“What we have done so far, is to digitally enable the supporting processes of businesses… But NOT the core DNA of each business.” ~ Janelle Hill, Gartner
Been thinking about eggs and chickens again – and this time, it’s not about a yolk remover. Instead, it’s about the interplay of process automation and digitization. Are they the same? How does one approach enable the other? How does a digital process inherently change and – in some cases – obviate a process flow entirely?
McKinsey, Gartner, and others have made the assertion – correctly – that the forces that drive process digitization come from the outside-in. In other words, expectations for process digitization are driven from the outside the enterprise by customers, partners, suppliers, and even employees. Whether it’s the use of instantaneous digital reservation systems, quote generators, shipping availability, or an employee’s ability to access to a total compensation statement – these real-life process examples are forcing process-level change, and also forcing an expectation of zero-latency in obtaining information. If change doesn’t happen, the stark likelihood is that customers and partners will defect to new relationships that can deliver on those expectations.
Processes need to be built to adapt. In spite of the forces in play, most companies today are dabbling at incremental, step-wise “little-d digitization”. They’re doing this by automating human-intensive fragments / pieces of processes, typically at the data inception layer (think: data entry, swivel-chair functions, validating, automating, searching, collating, scanning, etc.). In this scenario, human value-add consists of “getting ready to get ready”; that is, solely preparing or formatting information for a transaction to be performed (sometimes digitally), but ONLY within the confines of a pre-existing process flow. These efforts are primarily aimed at digitally retrofitting existing processes via automation that delivers “easy”/quick-wins that are efficient and cost-effective.
There’s nothing inherently wrong with these approaches. Yet all too commonly, automation here is essentially an “inside-out play” – a further standardization of existing, all-too-rigid processes. They are unlikely to be digitally adaptable to the onset of “extinction level” competitive threats. Automation efforts alone may fall short of the transformational change envisioned by “Capital-D Digitization” at the process level: where process information and meta-data is inherently “born as a digit” and opportunities for instantaneous analytics become possible. Insights come faster. Traceability and tracking is enhanced. Process-level sensors and the Internet of Things allow interaction costs to plummet, but the impact of the assembled data becomes significantly more powerful (consider a Google Nest thermostat that enables a Smart Home to be more energy efficient – and potentially cheaper to insure).
As a business leader, the natural temptation is to wait – but what if you wait until it’s too late? What if options existed to source highly interactive solutions or services for your customers, partners, or employees? This is the promise of digital process, and delivery models like BPaaS probably come closest to making that vision a reality today. Imagining a world of unlimited possibilities, what if you could create totally new business processes “from scratch”? Imagine the possibilities… what would you do? If the option presented itself, would you click the “I accept” button, and source BPaaS solutions from Google? Download process templates online, much like the app store, or 3D printing blueprints? Would you immediately untether data from existing, clunky legacy software? Could you completely re-engineer your entire business strategy on digital value chains? From this perspective, it’s easy to see why mere process automation alone starts to fall short, and a Digitalized world is where the long arc of the story lies. To be continued…