A car that parks itself. A drone “cameraman” capturing your sweet ski flip. 3-D printed jewelry. A selfie video of your weekend in Paris that’s worthy of the Travelogue Channel. Drink up — because your Uber car just arrived.
Our daily lives have, in many cases, already gone digital, starting when we took one single step (often on a smartphone or tablet) that created a ripple effect that helped guide and inform our interactions with people, places and things. But what about your organization’s business processes? How could a precision twist on digitization bring value to an entire value chain?
The Center for the Future of Work is imminently publishing the results of our latest research, which started here on futureofwork.com as a blog post.
We call this emerging scenario “digital process acupuncture.” The 5,000-year-old discipline of acupuncture is based on the belief that a set of accurately placed pinpoint treatments can impact the entire body. Similarly, we believe organizations can relieve operational stress that builds up atcritical process connections by identifying and isolating processes (or sub-processes) that are materially connected to other important activities and applying precise doses of digital change. Precision doesn’t mean half measures, either; decisive action requires intensive, digital focus on the connective tissue that constitutes entire functional processes.
By using digital technologies to “heal” process bottlenecks, lubricate friction points, optimize manual inputs or handoffs, and relieve systemic pressure points in information flow, businesses across industries can unlock substantial value, maximize healthier business outcomes and improve the experience for all participants — customers, suppliers, partners and employees — across the value chain.
Examples of this highly targeted use of digital technologies include capturing images with drones to reduce insurance underwriting risk and bring insurers closer to real customer needs; using digital wallets and beacon technologies to create shopper awareness and boost retail sales; tethering touchless payments to loyalty programs to predict buying patterns; and using sensors, IoT or RFID for real-time monitoring to streamline the business supply chain.
Our study of 321 North American and European executives helps us understand how banks, PC&L insurance companies, healthcare payers and retailers are grappling with business process digitization today. Because many businesses have different views on exactly how digital process acupuncture applies to them, we offered a tight definition of what we meant by digital process change: using digital technology to instrument, accelerate and link a seamless process value chain, often by integrating the physical and digital worlds. Process value (both in top-line cost savings and bottom-line results) is created when targeted, precision-guided digital change revises the sequencing of key touchpoints and channels in a way that improves the experience or boosts engagement.
We also gauged how pervasive respondents’ process digitization efforts have really been: casual, superficial or dabbling. As it turns out, most leaders are committed; in fact, only about one-third characterized their digitization efforts as being moderate or less.
Early winners in the digital era have shown us what works:
- Focus on the front office first. Customer-facing processes were prioritized in every vertical industry we studied. Approximately 64% of healthcare payers claim to have digitized enrollment and billing services, and 67% of retailers said they have digitized their B2C channels.
- Trim fat and build digital muscle. Digital process change propels top and bottom-line results by more than 18%, our respondents project, which equates to true capital gain. Respondents said they decreased costs an average of 8% due to process digitization efforts, with the greatest cost take-out originating with insurers (10%), and the lowest returns achieved by healthcare payers (5.5%). Revenues rose 9.8% due to digitization, with the highest returns originating from insurers (11.6%) and the lowest returns — though still impressive — emanating from healthcare payers (8.2%).
- Benefit from the treatment with process and value chain integration. Precision digitization within the process value chain significantly boosts the impact of cost reductions and speed-to-market improvements, and eliminates friction points. For example, nearly half of healthcare payers (46%) cited better integration of the member/provider customer support value chain, while retailers saw a similar impact on merchandising.
- Keep it safe. Effective digital process change relies on secure information and platforms. Roughly 59% of respondents cite data security as the chief issue today as their digital processes proliferate.
Whether your company is a bank, an insurer, a healthcare payer or a retailer, the time for digital acupuncture is now. Leaders need to make some critical choices regarding initiatives that will quickly allow the benefits of digital process acupuncture to permeate into other parts of the business. The scale of the opportunity is massive — and eminently achievable.
The new whitepaper from the Center for the Future of Work is entitled: “Digital Process Acupuncture: How Small Changes Can Heal Business, and Spark Big Results”. It will be published to futureofwork.com and www.cognizant.com