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COOs pursue tech effectiveness amid planning, policy concerns
COOs spend so much time on immediate issues, and their companies are paying a price. In our October 2024 Pulse Survey, 86% of operations leaders say day-to-day tasks that take time away from long-term strategic thinking are somewhat of a challenge or a significant challenge to achieving their priorities. Compare that to our June 2024 Pulse Survey, when 61% said that day-to-day operations prevent them from focusing on the future vision.
The outcome of the 2024 election could increase pressures. Three-fourths of COOs say that regardless of who is president, post-election trade and tax policies will hurt US competitiveness. The same percentage say the US regulatory environment stifles their company's ability to innovate. Not that they aren’t trying. Fifty-five percent say artificial intelligence (AI) and 49% say the Internet of Things (IoT) and connected devices are among the most important digital investments for transformation their operations function.
New regulations could make it hard to make operational changes
Regulatory change is top of mind as COOs consider the election and new legislation and regulations that could follow. Among the operational areas where it would be extremely difficult for their organizations to implement changes are environmental and sustainability practices (27%) and supply chain management (26%). This may reflect both recent political debate and volatile market conditions, as geopolitical stresses — including conflicts in energy-producing regions — have added challenges in terms of sustainability goals and overall supply chain reliability.
62% say new legislation or regulations would make it moderately or extremely difficult to implement changes in environmental and sustainability practices
The relatively low level of concern with operational efficiency and cost management — generally top priorities of COOs — is striking. Only 13% say implementing changes in response to new laws or regulations would be extremely difficult. That could signal more familiarity and comfort with adapting those areas, as well as increased confidence in new technologies that drive efficiency and a labor market that has been shifting to favor businesses.
What you can do:
- Adapt to anticipate regulatory change: Invest in forecasting, scenario planning and compliance initiatives to better anticipate new legislation and policies at all levels — state, federal and global. Dedicating teams to monitor political developments can help make transitions smoother and reduce operational disruptions.
- Enhance supply chain agility: Given the complexities and gravity of consistent supply chain management, consider how diversifying suppliers and fostering strategic partnerships can mitigate risks from global tensions and market volatility.
- Be open to new ways that tech can boost efficiency: Don’t assume that traditional actions to improve operational efficiency and reduce costs will work in the long run. Implementing AI-driven analytics and other innovative solutions can help streamline processes as the regulatory landscape evolves.
Tech issues, resource scarcity are biggest hurdles to hitting operations goals
Even as technology can be used to reduce operational complexity, speed and efficiency can be harder to achieve. The most significant challenges to COOs achieving their priorities are using technology and automation effectively and resource scarcity (each 47%). Competing technology platforms and lack of adoption of new tech – such as inconsistent or reluctant use – rank nearly as high (each 43%).
86% say using technology and automation effectively is a challenge
Operations leaders have always implemented new technology, but the options and complexity available today can be overwhelming and increase the pressure on COOs to make digital investments that deliver measurable value. That also raises the stakes in the supply chain, as any interruption or shortfall in necessary resources and materials — from weather events, geopolitical conflicts and other disruptions — can have a ripple effect through operations and ultimately to a company’s bottom line.
What you can do
- Implement, learn and expand. Reevaluate your digital investment strategy to focus on scalable tech and automation solutions that align with your operational goals versus specific tasks in individual areas. Conduct assessments to identify the most effective tools and how they can be integrated in other operational areas to reduce complexity and increase speed.
- Collaborate with your teams on tech training. Head off uneven use of new technologies by exploring what training would resonate most with employees. By promoting a culture of inclusion along with innovation and providing ongoing support, you can improve adoption rates and the value of digital investments.
- Improve resilience with resources: Whether it’s diversifying suppliers, building strategic reserves or leveraging predictive analytics, implementing robust practices to reduce risks and increase resilience can help mitigate the impact of disruptions and maintain continuity in operations.
COOs continue leaning into AI to help drive transformation
Operations leaders are intensely aware of how thoughtful technology investments can not only improve speed and efficiency in the near term but also better position their company for the years ahead. Among their most important digital investments, AI (55%) and IoT and connected devices (49%) top the list, with data analytics and intelligent automation (each 47%) not far behind.
55% of COOs say AI is one of the most important digital investments for transforming their operations function
While some of these technologies have garnered significant attention in the C-suite and in the media, other more established ones are flying below the radar. Consider that only 19% of COOs say enterprise resource planning (ERP) enhancements are important for operations transformation. That suggests COOs see ERP as less likely to transform operations. Yet when we asked operations and supply chain leaders in another recent survey about their most successful implementations, ERP investments and updates were often cited.
What you can do
Go deeper with AI and IoT. You know the potential of these technologies and may have already invested significantly. Now get smarter by identifying which use cases have been the most help with simplifying processes, anticipating issues and making more informed decisions.
Start conquering data complexity. Data availability is rarely the problem, but many leaders are still scratching the surface on how data analytics can improve operational insights and process efficiency. Effective analysis of large datasets can help drive more strategic decision-making and long-term growth.
Reevaluate ERP opportunities. Don’t take ERP for granted, perhaps thinking it’s something for CFOs or other executives to worry about. Updating ERP capabilities can help integrate various business processes, improve data accuracy and enable better resource management.
Get access to the complete survey responses and data
View the main Pulse survey
Executive takes on Election 2024
About the survey
Our latest PwC Pulse Survey, fielded September 12 to September 19, 2024, surveyed 709 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 77 were COOs.
Past surveys
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