Redesigning business processes for digital success

By CIO in Business Analytics, Expertise, Digital Transformation

A British utility had a customer service problem: Customers who questioned their bills had to navigate a tedious process to handle the complaint. They had to contact the company to schedule an appointment for a worker to visit their home to re-read the meter, a reading that was then fed into the corporate system that would later generate a new invoice.

Start to finish, the process took about a month — and, not surprisingly, created a number of unhappy customers.

Utility executives saw an opportunity to do better.

So Ashok Pai, global head of cognitive business operations at Tata Consultancy Services, worked with the utility’s CIO to explore not just where technology could aid the utility in fielding the customers’ complaints but whether it could actually transform how the company handled these requests from start to finish.

The solution: An app that customers can download to snap photos of their meters, images that optical character recognition (OCR) software then reads and processes to generate new bills. The app even gives customers the option to pay their newly generated bills immediately.

“It’s a complete reimagining of the business process,” Pai says.

And it was a success.

Business leaders continually stress the need to re-imagine how their organizations work in order to remain relevant in this digital age. In many, if not most cases, that means executives must reengineer business processes — a task that Bain, the global management consulting firm, describes as “the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality.”

Functional business leaders once had nearly sole responsibility for the job of redesigning business processes, experts say. But not anymore. Today technology not only improves business processes, it enables the complete transformation of them. The results can save money and increase revenue.

Given that, many leaders say redesigning business processes is a critical component of the digital transformation that drives organizational strategic agendas these days. And as a result CIOs are more and more essential to the task of business process reengineering.

“It’s hard to think through any business process that isn’t influenced by technology, and that means the way that companies now deliver value to their customers is technology driven,” says Cecilia Edwards, an Everest Group partner who co-leads its IT and digital transformation practice. “So CIOs need to know the technology and be the advisor on the possibilities that technology is unleashing for how business gets done today.”

Business processes = capabilities

Irving Tyler, a research vice president at research consultancy Gartner, sees business process reengineering as the most important job CIOs have today.

“If you ask, ‘How much time should CIOs be spending on this?’ my answer would be almost 100 percent,” he says.

The digital revolution is forcing organizations to change their value propositions to remain competitive, Tyler explains. Customers expect more from businesses; they want better quality, better service and better overall experiences. And workers expect much of that from their employers today, too.

“That in turn requires business-model change; you have to change your interactions with your clients, your channels, and maybe even the products and services you bring to the market,” Tyler says. “That’s why, when we ask business executives what’s changing in their business model, they say everything. That then necessitates change in capabilities. Most of these changes come into place through data and technology. We’re trying to change the DNA of the capabilities to make them intelligent, not just efficient.”

It’s here that CIOs can deliver real vision to their organizations.

“I encourage CIOs to reimage the executive part of their jobs, because the business needs someone who can help them find and understand the technology that’s necessary to change these processes. It’s about helping all the other leaders figure out how to do it within their domain,” Irving adds.

The CIO’s unique position to engineer change

That’s the approach SilkRoad Technology CIO Asif Malik says he’s taking as he looks for transformational opportunities.

“I look at the business activities, the business models, capabilities, all the processes, and I look at assets and the whole ecosystem,” Malik says. He says he sees it as a business exercise. “It’s not about technology. You can’t just throw technology at it and say, ‘Yup, the problem is solved.’”

He points to several recent projects to illustrate his point. He and his IT team redesigned a cybersecurity process, streamlining and automating steps to remove manual touchpoints and speed up action using both automation and intelligent systems to deliver the new capabilities. They similarly used automation and intelligent systems to reengineer networking operations, allowing four staff members to move to higher-level tasks. Additionally, they retooled how human resources can contact candidates, leveraging text capabilities to streamline the process.

Malik says CIOs are uniquely positioned to identify and advocate for business process reengineering opportunities because their role straddles business and technology more so than any other job in the company.

