Lately we discussed how the digital force awakened (Part 1) and briefly looked at the business fundamentals for a transformation of the digital core. Then we looked under the carpet of the business fundamentals and the value levers of companies (Part 2). Today I will serve you for dinner a deep dive into the individual value levers of the three categories and give process examples.
The core needs to be redesigned; there are no doubts about that anymore. This new digital core is designed to tackle complexity and improve the value levers. You now have an overview on where and how the digitized core can improve a company.
My two previous articles gave insights into application examples of a digitized core through several examples. Now I want to further discuss the precise value levers behind these three dimensions and clarify how and what they actually leverage in your business.
We jump into our first value lever of the dimension efficiency: Accelerate execution. This value lever emphasizes the new unseen speed of a digitized core, which undermines every process made. In the past even for simple requests or analysis, long time consuming batch processes or transactions were required. This sometimes can take 30 seconds for the easier ones but complex reports may take up to days. With the digitized core-typical in-memory technology you can break that length down to either a few seconds or just minutes respectively.
You might think 30 seconds doesn’t sound too long. But we know from research that if something needs more than 30 seconds to load or transact, users move on to different tasks. This ultimately means that people have several unfinished workflows opened and can’t focus on one and move on.
Even if something is faster than 30 seconds but still takes longer than 10, you lose context and get distracted – meaning the task is not finished as accurate and efficient as it could be. The digitized core allows even more and shines that it can break down executions to less than 3 seconds.
At that point we are talking about real time. This is where a digitized core shines and shows impact. Now users can rely on a single source of truth and work with real time data. High volume data is not a show stopper for the system anymore and can be evaluated in real time, instead of overnight or over the weekend.
Automate process steps
But what if you don’t have to wait at all because the task has already been done automatically? This is what the value lever “automate process steps” allows. Routine tasks that don’t need careful manual consideration can be automated with the help of the digitized core. Based on set criteria and algorithm, the system can decide of a request needs a manual interaction or not. This highly increases zero touch processes.
The real benefit here is that automated decisions free up the schedule and give employees additional time for important tasks. Again, I want to emphasize that the data is captured only at the source, which then allows you to deal with a single truth (recall the “Collaborative Work Patterns” use case, which is highly beneficial). Every user, no matter how he or she is involved in the project, works with the same data and the interaction between people is improved by atomized process steps.
With a digitized core, digital out-tasking becomes much easier. Compared to outsourcing, out-tasking means that you still manage the basic part of the whole process, but steps in between can be outsourced to external services. This allows you to focus on what really matters and leave the rest to experts on that field. This will increase the efficiency of your processes and reduce costs in several ways. The perfect fit use case for this lever would be to market to the segment of one. By leaving processes like deep-market analysis or mining of external customer data to experts, you can use the saved cost to invest into your core capabilities and shine there. With this value lever, we conclude the efficiency dimension.
Speed up to signal to action
Let’s move on to effectiveness dimension and its value levers. Speed up signal to action is a result of the previous lever: automate process steps. If you automate a big chunk of processes, some important ones that need more careful human evaluation may still remain. This is where the affected person gets notified, and this is what we call the signal.
You might also be interested in a very good technical blog from my dear colleague Thomas Fleckenstein, Signal2Action. Previously, the user would have gotten tons of these signals every day, and would need to consider and evaluate each single one manually. With the new core, if the user gets only a few signals, he knows that these are important and can focus 100% on them. The decision and the action follows faster now, making users more effective. We call this exception handling. A concrete example would be the accelerated material requirements planning (MRP) use case. The user can now rely on and react to signals and exceptions provided by the systems due to inventory shortages, for example.
Our fifth value lever is de-layer processes. It is an advancement of automate processes and emphasizes that multiple workflows cannot be merged into a single one. Previously, let’s say an agent needed to retrieve information from an analyst. He had to request it and wait till the analyst manually forwarded it. Now the agent also needs an approval from his manager, which requires more manual interaction from that side, resulting in lost time for everyone.
By automating the two interactions from the analyst and the manager and seamlessly integrating them into the agent’s workflow, he can now finish the task in one go and does not lose focus. This approach can support the detection of fraud by reducing workflow complexity and making it more transparent. Thanks to the collaborative work patterns use case, it is now possible to bring multiple delayered processes and involved stakeholders onto one single platform and make business data-related decisions much quicker.
Raise process intelligence
Value lever number six is making our processes even smarter. With the classical approach you must rely on your intuition and on delayed information, which often is old and no longer true. Often you also must collect this information collect manually. But by capturing data like click patterns, sensors, or geographical information, you can make decisions based on real-time information that is 100% accurate. Making your Big Data smart data and using predictive algorithms, analytics are enriched and then embedded into the process. With accelerated material requirements planning, process intelligence is improved dramatically due to the build system simulations and business recommendations provided to the user.
Next time I will continue with Lever 7 and sum up our findings.
Stay tuned for Part 4 and the new optimization levers. You can also follow me @BeSchulze or leave a comment.
Read the previous post in this series: The Digital Force Awakens (Part 2) – The Optimization Lever Strikes Back.