Creating a digital ecosystem that stands the test of time.
Why productivity from IT investments is stalling and how incorporating data-based process automation within your digitalisation strategy could improve the ROI of your IT.
In today’s interconnected world of business, digital transformation is at the heart of any future-fit corporate strategy. In fact, businesses are veritably splashing out on digital innovation to make their plans come to life. However, as technology investment has increased, productivity from these investments has declined over the past 20 years. “This indicates that technology has been modernised separately, to a meaningful degree, from the people and processes interacting with that technology,” writes Christopher Gilchrist, Principal Analyst for Forrester. In other words, digitalisation strategies, the majority of which have thus far taken an exclusively data-centric approach, have hit an ROI plateau.
Taking a data-centric approach
In many respects, these data-centric strategies have been crucial. From a manufacturing perspective, machines fitted with sensors, for example, have allowed for improved efficiency, better quality management and reduced error rates. The data generated by these IoT devices meant that once-fragmented value chains could be connected, sparking end-to-end data availability for all parties, shorter delivery times, improved inventory strategies, and in some cases even just-in-time production capabilities. From a sales perspective, this continual data integration – spanning from order to inventory check to invoicing, dispatch notice and payment confirmation – allowed for increased transparency, which, in turn, enabled short-notice and last-minute order changes. The result: businesses became more agile and were able to adapt to market changes more readily.
Where data-centred strategies have fallen short
However, as much as digitalising business information has clearly been essential, maximising the benefits of this data has reached its limits. The reason for this is quite straightforward. As the main focus of digitalisation strategies has been on improving availability of data, questioning or analysing the underlying structures has fallen by the wayside. One might say that businesses seeking to identify technical solutions for pre-defined sub-steps and structures are too fixated on the as-is state of their operations to consider their to-be potential. An oversight which comes at the expense of improvement, progress and ultimately innovation. Expecting to achieve a long-term competitive advantage purely based on data integration ignores the bigger picture. As Christoph Gilchrist rightly says: “It does not matter whether the change is sparked from technology, process, or people, because the only way for an organisation to optimally adopt the change is to have the three acknowledge the change in complementary fashion.” In other words: Data and processes must be viewed as two sides of the same coin by the people that work with them – to truly take advantage of digital transformation and prevent innovation stagnation.
Identifying the ‘to-be’ potential of your landscape
To achieve this intimate link between data and processes, the next step is to shift the focus from an exclusively data-integration-focussed approach to a more holistic view which gives equal weighting to process automation. Answering the question ‘How do humans interact and how can these interactions be supported by technology?’ empowers organisations to create their own people-centric digital eco systems where data and processes go hand in hand. That are designed for their unique needs, their core business but – more importantly – their employees, partners, customers and their relationships to one another. With the help of these key users, businesses can move from their ‘as-is’ strategy and identify ‘to-be’ processes and milestones. Similarly to when working with data, precision is imperative – in this case it is the business objects (i.e. customers, products and orders) and their life cycles that must be analysed and mapped as accurately as possible.
Integrating stakeholders and incorporating emerging technologies
Once the mapping is defined, the next step is to integrate stakeholders. After all – digitalised processes thrive on integration. This phase is a clear example of how data and processes support each other. Technology powered by modern data integration systems allow for no programming, connecting communication channels, removing media disruptions and converting all manner of data formats. This makes room for new and emerging approaches, which involve citizen developers and integrate low-code and no-code back-end technologies, for example. Front-end innovations include creating customer value with intuitive UIs, which now have mid-air tactile and gestural capabilities, along with more established voice-recognition assistants.
Thinking outside the box when it comes to process automation
With all processes mapped and all stakeholders integrated, we move on to the automation and orchestration portion of process automation. In many respects, the sky’s the limit here. Dr. Martin Fischer, CEO at Lobster GmbH, has an oven-ready example for a holistic automated ordering process. “It all begins with the sensors in the automated warehouse”, says the IT-savvy businessman. “They flag that manufacturing resources in the organisation’s inventory have fallen below a certain level, for example. This information is transferred to the ERP system. As a certain threshold value has been reached, this automatically triggers a procurement process. The procurement system is connected to various suppliers, enabling automated dispatch of enquiries. Next, the procurement system automatically sends requests for available prices, volumes and delivery times with a predefined list of suppliers. This data is transferred to a planning tool that also integrates data on any outstanding orders, correlates this information and then independently optimises prices, volumes and delivery times. The result is fed back into the procurement system and the ordering process is triggered automatically. Perhaps one might even go as far as to use this information together with the company’s own manufacturing availability to enable daily recalculation of the product price, thereby improving production capacity. Liquidity could also be taken into account by querying internal financial data. By connecting various financial service providers, it would subsequently be possible to immediately project potential financing costs.” Martin Fischer’s example proves just how continuous and independent self-optimisation of numerous business processes is made possible when working with automated responses to data made available from other systems. This gives businesses control over interdepartmentally networked processes both in-house and beyond.
Keeping tabs on your digital ecosystem
To guarantee that the newly established ecosystem is up and running at operational level, the final step is to enable a transparent overview of each business object, which continually generates tailored reports via customisable dashboards. Ideally, these interfaces include (near) real-time data and report on predefined key figures. Businesses can then use this information to monitor the effects of digital change, giving them an important tool to facilitate continual optimisation, drive innovation and solidify their competitive advantage.
Data integration and process automation as two sides of the same coin
Companies looking to fully benefit from a digital ecosystem and reap the rewards of their tech investments, would do well to balance their digitalisation plans by linking data integration and process automation. Provided the business has access to a coherent and consistent data management set-up, allowing processes to be mapped precisely and transparently, the potential to benefit from a thoroughly integrated and automated digital ecosystem knows no bounds – whether it be the ability to orchestrate processes E2E, understand the holistic impact of any changes made or streamline operations, freeing up the resources to reinvest in and focus on driving their core business.
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