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Digitization in practice: 4 barriers to automated business processes

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  • CategoryProcess automation insights

The digitization of business processes is at the heart of digital transformation. Decision-makers around the world have been dealing with the digital optimization of their business for years and have been hoping for the one tool that will move their company forward quickly ever since. But over time, that one tool has turned into more and more different solutions for digitizing specific parts of the business. These now need to be managed.

Enterprise-wide digital business processes have been traded for a supposed "quick win." Today, decision-makers are paying the price. Find out which thought patterns are holding back your company's success in terms of digitization and how you can make the right decisions in the future.

Barrier 1: Using many individual tools for digital automation.

Misconception: "The more comprehensive the digital automation tools, the more efficient the business".

Due to groundbreaking technology developments in recent years, there is an almost unmanageable number of (" isolated ") solutions on the market.  Each one promises to digitize a specific application area in the best possible way. However, day-to-day business is not a silo landscape: everywhere people work together and data and information are exchanged. Often, this exchange only takes place thanks to manual rework, and the individual tools communicate with each other more poorly than they should. Employees lose valuable time checking processes, gathering information or asking for the status of a task. In the paperless office, these tasks should be supported by software or automated.

Note: Digitizing business processes is not primarily about having the best tool for every use case. It is much more important to streamline the system landscape and relieve employees through digital end-to-end processes. To achieve this, it is imperative that companies, their decision-makers and not least the users have a precise idea of what is technologically possible, but also what makes sense from a business perspective. Otherwise, not only will digital automation progress slowly, it will also not result in the desired increase in efficiency or reduction in costs.

Barrier 2: Isolating digital automation of a specific business process

Misconception: "We need a solution for “accounts payables".

This phrase is often the initial reason to consider an ECM or workflow solution. Often, companies develop a tunnel vision on the specific use case, which makes the usefulness of a solution for other application purposes fade into the background. In particular, finance departments are full of different use cases and cross-departmental business processes. As a result, a lot of potential is lost, while costs continue to rise.

According to recent industry surveys of business leaders, 67% percent of companies are experiencing a growing demand for digital products and services that they expect to continue in 2021 and 2022. Over 80% plan to further expand digital automation and 75% believe that their digital abilities helped them weather the changes resulting from the pandemic. Finally, only half of the companies surveyed considered their investment in digital initiatives to be a success and less than 20% reported revenue and profitability increases of 10% or more from their digital strategy over 12 months. Increased costs are a concern for those decision-makers who are not achieving growth potential through their digital automation initiatives.

Planned digital automation initiatives at companies in 2021- 2023

Note: Inefficiencies in digitization and lower company growth can result, in no small part, from digitized processes that are not end-to-end. Companies need holistic solutions. For instance, a platform that can be used throughout the company for a wide variety of application purposes and as a result can noticeably and permanently increase efficiency. Therefore, a rethinking of the digital strategy must take place even before a system is selected. For example, measures such as end-to-end automation can help to reduce the total cost of ownership.

Barrier 3: Using ERP systems for comprehensive digital automation.

Misconception "The processing of our purchase requisitions takes place in the ERP system".

Understanding ERP systems as comprehensive digital process automation tools is a thought pattern that has been circulating since the early 2000s and still persists today. This ignores the fact that the classic standard applications are very often not capable of comprehensively fulfilling the specific needs of the organization. Especially with regard to process flows and the associated handling of documents, data and processes. If ERP systems are nevertheless used for comprehensive digitization, this often results in disruptions from a lack of integration. For instance, due to the need for additional manual input or when switching between different systems within a process flow.

It is because of this very issue, a hybrid approach to integration platforms, that Gartner asserts that companies need a flexible application platform for thoroughly automated business processes. This is because, in addition to the pure data from an ERP system, additional information originating from other sources is often required. These require integrated handling of document-based information and the handling of master data in a very flexible manner.

Note: A high-performance digital automation platform can master these tasks because it makes the data available to the relevant processors at the required point in the process. Interfaces ensure smooth communication between systems, automated process steps facilitate the exchange of information and provide certainty about the process status and required approvals. ERP systems alone are usually not able to do this.

Barrier 4: Use document management systems for comprehensive digital automation.

Misconception: "We control our company processes using a DMS solution".

A document management system is the most commonly used tool in the digitization of document-based processes. Nevertheless, it is an equally common fallacy that DMS or ECM systems offer comprehensive software to digitize and automate business processes. They focus on the document and thus neglect processes that are purely data-based. As a result, a lot of potential is lost.

Very often, in the areas of HR, finance or purchasing, DMS solutions are established that are functionally focused on the pure archiving of documents, and less on the actual, digital lifecycle of a document. Particularly in the financial sector, the focus on paper-based documents leads to attempts to transfer traditional or familiar methods such as the stamping of documents one-to-one into the digital world. Without considering the digital added value of automated business processes and new working methods.

Note: The digitization of business processes opens up new potential. Merely mirroring analog processes in digital ones wastes this opportunity and, in the worst case, can become a growth inhibitor. This is because rethinking often does not take place with this approach. Modern platforms for enterprise digitization offer a host of opportunities to consistently handle processes and tasks differently in daily practice. And beware: changes should not be seen as an end in themselves, but should always lead to greater efficiency in workflows.

Digital automation alone does not make the difference

If decision-makers want to advance digital automation within their company - and the company itself - they should scrutinize the underlying digital strategy in detail. What do my processes look like? Where are there inefficiencies? How can these be automated or digitally replaced? What business models can be developed from this? And, what software will enable me to achieve this growth in the long term?

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