Designing your Business Processes Management (including Outsourcing) strategy without factoring in digital capabilities like Artificial Intelligence and machine learning will - over time - put your organisation at a cost and performance disadvantage compared to your competitors.
If you've ever had the experience of packing up your belongings to move a long distance away - maybe interstate or overseas - you'll probably recall the dilemma of deciding what to take, what to put in storage and what to give away. It's the ideal opportunity to declutter and simplify; and while most decisions about what you should keep in order to have a functional life come naturally, cleaning out items you haven't used for years can be dictated by the fear that you might need them some time in the future. Sadly, organisations often have the same reticence about actively disposing of Business Processes that have outlived their usefulness, but it shouldn't be that way.
Every organisation has business or organisational processes, even though they may range from ad hoc to formalised, even within the same organisation. We know from decades of research that eliminating waste and reducing complexity relies on being able to classify tasks according to how they can be made routine.
Once a task is routine it can be automated or transported to another place or to another organisation. We've seen this process used extensively in logistics where companies have outsourced their needs for trucks and warehouses in order to get an improved costs and service profile. What inevitably happens is that companies using these services find their logistics providers will grow their technology capability faster and more efficiently than the company ever could themselves. This is what releasing value is all about.
As the new Industrial Revolution (Industry 4.0) ramps up speed, innovator companies are using new technologies like artificial intelligence and machine learning to automate or completely engineer new processes in order to reduce costs and (hopefully) improve the customer experience. This isn't an abstract idea, it's happening today. As a very simple example think about the last times you needed help on the internet. You were probably asked to type in your problem; the response might ask you to retype your question with greater detail, or make an estimation of the problem based on your what you originally typed. The chances are your help desk operator is actually a robot that's operating in a controlled and focussed way, to deliver content back to you that hopefully answers your question. In the best systems when the bot runs out of steam your question is seamlessly routed to a human who can solve more complex or arcane problems.
The help desk scenario is useful because customer service has long been a favourite focus for business process management, originally by outsourcing the function (getting rid of non-core activity), then offshoring the function (lower labour costs), and now by automating and moving to self service via the web (new functionality). The use of bots is a game changer because we can now scale without linear cost; once the help desk bot is built the number of customers it can service is practically unlimited.
Customers also seems to like self-service and avoiding queues; being able to get service as and when they want is important. Gartner's Framework for Applying AI in the Enterprise report points out that people want a friendly, multi-modal way of interaction without the need to learn technology, just using their voice. Thats what driving the 43% annual growth in user investment in Virtual Personal Assistants like Siri and Alexa, which they estimate should top $2bn by 2020. As more people accept human-machine interaction at a personal or home level their propensity to accept it in business situations will also grow.
Of course there are challenges to automated systems - millennials v baby boomer acceptance, information security, or people who are unable to interact with the system - but done right, the bot process can release tremendous value to organisations. And consumer interaction is just one example of how the elements of Industry 4.0 are turning the focus of Business Process Management from internal (efficiency) to external (the customer experience).
At this point business leaders responsible for business process management need to integrate human process much more tightly with a range of technologies, and be vigilant that the organisation isn't dropping the ball and holding onto value-destroying ways of working. They should start by analysing processes for see which tasks are repetitive and predictable, and probably rule-based. They should also look at the information or data that flows through these process to identify how much structure is involved in the data, and how much interaction there is with their corporate IT systems. And they should be developing a roadmap for the organisation to move to intelligent, machine-driven automation at an appropriate time.
We know that laggards - those organisations that hang on to old ways or working until the end - inevitably die. This is true of even large organisations like Toys "R" Us, Kodak and Blockbuster, once-great companies that didn't see how technology and innovation were changing the market or simply couldn't respond in time.
Make sure your organisation becomes future looking, and is ready to thrive in a digital economy. Get working now; because you don't want to become the next Blackberry.
If you'd like to discuss anything related to the content of this post please feel free to contact me on +61 429 576 662 or email me on bill@billramsay.com
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