5 Things to Keep in Mind When Going Through a Business Process Transformation
As organizations move to the cloud, continuous process transformation becomes a source of sustained competitive advantage. It is impossible to “overstress the importance for companies to be able to design, benchmark, improve and transform business processes across the enterprise to support new capabilities and business models” said SAP CFO Luka Mucic.
However, transformation projects, like an ERP upgrade, typically struggle to reach the finish line – according to McKinsey – 70 percent of these projects are doomed to failure.
The goal of any process transformation initiative will likely vary between organizations. Nevertheless, there are a few common criteria that can be considered good measures of success and will help any organization benefit from the advantages of process management and generate real value from the initiative.
Based on expert experience and lessons learned throughout dozens of business process transformation projects, in this blog post, we’ll present our top five success factors:
- Data Quality & Solution Adoption
- Training & Effective Change Management
- Business Value Realization & Communication of Success
- Organizational Setup & Process Ownership
- Leadership Engagement
1. Build a solid foundation for a successful transformation initiative
To start with, a clear definition of data requirements, coupled with the early involvement of both business and IT staff, should speed things up. From a project execution point of view, starting with a small and precise scope within the process or within the organization enables quick success. For example, in an invoice-to-cash process, the focus may start on the invoice creation subprocess. Bringing people up to speed on the project at the right time is equally important – where everyone involved should share a common commitment to the project and be aligned with the project goals.
Having a well-defined program that helps build a single consistent source of truth for documenting business processes drains fewer resources, accelerates adoption time, and maximizes transformation’s benefits.
2. People drive transformations
In addition to all technical and methodological aspects, the most important success factors for business process initiatives are human-centric. Does your organization have the necessary process management capabilities, skills, and resources? Hence, the right people, paired with a positive mindset and an affinity for change management, must be in the process transformation driver’s seat.
The employees must be actively involved in any activities on process improvements and asked to steer the change proactively. In the end, any process initiative also depends on a common, discussion-based interpretation of the insights. Otherwise, you end up with yet another IT project not living up to its potential.
3. A never-ending strive for business value
Based on survey results from consultancy Deloitte on process mining, which combines data mining, analytics, and process optimization, 84% of the participants responded that process mining delivers value through process improvements, transparency gains, and cost reductions.
And with that comes a common pitfall. The generated added value is not regularly communicated and consumed within the organization. Therefore, continuous value realization efforts, combined with a powerful communication strategy, avoid losing momentum and commitment from stakeholders.
4. Overcome siloed processes and responsibilities
“World-class process management requires seamless collaboration across functional silos” said Mark Nist, formerly Central Process Operations Lead at SAP. To effectively translate the process transformation strategy into action, a central process operations team must coordinate and lead the process initiative and enforce policies and conventions across those silos.
Besides the relevancy of the organizational setup, on an individual level, process ownership strongly depends on a precise definition of related responsibilities and the ability to perform the function with a clear mandate. Further, it requires strong support and governance by the central process operations team and clearly defined standards, guidelines, and conventions as a critical success factor.
5. Get buy-in from senior leadership
Ultimately, a clear endorsement from the management team is crucial to bringing the process transformation project to the finish line. Regularly sharing context and knowledge about the project is fundamental. “We had a strong mandate from our board as we were tasked to transform SAP into a process-driven company” said Nist on SAP’s own transformation.
Build customer trust through process excellence
In summary, everything a company does is the sum of all its business processes. It sounds simple, but most companies don’t realize it. In an age when customer experience is a cornerstone of ongoing growth, leveraging process insights to uncover optimization potential to drive the best decisions and experience is a key success factor.
Process transformation, in turn, can become complex and oftentimes messy. With a combination of technology and people-centric success factors, organizations can turn challenges into opportunities to operate and engage more efficiently and effectively.
Learn how the Wernsing Food Family is making processes in the company more efficient by linking SAP S/4HANA and SAP Signavio solutions.
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