Optimize Business Processes First, To Maximize Automation Returns

The current pandemic has suddenly accelerated the pace of digital transformation across all the industries. As Microsoft CEO Satya Nadella quoted: "We’ve seen two years’ worth of digital transformation in two months." The point here is that companies are investing heavily in their use of digital technologies such as cloud computing, robotic process automation (RPA), data visualization, and AI-based solutions. The IDC report highlights, 70% of global organizations have accelerated building for digital capabilities and investing in enabling technologies to boost productivity, takeout cost, and personalize customer experience (CX) by 2022. While this is a positive trend, far too many companies are rushing transformation programs to implementation without proper assessment and falling short of realizing their goals. To succeed, it is important to follow a prioritized, value-driven approach rooted in data and facts. In this article, we will outline an approach to take a look at process data and process analytics that increases the chances of maximizing automation value.

Look holistically at the end-to-end customer experience (CX)

Business processes are vital for the smooth operations of any company. At the same time, business process ecosystem is complex and cumbersome, often spanning multiple departments, systems, and time-consuming steps. It is all too easy to achieve short-term efficiencies gained by deploying narrowly focused automation solutions for individual tasks (e.g., reconciliations, automated data entry, etc.) can be short-lived, and often counterproductive. The right approach should be to focus holistically on assessing processes for the end-to-end customer journey. It is an important step towards unpacking the most common activities and hidden processes that customers (B2B or B2C) experience, including their communication channels and touchpoints. For example, mapping customer journey to file an insurance claim or open a credit card account shows instances that work well and others that result in frustrations. It highlights system limitations, data issues, and process design constraints. Understanding of these issues is essential to drive fit-for-purpose solution design and technology decisions including intelligent automation, data analytics, RPA, and other solutions to optimize CX.

Mine your process to derive insights about execution gaps and automation potential

Automating core processes can reduce cost, improve throughput, and shorten fulfillment times. While most processes can benefit from some form of automation, not every business process lends itself to complete automation. It often will not come to light until the effort is made to unpack a complete process flow and analyze the underlying process data. One tried-and-true approach has been through Lean Six-Sigma (LSS). It creates value by minimizing waste (Lean) and reduces defects (Six-Sigma). LSS has worked well for years but requires constant discipline, coordination, resources, and access to operating metrics that are often only available to larger industrial companies. The introduction of process mining tools has made methodologies like LSS more accessible to companies of all sizes. Process mining tools can extract or “mine” transactional data, analyze it, and provide insights on where and how often delays and inconsistencies occur in a given process. These tools do this by connecting with companies’ transactional systems in real-time to create a comprehensive view of the process (digital twin) and look at all transactions, not just a sample of them. It allows for in-depth analysis of anomalies, trends, patterns, and obstacles in processes performance. These tools also allow their users to model different scenarios to reveal where the biggest value opportunities exist.

Establish KPIs to benchmark process performance and measure returns

There is a reason the adage, “You can only manage what you measure” is so popular. KPIs, or Key Performance Indicators, establish a baseline for process performance from which teams can manage progress towards the future state targets. Selecting the right KPIs is critical, as they indicate what success should look like. Selecting the wrong KPI can have unintended consequences. For example, when we mined the Order-to-Cash (OTC) process for a large industrial manufacturing client, we identified that a significant portion of their custom orders were being delayed in their manufacturing process due to a lack of critical materials from a few key suppliers. While the suppliers were meeting the terms of their existing SLAs, it was still causing a 4-6 week delay in the completion of those high value orders. The KPIs outlined in the SLAs were not appropriately matched to desired outcomes. We worked with management to renegotiate SLAs that would drive more rapid fulfillment and a significant improvement in their customer experience and OTC cycle time. KPIs should include standard metrics across processes including process automation rate, throughput times, activity times, as well as process-specific metrics such as order processing cycle time and days-sales-outstanding. Using process mining tools and dashboards to monitor the conformance continuously or on a set cadence establishes common targets and makes it easier to spot trends and make intelligent business decisions based on those trends.

Path Forward

Automation is a key enabler on the journey to successful digital transformation, but process comes first. To truly transform, companies need to look at delivering process breakthroughs that leads to maximizing operational efficiencies and engender loyalty from customers. Spending time upfront in reviewing the end-to-end CX journey helps reveal opportunities to make processes better and faster and, eventually, can create competitive advantage. Process mining can provide execution insights very quickly and helps define the actions that create efficiency. A customer focused process design that is optimized leveraging mining tools and automation technologies will lead to improved performance and sustainable returns.