The Most Common Business Process Improvements From Digital Transformations

Summary

In this video, Eric Kimberling, CEO of Third Stage Consulting, explores key business process improvements driven by digital transformation. He highlights the automation of manual tasks, centralized data visibility, improved financial consolidation, and predictive analytics. Kimberling also discusses the benefits of machine learning, artificial intelligence, and shared services models in enhancing operational efficiency. He emphasizes that accurate data management is crucial for leveraging these technologies. The video aims to guide organizations on maximizing value from their digital transformation initiatives.

Takeaways

• 🔄 **Business Process Improvement**: Digital transformation often aims to improve business processes, with automation being a key driver.
• 🤖 **Automation of Manual Processes**: The first step in digital transformation is typically automating repetitive tasks to increase efficiency.
• 📊 **Centralized Visibility**: Digital technologies provide centralized access to information, which is crucial for better decision-making.
• 💼 **Financial Consolidation**: Improved financial consolidation is a common goal, aiming to streamline financial reporting processes.
• 🛠️ **Shared Services Model**: Larger organizations benefit from consolidating redundant functions into a shared services model for cost savings and efficiency.
• 📈 **Predictive Analytics**: The use of AI and machine learning allows for better planning and forecasting, improving business processes related to demand, manufacturing, and procurement.
• 🔗 **Supply Chain Management**: Advanced technologies help manage supply chain unpredictability, a critical issue in the current economic climate.
• 💾 **Data Management**: Effective data management is fundamental to leveraging AI, machine learning, and business intelligence for process improvement.
• 📚 **Resources for Transformation**: Third Stage Consulting offers resources like an annual digital transformation report and software rankings to guide organizations.
• 🌟 **Strategic Benefits**: Beyond incremental improvements, digital transformation can lead to strategic restructuring and innovation within organizations.

Q & A

What is the primary driver for digital transformation in businesses?

The primary driver for digital transformation in businesses is the desire to improve business processes, which includes automating manual processes, enhancing visibility, and increasing efficiency and effectiveness.

Who is Eric Kimberling and what is his role?

Eric Kimberling is the CEO of Third Stage Consulting, an independent consulting firm that assists clients worldwide in advancing through their digital transformation journeys.

What is the first and most common improvement organizations expect from digital transformation?

The first and most common improvement organizations expect from digital transformation is the automation of manual processes across various functions and business processes within the organization.

How does machine learning contribute to business process automation?

Machine learning contributes to business process automation by taking over highly repetitive and redundant tasks, allowing employees to focus on more strategic work and managing exceptions.

What is the significance of centralized visibility to information in digital transformation?

Centralized visibility to information is significant in digital transformation as it reduces the time spent searching for data and provides real-time access, enabling better decision-making and insights into business operations.

What are some technologies that provide centralized visibility into business processes?

Some technologies that provide centralized visibility into business processes include business intelligence tools like Microsoft's Power BI or Tableau, and enterprise resource planning (ERP) systems.

Why is improved financial consolidation important in digital transformation?

Improved financial consolidation is important in digital transformation because it enhances efficiency, effectiveness, and accuracy of financial data, which is crucial for business value and regulatory compliance.

How does a shared services model contribute to business process improvement?

A shared services model contributes to business process improvement by consolidating redundant functions across the organization, leading to time and cost savings, and a more consistent way of conducting business.

What role do predictive analytics and artificial intelligence play in planning and predicting for the future?

Predictive analytics and artificial intelligence play a crucial role in planning and predicting for the future by providing better accuracy of data and tools to make sense of that data, allowing organizations to anticipate future outcomes based on past events.

Why is better data management considered a critical business process improvement?

Better data management is considered a critical business process improvement because accurate data enables organizations to take full advantage of technologies like AI, machine learning, and business intelligence, leading to more effective operations.

What resources does Third Stage Consulting provide to help manage digital transformation?

Third Stage Consulting provides resources such as an annual digital transformation report featuring best practices and lessons learned, and independent software rankings for various types of software to assist in managing digital transformation.

Outlines

00:00

🔄 Digital Transformation and Business Process Improvement

Eric Kimberling, CEO of Third Stage Consulting, discusses the concept of business process improvement as a key driver for digital transformation. He explains that organizations typically undergo digital transformation to automate processes, enhance visibility, improve efficiency, and deliver better customer and employee experiences. Kimberling emphasizes the importance of understanding the potential value that can be gained from digital transformation. The most common improvement organizations expect is the automation of manual processes, which can apply to various functions like marketing, sales, supply chain management, and inventory management. Technologies such as ERP systems, CRM, and machine learning are increasingly being used to automate these processes, allowing employees to focus on more strategic tasks.

