Written with Michael Neece
There’s lots of heat in the marketplace about digitization, but not a lot of light.
The idea of digitization is appealing; it’s hard to resist. Who can argue with the coming tsunami of a digitization that will inevitably transform mundane analog processes into high performance operating engines?
But getting it done? That’s a different story.
Far too many organizations are misfiring, attempting this new transformation using old approaches. Some get stuck after aiming too high, launching huge programs and falling flat. Others are buying start-ups, attempting to graft new DNA into traditional bloodlines. Many are over-focused on tools and technologies while paying scant attention to changes in workflow, organization and culture. Still others get caught up in ideology; they chose one methodology and allow practitioners to insist that their way is the only way, restricting fresh ideas before the work has even begun.
Counter-intuitively, the best path to process digitization is to go small. No need to digitize all of the supply chain, just pick one process and get that done first. That makes it small and simple. But not just any sub-process will do, selecting a sub-process that matters a lot to a key stakeholder is smart. This focused approach can be swift, where projects can be done in weeks or days, not months or years.
For example, supply chain performance is affected by many related activities, any one of which could be a starting point. An Engineering Change Order impacts the Bill of Materials, testing protocol, Request For Proposal, inventory, factory scheduling, and inspection, not to mention suppliers and their sub-suppliers.
The 4S approach is one way to do it: Small, simple, smart, and swift. Then, after digitizing one process, tackle the next process in line. For example:
- Small & Simple:Begin with digital approvals
- Smart: Include stakeholders from Purchasing, Engineering, Manufacturing
- Swift: Map the process in one day, find opportunities to digitize the next
Success requires breaking free from traditional methodologies and simplify the approach just as you’re simplifying the processes. Organizational agility leads to improved productivity, and new revenue streams. McKinsey said it best. “… the digital age rewards change and punishes stasis.”
The best way to get started is not with answers but with questions.
WHY – WHO – WHICH – HOW – WHEN
Why are we digitizing? What outcome do we seek? It’s important to be specific on the outcomes that are most important at this moment . You might need to guarantee compliance or error-proof a process. Or increasing process capacity may be tops on your list. Just decide, and be reasonable in setting timeframe and metrics you want to and can achieve.
Who are the stakeholders served, and what do THEY want? Gathering and documenting goals from multiple perspectives and stakeholders will ensure that the “digitization” initiative will serve the desires of those affected by the project. Stakeholders will likely include the “business process owners” who must live with status quo and the “future state” of the digitized process. Stakeholders should also include those workers and trading partners who use the process daily. They will be your greatest source of improvement ideas.
Which process will we digitize? To figure this out look for the symptoms of process dysfunction. These include, too many exceptions, redundancy, the prevalence of shared folders that compensate for fragmented work, spreadsheet reporting, gray market applications, different apps for different workflows, e-mailing to collect process status instead of autonomic measurement, or wasting time searching for the latest version of a document. Your first process should be well defined and not a cluster of many sub-processes or fragments of dispersed functions.
How well does this process operate today? Change begins with a deep systemic understanding how things are really done. Most managers don’t really understand precisely how their process works. While each worker knows their specific tasks within a process, too often, leaders do not have a complete understanding of how all the process steps fit together. But that doesn’t require months of analysis. Just get started. To rapidly map the process, gather the people closest to the work and have a skilled facilitator lead a 4-hour mapping session. You might have to hold another session the next day, but when completed, stakeholders will have a detailed understanding of everything involved.
How can we automate this process, and only this process? Staying focused on one process may be difficult because in business every process is connected to everything else. For example you might be focused on your employee on-boarding process. But on-boarding is triggered by completion of the hiring / interviewing process. And on-boarding can trigger several sub-processes including facilities for office set-up, security for badge access and training. At the start of your mapping session(s) decide where the process starts and where it ends. And stay focused within these start-stop events. Often the hardest part is deciding where the process starts.
When can we get the first results? Two techniques are critical here: The first is to time-bracket the digitization project. Set a tight time frame to get this done within 2-4 weeks. The second is to ferociously manage scope. In other words, don’t throw another specialized “app” at the problem.
Organizations and people are overwhelmed with fragmented data and hundreds of special purpose systems. As you identify improvement opportunities, do not start seeking a specialized app to handle this one process. First look internally for tools you already have that can be modified easily, without writing a bunch of customized software code. As you consider ways to automate the process, be mindful of the other processes that come before and come after the process you’re improving.
After your team has a detailed understanding of the process and has identified improvement opportunities, you’ll discover that the cumulative effect of a series of small changes at the task level often yield quantum leaps in performance. Don’t underestimate the value of simple or crazy ideas from your team that may be outside current organizational norms or personal expertise. The experts are the people who work the process every day.
In the 1930’s Enzo Ferrari was warned about a problem with the brakes on his latest car. His response: “I make my cars to go, not to stop.”
The same is true for you.