Smart business transformations - from a practitioner’s point of view

Implementing business transformations incorporating artificial intelligence (AI) and fueled more recently by the excitement around generative AI (Gen AI), is an increasingly popular course of action for companies.

According to Capgemini’s recent survey “AI-led Generative Business Services: The future of Global Business Services (GBS)” conducted in partnership with HFS Research, over 80% of respondents agree it is time to rethink Global Business Services as Generative Business Services – better defined as AI-led data-driven services focused on driving growth and the enterprise innovation agenda.

It is worth remembering, however, that business transformations with tangible business outcomes are enabled through a comprehensive approach, i.e., applying suitable technology platforms, together with operating model and process transformation, not necessarily just AI alone.

The key to their effectiveness is a thorough diagnosis of the company’s needs, a strategic approach and individually tailored and industry specific solutions that collectively transform business operating models, processes, technology, and people.

In business transformations, we are seeing significant reliance and focus on the latest technology solutions, but the basic principles remain the same. The customer, i.e., the end recipient of products or services, must always be at the centre of the design. It is unlikely the transformation will be successful if we forget to identify their needs and solve them.

An increasingly popular and effective method of building a transformation strategy is the Outcomes Based Model, which focuses more on the business impact of the transformation program, rather than typical process performance measures and fixed or variable fee pricing models. Transformation initiatives or services provided are aligned with business outcomes, e.g., working capital improvements through reduction of aged debt, and increasing revenue through revenue leakage detection, prevention, and recovery. We are seeing cases where such models are applied are resulting in significant cashflow improvements, and outcomes realized in millions of euros for our clients.

This approach significantly improves the effectiveness of business transformation and goes beyond traditional priorities focused on productivity or labour arbitrage. It is then much easier to get the attention of C-level Executives, who are typically the decision makers and buyers of business transformation services.

We choose to work in this model because we are confident that well-planned transformations will deliver the expected results. We need to have a deep understanding of the clients we work with to enable the development of optimal strategies for them. We can then create tailored and industry specific solutions and prepare and support them through the change journey. We also rely on detailed data analysis and insights to drive informed decision making. This is coupled with an outcome-based commercial model which incentivizes the clients and Capgemini. This is what makes this model an interesting and beneficial formula for both parties.

In the context of strategic business transformation, very often the key role is played by organisations known as Global Business Services (GBS) or Business Process Outsourcing (BPO) Providers. This sector is strongly represented in Poland, and other countries in the region such as Romania, due to the availability of highly qualified specialists, expertise, and still relatively low wage costs in comparison to other countries. While the traditional roles and benefits of GBS/BPO remain vital and relevant, there is an urgent need to redefine the GBS/BPO narrative to appeal more to Business Leaders who are demanding more than just cost reduction.

Capgemini is no longer just a transactional services vendor, it is an ecosystem orchestrator that brings new skills, technologies, and capabilities to its clients, and thus is not just providing support but drives the strategic objectives of modern enterprises. Capgemini and its services and business transformation programs more often are expanding their scope of responsibility and expansion into more business lines and functional areas of their clients. which is allowing for greater bottom- and top-line financial impact for clients.

The power of simplicity

Today, technology is evolving at a dizzying pace, leaving companies constantly bombarded with innovative solutions that have the potential to improve their operations. This rapid pace of change often prevents full adaptation, resulting in technologies not used to their best advantage, which in turn inhibits the maximization of business impact. Many organizations implement only partial solutions, and do not always exhaust the possibilities of the standard technology deployed, limiting their effectiveness and return on investment.

Technology should be used to its fullest extent and that allows a greater part of the organisation to leverage the solution and its benefits. Such extensive use optimizes costs. Simply put, it means our clients can make the most of what they pay for. Companies should also look for technology platforms that allow them to fulfil many diverse needs, moving away from a multi-tool approach, and focusing on full and proper adoption.

The company’s growth is based on the development of the teams’ competencies

The key to successful business transformations, apart from good strategic planning, is change management & communication. Change is only effective if the people working in companies understand it, are convinced of it, and ideally when they have the chance to co-create it.

Business transformation also means developing competencies for the people the company employs. It is important to let people know from the very beginning of the process what role they will play during and after the change. In parallel with changes to business processes, it is important to plan and deliver robust training and equip staff with the right tools and resources to ensure there is no or limited disruption to business as usual and people can excel in their roles.

At Capgemini, we are focused on developing our teams in Gen AI and Industry specific certifications. People working for us have the opportunity, and sometimes even the obligation, to obtain key certifications in this area. This is to ensure we stay up to date with the current trends and changes and apply tailored solutions that are optimal for our clients. This is the only way we can be a dependable partner for our clients.

One of the best-performing ways of implementing change is through a “pilot” approach. This allows for testing a solution in a selected and sometimes isolated area before a wider roll out. This method works most effectively in large companies with a regional and global reach. The choice can be made on a geographical level, e.g., starting in a particular country or city according to business lines or business functions, and where people are most suited and willing to participate in the change process. The success of operating on a smaller scale allows you to de-risk, and with proven and positive results, to convince people who are less supportive of change before proceeding on an organisation-wide scale.

Twilight of the old technologies

Even the best implemented changes take time. In the case of large platforms such as S/4HANA, for example, the process can take years. Business Managers and their teams need to be prepared for a period of operating in different realities simultaneously. This is necessary to ensure business continuity, and it is worth taking the time to act in a comprehensive way because well-planned transformations, based on clearly defined business goals, produce long-term, measurable results and outcomes.