05:01

📊 Centralized Visibility and Financial Consolidation

The script continues with Kimberling discussing the benefits of centralized visibility to information and improved financial consolidation as outcomes of digital transformation. Centralized visibility allows for easier access to real-time data, enabling better decision-making and insights into business operations. Financial consolidation is highlighted as a significant improvement, particularly for larger organizations that previously spent considerable resources on manual accounting processes. The efficiency and accuracy of data are crucial for business value and regulatory compliance, especially for publicly traded companies. Kimberling also introduces the concept of shared services models as a strategic approach to restructuring organizations for efficiency, where redundant functions like accounting, HR, IT, and procurement are centralized to save time, money, and ensure consistency.

10:02

📈 Leveraging AI and Data Management for Strategic Improvements

In the final paragraph, Kimberling explores the strategic benefits of digital transformation beyond incremental improvements. He mentions the use of predictive analytics, artificial intelligence, and other quantitative technologies that enable better planning and prediction for the future. This is particularly relevant for financial planning, demand forecasting, manufacturing, procurement, and inventory management. The script also addresses the importance of supply chain management in the context of current global uncertainties, where AI and machine learning can provide clearer navigation. Kimberling concludes by emphasizing the critical role of data management in digital transformation, including master data management and transactional data management, which are essential for leveraging AI and other advanced analytics tools. He suggests that accurate data management is fundamental to realizing the full potential of digital transformation. The paragraph ends with an invitation for viewers to access additional resources, including an annual digital transformation report and software rankings, to aid in managing digital transformations effectively.

Keywords

💡Business Process Improvement

Business Process Improvement refers to the strategic and continuous enhancement of business processes to increase efficiency, reduce costs, and improve customer satisfaction. In the context of the video, it is a key driver for digital transformation, focusing on automating manual processes, enhancing visibility, and streamlining operations. The script discusses how organizations aim to automate tasks, reduce manual work, and manage exceptions more strategically through digital transformation.

💡Digital Transformation

Digital Transformation is the integration of digital technology into all areas of a business, fundamentally changing the way businesses operate and deliver value to customers. The video emphasizes how digital transformation can lead to significant improvements in business processes, such as automation and data management. It is portrayed as a journey that organizations undertake to modernize their operations and enhance their competitive edge.

💡Automation

Automation is the use of technology to perform tasks with minimal human intervention. In the video, automation is highlighted as a common and significant improvement in digital transformations, where manual processes are replaced with automated ones to increase efficiency and allow employees to focus on more strategic tasks. Examples from the script include marketing automation, supply chain management, and the use of machine learning to automate repetitive tasks.

💡Visibility

Visibility in the context of the video refers to the ability to access and monitor business data and processes in real-time. Centralized visibility is a key improvement that organizations seek through digital transformation, enabling better decision-making and operational control. The script mentions dashboards and business intelligence tools like Microsoft's Power BI and Tableau as technologies that enhance visibility.

💡Efficiency

Efficiency is the degree to which an organization is able to minimize wasted effort and expenses in producing a desired output. The video discusses how digital transformation can lead to increased efficiency through the automation of manual processes and the centralization of data, which reduces the time and resources spent on tasks and leads to cost savings.

💡Machine Learning

Machine Learning is a subset of artificial intelligence that allows systems to learn and improve from experience without being explicitly programmed. In the video, machine learning is discussed as a tool that can further automate business processes by learning from normal operations and flagging exceptions for human intervention, thereby reducing manual work and improving accuracy.

💡Shared Services Model

A Shared Services Model is a business strategy where organizations centralize certain operational functions to improve efficiency, reduce costs, and enhance service quality. The video script mentions how larger organizations can benefit from consolidating redundant functions like HR, IT, and finance into a shared services model, leading to cost savings and more consistent business operations.

💡Predictive Analytics

Predictive Analytics is the use of statistical algorithms and machine learning techniques to identify the likelihood of future outcomes based on historical data. In the video, predictive analytics is highlighted as a tool that can help organizations plan more effectively by analyzing data and predicting future trends, which is crucial for processes like financial planning and supply chain management.

💡Supply Chain Management

Supply Chain Management is the oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to the final consumer. The script discusses how digital transformation, particularly the use of AI and machine learning, can improve supply chain management by providing better data access and predictive capabilities, which are essential for navigating supply chain disruptions and bottlenecks.

💡Data Management

Data Management involves the development, execution, and supervision of policies, procedures, and controls that manage an organization's data at all stages of the data lifecycle. In the video, data management is emphasized as a critical business process improvement area, where accurate and well-governed data is essential for leveraging AI, machine learning, and business intelligence technologies effectively.

Highlights

Business process improvement is a key driver for digital transformation.

Digital transformation often aims to automate, provide visibility, and enhance efficiency.

Eric Kimberling introduces himself as the CEO of Third Stage Consulting.

Third Stage Consulting assists clients in reaching the third stage of their digital transformation journeys.

Automating manual processes is the first and most common improvement in digital transformations.

