A look at the economic weather report shows a storm front rolling towards the German economy: this summer, the ifo Business Climate Index fell unexpectedly dramatically, to its lowest level since 2013. The fear of trade wars, Brexit and the inability to keep pace with global megatrends such as digitization is spreading across German executive suites. At least 22 of the 30 DAX companies have announced or already started extensive programs to stabilize earnings, reduce costs and/or restructure their business. And even medium-sized companies are preparing for worse times, as shown by the announced plant closures of Vorwerk and WMF.
This time some things are different than the big cost-cutting programs of the past. While programs used to have a relatively narrow focus – e.g., measures to reduce administrative costs or lean operations in companies – operational improvement programs are now much more complex. They often target four areas of performance improvement: portfolio, processes and structures, assets and employees. Consequently, the effects to be measured are also more complex and broader: operating and capital costs, sales revenues, product and service quality, customer satisfaction, employee quality, etc. A second difference: Nowadays the megatrend of digitalization as a basic “enabler” can no longer be ignored during the searching for improvement potential, be it through digital service and business models or the development and implementation of digital products to increase sales, the use of process mining or process automation to increase efficiency, the optimization of customer interactions with the focus on customer journey / experience or the development of employees’ digital skills. A third difference is that many companies recognize that measures must also be assessed according to sustainability criteria in order to meet customer requirements, future regulation and/or their own guidelines. The central point of all these programs are the individual measures to be implemented – sometimes up to several hundred. This complexity is precisely why a comprehensive and tailor-made approach is important in this context.
A further difference is that the way programs are conducted hardly resembles the central TOP programs of 10 years ago. Nowadays, measures are often developed and executed in iterative, agile ways – “bottom up”. Starting points for improvement are more and more frequently derived from data-driven analysis, which requires a high level of IT competence in the programs. One example is the real-time tracking of hundreds of thousands of transactions within running processes and the automated analysis of process inefficiencies using process mining. And finally, the human factor plays an increasingly important role in the implementation of change measures, giving change management a starring role in these programs.
acondas uses an innovative approach for the initiation, execution and implementation of actions plan (acondas NEXT®), which reflects the characteristics and special features described above.
Fugure: acondas NEXT® approach
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