Digital transformation: digital business process

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DIGITAL TRANSFORMATION Reducing waste in business processes

Transcript of Digital transformation: digital business process

DIGITAL TRANSFORMATIONReducing waste in business processes

INTRODUCING PROCESS DIGITISATION

Process digitisationWhat is it?

› Changing paper-based and other analogue process into digital processeso Generally these are online processes

› The aim is to make the process cheaper, quicker, more effective, higher quality, or more flexible

Process digitisationBusiness benefits

› Fast, cheap processes & accurate data as re-keying is avoided

› Automatic auditing & quality control of tamperproof records

› Standardisation of processes

› Potential to make changes to a process without problems occurring elsewhere in the process

› Automated progress checking

› Integration with other systems

› Savings in physical space for storage

Process digitisationUser benefits

› Data can be accessed from anywhere

› Opportunities for knowledge management

› Customers can have instant access to data (EU data directive)

› Flexibility: documents can be “collated” in different ways

Process digitisationCosts

› Set up costso Acquisition of digitisation software

o Training and support in the new digital system

o Delays in access to records caused by set-up problems

o Inefficient access to records as a result of inefficient set up

› Running costso Creation of adequate metadata to allow document search

o Maintenance and updating of systems

o Additional security systems

o Data back up and storage

Process digitisationRisks

› The wrong records selected for digitisation

› The costs are under estimated

› Cyber risks increase

› Expected savings may not ariseo Digital system proves less efficient than existing system e.g. for diaries

o Physical copies are still be needed for legal reasons

› Records that are nor fit for purpose are created e.g. insufficient detail in images

› Physical copies required for legal reasons are destroyed

› Digital storage problems: third party storage contractors fail or enter into dispute with data owner

THE EIGHT WASTES

Digitisation and wasteThe origin of Muda

› Digitisation is often done to increase speed and reduce costs. Where this happens, identifying waste is important

› Waste is “anything other than the minimum amount of equipment, materials, parts, space, and workers’ time which are absolutely essential to add value to the product”.

› Shoichiro Toyoda (President of Toyota until 1999)

Digitisation and wasteThe eight wastes

› Toyota identified eight “wastes” (Muda) in their production processo Defective processes

o Over-production

o Damage during production

o Transportation costs

o Unnecessary resource use

o Unnecessary time

o Unnecessary quality

o Underused people

› These can be matched with potential wastes in service processes

The eight wastesWaste 1: Defective processes

› Errors in data entry

› A lack of the data necessary for a complete record

› The wrong data used to service an individualo A call centre employee might pull up records for the wrong person

› Badly integrated processeso Records available might not match promises being delivered elsewhere e.g. an advert

promises something but retailers can’t offer this to shoppers

The eight wastesWaste 2: Over production

› Failure to retain existing customers results in an expensive search for new customers because of:o Failure to service customers properly

o Failure to generate loyalty through communications (e.g. when offers are targeted only at new customers)

o Failure to recognise a customer’s status as an existing customer

› Creation of records that are not required e.g. keeping records of people who are not customers

› Requiring unnecessary data fields to be completed e.g. asking for a telephone number in addition to an email address

Note: If unnecessary data is collected and stored then there is a data compliance issue in Europe as data rules state that data should only be held when necessary

The eight wastesWaste 3: Damage in production

› When files are accessed, changes, additions and deletions may be made by the person accessing the file

› If this is done without appropriate record being taken, the file could be damaged as it would no longer be complete

The eight wastesWaste 4: Transportation costs

› Unnecessary transport of people who deliver services

› Inability for people to access records remotely, requiring them to visit a separate location to access datao Or the reverse: local offices that reduce transport costs but increase overall costs

The eight wastesWaste 5: Unnecessary use of resources

› Collecting or keying the same data in twice

› Unnecessary equipment such as tablet computers or software upgrades› These can also increase cyber risk

› Unnecessarily hard-to-find information

› When files are accessed, changes, additions and deletions may be made by the person accessing the file

› Unnecessary work › Emails where people are “copied in” for no reason

› Unnecessary or badly run meetings

› Compulsory training – where it is provided to people who don’t need it simply “just in case”

› Office costs – heating and lighting left on in empty rooms, unnecessary use of printer ink and paper etc

The eight wastesWaste 6: Unnecessary time

› Wasted time means increased costs and potentially decreased customer loyalty

› Badly constructed “critical paths” where actions that are dependent on other actions are not ordered well

› Unnecessary processes such as the duplication of data entry

› Unnecessary document handling: large numbers of versions of a “version controlled” document can indicate inefficiency

The eight wastesWaste 7: Unnecessarily high quality

› Elements of a service that are not valued by customers, or by most of them

› Unnecessary interactions with call centres by customers e.g. this may be wasteful compared with creating a good FAQ online

› Timing of the interaction may dictate whether it is wasteful or not

The eight wastesWaste 8: Unused staff skills

› People doing the wrong jobs, e.g. professionals doing admin jobso Tasks not allocated properly

o Weak management allows people who should be undertaking routine tasks to “delegate upwards”

› Professional people employed at a cheap rate, because they have been employed to perform a routine task, are likely to be bored and less efficient

DEALING WITH WASTE

Dealing with wasteBottlenecks

› Processes are as strong as the weakest link

› Focus on “bottlenecks” that stop efficiency or extend delivery time and identify and reduce waste there

Dealing with wasteWaste and digitising processes

› Digitisation does not in itself guarantee efficiency

› Identify waste in the process and then consider ways that digitising the process could reduce that waste

› Avoid digitisation that merely makes processes more complex

› Consider whether any risks associated with digitisation outweigh the benefits

THANK YOU

Jeremy Swinfen-Green, Charlotte [email protected] 341 589