Business leaders are facing a complex mix of economic, political and technical challenges. Global economic uncertainty combined with local political concerns, slowing macro-economic growth and short-term market volatility are difficult enough to deal with. The challenges and opportunities posed by digital technology are a further complicating factor.
For CEOs and their boards this environment poses significant questions: Should their primary focus be on growth or profitability? Should their digital transformation efforts aim to seek out new markets and new customers or should it be to operate more efficiently in the areas they know best?
These are, of course, not binary choices, but organizations have to make clear strategic and tactical decisions about their priorities and allocate resources appropriately.
CIOs and line of business technology leaders also face significant questions in dealing with the mandates from the C-Suite and their sometimes-competing priorities. These include:
- How do you meet the CEO’s demand to drive forward with digital transformation, while at the same time your budget for core operations and for innovation remains limited?
- Is it possible to build platforms for digital transformation and business agility while also ruthlessly driving through efficiency and process automation?
- How do you create an organizational structure and build platforms for agility and disruption that remains secure and compliant, while maintaining cost effective core systems?
- Do your current core enterprise applications offer a realistic platform for your future innovation and development, or will they keep you struggling with siloed data and inflexible operations and high-cost, long-term contracts?
- Should you double down on your investment in these applications in the hope that they can become the platform you need. Or should you be focussing on creating or acquiring niche applications to meet specific business needs and opportunities?
- Are there technologies available today that can help you build a platform from a disparate set of applications and data sources?
The key elements of digital transformation
Digital transformation is a much used and abused term. If it means anything, it is about using technology-driven innovation to deliver tangible business outcomes in both the short and long term, while preparing the organization for a life of constant change.
Organizations that can boast of successful digital transformation projects, do so, according to Stephen Powers, vice president and group director at analyst Forrester, ‘Not with long cycles of business requirements and software implementations. Instead, they continuously experiment and innovate with technologies to achieve real business results.’
CIOs can perhaps best approach this by taking the insights they have learnt through their own infrastructure transformation over recent years and applying it to the rest of the business.
Automation has become a requirement everywhere from desktop provisioning to security monitoring. Meanwhile, ‘software defined’ has become the standard for the data center and the systems within it, be they servers, networks or storage. Whether they are onpremise or in the cloud, the infrastructure is the code, and in digital businesses organizations, the business will also become the code.
That means using and innovating with new technologies such as artificial intelligence (AI), robotics and automation to deliver new products and services and enter new markets. And none of these new technologies can succeed without a renewed focus on process.
The power of process
Process optimisation and automation has been at the heart of organizational management and business development since the concept of scientific management was developed by Fredrick Wilmslow Taylor more than a century ago.
It remains an obsession of the C-Suite, from the Chief Executive and Chief Operating Officer, to the CIO and the CFO. The traditional reason for this is simply to improve organizational efficiency, eliminate waste and thus boost profits and the quality of goods and services provided to the customer.
In the digital world, however, ‘process’ takes on an even more significant role. Organizations that are on a digital transformation journey, particularly those that make customer experience the focus of that journey, face a dilemma. Customer experience and, increasingly workforce experience, requires seamless and efficient journeys through an organization’s systems.
This is easier said than done. There is a huge disparity between organization’s digital goals – to become an agile, efficient customer-centric organization – and the ability of its systems to deliver.
All but the newest start-ups struggle with a complex organizational structure and legacy technology, which no amount of cloud rhetoric can wish away. The result is that end-to-end automation, often seen as the Holy Grail of enterprise process initiatives, is very difficult to achieve.
Organizations are struggling to bring data out of the siloes in which it resides, and many are balking at the major enterprise system vendors efforts to get them to use a propriety ERP or CRM system as their basic platform for digital transformation.
Duncan Jones, vice president and principal analyst at Forrester, explains why when he writes, ‘The enterprise resource planning (ERP) era is over. The ERP model of a single integrated suite to handle every process for every division within the enterprise did not work.’
As a corollary to this, analyst groups also report some frustration among end users with the results of deploying traditional Business Process Automation (BPA) products, with their focus on a small number of major applications that focus on internal processes rather than on customer service and experience.
Digital challenges all this. Organizations must still operate in secure and cost-efficient manner, but the focus of innovation has to shift profoundly from optimising traditional, internally focussed services towards rapid application and product development, with deep input from business units, all driving faster innovation and rapidly improving user experience.
A new way forward
End-to-end automation is just as much the holy grail in the digital age as it was in the past, and organizations will, out of necessity, continue to drive traditional business process optimisation and automation. However, many organizations know that considerable amounts of their work processes and data siloes lie outside core business systems controlled by IT.
These processes can be best of breed solutions and point solutions acquired by line of business leaders, Macros on an Excel spreadsheet developed by someone in a business unit or even manual processes. Whatever their origin, these processes are almost invariably essential tools for staff trying to do their day job.
Many developed precisely because the large, monolithic, core systems could not deliver the kind of processes and information that customer-facing staff needed. Others are the result of line of business staff improvising on tools that IT has delivered. One of the most satisfactory sights for an IT professional is to deliver software to meet a business case and to see business unit staff not only adopt it enthusiastically but develop use cases far beyond the initial requirements when the tool was conceived, scoped and built.
A few years down the line however, and this process can result in tools and business uses that bear little resemblance to the product the IT function initially delivered, but which are highly relevant to the user and the organization.
