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Perspectives

Digitizing Business Process: Why Smart Hands and Machines Will Power the Second Industrial Age

2014-12-09


Whether your organization completely digitizes its business processes or takes a one-off approach, advances in foundational information technology, process automation and analytics, as well as machine intelligence, will unleash the potential for more productive and innovative ways of working.

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Whether your organization completely digitizes its business processes or takes a one-off approach, advances in foundational information technology, process automation and analytics, as well as machine intelligence, will unleash the potential for more productive and innovative ways of working.


The ever-increasing digital intensity of work has brought us to a profound inflection point in the way critical business services will be sourced and, more importantly, delivered. For starters, advances in technology, automation, interconnectedness, user experience, process analytics and machine intelligence have finally aligned to redefine and reshape the very nature of work. And over the next decade, disruptive changes are forthcoming on the order of magnitude of a second Industrial Revolution.

With digitally-fueled automation likely to wreak industry-wide change everywhere, will most humans effectively be "out of a job" by the end of the decade? Hardly. Imagine instead a future where functions become intelligent through technology, allowing humans and digital processes to put their heads together to create a more intuitive, more responsive enterprise. And through that collaboration, better business results will be delivered via new digitally encoded processes.

Historical Precedent Informs the Future Movement of People, Goods... and Information

Consider an analogy from the mid-19th century, when business entered the Industrial Age for good. The first transcontinental railroad was the emblem heralding the shift from the Agricultural Age to the Industrial Age and it created new, unforeseen functions, jobs and economic possibilities. In terms of outcomes, people could get other people, goods, services, things — and importantly, information — from point A to point B in a radically more efficient and effective  way.1

We're at a similar juncture today. It's not a stretch to say that the impact of SMAC technologies (aka social, mobile, analytics and cloud) on business processes feels like the 21st century version of rails, steel, telegraph poles and locomotive engines. We've started to see the metaphorical digital track being laid and tunnels being blasted. And, like the railroad, the impact will be at a scale not previously seen before in the history of business.

But much as trains need a destination, business processes — digital or otherwise — are useless if they don't support a business strategy. That means helping smart people make smarter decisions in support of differentiating activities.

Maximizing Digital Processes by Connecting Industry Value Chains

Signs of a powerful interplay of knowledge workers and digital processes are already evident on the road to 2020. This is especially true when you look at middle- and front-office processes within industry value chains.

Take healthcare and the ecosystem of dependent processes among medical providers, payers and pharmaceuticals companies. For a healthcare payer, a claim is the "main character" in the insurance process story that passes from a patient, to a doctor and then to the insurance company to be paid. It becomes powerful when wrapped with a Code Halo™ (i.e., the digital data that accumulates around people, processes organizations and devices).2 For instance, think of how a patient Code Halo, rich with metadata that captures the individual's vital signs, offers meaningful insights to a health payer about the correlation between the level of care a patient receives and her wellness (e.g., a $50 co-pay for a doctor's visit vs. a $1 million heart transplant).

When a doctor or nurse is given paperless mechanisms to create the claim as "digital" from the outset, qualitative and quantitative benefits across the industry value chain emerge in tandem with the caregiving process. These include increased speed (or elimination) of claims management, improved accuracy and consistency and compliance.

In addition to better patient care, other benefits of digitization, automation and Code Halos include improved results of clinical trials, increased accuracy of clinical trial yields and improved judgment and decision-making of physicians, such as avoiding the wrong combinations of pills when prescribing medications to patients. All of these advances help accelerate and improve the precision of regulatory approval for new and powerful drugs.

Consider a day when Facebook, Amazon or Google reveal that they have acquired, partnered or otherwise developed digital processes that facilitate the discovery of new drugs that cure cancer. That would be a definitive milestone for humanity — a signaling event — far surpassing the "driving of the golden spike." But it would also change the pharmaceuticals industry forever, prompting competitors to clamor for a response, as fast as possible, in search of cures of a similar magnitude.

So to prepare for these coming new digital realities, the journey to the future of process needs to begin today, by imagining how work will get done tomorrow. And to be sure, most organizations will need to walk before they can run down the path to the future.

'Big D' and 'Little d': Digitization at the Process Level

Some simple questions to ask include: "How do I eliminate paper-based process inputs, such as invoices or claims and make my process truly 'digital' from the outset?" "Are the people delivering my processes today adding value or injecting risk?" "What are we learning about our business or industry value chain as data is applied to process-level algorithms and is it facilitating people to make better judgments?"

