Digital technologies often make life more convenient. Apps help us summon a car, pay for our lattes and even order ready-to-eat meals delivered to our doorstep. Experiences like these with our smartphones or smartwatches are fun, but let’s be honest: In the grand scheme of things, many of them are somewhat trivial.
Nonetheless, they are daily reminders of the apropos phrase, “Software is eating the world.”
What is less appreciated is the impact of “being digital” on back-office systems, applications and processes that are at the heart of most big businesses – processes that drive work that matters today and tomorrow. This includes everything from processing insurance claims, to caring for patients, to growing personal wealth. If you’re a chief operations executive, that means software is also eating your processes – with the hors-d’oeuvres soon to be served up in unseen, expensive and undifferentiated middle- and back-office functions.
Because in a digital world of algorithms, automation and AI, the platform BECOMES the process.
The Center for the Future of Work just published these business process findings as part of our latest research, which is part of our Work Ahead research series that provides insight and guidance on how businesses – and jobs – will evolve in the digital economy.
For many business leaders, digital platforms will increasingly serve as a potent fuel that launches processes out of their silos – and businesses into orbit – by digitizing small steps and closing gaps between customers, suppliers, partners and employees. Organizations whose processes are left lingering on the launch pad risk irrelevance.
Your work ahead – your ticket to the digital economy – is connecting “old” processes to new technologies. To understand what the future holds for the digitization of business processes, we surveyed 2,000 senior executives across industries and an additional 250 middle managers.
Six key findings substantiate the critical lessons learned in their journeys so far:
- Digital is a two-stage, cost-plus-revenue rocket ride to outsized business process success. The average impact of cost reduction plus revenue increase on all core processes across the board – resulting from investments in digital – was about 4.6% in the last 12 months, according to respondents. In dollar terms, that equates to $364 billion in 2015. By 2018, respondents said the potential baseline revenue impact grows to a total of $770 billion.
- Digital process leaders are unlocking additional digital potential energy at both the top and bottom lines. Leaders in process digitization are pushing the envelope way beyond the averages above, unlocking outsized gains by digitally rewiring all their core processes. Such companies say an 11% additional improvement to the top and bottom lines is possible today, and will grow to 19% by 2018. That’s a potential “Process Leader’s Bonus” of $700 million per company by 2018 across all the industries surveyed.
- Managers are from Mars; senior executives are from Venus. Senior executives are more optimistic about process vision and execution than middle managers are. Only 22% of middle managers foresee significantly high impact on revenue from digital processes by 2018, compared with 39% of senior executives.
- Software is eating processes. But that’s OK! In every functional area – such as HR and finance in the back office, R&D in the middle office, and sales on the front lines with customers – “the platform is becoming the process,” and is linking customers, partners, suppliers and employees for greater digital impact.
- IT is universally seen as the function pushing digitized processes forward. The information services and technology function was rated as the leading business area by senior executives and managers alike for positively affecting cost and revenue today and in the foreseeable future.
- The importance of analytics to develop insights and meaning-making is immense. Senior executives aligned with process functions foresee a 23% surge in the need for analytical skills by 2020.
Our Work Ahead research illuminates the fact that most businesses will invest more in all manner of processes to drive savings, unlock new potential, break down hierarchical silos and – quickly – fuel the engines of the business. By doing so, they will achieve escape velocity from “the way we’ve always done it” and soar into the heights of the work ahead to drive meaningful and lasting change.
The new whitepaper from the Center for the Future of Work is entitled: “The Work Ahead: Soaring Out of the Process Silo”. It can be downloaded at: https://www.cognizant.com/FoW/the-work-ahead-soaring-out-of-the-process-silo-codex2436.pdf