How to Digitally Transform Your Business, Part 2: Processes
If you’ve been following our series on how to build a digital transformation plan, you’re familiar with the three pillars of digital transformation: people, processes and technologies, as well as the importance of capitalizing on digitization.
All three pillars are interconnected and critical to the success of an organization’s transformation. By evaluating current business processes and establishing the right new ones, you enable your employees to adopt the necessary skills and tools to support your initiatives.
Processes have always evolved to support new technologies and those using them. While digital transformation has been a buzzword for some time now, the concept is even older. Think back to the days of the automobile. This new technology enabled businesses to sell to a greater audience than before, since they could physically reach more people. Before IoT and workflow automation, there was word processing. This changed the way we wrote, and to take it a step further, email and instant messaging has changed the way we communicate.
The rate of change is simply more drastic today.
In evolutionary biology, there’s a theory called the Red Queen’s hypothesis that explains how organisms must constantly adapt and evolve to not just get ahead, but to survive in naturally-competitive environments. The IT landscape today is not dissimilar. To stay afloat amid competitors that are embracing various technologies and optimized processes, it’s imperative to evolve your own business processes and react rapidly to meet customer demands, competitive product innovation, new market opportunities and partnership prospects. Build processes that support these goals, so you can easily evolve and adapt
So, how exactly do you evolve?
Changing business processes, however, requires significant involvement from every department and business group in your organization. This is not a one-man (or one team) effort. While you may be leading the charge toward digitization based on your knowledge of the technology, the overall business process and model changes should be a company-wide effort.
Here are some guidelines to follow when considering implementing new processes:
1: Evaluate your business, your competitors, and look at your industry across different geographies. Shine a light on existing processes. Bring in leaders from each of your departments and business groups and discuss their operational processes. Consider if different process models might work company-wide or for specific teams, such as lean and agile methodologies for a software development group.
2: Analyze where there are areas for improvement within current business processes. Take stock of the strengths and weaknesses of both the process itself, as well as the reliance or effect on employees’ participation in the process. For example, if there’s an arduous HR process that requires information to be manually passed between multiple people, there’s a chance it could slip through the cracks one time. Using digital tools and processes, much of the manual effort and potential for error could be removed.
Based on the information you gather during this analysis stage, take time to identify what technology advancements may have the greatest impact on your business processes. Think about how to eliminate paper-based processes such as approvals, communications, and reminders.
3: Prioritize the areas for improvement. By performing a cost/benefit analysis of each process improvement, you’ll be able to assess your internal capabilities, necessary resources, and available/required budget to determine the best priority structure. Based on this information, you can devise a roadmap for changes to implement throughout your business.
Make sure to continue working with various department leads to ensure that the proposed process changes align to their strategic timelines and initiatives. As people are a necessary part of digital transformation, it’s important to ensure that they’re prepared for the process changes you’re planning to make. Especially for established companies, there can be so many areas of potential opportunity that without a clear roadmap, it may seem overwhelming to those involved. Prioritizing can help create a stress-free implementation plan.
4: Communicate the proposed process changes to all involved. At this stage, it’s critical to look at required budgets, identify various teams or people responsible for each step, redesign processes and plan a technical implementation of new technologies. Before a company-wide announcement, test the changes with the help of the required teams and make any necessary adjustments based on their feedback.
5: Implement and deploy the planned changes. Devise and announce a clear roll-out plan with each group that identifies roles, responsibilities and timelines. Encourage each department lead to have a point-person on their team who can help other members during this transition. Explaining the purpose and gains of these changes will support end users’ adoption of them, which is key to the success of your efforts.
Benefits of digital evolution
In terms of digital transformation, the act of changing business processes is not just about leveraging digital tools to lower operating costs or increasing efficiency. While important, the first critical step is to focus on using these efficiencies to increase sales and revenue by modernizing business models. Then you can focus on measures to decrease operating costs. The new business models will be supported by updated processes that align with new technologies.
- You’ll improve the customer experience. Through workflow automation, you can take a proactive approach to problem solving and predicting customer needs and issues. For example, you can utilize IoT monitoring to alert your staff when a product is going to need to be serviced. Teaming up with a local repair agency, you can proactively notify the customer and provide support, improving the overall customer experience.
- You’ll experience a faster time to market. Through digital transformation, you can accelerate the creation, revision and delivery of your products and services to potential customers and get feedback even faster. By employing agile business processes, your team learns to “fail fast” and become responsive to the market. For example, rather than waiting a year to release a new product, you can test a prototype with a small segment of your potential customers to see how it’s received and gather useful feedback.
- You’ll improve your offerings through continuous monitoring and reporting. With new tools and processes in place, you’ll have access to more performance metrics than ever before. Gaining information about opportunities for improvement will help you refine and optimize your products, services, processes – really, your business as a whole. An example may include usage statistics on an app you’ve developed. You may notice that users are interacting with one feature, but completely ignoring another. Having insight into this discrepancy gives you an opportunity to dig deeper to develop better products.
- You’ll improve employee satisfaction and increase productivity. Digital tools enable digital processes, which allow users to work anywhere and on any device. This flexibility is directly tied to increased employee satisfaction. For example, digital processes and workflow automation can streamline communication and approvals, helping to eliminate redundancy and expedite operational processes.
- You’ll turn competitors into partners. You can create more compelling value propositions by positioning your products and services alongside complementary offerings from other organizations. Competitors are no longer simply competition – they can help you enter new markets and reach a previously-untapped client base. For example, by utilizing processes in your marketing department that help you share client databases with partners, you’ve opened up another channel for customer acquisition.
Process transformation is just one pillar of digital transformation, but one on which people and technologies rely. It may seem daunting to take on the challenging of modernizing business processes, but new tools make it easy and the benefits far outweigh the effort.
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