Part 5 in the Finance Automation series
You’ve created your roadmap, you’ve decided on your working methods, and you know that going digital is not just about choosing what technology to use. Put another way, you have packed your bags and are ready to leave on the jet plane that’s going to take you on your digital transformation journey. It’s time that we describe the journey in more detail so you don’t miss any of the important stops along the way.
Your digital transformation journey
There are some essential stops you need to make on the way. Skipping them will certainly land you in a poor digital state.
- Analyze your current processes
- Design your future processes
- Optimize and automate your processes
- Choose metrics and measure progress
- Review outcomes
- Continuously improve
Let’s look closer at the first three steps.
Analyze your current processes
The most important step in any journey, including digital transformation, is to establish a baseline. Even if your organization has a well-established governance model for processes, and deviations to the standard process are well-documented and have undergone an approval process, you need to get the baseline right. That’s because there is a difference between how the process is defined and how it is done in reality. Process mining is a technology approach that can support you in analyzing how the process is executed. If theory and reality are not aligned, you might have a broken process.
Why “might”? It is too early to jump to conclusions. You have to validate why the process on paper is different from reality. There might be valid reasons for it. The most common is that the process needs to run in a certain way due to legal requirements. It might also be that the people doing the job do not have the right skill set.
We have also heard many non-valid reasons like:
- I was never trained properly.
- I have no tools or systems available to get the job done.
- We have always done it like this.
That does not make the deviation justifiable. Based on your analysis, you will have identified several challenges in the process. These challenges can be used in the next phase as you remember one important rule of digital transformation, which is not to digitize broken processes. Your broken process will be locked into a system or robot, and changing it will be costly.
Design your future process
Once you know the state of your process landscape, you can start designing your future process. Here, it is important that you challenge the status quo. It is all about eliminating redundant activities. Furthermore, as part of the analysis, you have identified certain challenges in the process that need resolution. It’s important here to focus on the challenges that have a significant impact on your ability to increase shareholder value, improve customer experience, or improve employee value.
Based on the complexity of the challenges in the process, either do a full process redesign or focus on the problem areas. Both approaches have advantages and disadvantages. In the design phase, you could leverage design thinking to engage people to come up with ideas on how the process can run in the future, as we have previously described. In design thinking workshops, you will learn that most people just want to implement a tool to fix the problems. Just throwing technology at it will fix only part of the problem, as it fails to address the people and organizational elements.
Based on the outcome of the prototypes and first testing, move to the next phase. The most important thing in this phase is to gather feedback and act on it.
Optimize and automate your process
With the analysis and design phase done, you’ve completed the most painful stops on the journey. Now comes the hard part: execution. You have identified areas that require optimization and could use automation. Now it’s time to implement your new processes, followed by digitizing them. The key principle here is automation, ensuring as many efficiency gains as possible – although in many cases, going digital doesn’t automatically mean automation. It could just as well mean, instead of keeping things updated in spreadsheets and slide decks, you get an online tool that enables real-time updates across a project team or user base.
In summary, the first three stops on the journey are: analyze, design, and execute. From there, you monitor progress through selected measures and evaluate if you achieve the expected outcomes. Then all that’s left is to continuously improve – for example, through Lean Six Sigma.
Safe (fast) journey ahead!
By now you should be comfortable about getting on the journey, and while this sounds like something that’s going to take a long time, it won’t. You know from design thinking and DevOps that you’ll do this work in sprints of one to four weeks, quickly producing results that will digitalize your company (or the part of your process landscape you’re focusing on). In any case, you can’t create digital roadmaps that take three to five years to yield results. After all, you know that what seems to be state-of-the-art in digital today might be ancient tech a few years from now.
Learn more by reading the other articles in the Finance Automation series.