Many companies are talking about and in limited instances actually using, "RPA" (robotic process automation) today. Think of this as "little d" digitization of information inception (such as e-invoicing or optical character recognition). As part of this, some organizations are running batch process or presentation-layer macros that automate pieces of end-to-end workflows (using software providers such as UI Path, WinAuto, Blue Prism, Automation Anywhere, etc. that rely on those process inputs). Commonly, automation at this level is an "inside-out" play — simply an incremental improvement on existing, intra-enterprise processes. In railroad terms, RPA is the railroad spur in the switchyard.

But there may be a gnawing concern that "little d" automation initiatives like RPA fall short of truly transformational, "Big D" process digitization — that is, re-imagining and instrumenting a process from its beginning to harness the power of code. Truly digital processes can use Code Halos to automate processes right from the outset, but the real prize is the data that's produced as a result. Information and meta-data in Big D processes are inherently "born as digits." And as physical value chains digitize, process feedback and analytics become instant. Open process loops are closed faster. Insights come faster. Traceability, tracking and auditability are enhanced.

Today, delivery models such as business process as a service (BPaaS) probably come closest to making the promise of Big D digital processes a reality. While many BPaaS offerings are almost entirely automated, their outputs are leveraged to help process and knowledge workers make quicker, more informed business decisions, using a model that's typically less costly than traditional sourcing options.

By automating systems to better sense, predict and deduce the data they consume, employees can work heads up, not down, with intelligence from digital processes supporting their own knowledge and experience. And the ability to capture information about the movements of people, goods, information and services through space and time is allowing leading-edge businesses to re-imagine processes as digital from the outset. Consider the Internet of Things, in which sensors — sure to include nanotechnologies in the near future — are beginning to totally digitize and automate processes in a straight-through data flow.3 Those companies that harness these types of digital technologies to recombine and drive innovation in their business processes will out-compete those who can't — or don't — for years.

Steps to Take Now, On the Journey to the Future of Process

Business process leaders can take practical action now to get their digital process train on the right track:

  • Analyze your company at the process level: Review in detail your processes as they exist today (new product/service development, sales and customer relationship management, operations, etc.). Infuse a digital process plan, including the applicability of Code Halos, by re-imagining moments of customer engagement or constituent journeys. Target tangible process metrics: cost-per-claim, clinical trial yield, healthcare unit cost, fraud prevention rates, etc.

  • Perform an automation readiness assessment: Map processes to a level of detail that includes inputs, process and outputs. Scan the market for tested and ready-to-implement technologies that have established tangible proof of success. Apply "little-d" automation technologies that are minimally invasive to operating environments today, but keep your eye on the prize for where "Big D" transformation makes most sense tomorrow.

  • Help humans evolve toward the work of tomorrow: Start by giving employees access to digital processes and machines that help them do their jobs better, smarter and with more meaningful impact to the business. It's not about the number of people tied to "doing the process"; it's about outcomes and making smart people even smarter.

To get to the future of process, don't wait. Start today, by imagining how the future of work will look tomorrow when digital machines, information and processes help humans do their jobs better, faster and with greater impact.

Footnotes 
1 Before it fell into collapse, historians believe the Roman Empire was tantalizingly close to having discovered the steam engine in the 1st century AD; the first recorded rudimentary steam engine being the "aeolipile" described by Hero of Alexandria. Had his invention come a century — or even decades — earlier, it is arguable that 1,000 years of Dark Ages could have been circumvented and the Industrial Age and Information Ages accelerated by one millennium. 

2 For more on Code Halos and innovation, read "Code Rules: A Playbook for Managing at the Crossroads," Cognizant Technology Solutions, June 2013, http://www.cognizant.com/Futureofwork/Documents/code-rules.pdfand the book, "Code Halos: How the Digital Lives of People, Things and organizations are Changing the Rules of Business," by Malcolm Frank, Paul Roehrig and Ben Pring, published by John Wiley & Sons. April 2014,http://www.wiley.com/WileyCDA/WileyTitle/productCd- 1118862074.html. 

3 Our book Code Halos refers to "amplifiers" for digitization (Chapter 4, pages 38-40). The best-known ones include laptops, location-aware mobile apps, wearables like the Apple Watch, Google Glass or Nike Fuelband and — increasingly — the Internet of Things (i.e., Google Nest). 

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Digitizing Business Process: Why Smart Hands and Machines Will Power the Second Industrial Age