Machine learning is increasingly used to automate manual business processes.

Centralized visibility to information is a key improvement from digital technologies.

Dashboards and business intelligence tools like Microsoft's Power BI and Tableau provide centralized visibility.

Improved financial consolidation is a common benefit of digital transformation.

Shared services model can save time, money, and provide a consistent way of doing business.

Predictive analytics and AI help organizations plan and predict the future better.

Supply chain management is a critical area for improvement with AI and machine learning.

Better data management is essential for leveraging AI, machine learning, and business intelligence.

Master data management is a critical business process improvement for digital transformation.

Resources such as the annual digital transformation report and independent software rankings are valuable for managing digital transformation.

The importance of understanding the potential value of digital transformation for business process improvement.

Transcripts

business process improvement is one of

the biggest drivers for digital

transformation it's a pretty vague word

so what exactly does that mean what are

the biggest business process

improvements that organizations

typically see with digital

transformations that's what i'm going to

talk about here today

[Music]

my name is eric kimberling i'm the ceo

of third stage consulting we're an

independent consulting firm that helps

clients throughout the world reach the

third stage of their digital

transformation journeys and when we're

going through digital transformations

inevitably most of our clients that we

work with are doing it because they want

to improve their business processes they

want to automate they want better

visibility they want to be more

efficient more effective provide a

better customer experience better

employee experience manage their supply

chains better all those different

reasons why organizations go through

digital transformations so what i want

to do today is talk about the

most common business process

improvements as well as the business

process improvements that have the

greatest opportunity for business value

within digital transformation the reason

this is so important to understand is

that so you don't lose sight of the

potential value that you could be

getting out of your digital

transformation

[Music]

the first and most common improvement

that organizations expect to see in

digital transformations

is automating manual processes this is

oftentimes the first thing that comes to

mind when organizations think about

their digital transformations and it's

oftentimes the lowest hanging fruit it's

the easiest thing to address as part of

your transformation which is why it's

the most common

so when we think about automated

business processes and getting rid of

some of those manual processes that you

have in place now that applies to a

whole host of different functions and

business processes within your

organization it can apply to your

marketing automation the way you manage

and track your sales force your supply

chain management your manufacturing your

warehouse management inventory

management

procurement all those different

components of your business can be

automated and you can take away some of

those manual processes

those spreadsheets that you're using to

track data and manipulate data all that

stuff can go away and so you can start

to look at ways to get rid of those

manual processes so that your employees

can spend more time

managing exceptions and doing more

strategic work as it relates to their

day-to-day business processes

now if we look at any sort of enterprise

technology whether it's an erp system or

crm human capital management supply

chain management manufacturing execution

a lot of those different types of

technologies are starting to use machine

learning as a way to further automate

manual business processes so in other

words they're taking

highly repetitive redundant business

processes and using automation to

automate those processes and to do some

of the thinking behind some of that more

mundane work so that employees don't

have to manually transact all the stuff

that they're transacting today so for

example if you're in the accounts

payable department of your organization

instead of processing each and every

single purchase order that comes in it

may be the machine learning can learn

what the common normal purchase order

processing might be so you can process

those for payment and it also knows when

there's an exception or an anomaly that

needs to be flagged for human

intervention and that can eliminate 70

80 or even 90 or more

of the manual work that maybe humans

were doing prior to automation so this

is just one example of many that

organizations are doing to

enjoy the benefit of automation as one

of their key business process

improvements

[Music]

another key business process improvement

that organizations often realize from

their investments in digital

technologies

is centralized visibility to information

so rather than having to manually go

search for data go into different

systems or ask people or go look in

spreadsheets or manipulate data to get

the data you really want

now you can have centralized visibility

into a whole host of business processes

and outputs from those business

processes and this is something that can

be a game changer for a lot of

organizations not only because they're

spending less time manually going to

search for that data but because now

they have easier access and more

real-time access to that data and they

can make better decisions and just have

better visibility and understanding and

insights into what is making their

business run what's working well and

what needs to be improved some of the

specific technologies and functions that

technologies can provide in today's

enterprise technology space is the world

of dashboards and business intelligence

you look at tools like microsoft's power

bi or tableau those are two business

intelligence tools that can bolt on to

other systems to provide that sort of

visibility

you also have enterprise resource

planning or erp systems that provide

end-to-end business processes but also

provide centralized reporting and

business intelligence to consolidate all

the data being captured in their systems

and these are just two examples of the

types of technologies that are enabling

the sort of visibility

into enterprise-wide data

[Music]

