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Will 2024 be the year Australian ops teams can finally transform?

As 2023 draws to a close, we can all acknowledge it’s been a challenging year for operations leaders. Looking forward to next year, the million-dollar question is how to overcome these challenges in 2024, and in particular, how data and artificial intelligence (AI) can help transform the way ops are run.

The need for modernisation is becoming increasingly urgent. Operations teams are navigating rapidly fluctuating work volumes (which are changing at a faster pace than ever this year), trying to figure out what the new normal looks like, and balancing that against the requirement to do more with less – all at the same time. Data analytics and AI give ops leaders an opportunity to unlock latent capacity to achieve all of that, without working their teams – or themselves – into the ground.

The operating environment is adding to the problem. On the economic front, inflationary pressures have continued to hang around, with the Reserve Bank of Australia forced to raise interest rates in November by a quarter of a percentage point to 4.35% – the first increase since June. Prices increased 5.6% on an annual basis in September, compared to 5.2% in August.

Growth has been stingy too, expanding by just 0.4% in the second quarter as Australians battle a cost-of-living crisis. Almost half of Australian mortgage holders are suffering from financial stress, according to Australian National University data.

In the latest edition of our OpsTracker – the Quarterly Performance Tracker for Operations, we reviewed OpsIndex data for the third quarter (July-September 2023) and looked ahead at the trends that are expected to shape service operations in the coming 12 months. The OpsIndex aggregates the data of thousands of operations functions worldwide to analyse how organisations are running their operations according to five key metrics – agility, control, effectiveness, efficiency, and focus – giving an overall score.

Australia and New Zealand’s grip is loosening on its long-held status as best performing region, rising to 61.6% from 60% but just over 1% below where it was heading into the final quarter of 2022. Elsewhere in the world, the UK and Ireland’s disappointing performance resumed in the third quarter, dropping to 45.7% from 49% in the previous quarter, which is the lowest (accounting for revised numbers) in at least four years. North America has continued to tease out consistent performance improvements, increasing just over 2% to 58.9% and 8% higher than where it was a year ago.

So, what do operations leaders in Australia need to watch out for in 2024 to maintain operational efficiency?

Advanced AI is coming

As advanced AI tools become ever-more applicable to the real world, ops leaders are understandably trying to figure out what AI means for them. While there is no doubt that advanced AI will change how operations are run, ops professionals believe that the transformative impact of AI is going to be gradual rather than sudden, with advanced AI likely to be first used to enhance human performance rather than replace them (for instance, one US business process outsourcing firm is using generative AI to help ops teams in different parts of the world to compose emails back to US operations in English rather their native language).

Cleaning up your data

Operations teams have no shortage of data. Their challenge is turning it into insights that can help improve operational performance. To do that, organisations need to get their data in order by dismantling traditional data silos and creating a centralised 360-degree view of the business to improve planning and resource management. Financial institutions are particularly under pressure in this area as regulatory pressures and the rise of advanced AI tools means those who don’t get their data in order will be left behind.

Operations as a business partner

Adopting AI in ops is going to require significant investment, which will involve getting buy-in from senior leaders to throw money at a department that has traditionally been seen as a cost centre. Ops leaders can turn this narrative around by adopting a similar technique as IT leaders have done in the past and position operations as a business partner that can save the organisation money. The case for AI is clear: it can streamline operational performance by automating tasks and enable teams to become more productive and efficient, helping to drive cost savings across the business.

Hybrid working 2.0

Hybrid working continues to spark debate as more organisations call on their workers to return to the office. What has become clear is that ops teams that use workforce data to track employee performance are able to demonstrate if their hybrid working policies are working or not. While many organisations still think about hybrid working as solely a question of location, some firms are now starting to think about it as a question of who is performing the work – humans or robots. By using a hybrid of the two, organisations can unlock greater efficiencies and improve performance outcomes.

Investing in team culture

As organisations look at how AI can help re-engineer the way ops is run, operations leaders need to ensure they don’t lose sight of the human side of the workforce and ensure their people are engaged in the transformation journey. Not only does this mean finding change agents within the business who can champion new ways of working, it also means investing in team culture and empowering individuals to speak up.

Given the ongoing backdrop of uncertainty across A/NZ and globally, it is more important than ever that operations leaders have access to real-time data that can help unlock capacity and improve decision making. While ops teams have been striving to transform for some time, most organisations are still struggling to get to grips with their data. But with the rise of generative AI and the potential for advanced automation it brings, the opportunity for ops teams to completely transform the way operations are run is finally within reach. To capitalise on that opportunity, getting their data in order has become more urgent than ever for service operations.

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