As businesses strive for excellence and continuous growth, process improvement and embracing digital dexterity emerges as the transformative force that drives innovation and fosters a culture of excellence within organizations. Yet many large enterprises face the challenge of managing their legacy systems and processes that hinder innovation and growth.
Legacy systems, applications and processes continue to be used even though they are out of date as replacing them are feared to be a costly affair or worse can be a potential risk of business interruption. However, as the complexity of these processes increases over time, organizations must strive for agility and flexibility to remain competitive. The significance of having flexible processes and their role in digital transformation initiatives is often overlooked.
The Struggle with Old and Rigid Processes
A staggering number of organizations still rely on applications developed in the 1970s, burdened by their rigidity and lack of support. With many developers who conceptualized these systems long gone and most documentation non-existent, enhancing legacy applications becomes an arduous task. As a result, organizations are left grappling with inflexible software that hampers productivity and incurs substantial replacement costs. Yet, many organizations continue to depend on these legacy applications, facing with the challenges of interoperability and lack of technical support. The absence of original developers and documentation makes enhancing these legacy applications a daunting undertaking. Consequently, businesses struggle with rigid software that impedes productivity and leads to considerable expenses for potential replacements.
Similar to legacy applications, processes can also suffer from increasing complexity over time. Outdated processes or traditional workflows that have been in place for an extended period may still function but could lead to inefficiencies, reduced productivity, and increased operational costs over time. As new scenarios, use cases, and regulations emerge, processes become rigid and difficult to maintain. A lack of clarity on the process's complete scope makes improvement initiatives falter, and enterprise-wide digital transformations risk being fraught with challenges.
Breaking Free: The Value of Agile Processes
The key to addressing the shortcomings of rigid processes lies in embracing agility. Agile processes adapt seamlessly to change, manage exceptions efficiently, and foster higher productivity among employees with minimal oversight. Ultimately, this leads to enhanced customer satisfaction and organizational success.
Navigating the Challenges of Digital Transformation
Process improvement is a critical step that is often overlooked before preparing for digital transformation. As per reports from McKinsey, BCG, KPMG, and Bain & Company, the likelihood of digital transformation initiatives facing failure ranges from 70% to 95%. Attempts to transform outdated, inefficient, or broken processes without first improving them can lead to significant challenges and impediments in the digital transformation journey.
Before embarking on any digital transformation journey, organizations must ensure that their processes are agile. Attempting to improve a flawed process is akin to adding features to a legacy software application; it often results in unintended consequences and inefficiencies.
Transforming processes into agile entities serves as a prerequisite for successful digital transformation. By optimizing existing processes, organizations can ensure that their digital transformation efforts build upon a strong and efficient foundation, leading to more successful outcomes and maximizing the benefits of the technological advancements. Fortunately, any process can be transformed into an agile and nimble one through a systematic approach.
The 4 vital steps to achieve process agility:
- Step 1: Digitize the process thoroughly, documenting exceptions, validations, and all pathways.
- Step 2: Establish a continuous digitization infrastructure, ensuring that every process change goes through approval mechanisms and updates the digital version.
- Step 3: Develop an automated mechanism for on boarding and certifying users when the process is transferred or in-sourced. This reduces costs and time while ensuring comprehensive internalization of process changes.
- Step 4: Initiate process improvement, automation, and digital transformation initiatives to uncover flaws, inefficiencies, and bottlenecks. A continuous cycle of hypothesis, data capture, fine-tuning, and further improvement drives agility.
The Impact of Agile Processes
Organizations that successfully implement nimble processes experience significant improvements in their top and bottom lines. On an average, the business topline can increase by 10-40%, and operational costs can be reduced by over 25%. Additionally, the intangible benefits of higher employee satisfaction and enhanced customer experiences make the digital journey worthwhile. Organizations with simplified process are characterized by flexibility, adaptability, and agility, experience remarkable benefits across their financial performance and overall business success with the potential to positively impact both the top line (revenue) and the bottom line (profitability) of the organization.
When processes are simplified and agile they enable organizations to respond swiftly to market changes, customer demands, and emerging opportunities. By being adaptable and quick to embrace new trends, these organizations can seize growth opportunities and gain a competitive edge. As a result, they can attract more customers, increase sales, and expand market share, leading to a boost in their business's revenue. The estimated increase in the business topline typically ranges from 10% to 40%, depending on the industry, market conditions, and the effectiveness of process implementation.
Simplified processes are designed to streamline workflows, eliminate inefficiencies, and optimize resource utilization. By automating repetitive tasks, simplifying complex processes, and reducing manual interventions, organizations can achieve significant cost savings in their day-to-day operations. This cost reduction not only enhances profitability but also allows companies to invest in other areas of growth and innovation.
They also bring a range of intangible benefits that contribute to the overall success and sustainability of the organization. For instance:
- Employee Satisfaction: Nimble processes empower employees by enabling them to work more efficiently and collaboratively. This leads to higher job satisfaction and motivation, reducing employee turnover and recruitment costs.
- Enhanced Customer Experiences: The ability to adapt quickly to customer needs and preferences translates into better customer experiences. Satisfied customers are more likely to become loyal advocates, leading to increased customer retention and potential referrals.
- Brand Reputation: Organizations with nimble processes often gain a reputation for innovation and responsiveness, further enhancing their brand image and market position.
- Future-Proofing: Embracing agility and digital transformation ensures that organizations are better equipped to navigate uncertainties and disruptions in the future.
Overall, process dexterity can significantly impact an organization's financial performance, leading to revenue growth and cost reduction. Moreover, the intangible benefits, such as improved employee satisfaction and enhanced customer experiences, add further value to the organization's journey towards becoming a more adaptive and resilient player in the market.
The value of flexible and adaptive processes in today's digital age cannot be overstated. As organizations strive for innovation and efficiency, agile processes pave the way for sustained growth and success. By embracing digital transformation and fostering smooth processes, businesses can unlock their full potential, delight customers, and secure competitive market advantage.
The author is co-Founder, CEO, and Chief Innovator of Epiance Software, as well as the chief advisor and mentor at Aashwasan Group of Companies. Views are personal.