another common business process

improvement is improved financial

consolidation which is partially based

on the efficiency gains that i've

already talked about but it's also based

on just being able to consolidate data

across the enterprise to get the

financial results that you need

and if you look at some of the larger

organizations out there in the world you

find that they spend a lot of manpower a

lot of horsepower on closing the books

every period whether it's every month or

every quarter every year

they have large teams of accountants

that are oftentimes doing very manual

processes and journal entries and going

to manipulate and find data that they

need to be able to provide that

financial consolidation so having that

efficiency and effectiveness and

accuracy to your data is important from

a

business value perspective and it's also

important from a regulatory perspective

too for a lot of organizations that are

publicly traded or have investors that

expect real time and accurate

information this can be very important

from a regulatory perspective as well so

financial consolidation and better

financial consolidation is one of the

more common business process

improvements that we see within

organizations going through digital

transformations

[Music]

now the first three business process

improvements that i've already talked

about are i'd call them more incremental

business process improvements they can

be very significant very material but

they're only scratching the surface of

what technology can do and what the

potential business process improvements

could be so now if we shift gears and

sort of work our way up maslow's

hierarchy of needs and get into some

more of the strategic

benefits from a business process

perspective

we can now start to look at real

innovative ways that we can restructure

our organization and one of those ways

is through a shared services model

larger organizations that have grown

through acquisition or organizations

that have multiple locations often in

times have built up

redundant competencies throughout the

organization in other words they have

multiple departments doing the same

thing and if they were to consolidate

those functions and have more of a

centralized shared services model they

could save time and money and have a

more consistent way of doing business

for example many organizations find that

functions like accounting hr and i.t

and procurement as well those are four

areas that organizations often find are

redundant throughout the organization

they're spending too much time and money

on people doing the same exact thing and

even though they may be doing the same

exact function they have different ways

of operating so what organizations are

doing in many cases is saying we're

going to move to a shared services model

where we're going to centralize and

consolidate our hr or i.t or our finance

department or whatever department it may

be and we're going to have a common

operating model we're going to use the

same tool set

we might reduce our workforce and and

have

less people doing more because you're

centralizing that function but that can

be a big game changer in terms of saving

time and money as well as becoming more

effective in the way they conduct these

business processes

[Music]

with the advent of predictive analytics

and artificial intelligence and other

sorts of quantitative

technologies that can help provide more

meaning behind the data that you're

capturing as an organization you're also

finding that organizations are able to

plan and predict for the future better

because they have better accuracy of

data and they have these tools like ai

and machine learning that can help them

make sense of that data and even

cast their minds forward to the future

to better anticipate what will happen as

a result of what's already happened in

the past that allows organizations have

better planning processes

so when you look at things like

financial planning or demand planning

trying to figure out what your sales and

revenue might be your manufacturing

planning your procurement planning

managing your inventory all the stuff

that requires you to make decisions into

the future before you have a hundred

percent certainty of what's going to

happen in the future that can be

automated and that can become

streamlined to become more effective as

a result of ai machine learning and

other sorts of enterprise technologies

that are providing that sort of

visibility another example that's

extremely relevant here in the 2020s is

supply chain management when you look at

broken supply chains and supply chain

bottlenecks and the unpredictability of

supply chains right now

having better access to data and better

tools like ai and machine learning can

help you navigate that uncertainty a lot

more clearly than if you didn't have

that tool set and quite frankly that's

why so many organizations are struggling

with their supply chains right now is

partially because of macroeconomic

disruptions but also because they don't

have the proper tools and data to help

them plan for the future so look to this

area as a potential business process

improvement that can be a total game

changer that can deliver a huge amount

of value in your digital transformation

[Music]

at the end of the day one of the

business processes that can be most

improved with the digital transformation

is just better data management and it

may sound sort of mundane and sort of a

back office sort of function or a real

technical function but if you think

about it the troubles that a lot of

organizations have are related to data

in inaccuracy of data

in some cases it's because they don't

have the right tool set to make use of

the data like the bi and the machine

learning and some of the other stuff

we've already talked about but on the

other hand it's also because the data

itself is not accurate in other words

we're not tracking data accurately we're

not putting in place the data governance

controls that are required to make sure

that our data is accurate and the better

data we have the better we're going to

be able to take advantage of ai machine

learning predictive analytics

business intelligence and some of the

other stuff i've already talked about

so master data management and overall

data management as a whole even

transactional data management is

something that can be a critical

business process improvement that can

deliver a lot of business value and a

lot more effectiveness to an

organization as part of its digital

transformation so in addition to some of

these business process improvements i

have talked about i also want to share

with you a few different resources that

will help give you some ideas on how to

better manage your digital

transformation and also make sure you

get more business value out of that so

below i've included a link to a number

of different resources including our

annual digital transformation report

that features a number of best practices

and lessons learned from digital

transformations throughout the world as

well as independent software rankings

for all different types of

softwares that you might be considering

whether it's erp or crm or hcm or

whatever the case may be so i encourage

you to download that report as well as

some of the other resources that have

included links to below so if you found

this information useful and hope you had

a great day

[Music]

you