“The CIO can take a holistic view of the digital playground, they have visibility into business function, they know the business ecosystem. It’s the one role that can actually take a look at all the moving pieces and decide in this digital age where this company should be heading,” he adds.

Reengineering the business-IT relationship

Many CIOs are indeed taking steps to do more to transform their organization’s business processes.

CIO’s own State of the CIO survey found that 27 percent of IT leaders said they plan to spend more time redesigning business processes in the next three years.

And BPTrends’ State of the BPM Market 2018, the most recent edition of this report, found that 93 percent of surveyed organizations are engaged in multiple process improvement projects; 37 percent have multiple, high-level business process projects underway; and 65 percent agree or strongly agree “that BPM processes and technologies have helped their organizations improve efficiency, versatility and customer satisfaction.”

Meanwhile, Deloitte found in its most recent global CIO survey, released in 2018, that one of the two top mandates for technology leaders was “transforming enterprise business operations,” according to the 1,437 executives surveyed. (Survey respondents said the other top mandate is for CIOs to align with the business strategy.)

However, not all organizations are prepared to tackle transformation or let their CIOs play a leading role in business process reengineering, says Taqee Khalid, director of strategy at Nerdery, a full-service digital consultancy.

“Many companies have this sense if it’s not broken, don’t fix it,” he says. These companies can, and do, make money so they may not feel the pressure to change — yet. But as those companies start seeing their industries disrupted, they’ll likely find themselves scrambling to identify where and how business processes should change so they can stay in business.

On the other hand, Khalid says born-digital companies and those companies who are most mature in their embrace of digital are already well down this path because “they don’t see it as partnering with IT, they just see IT as part of the business.”

Technology leaders and management consultants say that the CIOs who are successful with business process redesigns use many of the same skills they do for other types of projects — identifying opportunities based on the potential returns, building partnerships with their business-side colleagues to take on the project, forming cross-functional teams that will actually determine the best ways to rework the business processes, communicating what the changes will be along with the expected benefits, and then delivering the new capabilities incrementally with an agile methodology.

Even with those skills, however, some CIOs will face challenges to the task of business process redesign, according to researchers. Some still work in siloed organizations, limiting their visibility into the processes across the enterprise, or they work with CEOs and other executives who don’t see the opportunities or the value IT can bring to this task. A CIO will have a harder time getting traction for transforming processes, for example, if the head of sales simply wants better laptops to enable a mobile sales team and shuts down any attempts for more substantial change.

Opportunities abound

CIOs and executive advisers say there are plenty of opportunities to redesign business processes at every enterprise

Pai points to one financial firm that, when seeking to grow its client volume, redesigned how it connected with clients, using cognitive and automation technology to take on some parts of the firm’s interaction with clients — a move that allowed the firm to handle the growing volume with the speed that customers demanded. It left certain key aspects of client service, such as the more complex steps, for its human workers to handle.

Similarly, Pai cites the case of a retailer that reworked how seasonal workers are onboarded, using technology to speed up the process of getting them ready to actually work in shops by, for example, automating the approval and credentialing process needed for them to work point-of-sales devices.

Given the plethora of opportunities, CIOs and their C-suite peers will want to target for retooling those business processes that create the biggest pain points in the organization and/or those that have the most potential to deliver real business value, says Noah Fletcher, a director with West Monroe, a business and technology consulting firm, and leader of its Seattle Operations Excellence practice.

“You need strong guideposts on what’s important for the organization,” he adds.

Tyler advises CIOs to start by understanding the capabilities within their organizations, identifying which capabilities, or business processes, are essential as well as which ones generate value and which ones play supporting roles.

“We have to make strategic choices; we can’t possibly focus on everything with the same intensity at all time. So focus on the ones that create and deliver more value,” he says.

Like software development, Pai and others say business process reengineering takes agility and should focus on continuous improvement. As Tyler says, this work “is never done anymore.”