7 Ways the Rise of Digital Technology Impacts Process Excellence
When was the last time you opened an encyclopaedia to answer a trivia question? Or used a payphone to make a call? Or had to stop and ask directions? Even just 20 years ago – before Google, compact mobile phones, and affordable and easy to use GPS – all of the above would have been a common part of everyday life. But advances in digital technology have changed all that.
While the march of technological progress has resulted in wide sweeping social and cultural changes, it has also had a profound impact on business processes. Many manual and labour intensive processes have been digitized and automated, resulting in increased efficiency, speed and accuracy of output. Many companies – certainly most large ones - have introduced Enterprise Resource Planning (ERP) systems which help with planning and optimization of everything from inventory through to sales and marketing.
The latest round of digital transformation in companies, driven by advances in consumer technology, set the backdrop for a profound shift in business processes. Digitization is not merely about automating processes, but instead creating new capabilities for the business and responding to new market opportunities.
So what impact are these changes having on process excellence? Here are seven ways the rise of digital technology is transforming process excellence.
#1: Increased Focus on the Customer
With review sites and social media, the performance of companies and products is more transparent than ever before and customers are able to compare prices with the click of a button. That makes for stiff competition so Process Excellence initiatives need to be finely focused on delivering improvements that matter most to customers and reduce friction in the interaction between customer and company. Additionally, PEX teams need to be careful that productivity improvements in processes aren’t resulting in problems for customers.
#2: Demand for Faster Processing Capabilities
"If I want it, I want it NOW". As customers have become used to personalized and on demand web services, not to mention the ability to order a product online one day and get it the next, the idea of waiting for a product or service is almost unbearable. Companies must develop ways of doing things that can deliver a high quality and efficient output, but, generally, in as minimal time as possible.
#3: Rapid Project Delivery Timelines
With rising competition and fast changing customers expectations, businesses need to rapidly evolve business models and services/product offerings and the processes that support them. The days where teams had the luxury of doing 6 month process improvement projects are well and truly over.
PEX Network research supports this view, with research surveys undertaken in 2013, 2011, and 2005 showing a steady increase in the number of respondents reporting that average projects take 3 months or less (20% in 2013 versus less than 10% in 2005). "Our business excellence program must support an organization that has to react quickly," observes Sascha Fuhren, Head of Business Excellence at online auction giant eBay. "That means that we probably can’t afford to have projects of four to six months going on. We need to bring improvements to the market faster."
#4: Sometimes You Need More than Improvement
While small incremental changes to business processes can add up to massive improvements over time, it can also amount to rearranging the deck chairs on the Titanic if the underlying business assumptions and ways of working are fast becoming obsolete. Process Excellence teams need to be able to distinguish between processes that merely need improvement and those that need total reinvention.
#5: New Opportunities for Automation
Computer systems are getting more intelligent with the advent of sophisticated Artificial Intelligence tools and advances in robotics (both software-based and mechanical) are enabling those intelligent systems to be applied in new ways. As a result, the types of tasks and processes that can be digitized and automated can extend into areas that were previously seen as untouchable (because they require human judgement, for instance).
For a glimpse of the future, look no further than Japan. In April this year, the Bank of Tokyo-Mitsubishi UFJ introduced a customer service robot at its flagship outlet in Tokyo. The robot speaks Japanese, English and Chinese, and helps to direct customers to the appropriate person at the bank. While it doesn’t replace tellers the robot remembers stored insight about 5.5 million customers, can provide simple answers to questions and helps to free up the bank tellers for more value adding activity. A 2014 report by researchers at Oxford University, up to 47% of US jobs – including accountants, workers in transportation and logistics and administration – could be automated within the next two decades.
#6: Greater Process Complexity and Risk
With processes run across a whole host of both digital and non-digital platforms – legacy software, excel sheets, e-mail, paper – as well as through the complexities of organizational structures, process change is more complex than ever. Process professionals need to be able to unpick these complexities and come up with creative solutions for improvement. That’s all the more critical because with computer systems that can do things faster than ever before, the risk of getting something wrong becomes ever more magnified.
#7: New Skills for PEX Professionals
All of the above means that just getting your Six Sigma black belt is not alone going to make you effective in your job. New skills and awareness of other disciplines is becoming more and more important. Change management and other "soft skills" are critical for managing the people side of process change, especially during a time where these changes are coming thick and fast.
Meanwhile, it’s useful to understand what technology can do to assist in process improvement and transformation. With rapid developments in Artificial Intelligence, Robotic Process Automation, and "low code" software platforms, the art of the possible is rapidly shifting and technological solutions are becoming ever cheaper and easier to implement. That’s not to say you need to be a technological expert - we’ll be the first ones to argue that technology is no silver bullet – but understanding where technology creates opportunities for improvement is critical for today’s PEX professional.
The good news is that the demand for process improvement and transformation is strong and companies will continue to need professionals with analytical, creative problem solving and management skills to help drive successful process change through.
What do you think? What other impacts do you see digital technology having on your approach to process excellence?