How process mining and low-code increase flexibility and reduce costs

By News, Technology

Many organizations are facing exciting challenges as a result of increasing digitalization. To stay relevant, it’s ever-more important to quickly respond to new opportunities. Unfortunately, old IT systems, entrenched organizational structures, and outdated outsourcing contracts usually offer little room to properly respond to such opportunities. The combination of the ‘Superfluid Enterprise’ concept and IG&H’s unique ‘Make Strategy Work’ approach helps solve this challenge.

According to leading research and consultancy firm Gartner, companies currently spend 80 to 90 percent of their IT budget on maintaining their existing systems. To increase differentiation, innovation, and flexibility, it is recommended that this percentage is reduced to approximately 50 percent. Additionally, the organizational structure of most companies is mainly focused on maintaining the status quo. As a result, it is often unable to move along with the market in a sufficiently flexible manner.

In their value discipline model, Treacy & Wiersema state that an organization should perform in at least 3 areas. These are:

  • Operational excellence
  • Product leadership
  • Customer intimacy

In other words, for an organization to be viable, its customer friendliness, its efficiency, and the quality it provides should be sufficient.

As these areas are opposing forces, Treacy & Wiersema state that the organization needs to pick an area in which it wants to excel and make a difference.

However, as a result of increasing digitalization and technological innovations, the Superfluid Enterprise doesn’t have to choose. It excels in all these aspects!

Why is this relevant?
IG&H’s proven approach ‘Make Strategy Work,’ combined with the modern technologies that facilitate the Superfluid Enterprise, redesigns the organizational structure while tackling IT challenges. As a result, flexibility is increased and costs are reduced. This leaves more money and resources for differentiation and innovation to pursue new market opportunities.

The Superfluid Enterprise is based on two core technologies: process mining and low code.

What are the benefits?
Combined with a new look at business operations, Process Mining provides a clear picture of how your company is currently functioning. Sometimes, the outcomes may be little painful at first, but they’re always instructive. Also, remember that competitors are in a similar situation. By way of illustration, according to you, how many processes follow the standard-defined step-by-step plan in your organization? When we ask this question, the usual answer is 80 to 90 percent. In reality, the percentage is nearly always lower – sometimes even as low as 8 (!) percent… This (significantly) impacts your operational costs and lead time, as well as customer experience and satisfaction! This insight is provided by hard data gained through Process Mining. However, it’s perfectly possible to start in places where your gut feeling tells you a certain process could be improved.

Based on those hard data, you can start by improving individual processes, which will result in an improvement of the entire business process. Subsequently, it is possible to look beyond individual processes to determine a company-wide approach. Therefore, the key is to first break the familiar vicious circle, indicate points for improvement in small chunks, and demonstrate success, after which you can include the organization in an overall business improvement.

In addition to staff instructions, this improvement often requires adaptation of (existing) software. By using low-code technology, the maintenance costs for applications can be reduced step by step while delivering the required changes and additions. This makes it possible to keep using your old systems while quickly adding new functionalities at low cost from the start. No need to throw your existing systems out of the window at once – you can reuse them and phase them out step by step (this is also referred to as application rationalization). This results in major cost savings and allows you to safeguard your current operations as well as reduce risks.

Low-code also provides a solution to the risks, costs, and lead time of replatforming, as well as the discontinuation of certain packages/subscriptions. Moreover, it solves the issue of a supplier acting like a monopolist (working with unconscionable contracts). It takes less time and reduces the risks of errors while adding new, required functionality, which would take considerably more time during a replatforming project. In addition, it will also be cheaper to upgrade standard software packages used by the organization to a newer version in the future (for example, SAP Hana), and user license fees can often be reduced.

How do I get there and how do I go about it?
Your company can only be successful if it can respond effectively to the continuous changes in the market. Therefore, it’s very important to start by organizing processes in an optimal way: hire or build the right skills and experience.

In doing so, it is essential to clarify the leadership role that management needs to play in the various parts of the process. One thing is certain: an orchestration role will become increasingly important within your organization. For example, which products and services will the organization purchase, what will it build, which subscriptions will it take, and what will the company integrate?

To help make the right decisions, we use Process Mining tooling, supplemented with developments by our data science experts. The use of existing data will provide insight into how your processes actually go and help identify good potential starting points for the continuous improvement process. As mentioned, in reality, your processes often differ quite significantly from the way in which they were written down.

This instantly creates an impact list and a hard business case to make the required change negotiable in the organization. Now that you have a clear visualization as well as figures, this is a lot easier than before. Good to know: the number of interviews required to properly chart the organization is thus greatly reduced, so you can achieve results faster and with less interference of day-to-day operations. A few interviews with key individuals in the organization so as to get access to data and discuss connections will suffice.

These steps form the foundation for the transformation to a Superfluid Enterprise. Alternatively, you could, for example, start from a new business opportunity or a (major) system’s end of life notice. In all cases, it’s important to have the right partner on board that possesses all required knowledge and experience while being small enough to operate as a single company. This is what makes IG&H unique, and it’s the reason why major financial service providers, retailers, and healthcare institutions, among others, make us a preferred partner increasingly often.

Next steps
Who will realize the first successes in the organization? You can, for example, deliver a working prototype in a pilot – a so-called minimum viable product (MVP). In this case, priorities are determined based on impact, considering the departments and processes in which the highest profit can be made. With the right people, the right focus, and our support, it is easy to take the first step towards a Superfluid Enterprise!

Want to know how this could work for you? Feel free to contact Aernoudt Bottemanne to explore your opportunities.

