Develop a deep understanding of processes to derive meaningful value from digitisation
No matter where you look, it’s easy to find stories about how technology can radically overhaul a business’s efficiency and competitiveness. It’s true, but starting there puts the cart before the horse, as it is also true that investing in technology for technology’s sake can end up being an expensive exercise that changes little or nothing to improve business outcomes.
The starting point in any digital transformation story must start with your problem statement. In other words, what are we trying to achieve? Perhaps there is a problem that needs fixing or perhaps the desired outcome is aspirational. But the fact remains that this is the starting point that informs everything that follows.
In the case of business problems, one lands on pain points by listening to customers. Your customers talk to you about their frustrations with their spend, actions and behaviour. These problems are symptomatic of something. Once you appreciate this you go down the value chain to find the root cause or causes.
By way of analogy, imagine a situation where customers are becoming increasingly frustrated with the cancellations department. It is a point of great friction as customer frustration boils over due to delays in cancelling contracts or services. The easy route would be to look at how cancellations are managed, and then change it to become easy and fast. But, is this really a win?
The truth is that a solution like this is typical for treating a symptom. The more effective strategy is taking a deeper look at why so many customers want to cancel in the first place. And so, if the business focuses on this and fixes the appropriate steps in the value chain, it makes space for innovative solutions, and this is when digital transformation occurs.
Unfortunately, many businesses are in constant firefighting mode, reacting to crises when and where they happen by following the noise and then throwing resources at the problem. This is akin to sticking a bandaid on a wound that is symptomatic of a deeper, serious issue.
Instead, businesses need to understand their problems, develop an understanding of their processes and the context within which these processes operate, determine the root cause of the problem, and finally, fix the process issues and implement a solution that will enable the target state.
Developing an understanding of processes
But how does a business develop a real understanding of its processes? It starts with stepping back and understanding how you deliver value. You need to take an end-to-end view of the business to develop an understanding of the value chain to understand how value flows through each step to the end-user or customer.
Once you understand how you deliver value and have a view of the entire value chain, the next step is to understand how your processes fit into this picture.
Only now can you look at your business’s processes holistically and discuss what is working and what isn’t, and how to fix it. In doing so, you will find the root cause of the key problem, and then be able to dig deeper in order to fix or optimise the problem area. Do you have too many hand-offs? Are you generating reports no one reads? Are there poor process controls? Are there bottlenecks in the process? Most importantly, what is it costing you? How does it get fixed?
All businesses will have KPAs and KPIs, and (assuming that you are measuring the right things) key process outcomes should be measured against these to determine your performance and desired outcomes against your set objectives. Here, businesses can also identify performance thresholds - in other words, when are slight deviations acceptable and when should there be an immediate intervention? Having a clear idea of this will enable you to clearly articulate your requirements, the benefits and the potential ROI of any technological interventions.
This is the ideal time to digitise processes if there is a business case to do so. The reason we wait until this point is precisely not to be in a position where you automate bad processes and end up with bad results faster than ever before. Automation is a factor in improving processes but certainly not the only factor to consider. Your processes need to enable people in the organisation to work in the desired state, and digital solutions ensure these processes and people are fully supported.
Remember, no process is rigid and there is always room for continued improvement. The best way to develop this deep understanding of processes, and find ways to improve them, is by working with an experienced partner who can bring an external view and expertise to an ecosystem you are already deeply involved in maintaining in its current state.