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

By October 24, 2019 No Comments

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 Unfortunately, old IT systems, entrenched organizational structures, and outdated outsourcing contracts usually offer little room to properly respond to such opportunities.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

Aernoudt Bottemanne

Author Aernoudt Bottemanne

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