Tag Archives: Resilience

Updates from McKinsey

Building a cloud-ready operating model for agility and resiliency
Four operating-model changes can help companies accelerate the journey to cloud.
By Santiago Comella-Dorda, Mishal Desai, Arun Gundurao, Krish Krishnakanthan, and Selim Sulos – With customer expectations and technology evolving at an unprecedented clip, moving to cloud is increasingly becoming a strategic priority for businesses. Capturing the $1 trillion value up for grabs in the cloud, however, has proven frustratingly difficult for many companies. One of the main reasons for this difficulty is that IT’s operating model remains stuck in a quagmire of legacy processes, methodologies, and technologies.

Overcoming this problem requires business and IT to take a step back and think holistically about their cloud operating model. And they need to move now. IT has become integral to driving value and a crucial enabler in meeting business and customer expectations of speed, flexibility, cost, and reliability. At the same time, the risk of failure is increasing because of the growth in complexities and demands around new architectures, agile application development, on-demand access to infrastructure through self-service, cloud migration, and distributed computing, to name a few.

While most organizations will need to adopt a hybrid-cloud approach for the foreseeable future, it will be hard to capture much of cloud’s value without reimagining the IT infrastructure that is ground zero of the cloud operating model. Set up correctly, infrastructure can quickly expand access to new services and products, accelerate time to market for application teams, and cut operating costs at the same time—all of which unleash businesses’ innovation potential.

To capture these benefits, companies must undertake a holistic transformation of infrastructure grounded on four mutually reinforcing shifts: adopt a site-reliability-engineer (SRE) model, 1 design infrastructure services as products, manage outcomes versus activities, and build an engineering-focused talent model. The benefits of these shifts can accrue to infrastructure and operations (I&O) even if they remain completely on-premises. more>

Updates from McKinsey

Resilience in transport and logistics
The transportation-and-logistics sector is especially susceptible to economic shocks. Here’s how to prepare your operations for a smoother ride.
By Sal Arora, Wigbert Böhm, Kevin Dolan, Rebecca Gould, and Scott Mcconnell – The transportation-and-logistics (T&L) sector has benefitted from many of the most important business trends of the past half century. Globalization, the evolution of sophisticated just-in-time supply chains, and the rise of e-commerce have all helped the sector grow at a rate broadly similar to the overall economy.

But it hasn’t all been smooth sailing. Economic downturns tend to hit the sector particularly hard. Our analysis of the past five US recessions shows that T&L companies suffer more on average than the economy as a whole. And in recent cycles, the problem may have worsened. Truck transportation, for example, experienced little contraction in the recessions of 1980, 1982 and 1991. In 2001, by contrast, the industry shrank by 6 percent, and the 2008 recession triggered an 18 percent contraction.

As in all industries, sector averages don’t tell the whole story. Some companies ride out downturns much more successfully than others. When McKinsey analyzed the performance of around 1000 large, publicly traded companies through the 2007-2008 global recession, we identified a subgroup of “resilient” organizations that outperformed their peers by a significant margin over the cycle. The performance of these companies dipped less overall during the recession and improved faster during the ensuing economic recovery.

By 2017, resilient companies had delivered a cumulative total return to shareholders (TRS) that was more than 150 percent higher than their non-resilient counterparts. Among the logistics and transportation players in the study, the gap was even starker, at 267 percent. more>

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