Digitising processes Opportunity or failure?
2020-05-08, by Mario Buchinger
In these days – especially during this worldwide pandemic crisis – digital solutions become more and more popular. Now but also before this time, many organisations were facing challenges in creating digital process landscapes. As within many other initiatives in the past decades, whether it was “lean implementation”, “continuous improvement process (CIP)” or “agile”, the aim was always to increase efficiency and profit. Doing it this way, organisations are doing everything to fail, because they miss an essential lesson. When digitising processes pre-existing failures become more visible and are even exponentiated.
Efficiency does not mean effectivity
The novel “The Goal” written by Eliyahu M. Goldratt tells a story about a company struggling with processes not capable of delivering the right things within the right time to their customers. The journey of improvement with all mistakes and failures is written from the perspective of a site director. One of the major conclusions is, that
if you want to ruin a company, it must be made sure that all processes are maximum efficient. What first sounds as a big contradiction is nothing but a matter of fact. If everything is running on maximum efficiency, all these elements cannot run together as a whole.
Local efficiency optimisation destroys the performance of the overall system. What counts is effectivity, efficiency is not totally unimportant but must be considered second. While efficiency means “doing things right”, effectivity means “doing the right things”. Since customers are only interested in the right thing, the success of every organisation is determined by the view of the customers and they are not interested in local efficiency.
Digital technologies can offer huge opportunities. But they can also be dangerous if applied the wrong way. Privacy and cyber security issues are absolutely relevant. But often they are not in the focus of decision makers and shifted into the responsibility of someone taking care for GDPR or IT issues. Therewith the topic gets a low priority although it is essential and must be considered in the process design. Various persons responsible for the implementation of the GDPR measures can tell you a thing or two about that.
However, even if these aspects are adequately considered, digitisation of processes contains some other traps. What can be often observed, is the approach to run for efficiency improvements while ignoring the holistic view. This mistake, which was also done with “lean”, “CIP” or “agile” approaches, is continued by applying digital technologies. The weaknesses of the process landscapes remain the same but now they are getting digital.
The expectations on digitisation of process landscapes is a higher level of transparency and out of that a process improvement in order to increase efficiency. As already described, this approach is wrong since it is disconnected from the customers.
First, customer values and customer expectations must be understood. Out of this, products or services as the corresponding solutions are designed or if already existing, potentially improved. Finally, a process is required to make these solutions real. The process design covers all different process steps including the necessary information and communication routines, synchronised in the right way. What is the right way? The process must contribute to the overall benefit therewith losses of efficiency must be accepted in some cases.
Analog and digital
All these steps have nothing to do with digital technologies. We are still talking about creativity, intuition, measurements and development. In some cases digital solutions might be helpful. However, the majority of these activities happens outside the digital world while people interact. Even worse, this development cannot be implemented by a blueprint or algorithm.
Obviously, expectations on digital technologies regarding process design and operations are heading into the wrong way. If a process is weak, it will not get better after applying digital technologies. On the contrary, by doing this the complexity is increased und transparency gets worse.
First, it is important to understand what needs to happen and why. Second, it is useful to consider digital technologies only at these points where they support the process towards its final purpose: customer satisfaction.
Therefore, please be aware of the old saying:
“If you have a crappy process and you digitise it, then you have a crappy digitised process.”
Mario Buchinger is an economy-physicist, lateral thinker, musician and author. The specialist for changeability is certified Lean-Manufacturing-Consultant and worked as employee and leader in German companies (Daimler, Bosch) before he founded his own company Buchinger|Kuduz in 2014. More than 15 years of international experience in process development and improvement and a multi-cultural background create added value for his customers. Mario sees himself always as a part of the team and he is driven by the conviction of a fair and sustainable world within business and society.