digital transformation: digital business process
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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
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 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