How business simplification can help companies compete against the focused and fleet-footed

1. Copyright © 2016 Tata Consultancy Services Limited
A Cure for Complexity
Anantha P. Sekar, Global Head – Integrated Offerings, Global Consulting Practice
Nidhi Srivastava, Global Head – IT Consulting, Global Consulting Practice
February 2016
PERSPECTIVES
Volume 7 | Chapter 7

2. Simplify for a changing business world
Companies burdened by complexity must simplify to survive and grow in
a rapidly changing business world.
Rapid growth of venture capital-funded businesses
such as Snapchat and Spotify
Emergence of China as the second largest investor in R&D
after the US
Increasing use of digital channels for marketing

3. Offer too
many
products and
services to
several
customer
segments
Avoid complexity to compete effectively
Operate
globally with
specific
infrastructure
for each
market
Complexity is a challenge for companies that:
Offer
multichannel
access to
customers
Invest
substantially
in legacy
technologies
without
growth
Transact with
several
business
partners

4. Highly vulnerable to asset-light
competitors, such as internet media
and online lenders
Heavily invested in an operating model
that needs major improvements or
transformation, such as print media
and landline services
Identify the need for simplification
Companies need to simplify their businesses if they are:

5. Companies that trim operations can effectively channel resources
against more agile competitors.
Procter & Gamble sold 43
beauty product brands to
focus on brands that best
leveraged core competencies
HSBC cut annual costs and
reduced its workforce in an
overhaul of its global
business to focus on Asia
Focus on core businesses

6. Uber and Airbnb, that trade on existing
resources to connect consumers with services
Netflix, that mines data on viewer habits
to predict which shows will succeed
Transform through technological advances
Most CEOs consider technological advances to be the biggest driver of
transformation. This is based on the growth of digital companies such as:

7. Prune the
products and
services portfolio
Restructure the
operating model
by streamlining
processes and
systems
Redesign the
partner ecosystem
to outsource more
non-differentiating
business processes
Adopt four elements of business simplification
Boost people
productivity with
training, and
better data
and tools for
decision-making

8. Reduce the number of offerings in a manner that supports future growth
in the remaining portfolio. For example:
Build flexibility in supporting processes and
technologies so that they are not specific to a
particular product or business model
1. Prune the product portfolio
Design and build products differently to leverage
common platforms and reusable components

9. Use insights from
customer experiences to
create unified processes
across brands
Digitize
transactions
and streamline
common
practices
Put key systems on
common platforms to
improve productivity
and cut costs
2. Restructure the operating model
Optimize IT by
consolidating data
centers, shifting
applications to the
cloud, and offshoring
some IT functions

10. Standardize business processes
and train people to master them
3. Boost human capital performance
Identify work that can be
automated to improve efficiency
and price-competitiveness
Provide employees with the right
software tools and quick access to
better data for decision-making

11. External partners
can perform
operations that
do not make a
competitive
difference.
4. Redesign the partner ecosystem
Finding the right
business partner
is critical for
asset-and people-
intensive
processes that
support fast
diminishing
physical products.
These include
back-office
functions such as
human resources
and accounts
payable.
Companies prefer
to use fewer but
bigger business
partners or a
prime contractor
to manage other
partners.

12. Adopt a measured approach to
manage organizational change
through internal communication
and employee training
Overcome key challenges
Focus on a finite number of target outcomes,
using facts to justify the need for simplification
Manage cultural resistance through strong leadership
and deliver quick wins early in the simplification process

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