There are three fundamental elements to every business, digitally transformed or not;
Business processes provide the rules, automation (software) the tools, and people – if properly enabled and empowered – deliver success.
Business Process Automation (BPA) is the digital revolution equivalent to Business Process Reengineering (BPR) from the information revolution era. BPR, like most prevailing management thinking, evolved from total quality management principles being applied to scientific management theory. BPA is fundamentally the same tool as BPR, but because it’s deployed using digital technology, namely software, the impact is broader and quicker.
The problem this creates for organisations today, is they are:
- operating in the early stages of a digital revolution,
- using concepts created in the industrial revolution,
- whilst still using tools built during the information revolution.
Current times demand use of current tools. Success inevitably involves change of practices, mindsets, and beliefs (what we know to be true and have learnt from our experiences).
Business Process Reengineering was made popular in the early 1990’s. The creators explained that BPR was about “reversing the industrial revolution”. What they meant was that even though customer needs and wants were continually shifting in the [new] information age, many companies used rigid business processes to try and satisfy them.
BPR supporters claimed it engaged across business functions, as opposed to Total Quality Management (TQM) which was applied within each function and so created silos. They also suggested that satisfying customer needs involved business processes that straddled across business silos, and that process tasks need to be considered in the context of the entire business system. Today this is referred to as the “end to end customer journey”.
The Business Process Reengineering concept expanded on the elimination of waste principle introduced by TQM. BPR became promoted and recognised as a management theory defined by its creators as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, like cost, quality, service and speed”. A definition deliberately crafted to direct focus on how to best deliver customer value.
This definition is fundamental because it poses golden circle questions like:
- Why do we do this?
- Why is it done this way?
- Why can’t we do it differently?
Business Process Reengineering was considered radical because it was applied by starting from scratch and not being constrained by existing structures and procedures. Business Process Automation is no different. BPA if properly implemented will deliver dramatic and substantial performance improvement.
The quality guru, W. Edwards Deming said “It is not enough to do your best; you must know what to do, and then do your best. If you can’t describe what you are doing as a process, you don’t know what you’re doing.”
Describing your business processes across business functions is pivotal to successful Business Process Automation. Classically, businesses are divided into functions [departments], and processes are split into tasks that are spread across functions. BPA is used to examine tasks with respect to the entire business system and the ultimate purpose of delivering optimal value to customers.
The Right Direction
Implementing Business Process Automation is the first step of a thousand–mile journey. It’s a step in the right direction for modernising your business to prosper in the digital era, which might look and feel like a massive task.
You can start with a few processes that are causing the greatest amount of grief and gradually expand the practices learnt. A primary benefit of implementing Business Process Automation is that it also provides a way for establishing a culture of continual improvement.
Companies that successfully implement Business Process Automation experience the following organisational shifts:
- from hard copy to digital information sharing
- from hierarchical to networked
- from an information is power mindset to collaborative innovation
- from stand-alone to virtual and digital
- from command and control to performance-oriented
- from compliance centric to an outcome focused
- resident subject matter experts to diverse and talented teams
- from slow response to an agile capability
- from duplicate data entry to accurate data capture
- from fear of technology to technology augmented, human capability
There are plenty of books about Business Process Automation, and although no specific manual exists there are some guiding rules:
- Combine tasks into one job
- Let workers make decisions
- Maximise data integrity
- Establish a single point of customer contact
- Make decisions supported by real time analytics
Similarly, there are a few challenges that detract from a successful Business Process Automation implementation [which apply generally to any improvement effort]:
- Automating an existing process as a means of fixing it, instead of changing/improving it
- Not getting top-down support and instead trying to make it happen bottom-up
- Believing incremental improvement will fend off disruption
- Bailing out too soon because of excessive short–term focus
- Not diverting sufficient resources to the effort
- Obsessing with design and planning before execution
- Trying to please everyone when making a change
Even though several big businesses have enjoyed Business Process Automation success, it’s easy to find research articles that claim “up to 70% of BPA projects fail”. It’s likely this is because of the challenges listed. Working with an experienced adviser is the best way to ensure success.
A good example of BPA implementation is provided by this McKinsey article. Although it unfortunately introduces alternative, and potentially confusing, terminology it does a good job explaining the whole process. The fundamental message being, that successful business process automation needs a focus on people. Although the usual temptation is to use [technology] to reduce headcount, exploring how the customer and employee get new and better experiences has proven to deliver an optimal outcome and return on investment.
The authors suggest “[BPA, done well,] is an approach that focuses on growth and forces teams to consider the end to end customer experience. This broader view helps companies to see where [it] can be used, what technologies make the most sense for different activities, and what processes need to be redesigned.”
Fortunately, Newcastle and Hunter region SME’s should be familiar with Total Quality Management concepts as a legacy of the steel era, big business adoption and sharing across their supply chain. If that’s true, then it’s not a big leap to implement Business Process Automation.
Find and partner with someone to get started – Contact Us. We’re looking for five clients to fill the next modernisation cohort for 2020. It’s the early adopters in every technology shift that benefit most from the disruption.