BCG - The Boston Consulting Group

In many organizations, operations and IT are, effectively, separate entities. This translates into higher interface costs, platform redundancy, frustration for business users, and missed opportunities to leverage scale and share best practices. Leading companies have found an innovative way of addressing the situation, however. By integrating operations and IT into what we call Centers of Processing Excellence, these companies have driven down costs and improved the overall quality of service and delivery capabilities across their organizations.

The main source of business-client revenue for telcos is about to change, from the large-corporate sector to the SME sector. Incumbent telcos need to make appropriate changes in turn, and optimize their market-segmentation, product offerings, and delivery of services. In most cases, they should also establish a dedicated SME unit. This adjustment process is fraught with challenges—from pricing of bundles to transacting with reseller partners—and is best implemented in phases, with help from a real-time pilot.

In a quest for cost savings and improved efficiency, many companies outsource portions of their IT. Few companies, however, ultimately capture the value they expected. In IT Outsourcing Rediscovered: Getting Your Share This Time Around, authors Ralf Dreischmeier, Peter Balnaves, and Anthony Datel provide eight levers to help remedy the situation.

Trying to outshout the competition in an environment that is increasingly cluttered and expensive can lead to frustration and low returns. Managers can increase returns immediately and dramatically with a zero-based budgeting approach to advertising and promotions. In allocating investments according to the distinctive needs of brands, regions or countries, and market segments, companies can free up as much as 20 percent of their A&P investment. That transfers spending to areas in which it will have the greatest impact.

Many financial services providers today find themselves in the position of Formula One teams, trying desperately to catch the "Ferraris" of their markets. To succeed, these institutions must confront their malaises and explore a holistic transformation-or large-scale makeover-of the way they do business. Although every transformation is unique in its own way, there are three imperatives that are critical to success: believe in the need for fundamental change, develop a bold agenda, and instill a winner's culture.

This Perspective argues that a big new managerial challenge for our clients is to lower transaction costs and that the way to do this is to make trust scalable. It's not an argument you hear every day. In fact, it may surprise people. Most of us think that IT has lowered transaction costs. But the authors present evidence that our obsession with lowering production costs has led to an increase in transaction costs and that these costs are putting a "fundamental brake on innovation, both within companies and among them."

Based on BCG's client work, this sanitized tale looks at how a large manufacturer successfully integrated two separate supply chains following two major acquisitions. The piece offers lessons learned—regarding prioritization of efforts, internal communication, implementation timelines, and organizational considerations—for companies facing similar circumstances.

Companies that rush overseas in search of low production costs may be walking into a strategic trap, as gridlock hits ports and railways in the United States and Europe. It's easy to underestimate the hidden costs in long supply chains and their impact on profitability. The authors demonstrate how companies can get a handle on costs by comparing the economics of a typical North American domestic supply chain with those of a supply chain based in China.

Companies that rush overseas in search of low production costs may be walking into a strategic trap, as gridlock hits ports and railways in the United States and Europe. It's easy to underestimate the hidden costs in long supply chains and their impact on profitability. The authors demonstrate how companies can get a handle on costs by comparing the economics of a typical North American domestic supply chain with those of a supply chain based in China.

This Perspective lays out our view on how leaders must resolve an inevitable and desirable tension between engaging individuals ("talent") and directing or disciplining their efforts. It is an elevator speech that is consistent with BCG's brand of thinking. In particular, it is a humanistic point of view. We respect individuals and their rights to the economic value they create. But it is also a dynamic point of view. We see organizations as complex, interactive systems in which individuals collaborate and create more value than they would on their own. Top management's job is to put in place the hard and soft conditions for such cooperation to prevail despite all the "good" reasons that hamper it: specialization, individual focus, and incentives.