Navigating Your Way to Savings in The Short-Term – A Survival Guide
The human impact of 2020’s mass disruption is well documented. The business impact is still ongoing and remains unquantified. Initial emergency restructuring – first with people, then with data – helped businesses put a sharp, quick focus on bottom line cost reductions. I outlined tips on how best to achieve this in my last blog on Data Cleansing as-a-Service as well as on the Data Value Equation. But the dislocating effects of COVID-19 are vast. And we are only at the start. That’s why I want to help you find ways to maximize your short-term savings. (We’ll cover the mid and longer term in future blogs).
For now, optimizing and automating your business processes is one of the best ways of doing this. That’s because business processes happen everywhere, every day. And many of them are silently inefficient because we assume they’re executed as intended. In fact, just one bad business process is like a poorly performing invisible employee that costs you money every time it’s put to work. And these underperforming digital servants are lurking in just about every part of the business, sometimes in groups.
The problem is there’s a big difference (and big efficiency delta) between how processes work in reality, as opposed to how they’ve been documented to work on paper. Sometimes the business context has changed. Sometimes it’s human error. Other times users find ways around standard flow, often initially for sound reasons, but over time they lead to expensive consequences, creating cost, impacting liquidity, and working capital, and in some scenarios putting compliance at risk.
Process issues can occur in something as simple as an order to cash process. Sales reps can look at the wrong contract, give the wrong quote, the quantities might not match, or only partial product or service is delivered, creating cost, breaking trust, and proliferating inefficiency.
A Reality Check
The good news is that every process leaves a trail of digital breadcrumbs. That’s where process mining comes into play. Collecting and analyzing these breadcrumbs gives you a clear understanding how your processes actually work (rather than how you think they should work). SAP’s Process Mining by Celonis gives an accurate visualization and dashboard to see what the barriers are, how often they occur, identifies process bottlenecks for proactive continuous process improvement, and removes obsolete steps. And you don’t have to wait years for an ROI. Efficiency is immediate and savings are cumulative for every process rectified.
For customer-centric processes, this means strong efficiency, reduced cost, and long-term customer satisfaction. For supply and distribution processes, the result is straight through and cost-effective procurement and distribution operations. In finance, it means tight control over working capital and assurance of cost-efficient operations. And for product and service processes it delivers optimized development efforts and increased production efficiency.
Show Me The Money
By taking a strategic approach to end-to-end business automation and improving the efficiency and adherence of your processes, you can achieve major savings. I’ve helped several global customers gain significant savings just by understanding and optimizing their own processes. A global conglomerate transformed its order-to-cash processes, eliminating 10 million manual activities, saving $15 million annually. A robotics company transformed their supply chain processes, increasing on time delivery by 27%, saving $100 million. Likewise, a German energy company transformed its customer onboarding for three million customers, increasing its ‘go live ratio’ by 20% and reducing time to delivery by five days. This kind of transparency into complex, large volume processes is one of the easiest and most efficient ways of securing gains in the short-term.
Bot Best Practice
Of course, efficiency isn’t just about understanding and improving the efficiency of your existing automated processes. It’s also about identifying manual tasks and intelligently automating them. At SAP, we are unique in providing 70+ pre-built free best practice bot-enabled workflows using machine learning to learn from past experiences and make more accurate decisions. For example, automating repetitive manual entries, or reconciliations and consistency checks can save hundreds of man hours a year. Our Intelligent Robotic Process Automation lets you customize a bot out of the box, shortening project time and reducing errors. Rather than focusing on isolated problems, you can immediately see and address systemic issues.
In all of my blogs, I try to outline easy wins for organizations amid the current downward pressure of prolonged economic uncertainty, disruption, and volatility. You can find even more tips and insights in our upcoming webinar Cost Savings through Optimized Business Processes. And if you’d like to see these efficiencies in action, check out this video.
Gerd Danner, Vice President Data Management, EMEA-N Center of Excellence