strategic integration and automation is what allows VL OMNI Merchants to pursue true operational excellence that lasts and satisfies key areas that require improvement.
Additionally, with the VL OMNI Dashboard Merchants are able to drill down into specific issues across their organization by lieu of the unique channel-wide visibility the VL OMNI Dashboard provides. We provide the deep intelligence into where your business is meeting and exceeding expectations. And even more valuable, we also provide where improvements can be made in other systems for further efficacy.
At VL OMNI, we’re partners in our Merchants’ long-term success, and we provide you with all the tools you need to exceed your competition to reach true operational excellence today, tomorrow, and far into the future.