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Best Practices

Understanding the Benefits of Moving to a Digital Operating Model

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Published: Reading time: 4 minStijn-Pieter van Houten VP of Industry Solutions
Stijn-Pieter van HoutenVP of Industry Solutions
Published:

The shift towards a digital operating model (DOM) has become more than just a trend; it's a strategic imperative that’s here to stay. With industries facing unprecedented challenges - including supply chain disruptions, fluctuating demand, and the need for agility - the question becomes: Why should you move to a digital operating model now? Here, we will explore the multifaceted benefits of embracing a digital operating model, drawing insights from real-world examples and expert perspectives.

Why move?

The transition to a digital operating model is akin to upgrading from a traditional map to a GPS system in navigation. Just as GPS technology revolutionizes how we find our way, efficiently avoiding traffic and optimizing routes, a digital operating model transforms business processes. It allows companies to streamline operations, enhance decision-making, and deliver superior customer service by leveraging real-time data and advanced analytics.

Leveling silos for enhanced decision-making

One of the critical challenges in traditional business models is the existence of siloed planning processes. These are often rooted in legacy systems and practices, such as reliance on spreadsheets for supply chain planning. A digital operating model, by contrast, integrates these disjointed processes. It harnesses the power of digital transformation initiatives, making planning more intelligent, faster, and informed by real-time data. This integration is crucial for companies to respond swiftly to market changes, optimize their supply chain, and improve overall decision-making capabilities.

Real-world benefits

In an interview with the CEO of Marelli, Beda Bolzenius, he emphasized the significance of a digital operating model across industries, highlighting that the world's increasing complexity demands greater transparency and the development of sophisticated rules and analytics. This approach is vital for improving operational efficiency, competitive understanding, and customer relationships, ultimately driving business growth. Marelli's experience underlines the universal applicability of digital transformation, showcasing how analytics and rule-based systems can significantly impact the bottom line and enable profitable growth.

Several other leading companies have shared their journeys toward digital transformation, highlighting the tangible benefits of adopting a digital operating model:

  • Enhanced collaboration and efficiency: A global drinks manufacturer and a multinational food company both noted significant improvements in collaboration and efficiency. The adoption of digital tools like the o9 platform facilitated a unified source of truth, enabling smoother discussions, faster scenario planning, and more informed decision-making.
  • Agility in the face of disruptions: Recent global disruptions underscored the importance of agility in supply chain management. For example, a paint manufacturer’s implementation of a "Logistics Workbench" allowed for real-time visibility and responsiveness, proving essential during the pandemic's peak.
  • Long-term strategic planning: A tyre manufacturer’s experience with digital transformation showcases the value of long-term visibility and planning. By digitizing their integrated business planning, this company could anticipate demand, optimize production, and make informed decisions well in advance, highlighting the strategic advantage of a digital operating model.

The vision

The ultimate goal of transitioning to a digital operating model is not merely about adopting new technologies but transforming how businesses operate and make decisions. It's about creating a cohesive, intelligent ecosystem that leverages data to make faster, more accurate decisions that benefit customers, suppliers, and internal operations alike. This vision encompasses breaking down silos, integrating planning processes, and enhancing data-driven decision-making across the board.

Conclusion

Moving to a digital operating model is not just a technological upgrade but a strategic shift that enables businesses to navigate the complexities of the modern world more effectively. It offers a path to enhanced agility, improved collaboration, and superior decision-making capabilities. As our client success stories have shown, the journey towards digital transformation is a critical step in staying competitive and future-proofing operations in an ever-changing landscape. The analogy of upgrading from a traditional map to a GPS system encapsulates the essence of this transformation, illustrating the profound impact of digitalization on reaching business destinations more efficiently and effectively.

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The Forrester Wave™ for Collaborative Supply Networks 2022

o9 received the highest possible scores in ten criteria across the Strategy and Current Offering categories.

About the author

Stijn-Pieter van Houten VP of Industry Solutions

Stijn-Pieter van Houten

VP of Industry Solutions

Stijn-Pieter is VP of Industry Solutions at o9 Solutions. He has over 13-year consulting career in Supply Chain Strategy and Transformation and a keen interest in Planning and Control Tower topics.

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