Given this sort of environment some organizations, rather than trying to force all their digital initiatives onto one large, homogenized platform, are looking at the development of discrete applications to deliver automation across the enterprise and throughout the customer journey. This is possible with agile methodologies, deployed by teams combining both business unit experts and technology specialists. Indeed, it is often the only way to rapidly deliver new products and services and the applications to support them.
The benefits are clear. This approach can free up the central IT team to focus on strategic projects and give line of business professionals the control they need. It prevents IT from being a bottleneck in the development process – or a whipping boy for business units when they struggle to keep up with the market. Instead responsibility for new developments is spread across the enterprise.
Another key benefit of this approach is that it overcomes the ‘rogue IT’ syndrome. The term emerged with the Software as a Service (SaaS) era, when IT departments threw up their hands in horror as business units began acquiring software and services to meet their immediate needs, with little recourse to the central technology team.
Instead of ‘rogue IT’ being a problem, this new approach allows business unit staff to commission or develop quick fixes within a set of governance and support parameters agreed by the CIO. It turns rogue IT users into potential citizen developers, allowing them to become a powerful and legitimate source of innovation within the organization.
Achieving this requires new organizational structures and a refocussing of process initiatives away from traditional core applications towards customer journeys. It requires new thinking about the business process automation tools that are used. The low code and no code platforms that have emerged with the age of digital transformation, are key enablers in this process.
ROI now on a platform for the future
Gustavo Gomez, CEO and Founder at Bizagi, the Intelligent Process Automation company says, ‘we live in a world where business processes must be able to dynamically orchestrate people, context, applications, devices and information. That can only be done on a flexible programme that overcomes, not exacerbates, differences between technology and business teams.
‘Our technology is about building a common platform to enable collaboration between business and IT that delivers rapid return on investment, and which offers a foundation for the long-term construction of the digital enterprise.’
Bancolombia, one of the largest banking groups in Latin America, is an example of what is possible. It used Bizagi as a core part of its program to create a virtual workforce that brings together human, robotics, cognitive and analytic capacities to boost customer experience.
The bank, with more than 10 million customers in 10 countries across Central and South America, had many manual processes that it wanted to automate, but which were not a priority for the core IT team. Using Bizagi’s Live Processes, ‘no-code’ approach, the bank was able to boost branch efficiency of service time by 59 percent in 639 branches.
These results were achieved thanks to a robust, welldefined process architecture, managed through a Center of Excellence that allowed the bank, to roll out intelligent automation technology, including Robotic Process Automation (RPA)in support of 140 processes.
Efficiency gains have been accompanied by a 28 percent reduction in operational risk, thanks to the automation of repetitive and manual tasks and staff have been given considerable autonomy to build their own workflows to meet the need to rapidly address market opportunities, changing business conditions or overcoming newly revealed workflow bottlenecks.
Bancolombia now aims to build on these achievements.
A platform for the future
Digital transformation programmes can and do use a host of exciting technologies – mobile, social, analytics and cloud, machine learning, Internet of Things (IoT), APIs, microservices and robotics.
If these are deployed as point solutions that ‘robotize inefficiency’, any rapid ROI benefits that are initially delivered will be more than wiped out by the new technology debt they embed in the business.
Digital transformation is a continuous process, not a oneoff programme and it is no good deploying transformation technologies that replace one set of data siloes, systems and suppliers with another. To do so is simply to replace one set of fetters on your organization’s business agility with another.
For a platform to be a real springboard for business transformation it must deliver process automation, enhance business and IT collaboration and enable agile and iterative working. That means a platform that does not limit you to one supplier’s walled garden of systems and data or a preferred selection of systems. It has to leverage your existing systems while you rationalize your software estate and deliver ubiquitous technology integrations as you deploy new systems to continuously develop new products and services at your own pace.
It must be the technology bridge between your current operations and where your imagination tells you that your organisation can go.
Process – evolution and revolution
Digital Process Automation is a first step in the creation of a platform for digital. It offers a way of overcoming data and application siloes, allowing central IT teams and line of business technology leaders a unified, holistic approach that can deliver maximum benefit and flexibility from otherwise fragmented and niche systems, but it is not digital transformation.
Bizagi, the sponsors of the white paper, argue that digital transformation requires organizations to evolve from Business Process Management to Intelligent Process Automation, through a combination of Digital Process Automation, Robotic Process Automation and Artificial Intelligence.
Digital Process Automation is, in essence, the modernization and refocussing of BPM. It moves the focus from looking at internal systems and cost reduction, to business agility, competitiveness and customer experience. Use cases include, for example, new starter onboarding, loan or credit approvals and similar processes that touch multiple enterprise systems.
DPA offers organizations the ability to deliver agile change on top of legacy systems and, in the process, bring business and IT closer together.
Robotic Process Automation takes a step further, but it is not without challenges. RPA technology has long been available, but their use has proliferated in the last five years. It offers significant productivity benefits but has challenges around how to scale and in ensuring it fits within, a broader digital strategy.
RPAs strength is that it can automate business tasks across a number of modern applications and complex, fragile, legacy systems, to deliver significant business benefits. It’s weakness, as Leslie Joseph, principal analyst at Forrester argues, is that there is only so much you can do when you ‘robotize inefficiency’. Without a broader digital strategy, RPA-based efficiency gains might prove hard to sustain.
Artificial Intelligence can help your organization move beyond robotized inefficiency. Laying intelligence on top of your processes and data is at the core of Bizagi’s concept of Intelligent Process Automation. AI allows organizations not just to automate manual tasks and robotize existing processes, but to enables them to optimize internal systems to deliver new services that to drive better customer experience and competitive advantage.