By Jelle Lefering- Digital Business PlatformConsultant Nimble Institute
There’s been a lot written about digitalisation but what is it and how have corporate strategies changed in this new digital world?
Digitalisation is basically, the integration of products as physical objects, people and processes through the internet of things. Often, we use the term the “internet of everything” because everything and everybody is interconnected. That new integrated world creates for companies’ opportunities for completely new business models. For example, machinery company that produces compressors and used to sell those compressors as physical products, now can move to a business model to sell compressed air as a service. They just install the compressors at their client’s site, manage the compressor through the internet and they bill per month the amount of compressed air that the client used. So, they establish a new value proposition, they have people with a new qualification to deliver all that and of course, they have very different processes in place. You can move your organisation to the next level through digitalisation – if you do it right.
If you look at the key components of digitalisation you see that the products normally well managed through product managers and product marketing., As a company you normally also have a good management discipline around your people with your human resources organisation. In most cases you also have a good information technology capability in place that can take care about technology topics, including the internet connection. However, what is in many organisations missing is a management discipline around processes. If you cannot adjust your processes systematically according to your new business model and your new strategy, you end up not realising the full potential of digitalisation or you even don’t realise any real business value at all. So, it’s key that companies build a real management discipline around their processes, a discipline that moves strategy into IT and people-based execution. That’s crucial to be successful in our digital world.
BPMN (Business Process Model and Notation.) was over many, many years a field where practitioners focused on developing new methods, tools, approaches and provide them to companies. So, the whole domain was very tool and technology focused. Now we are in the lucky situation that many of those tools, technologies and approaches are on a high maturity level so that we can really focus on creating business outcomes using those tools and technologies. Value driven process management is all about focusing on value, focusing on outcomes. That’s why we can now talk about BPMN as a real management discipline that provides value by transferring strategy into people and IT based execution at pace with certainty. There is no better moment to move your organisation to the next level through digitalisation than now.
Three Key Factors to Achieve Process Excellence
One huge obstacle for achieving process excellence is working in traditional, functional specialist silos. This blog explains what the three key factors are for bringing those functional silos together to achieve process excellence.
1- Customer centric process culture
Changing the organisational culture to be both customer centric and process oriented is very important, because that way the organisation will start to align itself automatically towards process excellence. Customer centricity gives the processes the reason to exist and process orientation makes sure that the organisation is providing added value to customer as efficient way as possible. But you can’t really imprint this on the organisation and therefore you need to grow it as part of the organisational culture.
Your organisation needs a culture, where focus is on mastering processes from a customer-oriented process perspective – Build in competitive advantage in delivering value to customers. If your organisation has a genuine focus on the customer – the customer will become everyone’s business, no matter what functional silo the person represents in an organisation. Even people in “internal roles” should be doing something that enables others to serve customers. Always seek customer satisfaction and value through fulfilling their identified, true needs through business processes. It’s important that your employees understand that customers will always want something, but it’s even more important to know what they really need.
2- Shared goals and metrics
Shared goals for the entire organisation and key measures for gauging business performance, gathering the necessary data and analysing it using key variables is very important. You get what you measure for, but keep in mind that turnover, growth percentage and other faceless, corporate measures do not touch the hearts of people and therefore won’t lead to results either. Instead, build your balanced scorecard from customer-oriented perspective and make sure everyone sees and understands those results in the same way. Even human resources and the financial department people need to be connected to customer outcomes through what they do. With every KPI (key performance indicator) that you have ask “How does this help my customer to succeed?” This will help you to rethink internal matters of an organisation from a customer-oriented perspective. If something does not contribute to providing great customer experiences in a profitable way, change it so it does or get rid of it.
When using metrics, remember that extrapolating from the past doesn’t work. You cannot predict the future from what has happened yesterday. The reason is very simple: the world and the customer changes all the time. History won’t tell you what the next thing will be the customers get interested in. Those companies who extrapolate from the past won’t innovate something new and inspiring for their customers. They will be only a blend-improved version of what already was. Therefore, use the metrics to guide the behavior of people to the right direction, ensuring success in future.
3- Removing organisational barriers
It is very beneficial to remove organisational barriers through creating boundary-less collaboration culture – Break down organisational barriers to improve teamwork throughout the organisation. It might be best to have a truly process-oriented structure in your organisation, so that everyone gets what he or she needs to provide profitable customer experiences. Do not support old-fashioned silos that prevent people from collaborating.
Also train and coach management to be proactive, set goals for providing customer experiences, review them frequently, establish clear priorities and focus on problem prevention rather than resolutions after the fact. Have your people anticipate problems before they even occur. Cost of fixing the cause of problem is lower when detected earlier. Have people working in teams towards shared goals, without artificial silos preventing genuine collaboration.
Support a drive for perfection, combined with a tolerance for failure. You must be willing to try new ideas and approaches that have some risk of failure in order to make changes leading to perfection. Just make sure that you learn from your mistakes that you will make on the way. If you cannot extract a lesson from a failure, you better stop trying. No failure is a failure, if you learn something from it. And that is only possible when everyone is working together in an organisation regardless of their position, title, department, gender, age or anything else. Those people, who do not contribute to shared goals, need to look for other place to work, because there is no place for free riders in boundary-less organisation.
So, could you now imagine getting better software if the IT company that you employ had a real focus on your needs as a customer and they would produce those results regardless of organisational boundaries and everyone would actually communicate with each other? And wouldn’t it be even better if they were measuring throughout the project how they are advancing in relation to your business goals and supporting them with an IT system? Would that be something of interest to you?