Did Digital Transformation kill Operational Excellence?

In the last few months I’ve found myself sharing the same story with colleagues and customers alike once the conversation turns towards understanding and improving business processes.

Each time I get knowing nods and thoughtful faces so maybe it will resonate with you too. In summary, it goes something like this:

• For the last 10-15 years, accelerated by Covid, most organisations have been focused on becoming more digital (insert your own definition of “digital” here). This has primarily focused on improving external relationships and communication, by launching and improving mobile apps, websites, customer / partner portals etc.;
• This has by and large been quite successful, with more and more transactions and interactions shifting to digital channels and hence generating new or at least different inputs for internal operational teams to manage;
• This digital shift also included migrating systems to the cloud to free up capital expenditure and hopefully realise the fuller promises of Agile development (iterative, flexible, scalable). This saw many organisations adopting SaaS products as quicker and cheaper alternatives to rebuilding their legacy appplications, often adopting “vanilla” implementations to avoid the time and expense of customisation;
• While all of the above was taking shape, a generation of skilled operational excellence practioners (Lean, Six Sigma etc.) found their skills were no longer in fashion so needed to adapt in order to professionally survive. Some still found a market for their talents, but many needed to move into slightly different roles (e.g. BA, PM) or retrain entirely, which generally suited their employers who had lots of digital projects to focus on.

Putting this all together, and to explain why I started telling this story in the first place, we end up with organisations that are increasingly struggling operationally, because:

• The investment in improved customer journeys and user experience rarely extended into adapting the middle and back office processes that were hit by new digital inputs, often in greater quantities than before. As an illustration, one financial services client shared that their new external digital portals had been so successful that operations had added 50% more people to cope;
• The Agile approaches adopted by many to implement digital and SaaS products had not always left a great deal of documentation about the new processes. As a colleague recently said to me, “surely the SYSTEM is the process so why map it?”.
• The SaaS products were so vanilla in their implementation that they weren’t a good match for how many organisations actually worked. As a result, all sorts of workarounds had to be created and maintained, often using the bedrock of any digital enterprise – excel and email;
• Most BAs do a great job of capturing requirements from user interviews, but further training is required to proactively identify process improvement potential. Where previously organisations could rely on their process improvement professionals to get stuck into solving this problem, they found those skills were in short supply or entirely absent. 

To someone like me who’s a veteran of the 'Operational Excellence' days, it feels like we’ve come full circle as organisations once again need help understanding their existing processes before being able to drive meaningful improvements. Worse yet, by relying on workarounds outside of new SaaS enterprise systems, most organisations have less process data (not more) as neither excel nor email were meant to be a workflow platform.

As a result, they have less insight into what’s working and what’s not which is in itself a good reason to revisit a process in a more fundamental way.

The success of Digital Transformation is there for all to see, and we’ve no shortage of tools now available (Power Platform, RPA etc.) to make significant improvements in productivity, speed, quality, user experience, compliance or any other metric you value. However, before knowing what to invest in you need to know what you’ve currently got, and for many operational teams that knowledge is not within easy reach.

Investing in (re-)acquiring that process knowledge will pay for itself many times over as an enabler for operational transformation, especially if you can further leverage that work to rebuild your process improvement capability along the way.

At Kainos we house our process consultants in the Low Code practice which is where our expertise in business process automation and digitalisation resides. We’re hence very experienced in not just identifying but matching your process improvement potential with the best digital options to realise them.

We’re already working with several organisations on understanding and improving their operational processes for all the reasons explained above, so we’ll no doubt be well prepared to support your efforts as well.

Learn more about our Low Code practice here.