Presto "Digitization"

By Steven A. Stanton and Michael R. Neece

There’s lots of noise in the marketplace about digitization, but not a lot of light.

The idea of digitization is appealing; it’s hard to resist. Who can argue with the coming tsunami of a digitization that will inevitably transform mundane analog processes into high performance operating engines.

Actually getting it done. That’s a different story. Far too many organizations are misfiring, attempting to execute this new transformation with old approaches. Some are stuck trying to go big, launching huge projects and programs focused on mastering digitization. Others are buying start-ups, attempting to graft new DNA into traditional bloodlines. Many are over-focused on the tools and the underlying technology while paying scant attention to the actual digitized work.

Yet in other organizations the approach is ideological. Whatever prevailing methodology “owns” change will insist that their way is the only way. This restricts fresh thinking and clouds any solution before it’s begun.

The best path to process digitization is to go small

Counter-intuitively, the best path to process digitization is to go small. No need to digitize all of the Supply Chain, just pick one process and get that done first. That makes it small and simple. But not just any sub-process will do, selecting a sub-process that matters a lot to a key stakeholder is smart. This focused approach can be swift, where projects can be done in weeks or days, not months or years. Put these together yields the 4S approach: small, simple, smart, and swift.

For example, supply chain performance is affected by many processes. An Engineering Change Order (ECO) can affect the Bill of Materials (BOMs), manufacturing and testing procedures, initiate several Request For Proposal (RFP) processes, affect inventory management, factory scheduling, incoming inspection, as well suppliers and their sub-suppliers.

Using the 4S methods, select one process.

• Small & Simple: Maybe you’d choose the ECO review and approval process.
• Smart: Stakeholders likely include design & manufacturing engineering, engineering leadership, cost accounting, and the supply team.
• Swift: The ECO review and approval process is well understood, with fewer than eight steps, and can be mapped within one day.

After digitizing one process, “rinse & repeat” by tackling the next process inline.

Success using this 4S model requires organizations to break free from their lumbering traditional sequential methodologies and simplify their approach just as they’re simplifying their processes. “Paralysis through analysis” and “decision by committee” lead to delays and failure.

Organizational speed and agility lead to improved productivity, cost savings, new product launches and new revenue streams.

A February 2017 report on digital reinvention published by McKinsey & Company said it best. “... the digital age rewards change and punishes stasis.”

The best way to get started is not with answers but with questions.

WHY - WHAT - WHICH - HOW - WHO - WHEN

1.   Why are we digitizing? What outcome do we seek? It’s important to be specific on the outcomes that are most important at this moment . You might need to guarantee compliance or error-proof a process. Or increasing process capacity may be tops on your list. Just decide, and be reasonable in setting timeframe and metrics you want to and can achieve.

2.   Which stakeholders does this serve and what do THEY want? Gathering and documenting goals from multiple perspectives and stakeholders will ensure that the “digitization” initiative will serve the desires of those affected by the project. Stakeholders will likely include the “business process owners” who must live with status quo and the “future state” of the digitized process. Stakeholders should also include those workers and trading partners who use the process daily. They will be your greatest source of improvement ideas.

3.   Which process will we digitize? To figure this out look for the symptoms of process dysfunction. These include, too many exceptions, redundancy, the prevalence of shared folders that compensate for fragmented work, spreadsheet reporting, gray market applications, different apps for different workflows, e-mailing to collect process status instead of autonomic measurement, or wasting time searching for the latest version of a document. Your first process should be well defined and not a cluster of many sub-processes or fragments of dispersed functions.

4.   How well do we understand how this process actually operates today? Change begins with a deep systemic understanding how things are really done. Most managers don’t really understand precisely how their process works. While each worker knows their specific tasks within a process, too often, leaders do not have a complete understanding of how all the process steps fit together.

To succeed, don’t spend 6 months planning and mapping. Just get started.

To rapidly map the process, gather the people closest to the work and have a skilled facilitator lead a 4-hour process discovery session. You might have to hold another session the next day, but when completed, stakeholders will have a detailed understanding of everything involved. Please note, that a “swim lane diagram” does not render enough process details to identify process improvements and opportunities for digitization / automation. We recommend a framework like IDEF3 that identifies a checklist of steps for each step of a process. Checklists are important because many of the improvement opportunities are revealed at the task level.

5. How can we automate this process, and only this process? Staying focused on one process may be difficult because in business every process is connected to everything else. For example you might be focused on your employee onboarding process. But onboarding is triggered by completion of the hiring / interviewing process. And onboarding can trigger several sub-processes including facilities for office set-up, security for badge access and training. At the start of your mapping session(s) decide where the process starts and where it ends. And stay focused within these start-stop events. Often the hardest part is deciding where the process starts.

6.   How can we go really fast?  Two techniques are critical here: The first is to time-bracket the digitization project. Set a tight time frame to get this done within 2-4 weeks. The second is to ferociously manage scope. In other words, Don’t throw another “app” at the problem. Organizations and people are overwhelmed with fragmented data and hundreds (sometimes thousands) of special purpose apps. As you identify improvement opportunities, do not start seeking a specialized app to handle this one process. First look internally for tools you already have that can be modified easily, without writing a bunch of customized software code. As you consider ways to automate the process, be mindful of the other processes that come before and come after the process you’re improving.

Small changes (at the task level) yield quantum leaps in performance

After your team has a detailed understanding of the process and has identified improvement opportunities, you’ll discover that the cumulative effect of a series of small changes (at the task level) often yield quantum leaps in performance. Don’t underestimate the value of simple or crazy ideas from your team that may be outside current organizational norms or personal expertise. The experts are the people who work the process every day. With the 4S model, big change is closer than you think.

In the 1930’s Enzo Ferrari was once warned that the brakes of his latest model Ferrari were imperfect. His response became legendary. “I don’t make my cars to stop, I make them to go fast.”

The same is true for you.