Volatility in today’s business landscape is unprecedented: It is harder than ever to stay on top and win a lasting competitive advantage. Due to the Digital Disruption, it is now virtually impossible to develop a business model, cast it into the concrete of an enterprise resource planning (ERP) system and leverage highly optimized processes for years. Digital is about new business models that are emerging around “digital customers” that are always online thanks to the ubiquity of smartphones and mobile apps.
The always-online digital “things” (cars, houses, machines, etc.) equipped with sensors and “digital enterprises” externalized their customer-facing processes, democratized them, and made them available to consumers’ apps and partners’ ecosystem via APIs. Besides, each of the new generation of millennials has a “digital reflection” in the social media that can be targeted as a potential customer.
What does this mean for business?
The digital revolution means a new gold rush
Business has always been a human endeavor: You need a human employee to reach a human consumer and to deal with a human partner. But when they are digital, they can be done by a robot—a piece of software able to communicate with social media (hence Big Data analytics), mobile apps, partners’ processes, sensors, and agents (hence the Internet of Things). This means orders of magnitude increase in productivity with simultaneous cost reduction. Although this potential isn’t fully investigated yet, it drives businesses and investors crazy, creating a “Digital Rush.”
It isn’t clear at the moment what will win and what the winning digital strategy will be. Most probably there will be more than one anyway.
(Related: Why you need apps for BPM)
Instead, recall the amazing fact from the Gold Rush times: Those who sold equipment (picks and shovels), clothes (jeans) or alcohol sometimes made more money than gold miners. Similarly, there is a range of digital strategies one may integrate into an existing digital environment or try to establish on their own, such as operating on the front (customer-oriented) or back (service provider) end; inventing something; or replicating something invented next door, in another industry or culture.
With all these options there is only one constant: change.
The ability to change is key for corporate culture
The digital revolution changes the business environment dramatically and at unprecedented speed. Entire industries are turned upside-down with digital business models, such as publishing, lodging and transportation. However, as Jack Welch notes, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
Being ready for digital means being able to design and implement a new business process in a few weeks, which is not an issue for a small and nimble startup. But how can an established enterprise go through a digital transformation successfully?
Part of the answer is making digital both customer-facing and a back-end process. Otherwise, the enterprise just won’t fit into the digital ecosystem, because people don’t talk to robots. Business process management suites (BPMS) are the right platform for the task.
But is it enough to automate the core business processes?
Automation isn’t equal to agility. It may foster the speed of change, but process automation may also become a trap that freezes process improvement unless the proper BPM methodology is adopted.
Besides, process improvements are always implemented via projects. Small incremental process changes may require minimal project-management capabilities, but transformations are large-scale changes by definition, so they require solid project-management techniques, tools and skills.
Another way to get things done is via case management. This approach lies somewhere between projects and processes: more structured than the former but less than the latter. Case tasks are defined on the fly by a human performer, which is less efficient than automatic tasks assignment by a process engine. But on the other hand, it’s more flexible. Most importantly, process management requires significant analysis, design, implementation and testing efforts before the first process instance can be launched. Case management doesn’t imply this burden; with proper tools at hand, one can do a job literally in a day.
Are processes, projects and cases really that different?
Processes, projects and cases overlap. As an illustration, a process management body of knowledge talks more about standard processes that constitute the project work than about projects per se. Yet historically they were treated as separate management disciplines, with separate schools, certifications and supporting tools. Today, the border between project and process work blurs.
For example, a multinational pharmaceutical company used to treat new drug development as a project. Each project would last nearly three years, with about 600 projects run concurrently. A dozen managers at the project-management office heavily used mainly Microsoft Project to control them.
Then one day they come to the idea of a project template. Finally they realized that the best template is a process template. Now, all the routine jobs of controlling task sequences, inputs and outputs are done by the “robot.” BPM engines and project managers are focused on bottlenecks, delays and escalations, and increasing efficiency and effectiveness.
It may look obvious when it’s done, yet it was hardly possible for the pharmaceutical company to utilize the process management from the beginning because they didn’t have the required internal capabilities. And what’s probably more important, they didn’t have a clear understanding of how the work is done.
Every company needs time to find its “business recipe,” which consists of who should do what, when and how to deliver maximum value to the consumer while utilizing the available resources most efficiently.
Another example is an architectural firm developing both single building blueprints and development plans of city districts. This work is managed by a composition of project- and process-management methods. The overseeing body is typically called the Project Office, yet they are both project and process professionals.
It’s commonly agreed today that research, development and other so-called “knowledge work” require more than just a process approach. And even if the core operations are strictly process jobs, changes of these processes are projects or cases anyway.
To reach the level of business agility required by digital transformation, the full range of processes, projects and case-management methodologies, techniques and tools must be engaged, and the traditional borders between them must be eliminated.
Social networking drives unification
The new workforce is coming to enterprises: millennials who can’t live without mobile gadgets and apps even a single day. Losing a smartphone is like losing a part of the body or half of your memory. It’s a cultural shift no one can withstand because youth always wins, sooner or later. It’s better to embrace this with BYOB, social networks and gamification.
But you can’t really introduce a social change piecemeal. Just imagine your traditional ERP applications, BPMS/process/workflow/docflow applications, and project-management software, now equipped with a social functionality of their own. Will it work? Hardly so; people won’t be comfortable with such a fragmented social environment.
True social networking should cover all forms of work within the enterprise: from legacy applications to cross-functional operational processes to knowledge-oriented cases. We aren’t there yet, but forward-thinking vendors are already working on making it a reality.