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The Digitization of Business Processes
By Andrew S. Weinstein
Organizations are looking for a quick and seamless digital experience, and they want it today
Look within any organization large or small and you will find that many of their business processes are stuck in Analog! That does not mean that they are not automated. Rather, it means that they are not leveraging the value that today’s technology affords to improve business processes in a number of ways, which have significant impact on an organization’s bottom line, including:
• Global Process Standardization
• Reduced Process Cycle Time
• Improved Process Visibility/Tracking
• Implementation of Process Controls
• Elimination of Paper Forms
• Improved Workflow Productivity
‘Customers are demanding from companies in many industries a radical overhaul of business processes. Intuitive interfaces, around-the-clock availability, real-time fulfillment, personalized treatment, global consistency, and zero errors—this is the world to which customers have become increasingly accustomed. It’s more than a superior user experience, however; when companies get it right, they can also offer more competitive prices because of lower costs, better operational controls, and less risk.
Companies must go beyond simply automating an existing process. They must reinvent the entire business process, including cutting the number of steps required, reducing the number of documents, developing automated decision making, and dealing with regulatory and fraud issues.
Digitization often enables a process to be fundamentally reconfigured; for example, combining automated decision making with self-service can eliminate manual processes. Successful digitization efforts start by designing the future state for each process without regard for current constraints—say, shortening a process turnaround time from days to minutes. Once a compelling future state has been described, constraints (for instance, legally required checks) can be reintroduced. Companies should not hesitate to challenge each constraint. Many are corporate myths that can be quickly resolved through discussions with customers or regulators.’ 1
In order to reduce the challenge of complex IT legacy-systems integration, which can be more difficult to move along at a quicker pace, there are ways to mitigate the risks of delay. Outsourced IT organizations that provide the established solutions and methodology will not only significantly reduce overall implementation schedules, but will also maintain tight budget constraints. By standardizing on proven solutions that target key business processes, you will be delivering tools that offer cross-functional objectives, further reducing excessive and needless costs down the road.
Utilizing today’s connectivity technology and communication channels, specifically the Internet (or Cloud), Mobile Devices, and Social Networks, together with Rules-based Business Process Digitization Technology, transforms business processes from the old and slower 20th century way of operating a business (Analog) into the new and faster 21st century way of operating a business in real-time (Digital). The methodology of transforming a business process from Analog to Digital is called Process Digitization™.
Platforms to deliver Process Digitization™
The Cloud: The Cloud provides the infrastructure and the business model needed to implement and deploy new digitized business solutions. It makes the solutions available to a broad audience as it lowers the barrier of adoption with ease of deployment, scalability, and minimum capital expenditure, as well as changing the ability of companies to deliver solutions at the new speed of business and meet demands for greater agility. Overall, Cloud solutions have the potential to accelerate innovation and time-to-market, enhance customer engagement, and improve communication between trading partners.
Mobile Devices: The device mobilization world is rapidly changing as well. In business, it’s moving from desktops and laptops to mobile devices like smartphones and tablets. Mobile devices have an advantage because they are ubiquitous, always on, always connected, and integrate multiple functions into one device. Enterprises are adopting smartphones and tablets to enable their mobile workers to interact with business processes while on the go. IDC predicts that by 2015 more than a third of the total workforce will fall into the category of “mobile worker.”
Social Networks: Communication channels within enterprises have expanded well beyond paper and e-mail. Due to the Cloud and Mobile Devices, Private as well as Public Social Media platforms like Google Plus, Facebook, and LinkedIn have become yet another communication channel increasing the speed of communication and collaboration between internal resources as well as with trading partners. Many organizations have ‘company pages’ on social networks for promotion purposes, used primarily by marketing, and some have implemented Private Social Networks for internal information sharing and collaboration, but very few have integrated this new channel into their daily business processes.
Rules-based Business Process Digitization Technology: Rules-based Business Process Technology Cloud-enables, Mobile-enables, and Social-enables business processes, in addition to providing organization’s the ability to define their process approval policies and routing workflow rules in electronic format. Once the policy and workflow rules have been defined the technology will execute them in an automated fashion to notify the process members, via the channels discussed in this document, for the purpose of performing an action as part of the process. Individuals as well as Groups of people will be notified simultaneously and/or sequentially, as well as their delegates for people out of the office, to keep the process flowing forward. By eliminating most or all of the human intervention performed in the past for the communication required within various business processes (ie; either via creation of paper forms or manually created emails), the flow of processes are streamlined and logged. If a process slows down due to a bottleneck (ie; someone sitting on a CapEx request), the technology will identify who is causing the delay and allow for collaboration between process members to get the process moving forward. Surveys have shown that organizations utilizing this kind of technology have seen improvements in process cycle time as much as 500%, which has a direct impact on the bottom line when the process is converting a customer sales quote to an order, or converting a requisition to a Purchase Order for a critical spare part needed in the plant!
‘The benefits are huge: by digitizing information-intensive processes, costs can be cut by up to 90 percent and turnaround times improved by several orders of magnitude. In addition, replacing paper and manual processes with software allows businesses to automatically collect data that can be mined to better understand process performance, cost drivers, and causes of risk. Real-time reports and dashboards on digital-process performance permit managers to address problems before they become critical. Traditional IT-intensive programs deliver a return only at the end of the project, sometimes years after the project’s kickoff. Digitizing end-to-end processes one by one, however, can deliver improved performance in just three to five months.’1
Business Processes which leverage the Cloud, Mobile Devices, and Social Networks ‘tied together’ via Rules-based Business Process Digitization Technology allows for an organization to operate in ‘real-time’, eliminating ‘process lag’ and process inefficiencies. Improvements in productivity as well as reduced process costs will have a significant positive impact on an organization’s bottom line, and in today’s challenging economic environment organizations simply cannot afford to continue operating as they did in the last century (Analog). They must Digitize their business processes to remain competitive for both survival and growth.
Note 1: McKinsey & Company, ‘Accelerating the digitization of business processes’ | May 2014