A fresh take on process transformation: What every COO should know

Many organizations say they are currently performing, or have recently completed, a process transformation initiative. However, the expected benefits often fall short of expectations. This common cycle leaves many COOs frustrated and wondering why:

• Improvements take too long to carry out;
• Returns on those improvements are often incremental at best;
• The value derived from projects has been unsustainable, and
• Additional savings remain hidden even though everyone knows they must be there.

What can be done to help process transformation initiatives reach their potential?

A rapid, data-driven, dynamic approach

Operations organizations need a faster method to identify where breakdowns occur and then swiftly move to address them. The answer is in your data.

Most businesses have an abundance of transactional and financial information available in their ERP and related systems. With today’s process modeling, process mining, and intelligent automation capabilities, your organization can leverage that data to:

• Understand the mechanics of an end-to-end process and where breakdowns are occurring
• Model and simulate improved process designs
• Build those processes using little to no code
• Reduce manual execution of routine tasks
• Set up a controls environment and real-time performance monitoring
• Create an internal process for transformation and proofs of concept to uncover ongoing improvement opportunities

And this can all be done in a fraction of the time through leading pricing mining and process modeling technologies. These actions constitute a reimagined approach to process transformation—an approach at Deloitte that we call Process Bionics (see figure 1).

Figure 1. Process Bionics—a new approach to process transformation

What distinguishes this approach from others? It’s a more data-driven, automated, and visual way to identify the root cause of process breakdowns. It’s faster than traditional approaches because once the data surrounding the process has been mapped, inefficiencies quickly can be pinpointed.

It’s also a more sustainable approach. By generating a digitized and more detailed documentation of your organization’s processes, important information becomes available for day-to-day operational decision-making. This sustainability is important, because as the business environment changes, that repository of process intelligence can serve as a baseline to determine whether those business changes affect existing processes.

It also provides dynamic analysis capabilities. Using the tools available in the marketplace, your organization can regularly revisit your processes and use the digital repository of process intelligence to continually seek improvements to processes over time.

Where to focus your efforts

In our work with operations organizations across many industries, we frequently see process breakdowns occurring in customer-facing, middle-office, and back-office processes, such as:

• Marketing-to-Lead
• Client onboarding and client access to information
• Order-to-Cash
• Procure-to-Pay
• Payment and revenue cycle operations
• Contact center operations
• Issue-to-Complete
• Record-to-Report

For example, a major global Oil and Gas client was experiencing significant issues with customer invoicing and payment processes that severely impacted working capital. Yet through this new approach, in only a matter of a few months they reduced invoicing delays by about two days—a target they had failed to achieve using more traditional and time-consuming process improvement efforts. Most importantly, this cycle time reduction translated into $500 million in working capital improvements.

Using more advanced process mining and modeling techniques, operations organizations can quickly answer vexing questions, including:

• Why are customer satisfaction ratings so low for processes such as account creation and order processing?
• What causes so many delays in customer order confirmation, product shipping, and inventory marking?
• What activities are our people performing, and how efficient are the underlying processes?
• Why are our processes different from leading practice?
• Why can’t we issue invoices faster after customer receipt of products?
• How much faster could customer payments be processed and posted?
• Why can’t we resolve customer service issues on first contact?
• Why is our dispute management process so complex?
• What are specific opportunities for intelligent automation, and what could the value be?

These questions carry even greater weight in today’s COVID-19 crisis-induced economic climate. By quickly identifying and addressing process breakdowns, operations organizations can create a more direct line of sight between process transformation initiatives, customer experience, and working capital improvements.

Next: A look under the hood

COOs and their operations organizations face continued market disruption with the COVID-19 crisis, along with a growing need to reinvent business processes to stay competitive. That’s the raison d’être for a new approach to process transformation and its emphasis on innovation, execution, and evolution. Stay tuned for our next blog in this series, where we’ll go a layer deeper on ways to speed the identification of process breakdowns and ways to quickly develop solutions to them.

Get in touch

	Courtney Thayer Principal Center for Process Bionics			Alison Roy Managing Director Center for Process Bionics
	Daniel Csoka Specialist Leader Center for Process Bionics			Dinesh Kalluri Managing Director Center for Process Bionics
	Monica Monica Senior Manager Center for Process Bionics