Written by Tom Jongen, data scientist, and Aernoudt Bottemanne, technology & innovation director

Digitalization: the right approach for lasting success

By News, Technology

Digitalization is a complex undertaking. Unfortunately, this appears to be a well-kept secret, and as a result, digitalization is a laborious process for many companies. Often, they don’t achieve the set goals. The question is: What’s the right way to go about it and make your process succeed?

An interesting and topical research conducted by Gartnerreveals 6 points at which digitalization appears to go wrong: a conservative culture, sharing and collaborating too little, an organization that is not ready for digitalization, a talent gap, a way of working that hampers talent, and challenges involving change. All of these are recognizable obstacles that our IG&H consultants often come across at the companies which choose to work with us. All the more reason to have a close look at digitalization.

Doing ‘something’ with digitalization, but what?

“We need to do ‘something’ with digitalization.” It’s a frequently heard statement made by many company managements. This generic announcement has to do with the fact that many organizations have only just begun to discover that IT is a big part of their product. Some industries have even grown into true software factories – such as banks, which solely create software and algorithms. Virtually, this means IT is the only remaining product for them. In retail, growth continues steadily through e-commerce, and in healthcare, the digital component also keeps expanding. In short, automation is indispensable to everyone who wants to respond quickly to their customers’ demand. Of course, this is essential if you want to survive – or, even better, if you want to distinguish yourself!

It is good to realize this, but awareness alone will not get you far. For example, your current process design and way of working may be at odds with your digitalization plans. In that case, what are you supposed to do? Adjusting such matters is expensive and time consuming, and it often comes with risks. If you don’t handle digitalization the right way, your process will fall apart before you’ve had the chance to go through it from A to Z.

Knowing what’s going on

If, for example, your system isn’t properly documented, it will be difficult to digitalize it. Before you start with a transition towards digitalization, it is essential to be abreast of various aspects within your organization.

Many companies are dealing with legacy issues, which make it hard to quickly respond to user needs. Larger organizations that have gone through mergers and acquisitions, for instance, can easily work with 3 or more CRM systems. In such cases, you often don’t know exactly who your customers are. This makes it difficult to develop a good, central overview of your customers, which would allow you to utilize every opportunity and achieve true customer loyalty. Additionally, companies often lack insight into the productivity of and the value delivered by development teams.

If you want to develop towards a so-called Digital Factory, so ‘IT’ truly becomes the measurable factory of added value, you need to know such things exactly. Only then, you can correctly set up IT processes, select the right people (and provide teams with the right coaching to achieve objectives), and use proper tooling! The construction industry has embraced this approach years ago: those who design a bridge have a computer calculate the required strength of the construction. Manual labor is completely unacceptable, and in many countries – including the Netherlands – it is even forbidden. But when it comes to digitalization, many organizations go back to old-fashioned ‘manual labor.’ Remarkable, because as with a bridge, a lot is at stake here. Therefore, it seems more logical to use the right tooling. After all, this ensures that the construction rests on a solid foundation that won’t collapse after you’ve built the bridge.

What direction will you take?

After you’ve defined the desired goal, you need to determine what direction you and your company will take. The strategy is essential, as is the transition itself.

Before delving into this, it is important to realize that there is no 1 formula for success when it comes to digital transformation. Elements such as company culture and the need for change play a significant role. A retailer who still wants to exist in 3 years, for example, should really have their online branch in place. In some other sectors, the urgency is a little less high, which means there’s more time to handle digitalization.

Get to work enterprise-wide

Should IT be part of the business or vice versa? It is the central question of a discussion held within many companies. The answer is: it doesn’t matter. What matters is that you’ll only succeed if you truly work together. Eventually, there will no longer be a ‘business’ and ‘IT.’ They will converge.

Moreover, you should look at the data/analytics part: how will you measure and what data do you need for proper and timely control? Even better, how will you predict what may happen, and are you currently anticipating this? To this end, elements such as the right KPIs and dashboarding, which are often still highly spreadsheet centered, should be fully in order and automated…!

Briefly put, think carefully about how you measure. What you really need to track is the number of people who love to use your product! This is crucial. Unfortunately, not many companies judge themselves on this user adoption. A missed opportunity with far-reaching consequences, because ultimately, users determine your long-term success. If you provide a pleasant experience by optimizing processes using IT, you’ll secure your organization’s future. This is just as important as the quality of the product you deliver – the experience is part of your product or service!

How to go about it

A number of the issues discussed above can be tacked perfectly with the introduction of a Low-Code platform and an Agile way of working. As OutSystems is currently the best Low-Code platform, IG&H has decided to work with it.

With a Low-Code platform, you can build software faster and better. Like the name suggests, you need very little code. You largely model software the way you would model a bridge, car, or plane. The difference is that with this model, you subsequently generate the software with 1 press of the button. Moreover, there’s a level of flexibility: when you have specific software that you cannot yet model, you can add it manually later – hence, the word ‘Low.’

Furthermore, maintaining models requires less time than maintaining hand-written software. So with a Low-Code platform, you considerably lower your company’s maintenance costs, making more money available for innovations and improvements.

Organizations with legacy systems can keep using these sources through OutSystems, but get the opportunity to rationalize them in a phased and low-risk way. In the meantime, they already benefit from shorter lead times for new functionality andmodern, pixel-perfect user interfaces. Using these, they can support and improve the much-needed customer experience.

In addition, OutSystems offers the possibility of rapid prototyping. This is the quick development of prototypes without high costs, which often enables the delivery of a prototype within several weeks – very useful when you want to test new concepts in practice! If you combine rapid prototyping with a smart use of data analytics, you can quickly book results.

Using OutSystems, we help organizations make a successful transition to sustainable digitalization. All the points we’ve discussed in this blog are covered during the process.

Interested in what we can do for your organization? Don’t hesitate to contact me. You can also find us at the NextStep conference on October 8thand 9th, which IG&H will attend.